Sitting of 23 January 1985

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

    Israel
    Mr. Marlowasked the Secretary of State for Foreign and Commonwealth Affairs if he will make representations to the Government of Israel that the Falashas should not be settled in a manner which would disrupt the progress towards Palestinian self-determination.
    The Minister of State, Foreign and Commonwealth Office (Mr. Richard Luce): The settlement of the Falashas in Israel is a matter for the Israeli Government. Our firm commitment to the Palestinians' right to self-determination is well-known.
    Mr. Marlow: As those of us who have seen at first hand the inhumane way in which the Palestinians under Israel control are treated will not believe that the Falashas have been hijacked from their natural environment for humanitarian reasons, will my right hon. Friend reassure the House that Her Majesty's Government neither knew of nor assisted in the so-called Operation Moses? Will he make most firmly the point with the Israeli Government that we would not expect the Falashas to be used as front-line troops in the conflict on the West Bank?
    Mr. Luce rose—
    Mr. Speaker: Order. Before the Minister replies, I make a special appeal for shorter supplementary questions.
    Mr. Luce: The Government welcome any efforts that are made to alleviate the sort of suffering that we have been seeing in Ethiopia in the past few weeks and months. We deeply deplore settlements in the occupied territories and regard them as illegal. We are disturbed by the settlements because we think that they are an obstacle to peace. However, that is a separate issue.
    Mr. Janner: Having regard to the amazing and unique nature of this mercy operation, which I for one had the honour of seeing, would it not be right just once for the House as one to salute a tremendous enterprise of compassion that has been carried out by a nation with great difficulties?
    Mr. Luce: As I have already said to the hon. and learned Gentleman, the Government welcome any measures that are taken to alleviate grave suffering in Ethiopia. I am glad that the British Government have played a prominent role to that end.
    Mr. Steen: I think that the views of my hon. Friend the Member for Northampton, North (Mr. Marlow) are well known. However, will my right hon. Friend tell the House what steps the Government will take, either officially or unofficially to help save lives in Ethiopia, and especially to save the lives of Falashas and help to re-establish their link with Israel, which has offered them a home and a future?
    Mr. Luce: The bringing of the Falashas to Israel is a question for the Israeli Government, and the events in Ethiopia form a separate question. I must reinforce the view that the British Government are taking a prominent lead with the provision both of RAF aircraft and of supplies of food and care.
    Mr. Faulds: Is the Minister right in saying that this is a matter of concern only for the Israeli Government? Surely there should have been some reference to the Ethiopian Government in this matter? Is it acceptable that even Israel, which seems to think that it can behave in this exclusive and selective fashion, can mount an operation in another country which leads to a mass exodus during which many thousands of people die? It has been an incomplete exercise, which has partly failed. It was mounted in the interests of one community, to the disregard of millions of others who are starving in the same circumstances.
    Mr. Luce: That is specifically a question for the Israeli Government. People have a right freely to move across borders, and that is the Government's view. What matters in all this is that suffering in Ethiopia should be alleviated.
    Mr. Latham: Is it not deplorable that my hon. Friend the Member for Northampton, North (Mr. Marlow) and the hon. Member for Warley, East (Mr. Faulds) have criticised Operation Moses without having made any reference to the thousands of black Jews who were starving to death and who are now safely housed in Israel?
    Mr. Luce: I have noted my hon. Friend's views.

    Namibia
    Mr. Willie W. Hamiltonasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on his recent visit to central Africa, with particular reference to the future of Namibia.
    The Secretary of State for Foreign and Commonwealth Affairs (Sir Geoffrey Howe): I visited Zimbabwe, Zambia and Kenya between 5 and 12 January. In each country I had discussions with the Head of State or Government, the Foreign Minister and other Ministers. Our talks covered a wide range of international, regional and bilateral issues. In all three countries, I found deep concern over Namibia. We discussed how best to achieve our common goal of ensuring early implementation of Security Council resolution 435. During my visit I was able to see something of the contributions which British industry, our aid programme and the British Council are making to the development of the three countries' economies.
    Mr. Hamilton: I thank the right hon. and learned Gentleman for that reply. Does he, with the whole of the free democratic world, deplore the continuous procastrination by the South African Government in denying Namibia the right to freedom? What steps is the right hon. and

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    learned Gentleman taking with our allies in the United States to ensure that much speedier progress is made towards that end and to ensure that increased pressure is brought to bear on the South African Government to attain that end?
    Sir Geoffrey Howe: Namibia was a major topic of discussion in all those countries. Everyone agreed on the importance of early independence for Namibia on the basis of Security Council resolution 435. The main hope of achieving a settlement leading to that result lies in the current United States-led negotiations, which we support. I have urged other Governments in the region to support those negotiations. We shall continue to do everything that we can with our allies to encourage those negotiations to reach a conclusion and to move towards the implementation of Security Council resolution 435.
    Mr. Jim Spicer: Does my right hon. and learned Friend agree that, although it is fashionable to put Namibia at the top of the list, the problems posed by the complete disintegration of Mozambique must rate highly with the problems involving the Republic of Zimbabwe, because without—
    Mr. Speaker: Order. The question is about Namibia.
    Mr. Anderson: Security Council resolution 435 was passed long ago, in September 1978. Does the Foreign Secretary now understand the frustration and impatience of other African countries at the long delays? Is the right hon. and learned Gentleman content with the fact that the Contact Group appears to be dormant and to rely entirely on the United States Crocker initiative, which may be construed as bypassing resolution 435? Will the right hon. and learned Gentleman state that there is no linkage between the Angolan-Cuban proposals and independence for Namibia?
    Sir Geoffrey Howe: I certainly need no reminding of the widely felt impression about the long time taken in implementing Security Council resolution 435. That resolution is endorsed internationally and universally as the basis of Namibian independence, and it needs to be fulfilled as soon as possible. We are in close touch with the other Foreign Ministers concerned with the Contact Group. I recently discussed this question with the Foreign Ministers of France, Germany and Canada. We are ready to do anything in this or any other context that will help to promote a settlement. One must recognise that the best possible prospect for settlement lies in the negotiations now led by the United States.
    Linkage was no part of the Security Council's resolution. We do not recognise it as a precondition for settlement, but the fact that a linkage has been made cannot be ignored if a settlement is to be reached. We welcome the fact that Angola has put forward proposals for Cuban withdrawal. We shall continue to press the negotiations forward in that framework as hard as we can.

    Arms Control
    Mr. Corbettasked the Secretary of State for Foreign and Commonwealth Affairs whether he will make a statement on arms control talks.
    Mr. Chapmanasked the Secretary of State for Foreign and Commonwealth Affairs if he will report progress at the various disarmament conferences taking place.
    Sir Geoffrey Howe: As my right hon. Friend the Prime Minister told the House on 9 January, we warmly welcome the agreement to resume US-Soviet negotiations. We fully share the objective of working out effective agreements aimed at preventing an arms race in space and terminating it on earth, and limiting and reducing nuclear arms and strengthening strategic stability.
    At the Geneva conference on disarmament, our priority is to achieve a complete chemical weapons ban. We also hope for serious negotiation to begin at the Stockholm conference. On MBFR, the East continues to reject the West's latest initiative on force data.
    Mr. Corbett: As we approach the 40th anniversary pf VE day, will the Foreign Secretary acknowledge the heroic role played by the people of the Soviet Union and the Red Army in the allied defeat of Hitler and Fascism? Will he bear that in mind in the arms control talks and take seriously the new Russian determination to try to secure nuclear and general disarmament?
    Sir Geoffrey Howe: I certainly subscribe to the hon. Gentleman's first point. One of the matters very much in my mind during my visit to Moscow last summer was that the Soviet Union suffered massive casualties in the second world war and, with the rest of the alliance, played a notable part in securing victory.
    With regard to the negotiations, the fact that both sides agreed at Geneva to begin the negotiating process now in train is confirmation of the genuineness of both sides in that search. We have certainly done everything that we can to convince them of the necessity of sustaining it and we shall go on doing so.
    Mr. Chapman: Should not the United States research programme into space weapons be commended, if only because it raises the prospect, however remote, of an antidote to nuclear weapons being found? Does my right hon. and learned Friend agree that in any case that research programme has been principally responsible for bringing the Russians back to the negotiating table on the question of long and medium-range nuclear weapons?
    Sir Geoffrey Howe: The United States research programme is to be considered alongside the research into precisely the same kind of technology already undertaken by the Soviet Union. In so far as that research contributes to a strengthening of defence as part of the balance of armament, no doubt it is to be welcomed. The existence of that programme was no doubt one of the factors which the Soviet Union had in mind in agreeing to the resumption of the talks.
    Mr. Winnick: Does the right hon. and learned Gentleman agree that it would help to create the right atmosphere for the arms control talks if representatives of the Soviet Union and the United States were invited at the appropriate time this year to celebrate the 40th anniversary of victory over Fascism? Does he appreciate how concerned we were at the original answer given by one of his junior Ministers that VE day would not be celebrated? Will he try to exercise greater control over his Department in the future?
    Sir Geoffrey Howe: The Government's position on that is quite clear. Together with, I think, all the other Governments concerned, we recognise the case for commemorating the fact of 40 years' peace in Europe and

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    doing so in a fashion that takes account of the interest in the future of peace and conciliation in Europe, not only of our allies in that conflict, but of all who participated in it.
    Mr. Walden: Is my hon. and learned Friend aware that on 13 January Mr. Gromyko said in a television interview that he did not at all insist that Britain and France should eliminate their nuclear weapons? Will my right hon. and learned Friend find a tactful way of explaining to the Opposition the implications for unilateralism of that statement?
    Sir Geoffrey Howe: I entirely agree about the importance of that point. Mr. Gromyko's observation was in line with that made by Mr. Andropov, and recently quoted by a Soviet spokesman, that the concept of unilateral disarmament could not be contemplated by the Soviet Union because
    "we are not naive people."
    Mr. Healey: As the Foreign Secretary is now aligning himself more and more closely with Mr. Gromyko, and bearing in mind that the refusal of the British and French Governments to allow their missiles to be counted in the INF talks was one important reason for the failure of those talks, does the right hon. and learned Gentleman agree that in the statement to which the hon. Member for Buckingham (Mr. Walden) referred Mr. Gromyko insisted that British missiles should be counted in the forthcoming talks on strategic weapons, especially as the British Government regard them as strategic weapons and they are committed by treaty to NATO, and that if the British Government completed the Trident programme they would be capable of destroying 10 times more Soviet targets than would the present Polaris force?
    Sir Geoffrey Howe: The right hon. Gentleman will not be surprised to hear that I do not agree with that proposition. Our view on the position of the British nuclear force in arms negotiations is as stated by me in my speech to the United Nations two years ago, and is very closely in line with the statement made to the same assembly by President Mitterrand. If Soviet strategic arsenals and those of the United States were substantially reduced, and if there were no significant changes in Soviet defensive capabilities, Britain would review its position and consider how best to contribute to arms control in the light of the reduced threat.

    Ethiopia
    Mr. Jannerasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the current state of relations between the United Kingdom and Ethiopia.
    The Minister of State, Foreign and Commonwealth Office (Mr. Malcolm Rifkind): We have normal diplomatic relations with Ethiopia. In recent months, ministerial visits have enabled our two countries to discuss our relations more deeply. We continue to provide those in need in Ethiopia with very considerable amounts of emergency food aid.
    Mr. Janner: Will the aid that we are able to give to Ethiopia now be increased in order to meet the danger of the reported outbreak of cholera in that country? Secondly, is this nation, or any nation other than Israel, making any effort to settle or re-settle anyone who is suffering in, or is a refugee from, that sad land?
    Mr. Rifkind: The United Kingdom has given about £30 million of aid over the past two years. That is a major contribution towards dealing with the real problems of Ethiopia.
    On the second part of the hon. and learned Gentleman's question, it would be reasonable to assume from our existing knowledge that most of the Ethiopian refugees in the Sudan will ultimately wish to return to Ethiopia when circumstances permit.
    Mr. Bowen Wells: Will my hon. Friend tell the House why he has declined to support the World Bank's special fund for Africa, which is designed to prevent a recurrence of the famine and starvation in Ethiopia and other sub-Saharan countries?
    Mr. Rifkind: We have great sympathy with the initiative proposed by the World Bank, but any specific contribution that the United Kingdom made to it would be at the expense of other existing bilateral and international commitments. We must bear that in mind. I hope that the World Bank's initiative will continue to make progress as an important contribution to the problems.
    Dr. Owen: Is the Minister aware that the cholera epidemic in Ethiopia is extremely serious and will almost certainly spill over into the Sudan? There is a great shortage of medical personnel and nursing staff—
    Mr. Yeo: Why does not the right hon. Gentleman go?
    Dr. Owen: I would consider myself dangerous. I would not offer my services, even in that limited role.
    Will the Minister consider discussing with Health Ministers and with his right hon. Friend the Minister for Overseas Development whether it would be possible to mobilise medical and nursing teams from the United Kingdom to be sent to the Sudan and Ethiopia?
    Mr. Rifkind: I acknowledge the force of the right hon. Gentleman's point. There is no doubt of the seriousness of the difficulty. The United Kingdom has committed some £14 million to Ethiopia, and my right hon. Friend the Minister for Overseas Development will give careful thought to the best way in which that money can be used to make a contribution, both bilaterally and in co-operation with other interested parties.
    Mr. Baldry: The whole House warmly welcomes the extension of the United Kingdom's Hercules airlift to Ethiopia. However, is my hon. Friend aware that that airlift will be as nothing without long-term, preferably bilateral, aid to back it up and to assist in the development of agriculture in Africa so that the problem of hunger can be tackled?
    Mr. Rifkind: I appreciate my hon. Friend's point, but the present priority is to deal with the immediate problems of hunger and starvation in Ethiopia. In the case of longterm developmental aid, the needs of Ethiopia, which are certainly significant, must be balanced against the interests of the various other countries in Africa, who also have serious needs, and with which we have close bilateral relations.
    Mr. Tom Clarke: In view of the disappointment expressed publicly by the Secretary-General of the United Nations about the fact that warnings of famine in Ethiopia which were uttered well over one year ago appear to have been ignored, should not the British Government, in the light of the close relationship that the Minister has

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    mentioned, be encouraging Ethiopia to take the United Nations more seriously? Should not the Government be setting an example themselves?
    Mr. Rifkind: The United Kingdom did not ignore the warnings. Although we did not have a formal bilateral aid programme with Ethiopia, in the two years before the famine the United Kingdom gave food aid worth more than £15 million. I agree that Ethiopia should take the United Nations as an important international agency, as should all countries.
    Sir John Biggs-Davison: Did my hon. Friend's reply to my hon. Friend the Member for Banbury (Mr. Baldry), in which he mentioned the Royal Air Force contribution, mean that the Hercules aircraft will be kept there for as long as is necessary?
    Mr. Rifkind: My right hon. Friend the Minister for Overseas Development recently announced an extension of the Hercules airlift until March. The matter will then be reviewed to see what will be appropriate.

    Latin America (Debts)
    Mr. Wareingasked the Secretary of State for Foreign and Commonwealth Affairs if he will assess the implications for the United Kingdom's relations with the countries concerned of the current Latin American debt crisis.
    The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Tim Renton): The Latin American debt crisis has of course led to an intensified dialogue between ourselves and the debtor countries of the area. As my right hon. Friend the Chancellor of the Exchequer told the House on 25 October 1984, the British Government have played a leading role in promoting co-operation between Governments, international institutions and banks to tackle the problem of international debt.
    Mr. Wareing: What will be the Government's response when the rescheduling of the Nicaraguan debt is considered later this year? Will they merely follow their usual role as puppets of President Reagan, or will they be generous and take on board the overriding regional development problems of the area, as our EEC partners are doing? Does the Minister agree that we should be looking for other ways in which to finance development in countries such as Nicaragua, especially through direct investment in the natural resources of such countries, to overcome their long-term problems?
    Mr. Renton: The Government are playing a constructive part in considering and helping to restructure the international debt problems of Latin American countries. We are aware of Nicaragua's economic difficulties. We hope that its Government will agree to follow International Monetary Fund advice on policies to tackle those difficulties. We understand that the World Bank is discussing with the Nicaraguans the resumption of regular payments of outstanding debts to the World Bank.
    Mr. Maxwell-Hyslop: With the return of an elected President to Brazil, will the Government use their best endeavours, with other creditor nations, to ensure that Brazil is not submitted to stresses that are incompatible with a full return to democratic Government throughout that enormous country?
    Mr. Renton: We strongly welcome the election of the first democratically elected President of Brazil for 21 years. My right hon. Friend the Prime Minister has sent a message to Dr. Neves congratulating him. As my hon. Friend said, it is significant that Brazil is making important steps towards tackling her overseas debt problems. It is a matter of great pleasure that my right hon. Friend the Minister for Trade was able to announce in December that, for Brazil, there is now a resumption of medium-term export credit cover from Britain. I shall bear in mind the other points that my hon. Friend has made.
    Mr. Healey: Now that the Government and British banks have contributed to the agreement on Argentine debt, which was reached a few weeks ago, is it now established policy of the Government to lend Argentina money which might be spent on rebuilding the Argentine armed forces with weapons supplied in part by British firms?
    Mr. Renton: I am glad that the right hon. Gentleman expresses support for the action taken by the Paris club recently in agreeing to multilateral settlement of Argentina's debts. We look forward to playing our part in establishing what can be done on bilateral debt arrangements between Argentina and Britain.

    Departmental Costs
    Mr. Thurnhamasked the Secretary of State for Foreign and Commonwealth Affairs if he will give an updated report on action to control the total running costs of his Department.
    Sir Peter Blakerasked the Secretary of State for Foreign and Commonwealth Affairs what further developments there have been regarding the planned level of activity in the forthcoming financial year of the Diplomatic Service, the British Broadcasting Corporation External Services and the British Council respectively.
    Sir Geoffrey Howe: I gave details on 14 November of measures which are being taken or planned to control running costs in the Foreign and Commonwealth Office. I have since announced a list of 10 diplomatic and consular posts which will close or not reopen. The Overseas Development Administration has carried forward its plans to consider putting out to competitive tender a number of in-house services.
    I refer my right hon. and hon. Friends to my statements in the House on 22 November and 18 December 1984. There has been no further change.
    Mr. Thurnham: Will my right hon. and learned Friend say how the recent decline in the pound-dollar value will affect future resources? Yesterday's White Paper showed strict control on future spending in sterling terms.
    Sir Geoffrey Howe: As I made clear in my answer to the Select Committee on Foreign Affairs in October, rises in expenditure resulting from exchange rate movements and differential inflation will be considered as requirements based on changed economic assumptions. In fixing the longer-term programmes of the Department in the public financial survey, account will be taken of changes of economic assumptions, up or down, in setting the base line for future years. Obviously, much will depend on movements in exchange rates and overseas inflation. If there are major adverse movements, they can be reviewed during the next public expenditure survey.
    Sir Peter Blaker: Is my right hon. and learned Friend satisfied that his Department and its various parts can plan satisfactorily on that rather vague statement about the extent to which rises in costs incurred overseas may or may not be taken into account? Surely something much more precise is required. Do we not need a definite statement that his Department will compensate for any overseas risen costs, whether resulting from a fall in sterling or from excessive inflation overseas?
    Sir Geoffrey Howe: I understand the importance of my right hon. Friend's point. The sentence that I quoted from the statement in Cmnd. 9367 states that in fixing the longer-term programmes of the Department account will be taken of changes of economic assumptions, up or down, in setting the base line for future years. I understand the importance that my right hon. Friend attaches to that. It must always be subject to consideration, together with other questions, in the public expenditure survey.
    Mr. Kirkwood: Is the Foreign Secretary aware of the valuable work that the British Council does, especially in relation to Ethiopia? Is he further aware that it has projects in hand at the moment, which are of vital importance to Ethiopia, which use English as a secondary teaching language? Will he assure the House that any projected cuts in his Department will not interfere with that aspect of the British Council's work?
    Sir Geoffrey Howe: I recognise the importance of the work done by the British Council. In the year ahead there is no cut in grant in aid to the British Council. It is being increased by £5·8 million in 1985–86 to meet overseas risen costs, leaving the council to absorb £1·1 million of overseas risen costs. The council is still considering how to absorb that amount. I share the hon. Gentleman's hope that that can be done in ways that do not damage the excellent work done by the British Council.
    Mr. Soames: Does my right hon. and learned Friend accept that some hon. Members believe that cuts of this type in his Department are shortsighted folly in terms of Britain's interests? Will he assure the House that the cuts that are being made have not affected our efficiency and ability to represent Britain's case abroad?
    Sir Geoffrey Howe: I certainly understand and welcome the support given by my hon. Friend for the work done by my Department. It is inevitable that the reductions, which involved the closure of 10 diplomatic and consular posts, represent a reduction in the coverage of the services offered by the Department. A reason for proceeding in that way is to maintain the standard of the work being done by the Department elsewhere.
    Mr. Campbell-Savours: In the light of evidence given to the Committee on Public Accounts, could not savings be made if, instead of paying the school fees of the children of Foreign Office officials in Britain's public schools, the Foreign Office sent those children to comprehensive schools in the state sector, whether voluntary-aided or not, which have boarding facilities? If the Secretary of State is determined to save money, should he not consider this matter objectively? Real savings could be made and boarding facilities could be retained for the use of the children of Foreign Office officials.
    Sir Geoffrey Howe: I am sorry that the hon. Gentleman's vision of such matters is so limited by his narrow class perceptions. He must acknowledge that the
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    people employed in the Diplomatic Service have for many years, as a result of consecutive recommendations by external and internal Committees to successive Governments, had their salaries supplemented in precisely that way, just as occurs with many private sector employees. If one must serve in a remote station for a long time, and is likely to do so regularly, there is no substitute for a boarding school education for one's children. It would be wrong to make the narrow changes envisaged by the hon. Gentleman for the narrow, bitter, class reasons that he advances.

    Arab-Israeli Dispute
    Mr. Adleyasked the Secretary of State for Foreign and Commonwealth Affairs what assessment his Department has made of the likelihood of negotiations taking place in 1985 on the subject of the Arab-Israeli dispute.
    Mr. Luce: We remain deeply concerned about the Arab-Israel dispute as an important and dangerous threat to peace in an area of great importance to Europe. We have noted statements in favour of negotiations from Israel and the Arab side. Progress depends on the parties themselves. With our partners in the European Community, and, on the basis of our balanced approach, we shall continue to urge the parties to move forward towards negotiations. The United States' role continues to be of central importance.
    Mr. Adley: I thank my hon. Friend for that reply. Does he agree that the recent proposals by King Hussein, supported by the Egyptian Government and the PLO, are the most fair and realistic proposals that have come forward for a long time? Do the Government support them? Will he confirm that it is not Government policy to lend support or credence to a policy of countries invading and occupying neighbouring countries because they do not agree with their politics?
    Mr. Luce: We watch with great interest the development of some proposals and the efforts being made by King Hussein, in consultation principally with Egypt and other Arab countries, and with some Palestinian leaders, with a view to putting forward some proposals, which have not been fully evolved, to provide a basis for discussion. King Hussein is keeping us fully informed.
    Mr. George Robertson: Will the Minister pay careful attention to the fact that there are signs of conciliatory approaches in the Arab world, and to the fact that a Labour Prime Minister in Israel was associated with the pull-out from Lebanon, which provide a unique opportunity for an initiative to be taken in that troubled part of the world? Will he ensure that the United States is not diverted by something else in the meantime from the urgent task of making that initiative a front part of its policy?
    Mr. Luce: We have noted with interest the desire of the Israeli Government to negotiate; Israel's Prime Minister has already said that in public. President Reagan made it clear in his address to the United Nations Assembly that his proposals of 1982 remain firmly on the table as a basis for discussion. My right hon. Friend the Prime Minister has already had discussions with the President about the middle east and other important matters, and will do so again soon. We have a close interest in those matters.

    Brazil
    Mr. Maginnisasked the Secretary of State for Foreign and Commonwealth Affairs whether he has received an invitation to attend the inauguration of the next President of Brazil.
    Mr. Renton: As far as I am aware, the Government of Brazil have not yet issued any such invitations.
    Mr. Maginnis: In view of the recently established link between the aircraft builders Shorts of Belfast and Embraer of Brazil, will the Government let the new Brazilian Government know that the United Kingdom will encourage such economic co-operation between our countries?
    Mr. Renton: I appreciate the hon. Gentleman's interest in the matter. The position as regards the new trainer is as follows. My right hon. Friend the Secretary of State for Defence has invited Shorts and British Aerospace to submit best and final offers by 24 January. I understand that Hunting and Westland also intend to submit revised tenders by then. In addition, the option of refurbishing the Jet Provost has been kept open. Every relevant consideration, including foreign policy factors where appropriate, will be carefully assessed before a final decision is made.

    Lebanon
    Mr. Lathamasked the Secretary of State for Foreign and Commonwealth Affairs what is the latest position regarding possible United Kingdom logistical support for a strengthened United Nations force in Lebanon.
    Sir Geoffrey Howe: I was able to discuss the situation earlier today with the United Nations Secretary General. Her Majesty's Government have emphasised to all the parties the need for agreed and effective security arrangements in areas to be vacated by Israeli forces. A United Nations presence could play a valuable part in these arrangements. It is important that all the Governments concerned, not least the Lebanese, should now make practical proposals to that end.
    Mr. Latham: Does my right hon. and learned Friend welcome the Israeli withdrawal, which is beginning, and will he ensure that some early steps are taken to fill the vacuum, otherwise there may be serious inter-communal massacres?
    Sir Geoffrey Howe: That was the point of my answer. We welcome the fact that the withdrawal is to commence and we look for early, complete and orderly Israeli withdrawal. If that withdrawal is to be orderly, it requires co-operation with the Lebanon and with other countries, and full consideration of the effects of that on the stability of the area and the safety of civilians. That is why I have emphasised the importance of all the Governments concerned making practical proposals for possible United Nations presence in this area.
    Mr. Healey: I welcome the Foreign Secretary's statement that he has discussed this matter with Mr. Perez de Cuellar and agree with the sentiments that he has expressed. The Opposition would welcome a British contribution to a United Nations force if this were required, and if conditions laid down by the Foreign
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    Secretary were met, we would be satisfied. Does the Foreign Secretary agree, in the light of our experience of the ill-fated international force in Beirut, that before agreeing to put British troops into such a force it is vital that there should be the most precise definition of its role, and clear and strict arrangements governing consultation among components in the force about the possible use of weapons by the force?
    Sir Geoffrey Howe: I am grateful to the right hon. Gentleman for his acceptance of our view that the United Nations presence could have an important part to play in this area. He will appreciate that there are already substantial United Nations forces there, in UNIFIL or the United Nations Truce Supervision Organisation, and in other sectors as well. It is important that the conditions in which there are invited to play a part should be clearly defined along the lines that the right hon. Gentleman described. This is why I stress the need for early proposals, particularly from the Lebanese Government, to that end. Any question of an increase in the size of the United Nations force might arise hereafter. A British troop contribution has not been requested. We take the view that we are well placed, and remain better placed, to help on the logistical side of such an organisation.

  EUROPEAN COMMUNITY

    Own Resources
    Mr. Andrew F. Bennettasked the Secretary of State for Foreign and Commonwealth Affairs when he next expects to discuss the increase in own resources at the Foreign Affairs Council.
    Sir Geoffrey Howe: This issue is on the agenda of the Foreign Affairs Council of 28 and 29 January.
    Mr. Bennett: Does the Foreign Secretary agree that the only people pushing the British Government to expand the VAT base are the Commission and the other member states? Is it not unacceptable to the British people to be contemplating putting VAT on books, newspapers, children's clothes and other things such as food? Will the right hon. and learned Gentleman make it clear that the House will not put up with such a proposal?
    Sir Geoffrey Howe: The hon. Gentleman has misunderstood the position. The scope and coverage of VAT in this country does not relate to the proposal, which has been accepted, for an increase in resources by raising the maximum VAT rate. They are quite separate and distinct from each other. Under the adjustments agreed at Fontainebleau, which include the acceptance of a possible increase in own resources, our adjusted net contribution will be about half what it would have been without that agreement, and our effective VAT rate in the Community will remain below the 1 per cent.
    Mr. Yeo: Does my right hon. and learned Friend share my hope that any increase in own resources will be subject to the same critical scrutiny as the Government quite properly apply to all sectors of public expenditure? Will he undertake not to recommend the House to accept any such increase in own resources unless it can be shown that it is in the interests of Britain?
    Sir Geoffrey Howe: The question of an increase in own resources has at all times been stated to be conditional

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    upon other conditions being fulfilled. That remains the position. It is on that basis that it will eventually be brought before the House.
    Mr. Foulkes: Can the Foreign Secretary tell the House how much of the increase in own resources is attributable to enlargement, how much is attributable to paying the United Kingdom abatement and how much is attributable to new expenditure? Can the Foreign Secretary also tell the House what will happen to the United Kingdom abatement if there is a delay in enlargement and a delay in the agreement to increase own resources?
    Sir Geoffrey Howe: There is no recent estimate of the extent of the increase that is likely to be necessary as a result of enlargement. Earlier Commission estimates suggested that at the end of the transitional period enlargement would cost annually between 0·1 and 0·2 per cent. of the present VAT ceiling. The increase in own resources is connected with enlargement. That is why the Fontainebleau agreement provides for 1 January 1986 as the completion date for the enlargement negotiations. The agreement also provides for the abatement of the United Kingdom's contribution for 1985 to be met on the revenue side during that year.
    Mr. Budgen: Will my right hon. and learned Friend explain why the public expenditure White Paper published yesterday anticipates that a further supplementary payment of £200 million will be required to be paid to the EEC in 1985?
    Sir Geoffrey Howe: There are a number of reasons for variations between the figures set out in the public expenditure White Papers for this year and last year. I should not like to hazard an answer to the question posed by my hon. Friend on the premise that his question might be accurately founded.
    Mr. Spearing: I understand that the scope of VAT in the United Kingdom is partly, at least, the responsibility of the Chancellor of the Exchequer and partly that of the European Economic Community, does the Foreign Secretary agree that the actual rate of VAT "take" that we now send to the EEC is in the region of 10 or 11 per cent.? Will not that go up with the increase in own resources, and does it not increase if sterling declines relative to the ecu?
    Sir Geoffrey Howe: It is right that the increase in the own resource ceiling, while not affecting the VAT rate payable by way of tax in this country, is bound to have an effect on the sum being transferred, gross, from this country to the EEC. That was the importance of securing in the course of the Fontainebleau negotiations the machinery that we achieved for the very substantial abatement of our own contribution, thus achieving the significant reduction in our net contribution that I have described.

    Spain and Portugal
    Mr. Pikeasked the Secretary of State for Foreign and Commonwealth Affairs if he is satisfied with progress on the accession of Spain and Portugal to the European Economic Community.
    Mr. Rifkind: The Community and the applicant states are now in the final stages of the accession negotiations, after the agreement on Community negotiating positions on fisheries and wine. Agreement was also reached in
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    December on arrangements for the dismantling of Spain's highly protective industrial tariff regime. We are working for completion of the negotiations as soon as possible so that Spain and Portugal may accede on 1 January 1986.
    Mr. Pike: Is the Minister aware of the views of the new President of the Foreign Affairs Council, who indicated that he hoped for the early accession of Spain and Portugal in order to increase the own resources element as soon as possible and also to aid the Community's problems during the coming year? How realistic does the Minister think these views are, and what prospect is there of achieving that aim?
    Mr. Rifkind: As I said, there has been considerable progress in the past few weeks and it is still perfectly possible to keep to the political commitment to allow the negotiations to be concluded at a time that will enable the ratification procedures by each of the member states to be concluded, thereby permitting Spain and Portugal to enter the Community on the date proposed.
    Mr. Jim Spicer: My hon. Friend made no mention of the problems of the Spanish fishing fleet,. In view of the size of that fleet that seems to be a major obstacle that has still to be overcome. Will he say a word about that?
    Mr. Rifkind: My hon. Friend is correct. That is one of the remaining outstanding issues. The Community has adopted a position that is in accordance with the enormous importance that we attach to the fisheries question. It will prove a complicated question, but the Spanish Government are realistic enough to realise that the Community, having acquired a common fisheries policy only after many years of difficult negotiation, would not be able to consider any significant change to it that weakened the protection that is afforded to existing fishermen within the Community.

    Community Budget
    Mr. Deakinsasked the Secretary of State for Foreign and Commonwealth Affairs if the Council of Foreign Ministers has approved the European Economic Community budget for 1985; and what proportion of the budget is to be spent on agriculture.
    Mr. Rifkind: The draft European Community budget for 1985 was rejected by the European Parliament on 13 December. The exact proportion of the budget to be spent on agriculture is not, therefore, established.
    Mr. Deakins: Will the hon. Gentleman accept that in the draft budget, although rejected by the European Assembly, the proportion to be spent on agriculture rose last year from 67 to 74 per cent., and that there has been a decline in real terms on the other programmes of major interest to Britain? What is there in the new mechanism of budget discipline that will prevent agriculture getting a larger and larger share of the Community budget in future?
    Mr. Rifkind: The figure in the draft budget is 73 per cent., which is unacceptably high, although it is considerably lower than the average figure during the previous Labour Government, which I think was 76 per cent. With regard to the implications, I refer the lion. Gentleman to the agreement that has been reached, which binds the members of the Council of Ministers to ensure that any increase in agricultural expenditure is less than the

    979
    growth in own resources. That is not a growth of 40 per cent., as the hon. Gentleman incorrectly suggested in the debate in the House yesterday.
    Mr. Marlow: Is there likely to be a supplementary budget for 1985? If so, as the United Kingdom is the country that is most concerned and which works hardest for financial discipline, will he undertake to the House that we shall not be required to make a net contribution, as we did yesterday?
    Mr. Rifkind: As my hon. Friend is well aware, the draft budget that was sent to the European Parliament did not reflect the likely commitments of the Community during the year in question, but did reflect the legal limit of the 1 per cent. ceiling. The precise way in which that particular problem is to be resolved has still to be agreed, but, as my hon. Friend the Economic Secretary said yesterday, we cannot rule out the possibility, or indeed the likelihood, of some form of supplementary finance being necessary.
    Dr. M. S. Miller: What steps is the hon. Gentleman taking to protect British interests in relation to the accession of Spain and Portugal in connection with that matter? The British situation will worsen, as Spain and Portugal are likely to be net beneficiaries from the Common Market.
    Mr. Rifkind: Certainly the whole reason why the negotiations with Spain and Portugal have lasted so long is that the Community as a whole, including the United Kingdom, has been determined to be cautious to ensure that the financial implications of enlargement are kept to a minimum. One of the United Kingdom's main objectives is to ensure that mistakes that were made in the past with regard to northern agriculture, which produced unacceptable surpluses, should not be made with regard to Mediterranean agriculture. That is a particular priority.
    Mr. Dykes: Now that the system of financial control and husbandry in the Community is largely resolved, is it not rather sad and pathetic that some hon. Members should continue to grumble about the possibility of the United Kingdom paying an extra amount this year into the budget which would represent 0·7 per cent. of our GNP compared with the United Kingdom's existing budget deficit, which represents 2·25 per cent. of GNP?
    Mr. Rifkind: My hon. Friend is right to put the matter in its proper perspective, but we must also insist that any increase in the resources of the Community is used for desirable areas of extra expenditure and does not contribute to the continuation of undesirable and unnecessary surpluses.
    Mr. George Robertson: Is there not something bizarre and indefensible about a draft budget that will increase the proportion to be spent on agriculture from 67 to 73·7 per cent., which is closer to 74 than 73 per cent., at a time when over 14 million European Community citizens are out of work, and more than 25 per cent. of all young people in the Community are out of work, especially when that will be at the cost of programmes in industry, energy, transport, science and technology, which could make the best contribution to increasing the industrial viability of the European Community countries?
    Mr. Rifkind: I entirely agree with the hon. Gentleman that the proportion of the budget represented by agriculture
    980
    is unacceptably high. It is precisely for that reason that the United Kingdom has successfully insisted on a new formula that will ensure that agriculture will progressively represent a smaller and smaller share of the total Community budget.

    Community Reform
    Mr. Teddy Taylorasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement outlining his aims for the achievement of reforms in the European Economic Community in 1985.
    Sir Geoffrey Howe: Our aims were set out in our paper "Europe—The Future", copies of which are available in the Library of the House, and in the Queen's Speech of November last year.
    Mr. Taylor: Will my right hon. and learned Friend make it clear that in 1985 the Government will provide no official co-operation whatsoever to the bands of so-called European Members of Parliament who descend on this country to investigate matters of purely domestic interest, such as the conduct of the police during the miners' strike? Will he deny access to such groups?
    Sir Geoffrey Howe: The question of such groups having access to this country does not arise, as I understand it, because the bureau of the European Parliament, the Standing Committee, decided that the Committee could meet only in Strasbourg, Brussels or Luxembourg—its working places. Certainly I can give my hon. Friend the assurance that we will not co-operate with inquiries on subjects outside the European Parliament's responsibility. That includes policing matters. It is deplorable that the Labour party allowed this matter to be dragged on to the Floor at Strasbourg, with very scant respect for the authority of this House.
    Dr. Owen: Does the Foreign Secretary agree that it is now a major British interest to establish a genuine internal market, particularly in insurance and financial services? This becomes ever more important with the enlargement of the Community to 12. Does he further agree that that will be achieved only by more extensive use of majority voting and that Britain should not block but should encourage this?
    Sir Geoffrey Howe: I certainly agree with the right hon. Gentleman about the great importance for employment prospects throughout the Community of swift and comprehensive progress in establishing an effective internal common market in insurance and many other services. I do not believe that it is necessary to contemplate any change in the existing treaty provisions, provided that they are used effectively to achieve substantial advances towards a proper internal market.

    Dublin Summit
    Mr. Tony Lloydasked the Secretary of State for Foreign and Commonwealth Affairs if he is satisfied with progress made in implementing the decisions of the Dublin summit.
    Sir Geoffrey Howe: The decisions reached at Dublin helped set in place for the first time a mechanism to control Community spending. As a result of the discussions on enlargement, the negotiations with Spain and Portugal are now entering their final stages.
    Mr. Lloyd: In view of the overwhelming good will and compassion of the ordinary people of this country and throughout Europe to those who are starving in the Sahel region of north Africa, can the Foreign Secretary tell the House why progress has been so slow in implementing the decision taken in Dublin to provide 1·2 million tonnes of grain to that region, especially in the light of the 139 per cent. increase in grain stocks in Europe?
    Sir Geoffrey Howe: The substantial food aid commitments that were made by the Community in November are being delivered now. The commitments made in Dublin enabled the Community and the recipient countries to plan famine relief throughout the year ahead.
    Mr. Forth: Will my right hon. and learned Friend confirm that he will not ask the House to approve any increase in EC resources until the conclusion of the enlargement negotiations? If enlargement is not to be recommended to the House because the negotiations have not succeeded, will he confirm that he will not ask for an increase in EC resources?
    Sir Geoffrey Howe: Plainly, there is a close link between the conclusion of the enlargement negotiations and the time at which an application for an increase in own resources will be brought before the House.
    Mr. Hardy: Since summits over the last few years have persistently committed themselves to reducing the amount of money granted for the support and subsidy of agriculture, and since in that period no reduction in such expenditure has occurred, when can the House expect to be informed that there has been such a reduction?
    Sir Geoffrey Howe: The hon. Gentleman is one among many who believe that it is possible easily to reconcile the case, supported in all parts of the House, for support for our agriculture industry with a proper management of the resources devoted to that purpose. As a result of the decisions reached at Fontainebleau, an effective budgetary discipline has been put in place and a series of policy decisions have been taken either for the freezing or the reduction of prices, and for the installation of quotas. To give just one example, as a result of those decisions a substantial reduction in the output and, therefore, ultimately the cost, of milk is taking place. That policy will have to be sustained for a number of years.

    Institutional Progress
    Mr. Dykesasked the Secretary of State for Foreign and Commonwealth Affairs if he plans to press for an early meeting of European Economic Community Ministers with the newly appointed commissioner in Brussels to discuss ways and means of securing new institutional progress within the Community structure.
    Mr. Rifkind: Discussion is already taking place in the Ad Hoc Committee on Institutions. The European Community Commission is represented on this committee by Mr. Ripa di Meana.
    Mr. Dykes: Is my hon. Friend aware that I meant commissioners in the plural? As there is a need to press ahead with developments in the Community, and as the new Commission is beginning to make plenty of new suggestions, cannot the European Parliament and Commission, working together with the Council, achieve a new form of progress that will stand in contrast with the conflicts that have existed between those institutions in the past?
    Mr. Rifkind: The Ad Hoc Committee on Institutions was appointed by the Heads of Government to look at this issue. A commissioner was appointed to it to ensure that the Commission's views would be fully taken into account in any recommendations made by the committee.
    Several Hon. Members rose—
    Mr. Speaker: Order. We started these EEC questions one minute late, so I shall call one more question.

    Spending Priorities
    Mr. Parkasked the Secretary of State for Foreign and Commonwealth Affairs what effect he expects the text on budgetary discipline adopted at the Dublin summit will have on the spending priorities of the European Economic Community.
    Sir Geoffrey Howe: Your precision is admirable, Mr. Speaker.
    The agreement provides that the net expenditure relating to agriculture markets will increase by less than the rate of growth of the own resources base. This provision should allow greater headroom within the VAT ceiling for expenditure on non-agriculture policies, in accordance with the maximum rate provisions of the treaty.
    Mr. Park: Is it not a fact that the budgetary discipline document will do nothing to prevent agricultural expenditure from increasing as a proportion of the budget? Given the vast surplus in all farm products, is there any justification for such an increase?
    Sir Geoffrey Howe: The budgetary discipline provisions provide a framework within which the decisions about agricultural prices will have to be taken. As a result, the increase in the 1985 draft budget for CAP spending stands at 5 per cent., which is the lowest figure for several years. Under the Labour Government the average annual increase was 28 per cent. Thus, the measures are already having an effect.

Coal Mining Dispute
3.32 pm
Mr. Geoffrey Lofthouse: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 10, for the purpose of discussing a specific and important matter —[Interruption.] —that should have urgent consideration, namely,
"the coal mining dispute."
Before those public school punks on the Conservative Benches take any more sadistic pleasure out of the plight of the miners, perhaps they will listen to the case. Yesterday you, Mr. Speaker, said:
"I am in no doubt that an appropriate moment, and when it will be helpful to the settlement of the dispute, we should have a debate on this matter."—[Official Report, 22 January 1985; Vol 71, c.878.]
I believe that the time has now come to hold that debate. The matter is certainly urgent and specific. The Government caused the dispute in the first place by their decision on Cortonwood, and they have deliberately manipulated the miners strike. It is reported to have cost between £90 million and £100 million a week to try to defeat the miners. But the Chancellor of the Exchequer believes that that is a good investment. The Government never take any notice of the social costs involved.
The Government have a responsibility for creating the great distress that exists in the mining industry —[Interruption.]
Mr. Speaker: Order.
Mr. Lofthouse: There are great hardships, broken marriages, shocking bitterness and business bankruptcies. In my area the local chamber of trade has assessed that 25 per cent. of the businesses will be going out of business—yet we see the grinning and sadistic pleasure of Conservative Members. Let me say to Conservative Members who do not understand the situation that miners—[Interruption.]
Mr. Speaker: Order. I ask the House to allow the hon. Gentleman to make his application. He is addressing me and not, as he said, Conservative Members.
Mr. Lofthouse: I am grateful, Mr. Speaker, but I can assure you that Conservative Members will not stop me from putting the case.
The miners and the mining communities are not bothered about personalities. They are bothered that their jobs and standard of living are being destroyed. Most of the 42 per cent. of youngsters under the age of 25 in my constituency would normally have found their way into the mining industry. The Government have a duty to say in a debate in the House what opportunities those young people will have when the Government have destroyed the pits.
The miners feel, as do I and many hon. Members, that the door is open for negotiations. They feel also that the Prime Minister and the Government, and all the Prime Minister's satellites on the Conservative Benches, believe that if they sit back and do nothing they will drive the miners back to work through hunger, poverty and distress—and there is some evidence that some men, through sheer hardship, and not through any disloyalty to their union have been driven back to work. If the Government know anything at all about the miners or the mining community, they will or should know that that is the worst possible thing because, although the miners may be driven
984
back to work in that way, the country will still need coal and will still need the good will of the miners. That is not a victory, if that is what the Government think it is.
The present situation is very serious. It is not sufficient for people to say, "All right, we've taught them a lesson—go to the bitter end and make quite sure that we rub their noses in the mud and that we starve them back." The miners have a right, after their past performances on behalf of the country, to expect that the Government, even if they feel that they will achieve a great victory, will exercise their duty to consider that the dispute should be settled by negotiation and to bring about an honourable settlement. I hope that you, Mr. Speaker, will feel able to grant the application.
Mr. Speaker: The hon. Gentleman asks leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
"the coal mining dispute."
I have listened with great care to what the hon. Gentleman has said. I stand by what I said yesterday on a similar application. However, I regret that I do not consider that the matter which he has raised is appropriate for discussion under Standing Order No. 10, and I cannot, therefore, submit his application to the House.
Mr. Alec Woodall: On a point of order, Mr. Speaker.
Sir Kenneth Lewis: On a point of order, Mr. Speaker.
Mr. Speaker: Order. There is to be another application under Standing Order No. 10. I will take the points of order afterwards.
Mr. Woodall: My point of order arises out of the application made by my hon. Friend the Member for Pontefract and Castleford (Mr. Lofthouse).
Mr. Speaker: Order. I will not take the hon. Gentleman's point of order now.
3.41 pm
Mr. Bob Clay: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 10, for the purpose of discussing a specific and important matter that should have urgent consideration—it is a different aspect of the mining dispute—namely,
"the further evidence that has emerged last night and this morning that the Government and elements in the National Coal Board are determined to prevent a negotiated settlement of the mining dispute."
The matter is specific because, as was revealed last night and commented on this morning, at 5 minutes to 1 on Monday, the NUM went to Hobart house and, from then until 25 minutes past 3, had discussions with Mr. Ned Smith. At the end of those discussions, a minute was signed by both sides recording that they both viewed the discussions as having been useful.
As the union representatives left Hobart house at 3.25—no one having left the room since 5 minutes to 1—they were greeted by the 1 o'clock edition of The Standard which quoted Mr. Michael Eaton as saying that the talks had failed. It is clear that a senior official of the NCB, who must have had authority from the Government, had told the press that the talks had failed even before they had

985
started. If further evidence were needed of the determination of the Government and the hawks in the NCB to prevent negotiations on any conditions, that is it.
If any senior member of a nationalised industry behaved in that manner in any dispute, it would be a matter of grave and immediate public concern, whatever the length of the dispute or the matter at issue. For a senior NCB representative to announce to the press that talks had failed before they had even started would be a serious enough matter at any time. In current circumstances, it is infinitely more serious.
The matter is specific and of great public importance and it is also urgent. There are some matters that Conservative Members pretend to fail to understand. I was told today—as I am told every day—by representatives of the NUM in Durham that when that sort of thing happens it leaves men on the picket line with the feeling that they have no recourse left. If they are to be told that there will not be a negotiated settlement and they are determined not to go back to work, the feeling is that sooner or later—and probably sooner, because every time the Government behave like this it makes it more imminent—disorder will break out—[HON. MEMBERS: "Threats."] Of course it is not a threat; it is an observation of reality. People who believe that Parliament does not give a damn about what is happening have no recourse left. That is what Conservative Members do not understand.
I urge you, Mr. Speaker, in the interests of Parliament, to disregard the indifference of Conservative Members and to ensure that this desperately important matter is debated.
Mr. Speaker: The hon. Member asks leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
"the further evidence that has emerged last night and this morning that the Government and elements in the National Coal Board are determined to prevent a negotiated settlement of the mining dispute."
I have to give the hon. Gentleman the same answer that I gave to his hon. Friend the Member for Pontefract and Castleford (Mr. Lofthouse). I do not consider that the matter that he has raised is appropriate for discussion under Standing Order No. 10. The hon. Gentleman knows that the only decision that I have to take is whether the matter should take precedence over the business set down for today or tomorrow. I regret that I do not consider that the matter that he has raised is appropriate for debate under Standing Order No. 10 today.
Mr. Woodall: On a point of order, Mr. Speaker. I do not wish to contest your ruling, but in the recent abortive attempt to resume talks between the National Coal Board and the National Union of Mineworkers—I raise this matter in the presence of the Leader of the House—it appears that there has been indecent haste on the part of the Government through the Secretary of State for Energy and National Coal Board spokesmen—[HON. MEMBERS: "Progress".]—to deny that there has been any attempt by the Government to abort the attempt to resume talks—[Interruption.]
Mr. Speaker: Order.
Mr. Woodall: Conservative Members are a rowdy lot.
Mr. Speaker: Order. I think that the hon. Gentleman is tempting Conservative Members by raising matters that are rather wide of his point of order.
Mr. Woodall: I accept that, Mr. Speaker. My appeal through you is to the Leader of the House.
Mr. Speaker: This is not really a matter for me. There will be an opportunity during business questions tomorrow to question the Leader of the House on business for the following week. I can deal only with points of order that are matters for to me.
Mr. Woodall; With due respect, Mr. Speaker, I accept that. However, Her Majesty's Government, through the Secretary of State for Energy and NCB spokesmen, sought to deny that they had interfered almost before any accusation had been made.
Mr. Speaker: The hon. Gentleman is an experienced Member and he knows that he is raising matters that I cannot answer.
Sir Kenneth Lewis: On a point of order, Mr. Speaker. Have you received today, Mr. Speaker, any requests from the Leader of the Opposition or the Shadow Leader of the House to change the business for today, which is an Opposition Day, from a debate on post office closures to one on the miners strike?
Mr. Speaker: The hon. Gentleman is even more experienced in this place than I am. He knows that an application of that sort would not be made to me.
Mr. Peter Hardy: On a point of order, Mr. Speaker. I do not challenge your decisions on the Standing Order No. 10 applications, Mr. Speaker, but it will be within your recollection that at Question Time Conservative Members were sustained by a ministerial reply on the interests of the European Parliament in certain aspects of the miners strike. The Minister said—some of us would have some sympathy with him—that the Government would afford no facilities to the European Parliament to consider the aspects of the miners strike in which it has expressed an interest. If the Government are refusing, quite properly, to afford any facilities to the European Parliament to interest itself in aspects of the miners strike, perhaps you will agree, Mr. Speaker, that the Government should not refuse to afford facilities to the House to fulfil the same responsibilities.
Mr. Speaker: Again, that is not a matter for me. The business for next week will be announced tomorrow and none of us knows what will feature in that.
Mr. Anthony Steen: On a point of order, Mr. Speaker. I wonder whether you are aware that there has been the unilateral withdrawal of Post Office services today in the House of Commons Post Office. This is obviously having adverse effects on the services that Members can give their constituents. We pay tribute to the sterling work of the House of Commons Post Office and that of its workers, but if the withdrawal of services is to become a regular occurrence, Mr. Speaker, will you make alternative arrangements for Members of Parliament?
Mr. Speaker: I have heard that certain services will be withdrawn for a period today. I hope that this will not recur. It may be that this serious matter, which has caused many difficulties, will be overcome in due course.
Mr. Jeremy Corbyn: Further to points of order concerning the miners strike and the applications made under Standing Order No. 10, Mr. Speaker, I do not wish, Mr. Speaker, to challenge your

987
ruling in any way. I believe that the points made by my hon. Friend the Member for Sunderland, North (Mr. Clay) are extremely important and serious. Would it be in order for the Secretary of State for Energy to make a statement to the House on the cost of the dispute, his involvement in the NCB and communications with NCB officials on Sunday and Monday which led to newspaper stories appearing before the conclusion of the meeting between the NUM and NCB officials?
Mr. Speaker: The hon. Member has not been a Member as long as others in the Chamber, or he would know that newspapers make statements that do not necessarily have any relevance to the House.
Mr. J. F. Pawsey: Further to the point of order raised by my hon. Friend the Member for South Hams (Mr. Steen), can you, Mr. Speaker, advise the House with whom discussions took place about the withdrawal of the facilities at the Members' Post Office and when those discussions occurred? The action seriously impedes Members in the execution of their duties.
Mr. Speaker: I do not know the answer to that question. I shall look into the matter.
Mr. Sydney Bidwell: Further to the points of order about the mining dispute, Mr. Speaker. Is there anything to prevent the Leader of the House from announcing that there is likely to be a debate in the House?
Mr. Speaker: That is patently not a matter for me. A business statement will be made tomorrow.
Mr. Michael Meadowcroft: On a point of order, Mr. Speaker. Some hon. Members, including myself, feel that it is important to debate the mining dispute but are concerned about the fact that, day by day, the business of the House is interrupted at about 3.30 pm. Some of us have no power to compel the Government to hold a debate in Government time or to compel the Opposition to initiate a debate in Opposition time. I urge, therefore, that time be allocated for a debate so that we can avoid continued disruption at 3·30 pm.
Mr. Speaker: I, too, am disturbed by the fact that I continually have to hear applications under Standing Order No. 10, but that is my duty and my responsibility. I have
988
to make difficult judgments on these matters, and I have had to make a difficult judgment today. I cannot go beyond what I have already said.
Mr. Peter Bruinvels: On a point of order, Mr. Speaker. Is it not hypocritical and an abuse of this House, to demand today of all days a debate under Standing Order No.10 when the Opposition claim that the closure of post offices is a far more serious matter?—[Interruption.]—If the Opposition, some of whom are threatening the House—
Mr. Speaker: Order. I cannot hear the hon. Member.
Mr. Bruinvels: I was referring to an abuse of the House and the hypocrisy—[Interruption.]
Mr. Speaker: Order. The hon. Member, like me, does not have the advantage of great height which others have. I cannot hear what he is saying.
Mr. Bruinvels: Thank you, Mr. Speaker. I shall try to make up for it with my voice. Is it not hypocrisy for the Opposition to demand today of all days that there should be a debate under Standing Order No. 10 on the mining dipute when the Opposition wish to hold a special debate on post offices? If the Opposition consider that the closures of post offices is not as important as the miners, why have they not ceded the debate on post offices? I suggest, as a means of helping you, Mr. Speaker, that the Opposition might like to come to the House on Friday to debate the miners dispute.
Mr. Speaker: The hon. Member and the House know that I am not responsible for the subjects for debate chosen by the Government or the Opposition.
Mr. Dennis Skinner: On a point of order, Mr. Speaker. As a keen observer of these matters, and as reference was made last Thursday, unwisely or otherwise, to there being a planned operation, would you now consider drawing up a list—it would have to be a long one—of all those Members who have jumped on to the bandwagon since then? Now that the Liberals and possibly even the Social Democrats are joining in, I suspect that if you drew up a list on a big sheet of paper and then had a good look at it you might well reach the conclusion, by early next week or even before then, that the planned operation was necessary and that we might as well get on the journey.
Mr. Speaker: I do not think that I want to get writer's cramp.

Companies (Procedure)
3.55 pm
Sir Brandon Rhys Williams: I beg to move,
That leave be given to bring in a Bill to amend the law relating to the election and responsibilities of directors of companies; to require the circulation of particulars of candidates to the members and the consideration of the appointment of non-executive directors before any election of directors; to require the directors to prepare certain data and estimates; to make provision in regard to the establishment of audit committees; and to make other changes in the law relating to companies.
I am seeking once again to introduce a Bill relating to company procedure. I am sure that the whole House is concerned that the British economy should function as efficiently and as fruitfully as possible. I hope that the House will also consider that there is a need to examine the provisions of company law, especially as it relates to the functioning of small and medium-sized companies.
I have introduced a Bill on this subject in every Session since 1969 and I hope that on this occasion, too, the House will consider that my Bill deserves to make progress. I know that the Government are actively and rightly concerned at this time with the protection of investors when they are setting out to make their choice of investment. The Insolvency Bill, which recently had its Second Reading in the other place, is also concerned to deal with companies that have come to the end of their days. It seems to me, however, that there is a gap in the consideration given by the Government to what might be described as the middle ground—that is, the protecting of investments that people make in companies that then do not function as efficiently and effectively as they might. I believe that this gap in our company law deserves the attention of the House. I appreciate that a monumental job is now in progress in the consolidation of existing company law, but, as any practitioner will confirm, much of our company law is completely obsolete and unworkable in practice.
In every public company there are certain supervisory elements which could work more effectively than they now do for the benefit of customers, the work force, the management and shareholders alike. At present, in all too many cases they cannot function effectively in practice because the necessary procedures and background of law are not provided for them by the House. I am thinking in particular of non-executive directors who, all too often, are weak or ineffective members of boards. I think, too, of the auditors who, all too often, are content to look backwards over a company's performance and to consider it in strictly arithmetical terms, rather than to exert themselves to give boards and senior management the advice that they could well be providing as to the future direction of the company. I think, too, of the major institutional sources of finance, which all too often find themselves acting like absentee landlords instead of offering a really effective supervisory service to management—as they also well might and in other countries do.
I believe that quite minor changes in company law, relating mainly to the formal procedures of companies, could make a significant difference and could assist the whole economy to operate more fruitfully. I recognise the objection that the proposals that I have included in my previous Bills—and which I hope to reintroduce now—
990
are of a minor character and that companies, if they chose to do so, could very well do all the things that I recommend within the present framework of the law. That is no reason why there should not be legislation. We need to bring the less progressive companies up to the standards of the best. The House is failing the economy if it allows problems to develop such as are now developing, unnecessarily, in all too many companies.
The Bill deals with the election of directors. ensuring that competition for vacancies on boards will be more effective than it is at present in many cases. The Bill also deals with the preparation of data and estimates, to make sure that a company mobilises its own resources of information about its own likely performance in tile market against competition, so that it can judge how profitably it is likely to operate over a period of time.
The Bill also contains recommendations about setting up audit committees. On the New York Stock Exchange it is obligatory for every company that seeks to be quoted to have appointed an audit committee. In this country, the practice, though widely approved, is not often brought into effect. I believe that in our largest companies it should be generally adopted, and that smaller companies would then learn the routine and appreciate the value of setting up an audit committee. It would be desirable to stimulate such a development through legislation. There will, therefore, be a small provision in my Bill to encourage companies to set up audit committees and I intend once again to reprint a schedule showing a form of model practice for the operation of an audit committee. I believe it would deserve the attention of auditors and senior management, showing how the relationship between the boards and the auditors could be improved on a routine basis.
I hope also to include a schedule showing model articles for companies operating as a result of management buyouts, or in the form of very substantial partnerships. We have not paid sufficient attention to the problems arising when shareholders who are also employees retire from service and wish to dispose of their holdings. There are various possible legislative measures that might be helpful in such circumstances, though I would hesitate to introduce any compulsory measures at this time. However, with the help of hon. Members on both sides of the House, I hope I may be able to draw up a form of model articles for such a company that would be worthy of consideration.
Those are the proposals that I hope to bring in. On two previous occasions I have had the honour of seeing my Bill complete its Committee stage. I believe that on each occasion the House succeeded in attracting attention to areas of company practice that have been neglected and that ought to be studied. I therefore trust that, once again, I shall be given the leave of the House to bring in my Bill.
Question put and agreed to.
Bill ordered to be brought in by Sir Brandon Rhys Williams, Mr. Sydney Bidwell, Sir Edward du Cann, Mr. Bob Edwards, Sir Anthony Grant, Mr. Jeremy Hanley, Mr. Robert McCrindle, Sir David Price, Mr. Tim Rathbone, Mr. Tim Smith, Mr. Richard Wainwright, and Mr. Mark Wolfson.

Companies (Procedure)
Sir Brandon Rhys Williams accordingly presented a Bill to amend the law relating to the election and responsibilities of directors of companies; to require the circulation of particulars of candidates to the members and the consideration of the appointment of non-executive directors before any election of directors; to require the directors to prepare certain data and estimates; to make provision in regard to the establishment of audit committees; and to make other changes in the law relating to companies: And the same was read the First time; and ordered to be read a Second time upon Friday 3 May and to be printed. [Bill No. 62.]
Opposition Day
[5TH ALLOTTED DAY]—considered
Opposition Day

  Post Office Closures
  Mr. Speaker: Before we proceed with the debate, I should like to announce to the House that I have selected the amendment in the name of the Prime Minister.
  I understand that it is hoped to end the debate at about 7 pm. A very large number of right hon. and hon. Members have so far indicated their wish to take part. Unless they speak briefly, we may be here until 10 pm.
  4.5 pm
  Mr. John Smith: I beg to move,
  That this House regrets that the financial policies of the Government towards the Post Office may lead to the closure of 78 Crown post offices and 900 sub post offices and to other reductions of Post Office facilities, thus causing serious social harm, inconvenience and disadvantage, particularly to the elderly, the disabled and the parents of small children and imposing extra travelling expense; and calls upon the Government to moderate its financial requirement so that an extensive and socially responsive network of post offices is maintained.
  I need hardly seek to persuade the House of the social value of the network of post offices that this country has enjoyed for many years. For many communities and, probably, groups in every community, the post office—whether a Crown post office or a more humble sub-post office—is not just a retail outlet for the normal services of a postal system. Post offices happen to be part of the largest retail chain in the United Kingdom, but they are much more than that. The post office is a vital contact point in the administration of our social security system, and it is the most important and often crucial connection between many of our citizens and the organisation of the state.
  As the principal disbursement agency for retirement pensions and family and disablement benefits, the post office probably performs a unique role. There are three groups of people who particularly rely upon its services and upon easy access to them. A large majority of our senior citizens in receipt of retirement pensions collect those pensions from the post office. Their weekly visit is not just a business transaction. It is often a social occasion of great importance to them. At the post office they meet their friends and neighbours as well as collect their pensions. For the mothers, and sometimes the fathers, of young children, easy access to a post office to collect child benefit is of great assistance. For the disabled, such access is not only important but is at the heart of the service that we provide.
  The post office's customers probably include the least mobile members of society. Small distances can often make all the difference to their capacity to go in person to collect their benefits. Our network of convenient post office counters is one of the most important facilities for disabled people.
  Post offices in the United Kingdom may well be unique in that respect. No doubt international comparisons will be made in the debate with reference to the number of post offices in relation to the size of the population. We must always bear in mind that post offices in many other countries do not fulfil the obligations laid upon the post

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  office here as the payment centre for social security. In any event, I am not impressed by international comparisons in this context. It may be pointed out that in West Germany, France, Italy, Japan or the United States, fewer post offices serve as many people. I do not conclude that we should reduce our services to the low international mean. If we have a better service—as I believe that we have—we should retain it. We should remain superior and continue to provide a better service.
  The social obligations and the importance of the post offices have been recognised by Parliament, which has placed statutory social responsibilities, as well as commercial obligations, on the Post Office Corporation. At the heart of our debate is the question of balancing social and commercial responsibilities. We believe that the Government's financial policies towards the Post Office have become so rigorous, enforcing commerciality of an especially narrow kind, that the social responsibilities have been allowed to become subordinate and are steadily being eroded.
  A closure programme involving 78 Crown post offices and 900 sub-post offices is being embarked upon. I have chosen to state the figures positively in the motion, hoping that they bring home to Parliament and the public the scale of the closure programme. In all of the documents that the Post Office and the Government have provided concerning closures, the issue has been approached in a different way. We are told that there might be some difficulty with the network of counters, but that we can rest assured that 95 per cent. of the network will be maintained. It is never stated that 900 sub-post offices and 78 Crown post offices will be closed, although that is the truth. One of the consultation documents says that
  "the strategy involves some proposals for reducing the network, there will be proper consultation before any closures are carried out"
  I know that some of my right hon. and hon. Friends have some doubt about the effectiveness of consultation, especially in regard to some of the proposals that have been made in their constituencies.
  It is all very well to talk in terms of percentages and to say that there will be a 5 per cent. reduction or that the network will remain at 95 per cent. of its former size, but for the area that loses its post office the loss is not 5 per cent. but 100 per cent. For people who depend on the facilities of a post office, such a closure is a serious withdrawal of facilities which makes the service less valuable.
  Why are the Government's financial policies having this effect on the Post Office when it is making a profit? In the first six months of this year, the Post Office made a profit of £40 million. As it usually makes much more in the second half of the year because of Christmas and other factors, it is clearly heading for a profit of more than £100 million. Such a profit is a credit to the corporation's efficiency. When the Post Office is doing a good job for the public by making such a large profit and contributing to the state, why should there have to be closures? For financial purposes, counter services are reckoned in isolation, but they also make a substantial profit—it is likely to be £12 million this year.
  For the answer, we must go back to 1981 when the Government adopted a new approach. The Government changed from paying the Post Office on a cost plus 2 per cent. basis for services provided to Government Departments to what was called an agency services
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  agreement. The new system was introduced in 1982. The new regime sets much more rigorous targets for the Post Office and effectively demands a given level of profit from counter services. The targets have been set at a level which require counter services to be subjected to a major cost-cutting exercise. That necessarily leads to closures when counter services are under pressure because the Government are taking business away from them by encouraging other methods of paying pensions — for example, by direct payments into bank accounts.
  I am not suggesting that the Post Office should be the sole vehicle for payments of pensions and the like, but when the Government are reducing the scope of the work that is handled at the counter it cannot make good sense to impose an especially heavy financial burden on counter services. The targets which have been set for counter services neglect grossly the social considerations that must be involved in the balance of social and commercial obligations. The Government are saying not that the Post Office must staunch losses that have been incurred by keeping a substantial number of post offices open, but that post offices must be sacrificed to reach a level of profitability that the Government have determined. Most of us regard that as quite a different proposition from staunching an outflow of public funds which are subsidising post offices. The Post Office is profitable and to insist on it being more profitable, although that involves closing facilities, seems an entirely wrong set of priorities.
  We know that the Government's actions will result in big problems and that the savings will not be great. I should like to give an example that illustrates the case dramatically. My hon. Friend the Member for Newham, South (Mr. Spearing) pursued with the Post Office the costs in closing eight post offices in the borough of Newham. He was informed, after some correspondence, that the estimated savings from closing eight post offices was £39,000. That represents less than £5,000 for each post office. The total cost of post offices in the borough of Newham is £1·7 million. For less than £40,000, eight post offices are being removed from the scene. I fail to see how that can ever be regarded as a sensible balancing of social and commercial responsibilities. The savings are paltry as compared with the loss of service. I am grateful to my hon. Friend the Member for Newham, South for, as always, pursuing the matter indefatigably and for producing such a good example.
  Our criticism is that counter services are being asked to make too high a contribution to overall profits. The result will be a large loss of jobs and a reduction in services for many people. I am sure that many of my right hon. and hon. Friends and Conservative Members will give examples, drawn from their constituencies, of the social impact of closures. I do not intend to elaborate as I want to enable as many other hon. Members as possible to speak.
  The closures seem to many of us to be part of the relentless process of increasing unemployment and reducing public and community services simultaneously. Not one day, let alone one week, goes by without there being another cut in a community service, thus throwing even more people into the dole queue. The Government do not build, but destroy. They do not open new opportunities for our people, but close facilities that are essential to civilised life. Seldom are they persuaded that they are wrong, and they yield only occasionally to public opinion. This is an occasion for Parliament to speak on a

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  crucial community matter and to act. Many Conservative Members have been vocal in their opposition to post office closures in their constituencies. They have a chance today to speak and to vote. As we know from recent history, there are occasions when Conservative Members do not hesitate to try to influence the Government on issues that are close to their hearts or their sense of self-preservation.
  We are not asking Conservative Members to commit their Government to an outrageous extension of public expenditure. All we ask, and all that this issue requires, is some moderation in the financial targets that are set for the counter service section of the Post Office, even after the adoption of which substantial profits would accrue. It is not much to ask, but it means a great deal to many disadvantaged people. That is why we feel entitled to ask for the support of the whole House for the motion.
  4.18 pm
  The Minister for Information Technology (Mr. Geoffrey Pattie): I beg to move, to leave out from "House" to the end of the Question and to add instead thereof:
  'recognises that the future of the Post Office counters network will depend on its ability to compete successfully by operating efficiently and reducing the costs of its operation while having regard to the social needs of the United Kingdom; and fully supports the Post Office's efforts to secure by these means the future of an extensive and socially responsive network.'
  The Opposition motion states that
  "serious social harm, inconvenience and disadvantage"
  may result from the post office closure programme. The right hon. and learned Member for Monklands, East (Mr. Smith) must not be surprised when I say that, by definition,
  "serious social harm, inconvenience and disadvantage"
  must have applied with equal force to the post office closure programme that took place in the last five years of the Labour Government.
  During the first five years of our Administration 734 net post office closures took place, compared with net closures during the last five Labour years of 1,140. That was 230 a year. Is the right hon. and learned Gentleman saying that post office closures under a Conservative Government cause
  "serious social harm, inconvenience and disadvantage",
  but that post office closures under a Labour Government have a different social effect? Or is he saying that the Labour Government were not responsible for the closures because the earlier Labour Government in 1969 established the Post Office as a separate publicly owned corporation for the purpose of running its own business and with its own board of directors? He would be right, for once, if he were saying that.
  Lest there should be any doubt about the matter, the 1978 Labour Government White Paper on nationalised industries set out the basis of the relationship between Government and nationalised industries, and how Government were to discharge their responsibilities for monitoring and control. It is a bit much for the right hon. and learned Gentleman to wax rhetorical, talk about closures and about the Government destroying parts of the framework and infrastructure of Britain. I have just given the figures for post offices. If my right hon. Friend the Secretary of State for Social Services were to give the figures for hospitals, it would be apparent that far more
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  hospitals were closed under the Labour Government than under the Conservative Government, and if today we were having the debate that is so strongly desired by the Opposition that they will not select in their own time—the debate on the miners' dispute—it would become apparent that more coal mines were closed by the Labour Government. Who, then, is engaging in closures?
  Mr. John Smith: Our argument is that the adoption of new financial targets in the agencies services agreement is the reason for the closures and is a point of departure from policy by this Government as opposed to previous Governments. The Minister knows that "cost plus 2 per cent." was replaced by new rigorous targets. Does the Minister deny that the closures are caused by the agencies services agreement and the new targets for counter services?
  Mr. Pattie: Yes, I do. In 1982–83 the so-called agencies services agreement came into operation. It does not mean a change to a system that requires a mark-up in the services provided for Government Departments. It presupposes real unit reductions consistent with the Post Office's efficiency target. That means that greater efficiency requirements will be made of the Post Office. The agreement does not require a mark-up. The counter network will reduce real unit costs consistent with the whole business target of a real unit cost reduction of 5 per cent. over the three years from 1982 to 1985.
  Mr. Harry Ewing: No doubt the Minister is pleased with himself for making the clever point about closures under the Labour Government. Does he not understand that the closures were part of an agreement with the unions involved and the public, which was entered into to bring about postal mechanisation? The complaint now is that, the postal mechanisation programme having been completed and the jobs having been surrendered, the workers and the public are being stabbed in the back by the Government who are breaking that agreement.
  Mr. Pattie: The Post Office workers are not being stabbed in the back by the Government, or by the Post Office Corporation. Since the establishment of the Post Office as a separate corporation in 1969, no Government have had the power to intervene in the day-to-day decisions and workings of the Post Office. It is interesting that the hon. Gentleman talked about modernisation because in today's Financial Times there is news of a new cash machine network which is to be launched, and which has various partners, including the National Girobank. What is being sought is not mere accounting efficiency and returns, but ever-increasing operating efficiency so that the Post Office can compete.
  It is important to remind the House that, even after the contemplated programme of closures is completed, there will be the largest retail network of any sort in the country. It will involve 21,000 sub-post offices and 1,567 Crown offices. I shall not make the international comparison to which the right hon. and learned Gentleman alluded, because such comparisons can be misleading.
  I share the right hon. and learned Gentleman's belief that many hon. Members will wish to intervene to cite examples from their own constituencies. I imagine that there is hardly a constituency that is not affected by the programme, and mine is no exception. Hon. Members will

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  tell us of the difficulties that certain individuals have in getting to post offices. When the Opposition use the phrase "serious social harm"—
  Mr. John Smith: That is what it is.
  Mr. Pattie: I disagree. I am not aware of any products or disbursements of benefits that cannot be disbursed and made available over a post office counter to anyone authorised to act on behalf of a recipient of such a benefit, usually the elderly, infirm and disabled. There are thousands of arrangements of that sort. Throughout the country in the 21,000 sub-post offices and the Crown post offices people draw benefits for other people. The closure programme focuses on urban areas, not rural areas. So long as there are other shops or meeting points in a local community that people can regard as a social meeting place, there will be no serious social harm.
  Mr. Charles Wardle: Is my hon. Friend aware that in my constituency, which has the highest average-aged population in the European Community and where there is therefore an extremely high weekly collection of pensions, there is a proposal to close a sub-post office in Sackville road? Is he further aware that the chairman of the Post Office and senior management have taken a personal interest in the consultation process to ensure that the interests of the many elderly people in the town are adequately safeguarded? Does he agree that that is a clear example of the Post Office's determination to ensure that its social function is properly attended to?
  Mr. Pattie: I am grateful to my hon. Friend, who is right to say that all closures are considered carefully, in many cases by the chairman of the Post Office in person and by his staff.
  The right hon. and learned Gentleman cast some aspersions on the consultation process. Although it is not a statutory requirement, in at least 10 per cent. of the cases where representations were made the decision was varied. That shows that the process is not a charade. The chairman and the Post Office board would resent any suggestion that it was a charade, because all representations are considered seriously.
  Mr. Frank Field: May I ask the Minister about his representations? When he was told about the closures, did he not believe that they may have a major social impact? If he thought that, did he communicate his views to the Post Office? If he did, what guarantee was he given that there would not be the impact that the Opposition believe there will be?
  Mr. Pattie: I did not believe that there would be such a social impact. Therefore, I did not make representations along those lines. I had to satisfy myself that the Post Office's proposals, which meant that 21,000 sub-post offices and 1,567 Crown offices would remain, would leave the network in an effective condition. Once I was satisfied on that, I accepted the proposals. The Post Office alone decides on its operating requirements.
  Mr. George Park: Will the Minister give way?
  Mr. Pattie: I shall be happy to do so, although I bear in mind what you said, Mr. Speaker, about many hon. Members wishing to speak in the debate.
  Mr. Park: The Minister has got it the wrong way round. Did the Government say to the Post Office, "Your
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  profits must be 4 per cent. instead of 2 per cent. and you must meet this?" From my correspondence with Ministers I have learnt that they said, "We set the targets and it is up to the Post Office to implement them." How could the Minister make representations after doing that?
  Mr. Pattie: I was asked by the hon. Member for Birkenhead, (Mr. Field) to say whether I shared his view and the view of the Labour party that there would be extensive social damage. I told him that I did not. However, I understand, as does the Post Office, that it cannot close post offices anywhere without causing some inconvenience and increased cost to those who must travel further. But neither factor leads to serious social harm.
  The right hon. and learned Member for Monklands, East said that he was worried about the effects not only on Post Office customers, but on staff. I must ask what is best for the Post Office, its customers and staff? Would it help the staff if the Post Office board gave no thought to the efficiency of its operation? What would be the reality of having a post office on every corner? It might be very convenient, but the facility could not be enjoyed for long without someone having to pick up the bill and the entire business being jeopardised. If the Post Office counters network is to operate successfully, it must provide a service that is efficient and effective at prices that customers are prepared to pay. The majority of the business undertaken at counters is work which the Post Office handles on an agency basis for Government Departments, public corporations and local authorities. They use the counters network because it provides a cost-effective way of meeting their requirements. It would be wrong for Departments to be expected to use the network irrespective of the cost of the services provided.
  Therefore, to retain existing business and secure new business, it is essential that the counters network provides an efficient and cost-effective service. In this way, the Post Office will secure a future for the counters business, to the benefit of its agency customers, its staff arid those who use the services. If it fails to follow that path, it will slip quickly into a vicious circle of charging unattractive prices, losing business, having to charge higher prices to cover its costs and, as a consequence, losing still more business. Once it is in that position, the future of the entire network would be imperilled. I cannot believe that the Labour party would regard that as sensible or desirable.
  Mr. Paddy Ashdown: How can the Minister say that the future of the network will be imperilled when the Post Office counters network is making £12·5 million a year?
  Mr. Pattie: I would ask the hon. Gentleman to raise his sights for a moment to the future and to say that the important thing for any business is to ensure that it maintains its efficiency. If it makes profits today, that is fine, but will it make profits next year or the year after?
  Among those who have made representations to my Department about the closures was the Union of Communication Workers, which expressed concern about the implications for its members in Crown post offices. Clearly, the precise implications must be discussed by the union and the Post Office board. However. I understand that the Post Office expects to carry out the reduction in Crown post offices without redundancies. Apart from 12 closures during the past 18 months, the Post Office plans to close between 60 and 70 Crown offices out of a total

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  of 1,567. The reduction is hardly draconian. The House must recognise the important points that I have made about how vital it is to the future of the network and, therefore, to the jobs in those Crown offices, that the Post Office continues to try to improve efficiency.
  As the House will be aware, since 1945, the Post Office has had a criterion of providing post offices at one-mile intervals in urban areas. In 1983, the Post Office instituted a review of the town sub-office network, which showed that against that criterion, despite closures over the years, there was an excess of 2,000 offices. The review also showed that if the Post Office were to limit the urban network to offices that made a financial contribution to central overheads, again, the number of offices was 2,000 more than could be justified. Nonetheless, because of its social obligation, the Post Office decided to restrict the number of sub-offices to be closed to 1,000 or 5 per cent. of the total, with a similar proportion of Crown offices.
  A major reason for the excess over the standard criterion was that changes in the distribution of population had not been reflected in the provision of post offices. That was especially the case in the cities and in some inner city areas that had had substantial reductions in population in recent decades, which were not matched by appropriate reductions in the number of post offices, although many offices had been opened to service new centres of population.
  Reference has been made to the special needs of areas of social deprivation in old inner city areas. Again, the Post Office has taken that into account. For example, during the past 20 years, the population of inner London has decreased by 28 per cent. The reduction in the network is nothing like that, and inner London will continue to benefit from a network of sub and Crown offices that will be about twice as large as it would be if the Post Office standards in existence since 1945 were applied rigidly. It should also be noted that until the Post Office review showed that the great majority of sub-offices in rural areas were run at a loss to the Post Office, for social reasons the Post Office intended no closures there, except where it was unable to find an acceptable sub-postmaster willing to take on the job.
  Mr. Alfred Morris: The Minister mentioned the social reasons for not closing post offices. Is he aware that the managing director of Post Office counter services told me that there would be a facility for a friend or welfare worker to collect pensions or allowances on behalf of the elderly or disabled? He speaks as though social workers grew on trees. It will be impossible for many elderly and disabled people to make arrangements for the collection of their benefits. Is he further aware that post offices are regarded as community centres where information is available? Will he reconsider the entire proposal?
  Mr. Pattie: The hon. Gentleman was not present at the start of the debate, when the right hon. and learned Member for Monklands, East was deploying similar arguments and I dealt with some of those points. In particular, I said that there are many examples of arrangements to ensure that the appropriate benefits are collected, whether by social workers, friends or relatives.
  The Government were informed of the outcome of the closure review and of the Post Office board's subsequent
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  decision to reduce the size of the urban network. In accordance with our responsibility for general policy matters, we considered the proposals and were satisfied that the proposals were not inconsistent with the Post Office's statutory duty both as regards social needs and efficiency.
  The right hon. and learned Member for Monklands, East spoke about serious social harm. This suggestion does not bear close examination. I have already said that the review revealed 2,000 urban offices in excess of the one-mile criterion and 2,000 urban post offices that are unprofitable, as are about three-quarters of the 11,000 rural post offices. A hard-nosed commercial approach would see all or most of these offices closed. The fact that they are to remain open is the strongest possible evidence that the Government and the Post Office both recognise that the Post Office is not simply a commercial organisation but has social responsibilities as well. The Post Office takes these responsibilities extremely seriously.
  Mr. James Couchman: Is my hon. Friend aware that in my tight urban constituency, of the 27 sub-post offices, only one is proposed for closure? That is a quarter of a mile from an under-used Crown office and a quarter of a mile from another sub-post office. Keeping that office open would be taking the social responsibility of the Post Office too far.
  Mr. Pattie: I am grateful to my hon. Friend for that point, which requires no further amplification from me.
  A further illustration of the acceptance by the Post Office of its social responsibilities was its decision—with no prompting from Government or anyone else—to defer all the Crown office closures then under consideration until the effect of the DHSS's dispute was dealt with. Although the strike has now been resolved, it will still be some four or five months before normal service is resumed, and the closure programme will not be reactivated before then. It also decided to defer all sub-office closures where the sub-postmasters concerned were willing and able to remain in business for the same period. The Post Office has acted with real responsibility during this dispute, and unfairly taken criticism for long queues resulting from industrial action in which it had no involvement.
  I pay tribute at this point to the dedication and hard work of the counter staff, who have had to endure many months of an appalling increase in their workload because of the cynical and unjustified strike at the DHSS offices in Newcastle.
  I have referred to the Government's recognition of the role that post offices play in the social life of the country, a role that has been recognised by previous Governments and is reflected in the legislation. I have also made it clear that this Government, like their predecessors, also recognise the commercial nature of the business, and this too is covered in the legislation. I think that it would help the House if I set out the statutory position on the Post Office's duty, and correct the misleading impression which the right hon. and learned Gentleman has given by his selective interpretation of the relevant provision.
  Mr. Eddie Loyden: Is not the Minister ignoring the fact that the role of the Post Office has changed dramatically in the post-war period, year by year? Post offices have now become an outlet for the

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  payment of benefits, and there is a clear responsibility on Government to see that that provision is made. If it is not made by the Post Office, some other agency should be taking up that responsibility. When this matter has been raised, the DHSS, which has prime responsibility for the distribution of benefits, has appeared not to be interested. Traditionally, this has always been a matter for the Post Office, so it is nonsense to say that these closures will not cause social difficulties and hardships. The Minister should visit post offices where sometimes queues for benefit payments extend for 20 or 30 feet outside the post office. What will happen in the future if further closures—
  Mr. Deputy Speaker (Mr. Harold Walker): Order. Interventions should be brief. Many other hon. Members are waiting to take part in this debate.
  Mr. Pattie: I am probably unwise, Mr. Deputy Speaker, in that, in seeking to assist the House, I gave way perhaps more frequently than I should do, although I was aware of Mr. Speaker's injunction to keep speeches brief as many hon. Members wish to speak in this debate. With your permission, Mr. Deputy Speaker, I shall restrict myself to not giving way any more.
  Section 59(2) of the British Telecommunications Act 1981 imposes on the Post Office, in providing its services, a duty to have regard to the social, industrial and commercial needs of the United Kingdom and to efficiency and economy. The Labour party has chosen to ignore the requirements as to efficiency and economy. The right hon. and learned Member for Monklands, East referred to efficiency and economy.
  Mr. John Smith: I did not mislead the House.
  Mr. Pattie: I did not say that the right hon. and learned Gentleman had misled the House. I should think long and hard before saying that.
  I make no apology for the fact that the Government, like their predecessors, look to the Post Office to satisfy its statutory duty as regards efficiency and economy—just what the right hon. and learned Gentleman would—just as we look to it to satisfy the requirement as to social needs. The right hon. and learned Gentleman has accepted the economic requirement, and we all know that it was established originally by a Labour Government in the 1969 Act. He has rightly said that conflict clearly arises between satisfying the social requirement on the one hand and the efficiency requirement on the other. A post office on every street corner might satisfy social needs but would not be efficient or economic.
  In formulating its plans and policies, the Post Office's statutory duty requires it to seek to strike an often difficult balance between the social needs of those whom it serves and the need for reasonable economy and efficiency. It will always be a matter of judgment whether in any particular case it has got the balance right. As I have explained, our judgment was that the Post Office's proposals for the urban counters network were not inconsistent with the Post Office's statutory duty.
  However, that is the extent of the Government's involvement. My Department has received a very large number of representations against specific closure proposals, as have other Ministers and my right hon. Friend the Prime Minister. I hope that I have made clear to the House why the response in all cases has been the
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  same. That is to say that the Government are not involved in specific closure proposals and have no power or desire to intervene. I am sure that many hon. Members will give us details about their constituencies, but when my hon. Friend the Under-Secretary of State for Trade and Industry replies to the debate the answer will be exactly the same.
  The need for the Post Office to respond to competition is reflected in the Post Office announcement of a network of 180 automatic telling machines, which, in time, will be part of a much larger network provided by it and its partners. Response to competition is why the Post Office is so keen to come forward to the Government with a programme of counter automation this spring.
  That also is why the Post Office wants to modernise its premises—so that it can compete. However, it cannot afford to do this if it continues indefinitely to provide a network that remains so much in excess of standards that have existed for 40 years. It was absolutely right that the Post Office should publish the facts so that we could understand what it was doing to provide a viable modern network for the future.
  It has been claimed that the Post Office has only had to consider closing post offices because of Government policies, which have taken work away from the counters network. This is another assertion that does not stand up to examination. It is of course a feature of the counters network that it is an operation that has high fixed costs and the economics of running it depend heavily on the volume of business that is undertaken.
  When the Post Office put its proposals to us, these included its intentions to consult the National Federation of Sub-Postmasters, the Post Office trade unions and the Post Office Users' National Council. It also confirmed that individual closure proposals would be subject to the existing code of procedure agreed with POUNC, which provides for consultation with local interests before final decisions are made to close an office.
  Mr. Max Madden: That is a sick joke.
  Mr. Simon Hughes rose—
  Mr. Pattie: I shall not give way. Had the hon. Gentleman been here earlier, he would have heard me say that I had given way consistently and was not prepared to do so any further.
  I am aware that criticisms have been made about—
  Mr. Hughes rose—
  Mr. Pattie: I said earlier, whether or not the hon. Gentleman heard me aright, that over 10 per cent. of the proposals that have been examined have resulted in the decisions being varied. It would be something of a slur, which I am sure that the hon. Member for Bradford, West (Mr. Madden) did not intend, upon the Post Office board and upon the senior personnel of the Post Office to suggest that the consultation process, which is not a statutory requirement, is a charade. I know that the hon. Member is not saying that.
  Mr. Madden: I am. I said that it was a sick joke.
  Mr. Pattie: The hon. Member is, then, saying that. It is most unworthy. He now says that it is a sick joke. I have told him that over 10 per cent. of these consultations result in the decision being varied. It means that if consultation

  1003
  had never taken place there might be some substance in what the hon. Member is saying. The fact that the Post Office has withdrawn proposals in a number of cases demonstrates that it listens to local views. If anybody is open to reason, that must dispose of the suggestion that the consultation procedure is a formality in advance of a foregone conclusion.
  I repeat that when the Post Office told the Government about its proposals for reducing the size of the urban counters network we were satisfied that they were not inconsistent with the statutory duty of the Post Office. In undertaking the review and in framing the proposals for closures the Post Office is looking to improvements in the efficiency and cost-effectiveness of the counters network and to securing its future. This exercise must be to the benefit of the community. The Government fully support the Post Office in these efforts.
  4.51 pm
  Mr. Roy Mason: I was very disappointed in the Minister's speech. He had a cold, unemotional script. He did not appreciate the problems faced by our communities. He gave the impression of not understanding what is happening in the towns, boroughs and rural areas of Great Britain.
  I was disturbed and sorry to note in the press of December 1983 a report about the future of town sub-post offices. The report said that more than 1,600 post offices faced closure as a result of an internal review undertaken by the Post Office. The review was to examine the profitability of town sub-post offices and main post offices. Internal minutes of the September meeting of the Postal Business Joint Council revealed that the study concluded that 1,609 of the 9,533 town sub-post offices should be closed if the Post Office insisted that they all made a profit. We all know that the review was forced upon the Post Office as a result of the tough financial targets set for the service.
  The Post Office is now specifically looking for loss makers. It is the profit test. Profit, not need, is now the theme. I never thought, as a former Postmaster-General, albeit for a short time, that I would see the day when the profit motive would be determining the existence and future of our sub-post offices. When I was Postmaster-General I was imbued with the spirit that the Post Office cares. All my civil servants cared about the rural post offices, the country pillar box, the rural telephone kiosks. They cared about the service that they provided and they were proud of it. That caring rubbed off on me. That is why I intervene briefly today. However, the profit motive can never be the test of country or rural sub-post offices. Nor should it be the test where a case of need exists and is seen to exist in a town sub-post office. This is a harsh streak in Post Office policy now, emanating from the Government's monetarist policy which is already causing distress to many thousands of people who are sorely in need of help but who, by the Post Office closure decisions, are being denied that help.
  I raised the case for the survival of the Union Court sub-post office in Barnsley. The postmistress was about to retire. The postmaster and the chairman of the Post Office used the words "seizing this chance" to close it. That is the language of the profiteer. It is not the caring Post Office that I used to know. The head postmaster in Barnsley
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  informed the interested parties that because the postmistress had tendered her resignation he had formed the view that Union Court could close and that the needs of its customers could be adequately met elsewhere, naming Dodworth road sub-post office as an alternative as well as the town's main post office. The mayor and the councillors met the postmaster and explained the harshness of his decision. The alternatives meant a long walk along hilly terrain for pensioners, with no bus service to cater for them, negotiating traffic through the town, the difficulties of the winter months and the persistent queues in the town post office and a counter service where people queue for 20 minutes for any service at all. Their protest was long and it was loud.
  But why all this fuss? Why did the entire town council express opposition to this closure? There was a petition that contained 1,800 signatures in opposition to the closure. There was a demonstration of opposition by pensioners and disabled people outside the general post office. There was a major intervention by Age Concern in Barnsley and district, because this post office was right in the centre of a housing development that was built mainly for pensioners and disabled people, all within 100 yards of the post office. Around the post office are flats and maisonettes just for these people. The fact is that 138 pensioners from nearby high-rise flats use this post office, and eight out of 10 of the disabled and elderly people who live there depend upon it.
  This was a special case. The post office was built with local authority assistance. It was custom built, because of the circumstances. It was opened only in 1969 because of the special needs at that time. Since then there has been more development. The local authority is building another 28 dwellings to house 58 aged and handicapped people in the immediate vicinity. The local authority made the appraisal that this post office was an absolute necessity. It would be handy and convenient because of the preponderance of old people in the area. It was a sensible, caring decision. It was caring based on need. That is why we have had over 50 years of unbroken Labour party local authority in Barnsley. It is because the local authority cares.
  Nevertheless, the postmaster and the chairman of the Post Office ignored all pleas from all quarters and went ahead with the closure. The mayor, echoing the feelings of the townspeople, said:
  "It is an inhuman decision taken with callous disregard for the needs of the elderly and disabled living in the area".
  Even the housing director issued a statement, saying:
  "It seems very unreasonable to me, the council having gone to such considerable capital expense, that the post office should unilaterally withdraw their facility".
  So much for consultation with the postmaster and the chairman of the Post Office. These were all storms of genuine protest from all sections of the community. Everybody but the head postmaster believed this closure to be an outrage. The image of the caring, compassionate Post Office service in my town has been blighted. The community will never have the same faith, trust and confidence in the Post Office again.
  But that is not all. Since that closure one of the alternatives quoted to us all that could be used, namely, Dodworth road sub-post office, has now been given its notice to close. Indeed, I have no doubt that but for the Newcastle computer strike it would have been closed by now, or we would be once more in the midst of a battle

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  to save it. However, let the Post Office and the Minister beware that that is yet to come. All over the country there are skirmishes and battles taking place to try to preserve the social role of the Post Office. The point is that 157 sub-post offices closed in the year ending March 1980; 162 in 1981; 62 in 1982; and a further 98 in 1983, most of which have been contested by local people.
  The differences between the closures when a Labour Government were in office and now is that need was then recognised. Now it is profit that is recognised. Why should the Post Office be so heartless when the half-year gross profits for 1984–85 are £40 million? Gross profits are therefore running at an annual level of £80 million. The profits are so high because community need is now being neglected. The Post Office is losing its social conscience. That is my sad conclusion.
  My Department will be feeling sad and sore at this most invidious predicament in which it finds itself. For the first time that I can remember the British Post Office is being blighted throughout the land because it is being forced down the path of profit and efficiency to the complete disregard of its social, caring and human qualities.
  The Government will no doubt reap their electoral reward through all those people whom they have hurt. That time will not be long and when it comes those people will be able to register their national disapproval of the targets that have been set by the Government to force the Post Office down this callous and cruel road.
  5 pm
  Mr. Conal Gregory: Both the substantive motion and the amendment refer to the economic and social aspects of the Post Office's work. I appreciate that the Post Office cannot be treated exclusively as a commercial organisation. and therefore it is right that today we should debate one aspect of its policy. Who is the biggest customer of the Post Office? It is the taxpayer, through the agency of Her Majesty's Government. Efficiency with a social heart should be the watchword of today's debate.
  My constituency of York has experienced the closure of three sub-post offices since my election. Those closures illustrate the specific nature of the debate. The Post Office plans to close some 500 post offices nationally in this financial year. It tells the local authority of any office proposed for closure to allow views to be made known. That is well and truly putting the cart before the horse.
  The Post Office has seen a decline in its agency work performed for the Government. If it continues to reduce counters, there may well be demand for offices in building societies and clearing banks to take on the agency functions such as cashing pension allowances and family benefit. But the elderly population relies on state pensions.
  The Post Office has given an assurance that 95 per cent. of the network will be maintained over the next three years. I have been pleased to learn from the managing director of counter services that the policy to close sub-post offices in urban areas that are within one mile of each other is not rigid. My hon. Friend the Minister for Information Technology referred to a flexibility there. I chose not to join all those hon. Members who intervened, but he did not say where the criterion of one mile came from. Is it because the Post Office's compass works on local geography of one mile? I have not heard a justification for that and I should like to hear it in due course.
  1006
  How much credence can one attach to the Post Office's statement that
  "Each closure proposal is made after full consideration of the economic and social factors"?
  I should accept that if the Post Office had consulted the professional people involved—the social workers and voluntary agencies such as Help the Aged, Age Concern, and so on. But in the examples that I am about to come to the social workers and professional people involved were not consulted. The Post Office suggested that the local authority, if it deemed fit, should contact those agencies.
  Mr. Chris Smith: The hon. Gentleman may care to reflect on an answer that the Under-Secretary of State for Trade and Industry gave to an Adjournment debate on 9 March 1984 when I raised the question of the one-mile interval. Referring to the Post Office, he said:
  "This, it believes, is representative of the fair balance between the service that its customers would like and the costs involved." — [Official Report, 9 March 1984; Vol. 55, c. 1156. ]
  Does that not reveal that we are back at the same old formula that the Minister came out with earlier today about service and cost, with cost predominant in the thinking of the Government and the Post Office?
  Mr. Gregory: I well recall reading that Adjournment debate. We are back to the difficult matrix between the social philosophy and the economic aspects to which], and I am sure other right hon. and hon. Members, will return.
  If we take into account not only the distance but also the type of terrain, which may be important in the case of a community home, the alternative facilities, local transport, future plans for the development of the area, and the ability of other offices to absorb the additional business, we can see that a complicated formula faces the Post Office.
  Let me refer to three examples from my constituency which illustrate those factors. Poppleton road in York illustrates the agency business. That has now been closed by the Post Office following, as at so many sub-post offices, the retirement of the postmaster. The business was relatively small and the number of pensions dealt with had fallen by some 6 per cent. to about 346 a week and family allowance payments had been reduced by 12 per cent. to 219 in the years 1982–83. But—this is an important factor to bear in mind when considering the elderly, the disabled and the young mother with children—it meant a one-and-a-half-mile round trip to the alternative post office.
  Cromer street serves some 8,200 inhabitants in York, of whom 1,335 are elderly. It is in a primarily residential shopping area and is certainly disadvantaged. In that catchment area over 900 people claim housing benefit and 229 claim rent allowances. Clifton sub-post office, the alternative, lies about one mile away, but that involves crossing a busy main road. That is another factor that the Post Office management needs to consider seriously. Crichton avenue sub-post office is some 740 yards away.
  If the post office in Heslington road is closed. as has been proposed by the postmaster, the elderly will have to cross the heavy traffic at Barbican road, Lawrence street and Foss Islands road, which are en route to the proposed alternative of Walmgate sub-post office. We are talking about 6,500 people in that catchment area.

  1007
  I appreciate that hon. Members may not be able to follow the detail of this but the argument two years ago for the closure of another sub-post office at Lawrence street was on the basis of its proximity to Heslington road. Now that the Heslington road office is to be closed we are seeing the decimation of the urban area of the fine medieval city of York.
  People prefer to collect their own pensions rather than make alternative arrangements with neighbours and managers of community centres, relying upon the good will of other people.
  At no stage has the Post Office in any of the three examples that I have given, given any economic justification either in private to me or in public. Are they making a profit or a loss? I am sure that the people not only of York but nationally would like to know. It is understandable that the postmasters are attracted by voluntary redundancy when sums of about £17,000 are offered as an inducement. In Yorkshire more have applied for redundancy than there are offices proposed for closure.
  Why is there not more adequate consultation? Will the professionals and volunteers in the field, whom I have mentioned, be consulted at a much earlier stage when considering effects? Surely in any proper evaluation the consequences should be taken into account. Should we not look at the role of market research? The customer rather than the bureaucrat must come first, especially as the Post Office recorded a pre-tax profit of £40 million in the half year to September 1984.
  By all means encourage the Post Office to attract new business, modernise its services and buildings and allow marketing, not rigidity, to rule. Some sub-post offices are prohibited from selling postage stamps and other services before the clock strikes 9 am. If they want to open earlier and sell newspapers, why on earth should they not? That would prevent people being driven from their local post offices. It is a curious aspect of local service that I would commend and it would lead to a better future for users, particularly the elderly, the disabled, the infirm and young parents.
  The briefing document "The Post Office Counters Network: A Strategy for the Future", published in May 1984, concludes that
  "there is a fine balance between meeting social needs and the statutory requirement to run an efficient service".
  The proposals for York fall far short of that criterion. They do not display the flexibility referred to by my hon. Friend the Member for Chertsey and Walton (Mr. Pattie). Senior Post Office management should have greater social awareness and care within the exciting possibilities offered by new technology.
  5.10 pm
  Mr. J. D. Concannon: I do not think there is any need to go into all the detail that has already been covered by my right hon. and learned Friend the Member for Monklands, East (Mr. Smith) and by my right hon. Friend the Member for Barnsley, Central (Mr. Mason). We have to try to explain to the Minister what it is like in the real world outside. There have always been closures of post offices. In areas like mine, when the Co-operative used to run the shop on the corner, it doubled as a post office. With the rationalisation of the Post Office there have been closures. A post office was opened on a new
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  estate in my constituency recently, so negotiations can work both ways. I have had meetings and discussions with the head postmaster for Nottingham and I have no complaints about my negotiations with the Post Office.
  Last year I was surprised when I was notified that four sub-post offices in my area were to be closed. The local council and I said immediately that we wanted negotiations with the postmaster. Before the negotiations took place the matter was covered in the local press. Suddenly I found out that the people who were running the post offices had already been contacted by the Post Office. I was told that redundancy had been offered and accepted. Therefore, I wondered if it was all a fait accompli. Then I had a phone call from one of the sub-postmasters saying, "I know you have to do your job, but do not do it too well and do not be too successful." I had to tell him that, although I might sympathise with his position. I had to think about the social consequences for the people who use the post offices.
  I should like the Minister to explain where he gets the 10 per cent. variation. Three of the post offices proposed for closure in Mansfield feed directly to the general post office. The local councillors and I had a good meeting with the postmaster. However, I suppose it takes a poacher to catch a poacher. It was not long before I found myself in a Chinese bargaining position. All of us who have bargained in the trade union world know what that is. If the authorities want to close three post offices, they say that they want to close four. It is so obvious that one should not be included that at the end of the day they can give a victory on that one.
  We got our victory, but three are still to be closed. Unfortunately, those three feed on to the general post office. In the discussions I think the postmaster agreed that the facilities at the general post office in the centre of Mansfield leave a lot to be desired. At Christmas, in the foul weather and driving snow that we have had recently, there have been queues outside the general post office, even before the others have been closed. This must not be taken as a reflection on the staff of the general post office. Facilities in that post office cannot cope with business now, never mind what will come from the post offices that are to be closed.
  We had our victory. The postmaster was very good. He listened to all our complaints. Then he went away, got out his little wheel and walked down into the centre of Mansfield. It is downhill all the way from Victoria street, one of my areas; then one has to cross a busy main road. The postmaster is a fit young man in his forties or fifties. The general post office in Mansfield is on the lowest ground and it is uphill from it in any direction. Victoria street is in one of the older established areas and needs a post office. I am told that the post office there must be closed. I could have understood the argument about the closure of some of the sub-post offices if the general post office could take the extra workload, but it cannot conceivably cope with any more business.
  I am sorry for the postmaster in Nottingham. Those in charge will suffer the brunt of the wrath of the people. I had not been at the meeting in Mansfield town hall long before I realised that a Government Minister should have been there to answer for the Government. The blame for these closures can rest only on the decision of the Government and not on the Post Office. Once again, because of the actions of the Government, it will be the weaker sections of society who will suffer most. I hope

  1009
  that Government Back Benchers will not just voice their opinions but will vote according to their opinion to try to shock the Government into carrying out their responsibility properly.
  5.16 pm
  Mr. Richard Alexander: It has been difficult to secure this debate, partly because these days no Government Minister takes day-to-day responsibility for the decisions of the Post Office and also because it is hard to call the Post Office itself to account for its day-to-day decisions. It is closing two excellent little sub-post offices in Newark. The decision is causing widespread concern, anxiety and resentment.
  These emotions are held against a background of seriously deteriorating service in the Crown post office, such as the right hon. Member for Mansfield (Mr. Concannon) has described in his constituency. Queues often stretch into the street. The chairman of the district council, as an exercise, went into the post office recently to buy stamps. It took 40 minutes between going in and coming out for him to get a book of stamps. Yet the head postmaster in Nottingham has told me in correspondence that the decision to close the sub-post offices can be carried out without undue hardship to his customers. I tell him that he is wrong.
  It is the elderly, the handicapped and the mothers with young children who are not so mobile who will have to trudge to the Crown post office. They will have to swell the queues. The Crown post office will not be able to cope. I am astonished that the Post Office is willing to contemplate the resulting hardship.
  I listened with great care to what my hon. Friend the Minister said about dealing with the hardship. He said that the elderly or the handicapped can find a friend to go to the post office for them. Perhaps some can, but many elderly people live on their own in total, splendid isolation and they are proud, private people. Their families have gone. They do not have the close friends that they can trust with their personal affairs. It is just possible that a social worker will come on the scene, but generally the change will cause hardship to many elderly people. It was particularly galling for them just before Christmas when it was announced that the sub-post offices were to close, because there was a lot of advertising on television showing smiling old ladies popping into their post offices, collecting their money and savings within a few seconds, and sweetly coming out very happily. The grim reality of the Newark Crown post office and of others in Britain bears no resemblance to some of that advertising.
  We are told that the Post Office wants to cut its costs. Let it cut out unnecessary and misleading advertising for a start. From time to time we receive glowing reports from the Post Office. Indeed, we received a report this week called "News Review", dated January 1985. We are told that there is a "World First for Intelpost" — whatever that may be. We are also told that there are
  "Girobank Postcheques for Corporate Customers."
  Perhaps one day we will receive a report saying "Average waiting times in Crown post offices cut to five minutes. Sub-post offices extended throughout the country." I urge the Post Office to cut out all that frippery, to put its stodgy Crown post offices into the 20th century and to bring back 19th century standards of service, courtesy and speed for its customers.
  1010
  Crown post offices would not be convenient for all, even if they could get in and out of them promptly. Often the post office is bang in the centre of town, and customers find it almost impossible to park nearby. The bus station is generally well away from it.
  Although the technology might be fantastic at the rarefied level of international business, the plodding clerking that goes on in the Crown post offices remains a disgrace. A person still cannot buy a pound's worth of stamps in a slot machine and walk away. The technology in the Crown post office is generally nil. Yet, as the right hon. and learned Member for Monklands, East (Mr. Smith) said, in the last half year the Post Office made £40 million before tax. The right hon. and learned Gentleman asked, and regrettably my hon. Friend the Minister did not answer, why, if the Post Office has that money—and there is no reason to suppose that it will not have another £40 million after the next half year—it decided to cut the number of sub-post offices despite the hardship that that will involve? I hope that my hon. Friend the Minister will deal with that point. Only some of that £40 million need be used to keep open the sub-post offices instead of going in for the international computerisation that we have heard about.
  People want a nearby, friendly, safe service. That is all that they ask for from their post offices. Old people do not want a pile of leaflets stuffed in front of them whenever they go into a post office. They want prompt service, and a smiling helpful face. They find that helpful face in the sub-post office. Without any disrespect to those who work in Crown post offices, it must be said that, as they are busy, they cannot be so helpful or friendly to the many people who need help.
  I suggest to my hon. Friend the Minister that, if we are to close anything, we should think of closing the Crown post offices and of building up the sub-post offices. But, of course, the Crown post offices are virtually a nationalised industry and are not responsive to customer demand or need. They certainly could not do much worse under private enterprise than they are at present, and even most Opposition Members will perhaps agree with that.
  The decision concerning my constituency is a disgrace. It has been taken against clear evidence of hardship for the least fortunate—those who are least able to cope and those who need help most. Life for them will become more grim and more harsh as a result of that decision. That should not be happening in a caring, civilised community.
  5.25 pm
  Mr. Harry Ewing: I begin by declaring my interest, being the only Member of Parliament to be sponsored by the Union of Communication Workers. Together with my right hon. and learned Friend the Member for Monklands, East (Mr. Smith), I had the pleasure—I suppose that some would say the doubtful pleasure—of receiving outside the House a petition that contained more than 150,000 signatures complaining about the proposed closure of 700 sub-post offices and 70 Crown post offices.
  The hon. Member for Newark (Mr. Alexander) spoilt a good speech towards the end by suggesting that the Crown post offices should be closed. Of course, their closure would be just as big a disaster as the proposal to close the 700 sub-post offices. It would be wrong to assume that, as no Minister takes day-to-day responsibility for the Post Office, Ministers do not have a hand in what

  1011
  goes on. If we thought for a moment that the Government did not have a hand in these proposals, we would not have raised this subject for debate. But we not only think but know that the Government are behind the proposals to close the Crown post offices and sub-post offices, and that is why we decided to initiate a debate on this important subject.
  There was an interesting forerunner to this debate. The hon. Members for South Hams (Mr. Steen) and for Rugby and Kenilworth (Mr. Pawsey) raised points of order because the closure of the post office in the House for perhaps an hour or two caused them great inconvenience. But the proposed closures will cause great inconvenience to hundreds of thousands of people, because those post offices will be closed not for one or two hours but permanently.
  I was bitterly disappointed that the Minister should seem to say that later tonight his ministerial colleague would virtually tell hon. Members that they were wasting their time in holding a debate, because the Government had made up their mind that the closures would go ahead. That was a very distressing attitude for the Minister to adopt.
  Mr. Pattie: I was attempting to make it clear that because the Government had no responsibility for the details of individual closures—the merits of one street versus another—any such representations would receive the same answer as we have already given in correspondence.
  Mr. Ewing: I am grateful to the Minister for making that clear, but I intend to show that the Government have responsibility and authority, even in the case of individual closures.
  I wish to put on record my disagreement with the Minister about the number of closures that took place under previous Labour Governments, particularly between 1974 and 1979.
  One of the legitimate complaints of the Union of Communication Workers, which has a vast membership in the Post Office, is that the closures which took place between 1974 and 1979, and, indeed, later in the early years of the incoming Conservative Government, were part of the postal mechanisation programme. In the process of that programme, 1,700 postal officers posts went by agreement. These closures were part of an agreement made between the Union of Communication Workers and the Post Office as part of the postal mechanisation programme with effects on job security and the continuation of the Post Office counter network as we know it. The complaint of my union is that that agreement is being thrown overboard. Those workers had pledged themselves to modernise the industry.
  I disagree with the hon. Member for Newark who suggested that we should take the Post Office back into the 19th century. Some of us have fought long and hard to drag it out of the 19th century. Workers who fought long and hard and who co-operated in bringing the Post Office out of the 19th century into the 20th and 21st centuries are now being betrayed.
  The members of the Union of Communication Workers who are employed in the Post Office feel that they have been betrayed by the Government and, to a certain extent, by the Post Office as a result of these proposals, although
  1012
  there are mitigating circumstances in the case of the Post Office in that it has no control over the external financial limits imposed on it by the Minister acting on behalf of the Treasury.
  One of the problems that the Post Office faces at present and will face in years to come is the requirement to meet the external financial limits imposed on it by the Government. The Post Office has mistakenly come to the conclusion that the only way in which it can meet these external financial limits is by closing 700 sub-post offices and 70 Crown post offices. The Minister states that even after those closures the Post Office will still have the largest retail network in comparison with any similar organisation in the country. That is true. However, that will be so only until the next round of closures because, judging the Government on their record, what we are debating tonight is only the beginning. While we are worried about the present proposals, we are also worried about what will ensue.
  The Post Office is working under the severe handicap of the external financial limits that are placed upon it. The social responsibility of the Post Office is written into the British Telecommunications Act 1981, as are the Minister's powers. Section 60 of the Act provides that the Secretary of State has powers to give directions to the Post Office. That the Minister is currently failing to do. He is not giving any direction to the Post Office in response to the representations that are being made by the public and by hon. and right hon. Members on both sides of the House.
  I deal next with two constituency points. I recognise the point that was made in this respect by my right hon. Friend the Member for Barnsley, Central (Mr. Mason), a former Postmaster-General. In my constituency of Falkirk, East I had notification that two sub-post offices were to be closed, one in Grangemouth and one in Bo'ness. The difference in the attitude of the two head postmasters in different areas — and I suspect that this goes on throughout the country—would have to be seen to be believed. To deal first with the Bo'ness closure in a small part of the town called Grangepans, when the head postmaster of West Lothian wrote and informed me that the office was to close, I requested, and subsequently had, a meeting with him. I did not need to go to his head office, which is in another part of West Lothian, but he willingly came to Bo'ness where we met. I persuaded the head postmaster that it was necessary not only to consult the local authority but also to speak to community groups such as young mothers' clubs and old-age pensioner organisations.
  I wish to place on record my thanks to the head postmaster of West Lothian, who met all the community groups that asked to see him. As a result, he changed his mind and the decision to close the sub-post office in Bo'ness was reversed. I pay tribute also to the sub-postmaster, because, as was stated by my right hon. Friend the Member for Mansfield (Mr. Concannon), the sub-postmaster had in his pocket an offer of £20,000 to give up the sub-post office. He too joined the decision to reverse the closure for which I pay tribute to him.
  With regard to the proposed Falkirk closure, the head postmaster of Falkirk wrote to me. He consulted only the district council. He did not bother to consult the old people's organisations, the young mothers' clubs or any other group. The users of the sub-post office which he intends to close were never consulted. He stuck to his

  1013
  original decision: the Oswald avenue post office, Grangemouth, according to the postmaster of Falkirk, is surplus to requirements and will, therefore be closed. The people who use that post office will have to walk not one mile but something like two or three miles across busy main roads. That illustrates the difference in approach of various head postmasters which I suspect is to be found throughout the country.
  I return to the central theme of the debate which was set by my right hon. and learned Friend the Member for Monklands, East in opening the debate. The Union of Communication Workers has a proud record of cooperation in modernisation. As I said earlier, we gave up 1,700 jobs in order to bring the Post Office into the 21st century.
  The union and the Opposition do not intend to sit back and take the closures as if they mean almost nothing. They cause genuine social hardship. The Minister has failed singularly to understand or to appreciate the social hardship that they entail. For that reason, I know that my hon. and right hon. Friends who have at heart the concern of the people who use the post offices will vote enthusiastically to seek to impress upon the Minister that he has a duty and can use the powers contained in section 62(1) of the British Telecommunications Act 1981. He can give directions to the Post Office. He is not at liberty to hide behind the coat tails of Ron Dearing or of any other member of the Post Office board. He is the responsible Minister. We ask only that he accept his responsibilities.
  5.37 pm
  Mr. Roy Galley: As a former employer of the Post Office, it may be appropriate for me to declare an interest, however obliquely, in the matter before the House. Having taken a view as a manager, and more sharply now as a consumer, I hope that I may have a balanced view of the issues under debate.
  The Opposition motion, which seeks to blame Government directly for sub-post office closures, is arrant nonsense. It stretches logic rather too far to complain about the level of profit in order to complain simultaneously about the stringency of Government targets. One has to have a degree of balance about the management of post offices.
  It has been a remarkable task over a decade and a half to transform a Civil Service department into a commercial body with not a little agony and with great credit upon the people who have worked in that organisation. It must be a relevant consideration that we have one of the most compehensive post office networks in the world.
  Mr. Nigel Spearing: At the moment.
  Mr. Galley: And even after these closures, which I do not entirely support. The hon. Gentleman should not jump the gun. Even after the closures as proposed, we shall have one of the most comprehensive sub-post office and post office networks in the world.
  It must be a relevant consideration that there is to be £25 million of additional expenditure on refurbishing and modernising Crown offices, and grants will be available to improve sub-post offices. It also has to be a relevant consideration that about £20 million will be spent on the automation of counters and, at long last, the installation
  1014
  of cash dispensers and the like. The Post Office has lagged behind the banks in many respects. It is at last beginning to grapple with the need to modernise in many areas.
  Sir Bernard Braine: I am following my hon. Friend's comments with great interest and I can see that there may be a case for closing a sub-post office if a Crown office is to be establised in that area.
  However, what does my hon. Friend say when a sub-post office is closed in a well populated area and its customers are obliged to go to another sub-post office which cannot properly cope with even its existing customers? Does my hon. Friend agree that in such circumstances there should be a pause for reconsideration so that the social difficulties can be avoided? If no Crown post office is planned for an area, ought not this silly and anti-social business be abandoned?
  Mr. Galley: The point made by my right hon. Friend may be valid, but so may mine. There is a need to modernise the counter network and to market new services and compete in many areas. There is also scope to allow the Post Office more commercial freedom in its counter operations and what may be sold in post offices.
  It must be a relevant consideration that there have been significant demographic and housing changes resulting in some sub-post offices being in the wrong place. That is the case with one of the closures in my constituency. Many of the surrounding houses have been pulled down and the sub-post office is no longer needed.
  The revision of the counter network has been based on a combination of discovering which sub-postmasters would be willing to accept compensation for the closure of their office and the acceptability of those offers to the Post Office management, working on the criteria of the agreed guidelines.
  I applaud the fact that, as my hon. Friend the Minister said, consultations have taken place and decisions changed in 10 per cent. of cases. However, I have some reservations about the consultation procedure. It is my impression from most of the cases with which I have been dealing that nobody was prepared to budge from the decision, despite considerable public pressure, extensive petitioning and proof of serious social problems.
  The House has to balance its judgment about the need to modernise the counter network and, in the same way, the Post Office has to balance its judgment on the closure of sub-post offices by considering the social and commercial factors. That is a matter for the Post Office and not for the Government.
  Historically, it has been the practice in making such decisions to take into account the topography and the terrain of an area, along with the composition of the population and other social factors. It has also been standard practice to take into account the availability and quality of services in the surrounding area.
  It is not acceptable to close a sub-post office when the standard of service at the Crown office a mile or so away is accepted by Post Office management to be inadequate. I do not wish to go into detail on local cases, because they are not the responsibility of the Government.
  Attempts have been made to improve staffing arrangements and staff are working more efficiently. I know that the Post Office faces great difficulties because of the peaks and troughs of its business during the day and during the week. I accept that the DHSS strike has

  1015
  produced enormous problems for the Post Office for a long time. The callousness of those involved in that strike is incredible.
  However, it seems insensitive, to say the least, for the Post Office to close a town centre sub-post office when there is an inadequate Crown office service in that centre. If such closures must go ahead, the public must be convinced that the service at the Crown counter has been improved.
  A more widespread cause of concern is the fact that it is not acceptable to close a sub-post office in an area where a large proportion of the population served are elderly and the terrain is hilly.
  It is argued that the friends, neighbours, home helps and social workers of elderly people can collect their pensions, but that is not true in every case. I have submitted to my local head postmaster, so far without effect, some harrowing letters from people in their 70s and 80s in an area where many of the local people are elderly. Their friends and neighbours are elderly, they have no home help or social worker and, because of the mobility of our modern society, their families have moved away. What are they to do? There is no one to whom they can turn for assistance.
  It is argued that many elderly people would have to make a journey during the week to do their shopping. However, many elderly people can buy most of their day-to-day needs within a small area near their home. Not every pensioner will take a long journey each week to do the shopping.
  The Post Office must take into account the needs of the elderly and the disabled when taking detailed decisions and it must show more sensitivity. If sub-post offices must close, it may be possible for the Post Office, in conjunction with charitable organisations such as Age Concern or Help the Aged, to set up a joint scheme, at little cost, to provide a delivery service to pensioners in difficulties. I urge the Post Office to consider that option. There may be difficulties about the security of cash, but that does not seem to be much different from what happens when neighbours collect pensions. It may be argued that the Post Office is not running a social service, but it has a responsibility to its many customers.
  Single queuing has been implemented at many Crown post office counters, to good effect in many cases. However, there are still difficulties because of the wide range of transactions that take place at the counters. Some are simple stamp purchases or money transfers, but some are complex licence or passport applications. It is about time that the Post Office followed the banks and established quick service tills for the simple transactions. That could be operated within a single queuing system.
  There are many problems and I believe that the Post Office is not being sufficiently sensitive. I accept that it is trying to implement many laudable schemes, but it must not steamroller through sub-post office closures in difficult areas to the extent that it is now doing.
  5.50 pm
  Mr. Paddy Ashdown: I listened to the hon. Member for Halifax (Mr. Galley) with some interest. He made the sort of speech that we have come to expect from someone who has been a chairman of the Young Conservatives in his area. I listened with more interest and
  1016
  in more agreement to the hon. Members for Newark (Mr. Alexander) and for York (Mr. Gregory), who made a powerful case against the Government's proposals. If the hon. Members for Newark and York fail to find the courage to vote for the Opposition motion and against the Government amendment, many of us in the House and many outside it will find their brave speeches somewhat empty and designed, apparently, more for their local newspapers than for the central debate.
  A local post office is a social resource and not merely a facility. It is for many pensioners and others one of their only points of contact with the outside world. In many instances, it is the means by which those engaged in small businesses can find an assured income of sufficient size to enable them to run a small shop. The closure of local sub-post offices in our towns and cities means the removal of facilities for cashing pensions, buying stamps and changing postal orders, but in many instances, especially in cities, it means the closure of yet another corner shop. That is a loss that must be added to the closure of so many of our churches, pubs and small schools. Our local communities depend on these facilities as they give a sense of identity within the faceless conglomeration of cities and towns.
  We live in a harsh and no doubt troubled and brutal world in which, perhaps, efficiency, profit and cost-effectiveness are gods which we are required to worship. Perhaps we must grit our teeth and remove sentimentality from our minds if that costs us money. If the Post Office counter network were making a loss, there might be good reason to wield the knife and slice off cosy and human inefficiencies, if inefficiencies they were, which we loved but could afford no longer. However, the Post Office is not making a loss. It is making a profit of perhaps £110 million this year. The counter network is about to make a profit of £12.5 million, as the Minister agreed.
  It is true that the return on investment and capital is not up to commercial standards, but the Post Office is not solely and wholly a commercial organisation. That is reflected in section 59 of the 1981 Act. The Post Office is a balance between economy and social need. The closures are not coming about because of loss or diminished social need. The contrary is the case. The social need to provide child benefits, for example, is greater than it was. The closures are taking place because the Government have decided to impose a new and more stringent set of targets. Indeed, they have added £10 million to their target figure to make it £70 million. That has been done in pursuit of inefficiency that is measured in economic terms but most assuredly not in human terms. The Government require higher counter turnover.
  The closure programme is the direct result of a hastily and insensitively implemented Government policy. The Minister was right to say that there have been closures previously, but they have all been carried out in return for a greater degree of efficiency, the automation of our postal services and a better service for the public. The present closure programme will result in a worse service for the public. There will be a net loss of service. That is what distinguishes the present closure programme from previous ones.
  The Government are responsible for the closure programme but the Minister claims that the Post Office is responsible for the decisions that are taken. So be it, but behind the decisions of the Post Office is the Government's new policy. The Minister is responsible

  1017
  ultimately. The Minister can say until he is blue in the face that he has no responsibility for the closures, and the Under-Secretary of State may well decide to hand the matter back, as it were, to the Post Office when he replies, but that is not what the facts tell me. Section 11(2) of the Post Office Act 1969 states:
  "If it appears to the Minister that there is a defect in the general plans or arrangements of the Post Office for exercising any of its powers, he may, after consultation with it, give it directions of a general character for remedying the defect."
  Does the Minister agree that that means that we can take every individual case for closure to the Minister to ask him to remedy what we regard as a defect? The Minister has ultimate responsibility in law as well as in fact. He is the ultimate arbiter and he cannot dodge that responsibility. It is clear that it rests with him.
  We need a serious review of the Post Office. We must decide how the social function which is set out within the 1981 Act is properly to be funded. We shall not be able to create a decent network which responds effectively to the economic nature of the world and social responsibilities until the Government are prepared to come clean on the way in which social responsibilities will be honoured. Unless that is done, all subsequent reviews will be, as this one is, inappropriate, insensitive and damaging.
  The consultation process has proved to be a sham. My hon. Friend the Member for Truro (Mr. Penhaligon) has reiterated the statement of other hon. Members that closure decisions had already taken place in October 1984. My hon. Friend the Member for Isle of Wight (Mr. Ross) has fought hard against the closure of five post offices on the island. He tells me that the Post Office had already decided that many, if not all, of the closures should take place. He has spoken of the Post Office acting as judge and jury. My hon. Friend the Member for Cambridgeshire, North- East (Mr. Freud) has said that, even if a Member manages to save a post office, the postmaster, "flushed with redundancy payments, is up and away in any event." My hon. Friend the Member for Leeds, West (Mr. Meadowcroft) has said that the post offices concerned have accepted the direction as if it were inevitable.
  I shall squeeze into my speech a constituency example. I asked Post Office officials to tell me what the savings would be from the closure of the sub-post office in Station road, Ilminster. I was told that the information was not available. The Government and the Post Office tell us that they want to make savings and yet there was no information about the savings that would flow from the closure. Having gone to the top and seen the director of counter services, I was offered a global figure. There was no back-up information to provide evidence on which I could judge whether the figure was correct. I was told that the savings over the year would amount to £4,000.
  There are 100 pensioners in the area that is covered by the sub-post office at Station road, Ilminster. They will have to go into Ilminster to collect their pensions. They may be robbed of the facility provided by the shop in which the sub-post office is presently situated. If 100 pensioners cost 50p a week in these terms, the Post Office might save £3,000, but that sum will be dumped on the backs of pensioners. The net saving to the community will perhaps be £1,000 or about £3 a day.
  That does not take account of the fact that 11 firms use the sub-post office regularly for all their postal services. The work forces of those firms use the facilities of the sub-post office during their lunch times. They will not transfer
  1018
  their business to the post office at Ilminster. What a ridiculous way to go about cutting a service that has proved so successful and useful for my community.
  Mr. Simon Hughes: Will my hon. Friend give way?
  Mr. Ashdown: I do so briefly.
  Mr. Frank Haynes: On a point of order, Mr. Deputy Speaker. The hon. Member for Southwark and Bermondsey (Mr. Hughes) is really naughty. He has just walked into the Chamber and he now wishes to intervene. Many hon. Members are waiting to take part in the debate.
  Mr. Deputy Speaker: Order. The House knows that this matter is beyond my control. Clearly interventions are made at the expense of other hon. Members. Some hon. Members have been waiting a long time to participate in this debate.
  Mr. Hughes: I wish to add a brief point of great importance. In the case of an important office, such as the south-east district office, there will probably be no saving. There will probably be a profit, and there will be, therefore, no justification for closure. Will the Under-Secretary of State take responsibility if the consultation process does not allow such post offices to remain open?
  Mr. Ashdown: That is an important point, and I hope that the Under-Secretary of State will address his remarks to it.
  I do not mean to suggest—I am sure that other hon. Members do not wish to do so either—that the Post Office has no problems. We recognise that the business of the Post Office is changing. We recognise that there has been a decline of 30 per cent. in the sale of stamps over the counter, that the number of postal orders issued has decreased from 502 million to 61 million and that national savings business decreased by 5 per cent. in 1982–83.
  We recognise that, because of demographic changes, some post offices have become stranded in inadequate catchment areas. We need to review our post office services, but that should be done as part of a long-term strategy — not as a panic measure to meet the Government's latest whim. Page 12 of "Post Offices Counter Network 'A Strategy for the Future'" says that the review is part of such an overall strategy. The Post Office, however, gave the game away on page 9 when it stated:
  "Closure is only considered when post masters retire or resign."
  Sub-post offices are singled out for closure not because they incur a loss or do not perform a social service but because they happen to suffer from the supreme had luck of having a postmaster who is ready for retirement. What a way to set up a decent strategy for the Post Office of the future.
  Our post office network is the envy of Europe, but this chaotic programme of closures threatens that structure. This programme has been brought about by Government policy. It is the result of the Government's whim. The programme is being insensitively and capriciously carried out. The public consultation promised is a sham. Closures will cause the further destruction of our communities and more misery for the vulnerable. We need a comprehensive strategy for the post offices, not a short-term panic measure to implement theoretical targets instituted by the Government, irrespective of the cost or disruption to a vital institution.
  The Liberal-SDP alliance would not oppose a sensible, long-term plan for the restructuring of the post office

  1019
  network, but it opposes this shortsighted and destructive programme of closures which will save little and add much to the burden of misery for many.
  6.3 pm
  Mr. James Hill: My hon. Friend the Minister for Information Technology made a telling point when he gave us the figures for closures under respective Governments. He said—he can correct me if he wishes—that in their five years of office the Labour Government had closed 1,140 sub-post offices and that in the past five years the Conservative Government had closed 734 sub-post offices. The position is clear. There have been steady closures for many years. My only difficulty lies in the fact that there is unsatisfactory consultation about the sub-post offices that should close. I believe that the consultation procedures are not adhered to by those concerned.
  I was extremely embarrassed when I first heard of the closure of a post office in my constituency in a letter written on 4 July telling me of the need to close the post office at Lower Brownhill road, Redbridge, Southampton. Mr. Gilbert, who is an excellent head postmaster in Southampton, said that he had already telephoned the sub-postmaster concerned. The sub-postmaster told him that he would be willing to accept voluntary redundancy under the terms recently agreed between the Post Office and the National Federation of Sub-Postmasters. Mr. Gilbert said:
  "If there are, however, any other factors which you feel I should take into account or if you have any other comments on the proposals, please let me know."
  As soon as news of the closure was reported in the local press, I received a massive number of complaints. A local Labour councillor got in touch with me and gave me a petition from more than 500 pensioners who were dismayed at the closure. They admitted that the sub-post office was within the one-mile limit set down, but they believed that the road they had to travel was one of the trickiest roads in that part of Southampton.
  Who decided the distance between sub-post offices? Was the decision made in Victorian times? Was allowance made for the fact that Southampton is a sea port? Did people think of master mariners with peg legs and parrots on their shoulders? Was some other criterion used? Each time closures are decided, it is simple for the head postmaster to note on a map any two post offices within one mile of each other. The head postmaster can immediately telephone one or both of the sub-postmasters and ascertain whether a sub-postmaster wishes to take voluntary redundancy. I believe that the consultation process has been pretty thin.
  Following the complaints, I got in touch with Mr. Clinton, the managing director responsible for counter services. He said:
  "I appreciate that when an office closes the elderly may experience some difficulty".
  Mr. Clinton will be old one day, but perhaps he will not experience the same difficulty. He continued:
  "I sympathise with those who may be affected in this area. It is however possible for those who do experience difficulty travelling to a post office to nominate a friend"—
  how does one nominate a friend?—
  "relative, or member of the welfare service to collect their pension or allowances for them".
  Does not Mr. Clinton realise that the very elderly already do this, because many of them are housebound? Is this not
  1020
  an additional burden on welfare services? Could welfare services cope if overnight there were a serious number of closures?
  I believe that the Post Office began to listen to some of the protests about my closures. A letter dated 14 September 1984 told me that the Post Office had "carefully reviewed" the position. The letter stated:
  "from this first trawl the only office to emerge as a candidate for closure in your constituency was Lower Brownhill".
  The letter went on:
  "We have however considered very carefully the views expressed by our customers who took the trouble to write in".
  That sounds democratic but, unfortunately, another letter from the Post Office dated 27 September 1984 stated:
  "Before reaching the final decision"—
  I believe the Post Office was close to making that decision—
  "we took very careful account of the views that had been expressed to us, and I would add here that in addition to the letters from Councillor Allan, only three other letters were received concerning the closure."
  Why did the man who could possibly avoid making the closures receive only three letters, while I received dozens of letters and a petition from more than 500 people? Why was he almost in purdah? Why did he not receive the necessary information? Could he not have arranged for a leaflet to be dropped in the area saying that the sub-post office was about to close and asking whether any people objected to the closure? One Opposition Member with such a wonderful head postmaster in his constituency was able to attend all the public meetings. Was there no way of saying to the local councillors, myself or even the chief executive of the Southampton city council, "Call a public meeting. I shall attend that meeting and listen to the protests?" That is democracy. That is what a Member of Parliament must do from time to time, and I do not understand why the Post Office should not do the same.
  I am all for economies and efficiency. I am delighted that the Post Office made a profit of £40 million in the first six months and that it may make a further £40 million in the next six months. I also agree with closures that must take place of necessity, but I am far from delighted at the lack of consultation and the lack of sympathy shown for the problems caused. I should say in the Southampton head postmaster's defence that in the middle of this fiasco Mr. Gilbert was moved to another area. But why does the head postmaster not involve himself more? Why does he just sit in his office waiting for protests? Why does he not go out and face the protests head-on rather than saying that, although everyone knew about the proposed closure, he received only three letters? We can all keep our heads tucked down behind the barricades and then say that we have received minimal post on a very important matter.
  My hon. Friend the Minister put up a first-class case, given that he had no trump cards at all. I hope that he will now ask the chairman, Sir Ronald Dearing, a very able person, to consult further. The exercise may end with exactly the same result, but at the moment there is strong feeling in the area that consultation has not been good enough and we hope that the chairman of the Post Office will think again.
  6.11 pm
  Mr. Frank Haynes: The Minister stood at the Dispatch Box for 31 minutes without telling us anything that we did not already know. The problem is not the Post Office but the Minister and the Government. You,

  1021
  Mr. Speaker, will recall pulling me up the other day when the Secretary of State for Employment announced the closure of many skillcentres and I called him a coward.
  Mr. Speaker: Order. I am not sure that that is quite right. I do not think that the hon. Gentleman really meant that.
  Mr. Haynes: Thank you, Mr. Speaker. I was afraid that I was in trouble again. I shall not call the Minister a coward today. I shall simply say that the Minister is hiding behind Ron Dearing and his organisation. The problem is not the Post Office but that lot on the other side of the House. I am glad that so many Conservative Members have spoken out today. I hope that they will be going into the correct Lobby to vote. The hon. Member for Rugby and Kenilworth (Mr. Pawsey) laughs. If he has the opportunity to speak in the debate, I shall be interested to hear his contribution. The Government in general and the Minister in particular are hiding behind the Post Office.
  Consultation on post office closures in my area was a complete waste of time because the decision had already been taken, due to Government pressure on the Post Office to close a certain number of offices and to save a certain amount of money. [Interruption.] If the Minister spends his time talking to his Whip instead of listening, how can he reply to the debate? He is being really naughty.
  It has been suggested that redundancy is being offered to people who have reached the age of between 59 and 65 years, but in my area it is being offered at the age of 42. That is very early retirement. Moreover, no one else will be able to take the job, so there will be one more person on the dole queue. The Government talk about their compassion for people who cannot find work. Yet here they are destroying jobs yet again. We have not heard much about that aspect from Conservative Members.
  I have been through all this before when a post office in a rural area was closed. It was situated in a basin, so the elderly people using it were forced to climb a hill to use any other post office. There is much talk about how far people have to walk to reach the next post office. Our postmaster in Nottinghamshire, a man in his forties, talked about how long it took him to walk from the post office to be closed to the next available office. If I told the House how long he said that it took, hon. Members would wonder why he is not representing this country in the Olympic mile. It is ridiculous that elderly and disabled people should be expected to walk such long distances.
  There are two complexes with 52 elderly people in each just across the road from the sub-post office proposed to be closed. Many of those people walk with frames. Going to the post office just across the road is a little exercise for them, but, according to the Government's policy, they should be expected to walk a mile. The Government know very well that that is just not on.
  The Government must take note of what is being said in the House and outside. I hope that the Minister will take this seriously because we are not satisfied with what is going on. If that sub-post office is closed, elderly people will have to cross a busy main road without a pedestrian crossing. They should not have to do that, but the Government are trying to push them into it. The Government are supposed to represent people too. I wonder whether the Minister knows where the sub-post offices are in his constituency. I very much doubt it. If he did, he would understand the message of this debate and
  1022
  the problems caused by the Government's attempts to close post offices. I hope that the Minister has now understood that message. He has had his ear clobbered today, and if he does not change his mind he will have it clobbered again.
  6.18 pm
  Mr. Tom Pendry: My ever-friendly Whip, the hon. Member for Ashfield (Mr. Haynes), has asked me to make a short contribution. He should not knock the hon. Member for Yeovil (Mr. Ashdown) too much for giving way to his hon. Friend the Member for Southwark and Bermondsey (Mr. Hughes) after making constituency points on behalf of his hon. Friends the Members for Leeds, West (Mr. Meadowcroft), Isle of Wight (Mr. Ross) and Cambridgeshire, North-East (Mr. Freud) because one cannot hope to become leader of the Liberal party if one does not pay attention to that kind of detail. Moreover, they have now all disappeared except the hon. Member for Southwark and Bermondsey.
  I proposed to say that this was a very timely debate for many hundreds of my constituents. However, it will be timely only if Ministers will listen to it. There has been no evidence so far that they intend to take note of the points that have been made. I am always giving the Parliamentary Under-Secretary advice, in Committee and in the Chamber. I advise him now to stand up for himself. He should stand up to his senior Ministers and make his own contribution, because I believe that he has a future. He must face some of the detailed points that have been made.
  In my constituency, a sub-post office has been closed in an area where many elderly and disabled people rely on it very much. Like other hon. Members, I have received nothing but the greatest co-operation from the postal board. The chairman of the North-Western postal board has been most helpful, and the postmaster has stomped the area with me and met many of the elderly people and many representatives of pressure groups. Our quarrel is not with the postal board but with the Government and their rigid approach to the question. The Government have ignored the social consequences of their actions. They are trying in a deceitful and underhand manner to use Post Office cuts in their spending programme. In my constituency, industry is affected as well as the disabled, the pensioners and the less fortunate.
  The sub-post office was closed on 7 January. Yesterday I received a letter from Mr. Varney, managing director of Allen-Wellerman Limited, which is an industrial concern in my constituency. Mr. Varney says:
  "I write to add the support of our Company to your campaign to have the above"—
  in other words, the sub-post office—
  "re-opened. The Company started in business on Commercial Brow in July 1984 and, although its level of activity during the remainder of the year was relatively low I anticipate a turnover in the region of £2 million during 1985, rising steadily thereafter. The loss of this facility will therefore represent a significant inconvenience and cost."
  The decision to close has had a significant effect. There have also been protests and representations. I hope that the Minister will therefore intervene and ask the Post Office to reconsider that decision. There must be flexibility.
  A massive petition has been organised in my constituency by a lady who lives there and by Councillor Clark. The lady has written to me telling me of a visit to the central post office in Hyde where she joined a queue that spilled out into the snow. There were many elderly

  1023
  people in the queue. The lady is in despair. She relies on me and other hon. Members to put pressure on Ministers and on others outside the House so that she and others may enjoy a proper service.
  I have been brief, as I was asked to be. In conclusion, I should like to point out that we have heard courageous speeches from the hon. Members for York (Mr. Gregory) and for Newark (Mr. Alexander) and others. We have heard about their compassion. We expect them to have guts as well. We expect them to join us in the Lobby tonight and show how much they disapprove of what the Government are doing. I hope that there will be a healthy vote tonight, and that we shall be joined in the Lobby by many Conservative Members.
  6.24 pm
  Mr. John Golding: I declare my interest as an assistant secretary of the Post Office Engineering Union. I protest not only against the Government's insistence upon post office cuts but also against the way in which those cuts have been implemented. Both Ministers and Post Office management are at fault. They try to hide behind each other, but in doing so they simply make it clearer that the Government have ordered cuts and that the management has carried them out in a docile, cynical and ham-fisted fashion.
  The document prepared by Mr. Brian Roberts, the director of industrial relations, suggests breaking a solemn agreement—the job security agreement—and sacking up to 5,000 post office engineers and motor transport staff. It was a bombshell to my union. It is the most shoddy, disreputable and disgraceful document that I have seen in 25 years as a national union officer. Management says that it is only a working document. I advise management to scrap it.
  Management claims to have legal advice that the job security agreement is negotiable. The job security of the union's members is not negotiable against the background of over 3 million unemployed. The Post Office management entered freely into that agreement and will not be allowed easily to renege on it now. We want our members to be at work, not on the dole. Problems should be settled by negotiation on shorter hours — on the POEU's "broad strategy," which has already been presented to the management. Many POEU members and Union of Communication Workers counter staff joined the Post Office as civil servants. They accepted lower pay than they could have earned in industry in order to enjoy the job security and pensions of civil servants. The POEU accepted craft flexibility and productivity bargaining because of the existence of job security, and job security must stay. The Government and the management are determined to make a shambles of the Post Office.
  I am concerned about the public service aspect. Last year the local postmaster shut the George street sub-post office in my constituency. I argued to keep it open. The arguments were strong and familiar. The closure of the post office brought hardship to many old people. They either have to walk up and down to the bank—although many of them are ex-potters, ex-miners and ex-foundrymen suffering from chest complaints — and through a subway which they hate, or to travel by bus with all the attendant difficulties. The remaining post offices are crowded and the old people have to wait for ages. Our
  1024
  Crown post office is understaffed and cannot cope properly with extra business. One sub-post office to which those once using George street were directed now displays a notice asking people not to call on Tuesday or Thursday unless it is essential for them to do so.
  That is the state that we are in. Our post offices are now more crowded on Thursdays than was the black hole of Calcutta, but the talk is not of relief but of further closures. Why should we treat our old people in such a way?
  The response from authority to my arguments was less than helpful. Our local postmaster, Mr. Cole, commended the local bus service. Perhaps that is why the Government mean to take it away. He also suggested that relatives or friends could collect pensions. That must be the standard response given by postmasters to Members of Parliament who complain.
  We are concerned for the dignity of pensioners. They do not want to be reliant upon other people. They want to collect the pensions themselves. I also wrote to the Director General of Fair Trading, Sir Gordon Borrie, who sent my complaint to the Minister for Local Government. If the Director of Public Prosecutions received a complaint from the police, would he send it to Dr. Crippen? In this case, Dr. Crippen turned out to be the Parliamentary Under-Secretary. The Minister for Local Government himself had more sense than to send me daft replies. The Under-Secretary wrote that this was
  "a matter for the Post Office Board and the Government cannot intervene."
  I was referred from the Post Office to the Minister, and the Minister referred me to the Post Office. Off I trotted to see Sir Ron Dearing. He told me that it was hard luck, but that the Government were insisting on a 5 per cent. cut. The Government have discovered the secret of perpetual motion. I was referred from the Office of Fair Trading to the Government to the Post Office to the Office of Fair Trading. It is a vicious circle, but our people are caught in it, and they are fed up with it. The closure of George street post office was a disgrace, but even more disgraceful was the inability of local people to challenge the decision and the buck-passing of those in authority.
  I should have liked to have spoken longer. but time is short. We in the Post Office unions oppose the closures. We want service for the public, we want time to give service with a smile, we want work, not the dole, for our members and we want the Government and the management to stop destroying this great public service.
  6.29 pm
  Mr. John Fraser: I represent a constituency where two post offices have already been closed-both almost by accident. One was closed as a result of robberies and the other was closed as a result of legal proceedings.
  I should like to give the figures concerning one post office—the Post Office has been helpful in supplying them. Every week, the post office served 1,500 main customers. More than 750 were pensioners, more than 500 were people picking up child benefit, almost 100 were picking up Girocheques and the rest were making Giro deposits and Giro withdrawals. That gives a total of 1,500 people who made good use of the service each week. Saying that they should turn their attentions elsewhere and travel a longer distance is to apply to post offices the type of argument that is used against mines. They are closed

  1025
  because of a definition, which is conjured up by the Government, of what is uneconomic, without paying regard to the needs of the community and the customers.
  The reaction of my constituents and those of the hon. Member for Dulwich (Mr. Bowden), who has worked with me on this matter, has been anger and astonishment. There have been masses of meetings, petitions and letters. We have both seen the director of the London region and Sir Ron Dearing, but without success. I was amazed at the self-satisfaction of the Minister for Information Technology when he talked of people collecting pensions. I wonder whether he or the civil servant who wrote the speech trudge down to a post office in the cold and I wonder whether they would like to trudge another 1,300 yards in a city where bus services are to be cut. I wonder whether they will see the time of home helps being wasted. I also wonder whether they will risk robbery.
  We read in The Standard that the special patrol group has been drafted into Brixton and that there are surveillance and targeting operations because there are so many robberies on the streets. What do the Government do? They close the post office in Croxted road so that people must walk a lonely path to the main Crown post office, thus being exposed to risk of robbery. And what happens when people get to that post office? I wonder whether the Minister or the civil servant who wrote that speech would like to be in a queue of 80 people, as has been reported by some of my constituents. Relying on Post Office figures, they would find 55 people in front of them in the queue at 9 am, 38 at 9.45 am, 37 at 10.45am and 31 at 14.45.
  The closure is wholly unrealistic and has been proposed by people who do not live in the real world where vulnerable and poor people will have to suffer the inconvenience of going to Crown post offices which are grossly overcrowded because they are unable to cope with the weight of business. It is impertinent for the Minister to tell us that he will do nothing about any individual closure—the blame rests fairly on the Government's shoulders. They treat the Post Office and other nationalised industries worse than the Mafia treats the victims of a protection racket. They extract from the Post Office a profit of £80 million a year at the present rate, compel it to reduce its unit costs by 5 per cent. and require it to make a profit on turnover of 4 per cent. So far, that is analogous to the Mafia which extracts money out of those whom it controls, but if the Mafia were extracting money from ice cream parlours, the last thing it would do would be to demand, as the customer, that it pay less for its ice cream. However, that is what the Government are doing because 20 per cent. of the Post Office's business is the mail, which makes a profit, about 16 per cent. is the savings bank and the rest is business for which the Government are the customer. The Government are putting the Post Office in a double grip. At one end they are demanding a higher rate of return and greater efficiency—ignoring social responsibilities—and at the other, acting as a monopoly customer of the Post Office, they are saying that they are not prepared to pay the right amount for the job.
  All we can do when we see Ron Dearing or our local regional director is choose which of two evils is to be executed. The Post Office says that it must maintain a balance between social responsibilities and economic ones. It says in its standard letter that it is finely balanced. It is not. It is crudely balanced because of the way that the
  1026
  Government have weighted the scales. The Government should at least have the decency to own up to their own responsibilities.
  6.35 pm
  Mr. Frank Field: The noticeable feature of this debate is that nobody, not even among Conservative Members, has defended the Government's policy. Even the hon. Member for Halifax (Mr. Galley), who came nearest to giving a defence, strained at the leash for much of his speech, wishing to criticise Government policy. We have all centred some of our comments on the criteria that the Government have decided on to judge whether there will be hardship. The more the Minister for Information Technology tried to defend himself with the one-mile formula, the more I was reminded of a comment that Aneurin Bevan was reported to have said having listened to a speech by Neville Chamberlain: "Listening to the Prime Minister is like a trip round Woolworths—everything is in place and nothing is over sixpence." We have been trying to tell the Minister that our constituents' needs do not come in neat packages, nothing costing more than sixpence. Saying that there is to be a sub-post office within one mile of those which are to be closed does not mean that there will not be real hardship.
  If the Minister is still in doubt about the hardship that closures will cause, I advise him to get in touch with the chairman of the Post Office north-west region who came to a meeting called by Merseyside county council and at which my hon. Friend the Member for Liverpool, Walton (Mr. Heffer) and I were present. We described, as did many local councillors, the effect of the closure programme on our area.
  As we have been asked to be brief, I shall concentrate on just one closure in my constituency—the one in the St. Anne's district. We are told that my constituents will have little or no difficulty using other post offices or sub-post offices. We are told that they should go to Hamilton street. Going from St. Anne's to Hamilton street involves climbing a gentle incline. It is easy enough for the Minister and for me to climb but it is much more difficult for people who suffer from emphysema, who use a wheelchair or who have children to push. We are told that, alternatively. they can go to one of the Crown post offices, but the Crown post offices in Birkenhead are on major roads. It is easy enough for the Minister or me to cross them but it is difficult for many of my constituents.
  I should like to reinforce what my hon. Friend the Member for Norwood (Mr. Fraser) said about the risk of crime. He is the only hon. Member to have mentioned it. Those of us who represent inner city areas are aware of the level of crime and the frequency with which our constituents suffer muggings. It is not uncommon to see in our surgeries constituents who have tasted their second or third mugging. The Government are doubling the journey, and therefore the risk of being mugged, of people who go to post offices to pick up their main, or only, income.
  If the Minister is still as satisfied with the one-mile rule as he appeared to be at the beginning of the debate, I should like to make one plea to him. If he lived in central Birkenhead, the closure that he and the Post Office are proposing would be unacceptable to him and his family just as it would be unacceptable to me and my family. If it is unacceptable to us, it is unacceptable to my constituents. I hope that the Minister who is to reply will

  1027
  show that he has listened to what the House has said. I hope that he will say that the closure programme will be considered and that the one-mile radius and the making of profits are not the only criteria. Having said that, St. Anne's is to be closed although it is making a profit. I hope that he will recognise the message that the House has given—that people's needs matter more than profits.
  6.39 pm
  Mr. George Park: I agree with my colleagues who said that many hon. Members who have taken part in today's debate aimed their criticisms at the wrong target. Post office closures are one more facet in the illusion being created by the Government that they are determined to ease the burden of taxation. While the Chancellor of the Exchequer dangles the carrot of reductions in income tax, he is engaged in increasing charges, which force up the cost of living. Apart from the Post Office, the water, gas and electricity boards have all been required to raise their charges above the necessary levels, and the Treasury takes the excess profits that are generated.
  We may get income tax cuts, but the cost of living is definitely higher. That particularly affects those on low fixed incomes, and that same section of the population are most hurt by the closure programme outlined in the post office document, "A strategy for the future". I am surprised that there has been only passing reference to it. The Government set the targets and stepped back, and the Post Office produced a revealing document.
  On page 1 of the document it states that:
  "Savings…will be ploughed back into the business"
  but it does not say that during the past three years the Post Office has been required "to loan" £72 million to the Government. In the foreword on page 3 it states that the Post Office has worked out a policy designed, among other things, to
  "meet social obligations to the communities".
  How that can be reconciled with the closure programme, which will force pensioners to travel further to already busy offices to stand in longer queues, I fail to see.
  Page 6 deals with "The Changing Market". It gets to the heart of the matter because it illustrates how the Government have completely changed the method of running the Post Office. From being a public service operating on a cost—plus pricing agreement, it is now committed to cutting its counter services by 5 per cent. and to making a profit of 4 per cent. on turnover in 1984–85. The conclusion must be that public service has taken a back seat in favour of commercial considerations. That is affirmed in the "Conclusion" on page 12.
  The Post Office has shown a profit for eight successive years. In 1984 the profit amounted to £116,900,000. Because each sector must individually show a profit, it means that high profit sectors must not support the less profitable sectors, as is normal practice in industry and commerce.
  The Post Office is well on the way to meeting the recommendations of the Rayner report of 1982. It recommended the closure of 200 main Crown offices and 3,000 sub-post offices. The closure programme has already hit 2,500 offices. The Government have an arms length approach right across the board. Their policy is,
  1028
  "We set the targets. You carry out the work, and don't come to us about it". From my correspondence with Ministers it is clear that that is their approach.
  Head postmasters are given the responsibility of designating which offices in their areas are to close to meet the 5 per cent. target. The Coventry head post office covers the city of Coventry and most of Warwickshire. Closures in Warwickshire are largely excluded because it is a rural area. That means that the closures in Coventry are proportionately heavier. Page 9 of the document states that town and country areas are to be taken together. The national figures given in the Post Office annual report show that on average the United Kingdom has one post office for every 2,480 people. In Coventry, before the latest closure programme, there is already only one post office for every 4,500 people.
  It strikes me as odd that, although 12 or 13 considerations are to be taken into account in deciding whether to retain sub-post offices, the Post Office has chosen consistently to use the distance-of-a-mile consideration. All hon. Members know of the anomalies that that can create.
  Page 15 explains that the closure programme begins with the resignation of a sub-postmaster. At the two public meetings that I arranged and to which I invited the head postmaster—I hope that the House will note that I arranged the meetings and he attended them—the head postmaster, having carefully gone through the technical side—I have no personal grouse against him—said that if the sub-postmasters concerned had not resigned the two sub-post offices would not have been closed. That blows the whole matter sky-high.
  When I contacted a postmistress, she said that she had been unable to get any assurance about the future life of her sub-post office and had therefore accepted the 23 months' salary on offer, as against a three months' salary which she would have received if she had stayed and then been told that her sub-post office was to be closed. That is a perfectly understandable decision to take.
  It should be borne in mind that refurbishment of post offices, as detailed on page 11 of the document, relates only to the Crown offices. Paragraph 5 makes a fleeting reference to the fact that any refurbishments or improvements at sub-post offices are the responsibility of the people who run them. How many of them will wish to take up the loan suggested, even at preferential rates, for an uncertain future, as the Government change the targets? In addition, my hon. Friend the Member for Newcastle-under-Lyme (Mr. Golding) said that discussions have already started about massive redundancies among staff in post offices.
  Finally, I wish to draw attention to the local government and housing association aspects. About 200 local authorities and 300 housing associations use the Giro system for rent collection and issue Girocheques for housing benefit payments. The charges are high, considering the number of sub-post offices available when they were fixed. They will need revision when the network is decreased. If the closures are to continue, local authorities may have to consider ending their use of the Giro system and looking for an alternative. That cannot be in the long-term interests of the Post Office.
  In conclusion, many hon. Members referred to the effects of closures on elderly people, and I do not intend to go over them again as by now the House should know about them well enough. If we cannot get the programme

  1029
  withdrawn or amended, I hope that we shall place the responsibility squarely on the Government's shoulders, because they are the initiators of the closure programme.
  6.48 pm
  Mr. Alan Williams: The Minister for Information Technology must be looking forward to the speech of his hon. Friend the Parliamentary Under-Secretary because it will be the first one this afternoon that may support the Minister's opening speech.
  This has been a remarkable debate, with protests from Conservative Back-Bench Members. Usually the Government find it possible to identify some placeman, poodle or man of ambition who is willing to support the Government, but today not a single supporting voice has been heard. That is hardly surprising. The Government's proposals could mean the closure of 78 Crown post offices and 900 sub-post offices.
  That would be bad enough in terms of morale within the Post Office, coming as it does after a carefully negotiated and agreed programme of mechanisation in which 1,700 jobs were lost, against an assurance of job security for those who remained. It is small wonder that the word "betrayed" has been used to describe the attitude of those who work in the Post Office. The proposal is not only disastrous for morale; it is completely unnecessary. The Post Office made a profit of £40 million in the first half of the year, and it will almost certainly make a bigger profit in the second half. The proposal has nothing to do with the internal requirements of the Post Office or the redundancy of sub-post offices and Crown offices; it relates to the arbitrary imposition of a £10 million external financing limit by the Government, which by coincidence is the amount that the Post Office will save as a result of the operation.
  Although the Government will gain an additional £10 million, the weak will suffer. Many hon. Members have referred to the elderly and the handicapped, and the Minister does not seem to understand the reality of the suffering that the proposal will cause. He said that the elderly could nominate friends to collect their pensions. However, one should not overlook the fact that some people are extremely proud. Some regard such matters as confidential. As my hon. Friend the Member for Birkenhead (Mr. Field) rightly said, in some areas those who collect multiple pensions could become targets for mugging. But, even more importantly, my hon. Friend the Member for Bradford, West (Mr. Madden) passed me a note saying that he consulted his local DHSS office about the procedure of nominating a friend to collect one's pension. It was made clear to him that the DHSS regards this only as a temporary facility. It should not be a permanent arrangement. As my hon. Friend said, the proposal will present special problems in multi-ethnic communities, especially in those where some beneficiaries may have difficulty with the English language and may not be able to establish their identities at the post office counter.
  It has also been suggested that home helps should collect pensions for the elderly, but home helps are being cut and the remaining ones are overworked. This would be a misuse of the home-help system, and it would be unfair to impose such responsibility on them.
  Hon. Members on both sides of the House have expressed doubts about the consultation that took place. The hon. Member for York (Mr. Gregory) said that in
  1030
  areas with a predominance of elderly and perhaps handicapped people no attempt had been made to seek the advice of the social workers or those who look after the interests of the elderly and the handicapped. My right hon. Friend the Member for Mansfield (Mr. Concannon) gave the example of a sub-postmaster in his constituency who told him that he had already agreed his terms for compensation with the Post Office before the consultation started. There is a grave suspicion that the consultation was more cosmetic than real.
  Even Conservative Members, who will feel the wrath of their constituents, recognise that the result of the proposals will be longer queues at post offices, longer waiting times, longer walks to reach post offices and more bus fares, insofar as bus services will be allowed to survive. Those who are lucky enough to have ears will probably discover that it is almost impossible to park near the main post offices.
  The best thing that the pensioners' organisations can do, if they have a Tory Member of Parliament in a marginal constituency near to where they hold their meetings, is to lobby him and tell him that they also have power. They should tell him that they are not impressed by the financial arguments of the Treasury and that their dissatisfaction will be expressed in the appropriate way at the appropriate time. Those hon. Members who had the courage to attack the Government today—as I said, no one had the courage to defend them—for the shortcomings of their policy should follow that attack to its logical conclusion. I invite them to join us in the Lobby and vote against the proposal.
  6.55 pm
  The Parliamentary Under-Secretary of State for Trade and Industry (Mr. David Trippier): The right hon. and learned Member for Monklands, East (Mr. Smith) and his hon. Friends have competed with each other in the passion that they brought to their condemnation of the Government in this matter. We have heard many emotive phrases. The hon. Member for Bradford, West (Mr. Madden) called it a "sick joke". The right hon. Member for Barnsley, Central (Mr. Mason) referred to our monetarist policies, and the hon. Member for Falkirk, East (Mr. Ewing) went further and referred to a stabbing in the back.
  Yet if we examine the charges and wade through the crocodile tears to reach the solid facts, what do we find? Opposition Members are accusing the Government of following the very policies that their right hon. and hon. Friends continued when they were in office between 1974 and 1979. They were also followed by the Conservative Administration, having been introduced by a Labour Government in 1969. I wonder whether it was as a result of "monetarist policies" that the right hon. Member for Chesterfield (Mr. Benn), the then Secretary of State for Industry, aided by his lieutenants the right hon. Members for Glasgow, Rutherglen (Mr. MacKenzie) and for Manchester, Gorton (Mr. Kaufman), and the hon. Members for Liverpool, Walton (Mr. Heffer) and for Oldham, West (Mr. Meacher), presided over the closure of 223 post offices in 1974–75 and a further 270 offices in 1975–76. Was it "stabbing in the back" when the former right hon. Member for Chesterfield, aided by his lieutenants the right hon. Members for Gorton, for

  1031
  Rutherglen and for Swansea, West (Mr. Williams), presided over the closure of 266 post offices in 1976–77 and a further 203 post offices the following year?
  The hon. Member for Falkirk, East told us about an arrangement—he called it an agreement. During the debate we checked with the Post Office, which is unaware of that agreement. The Department of Trade and Industry is certainly unaware of it. The hon. Gentleman referred to the Union of Communication Workers' proud record of co-operation on mechanisation, but I wonder why he did not tell the House when the union will lift the embargo on the extention of mechanical inward sorting that it has maintained for the past few years.
  Mr. Ewing: I suspect that the UCW is more concerned with its distrust, as a result of the Government's directive to the Post Office—[Interruption.] The Secretary of State for Trade and Industry, who has just returned to the Chamber, should learn to shut his mouth now and again and to listen to what is said. The problem for the UCW and its members is that they no longer trust what is being said to them because of the way in which the Government betrayed them over the closures.
  Mr. Trippier: With great respect to the hon. Gentleman, he is changing his case and taking an entirely different line. I would not suggest that he means to mislead the House, but he gave a clear understanding that there had been an agreement. As we have now checked this with the Post Office—
  Mr. Ewing rose—
  Mr. Trippier: We can probably solve this problem through correspondence. However, it is important that, as a Government spokesman winding up this debate, I should say that we do not know about that agreement in the Department of Trade and Industry and the Post Office does not know about it either.
  Mr. Ewing: It is unfair of the Minister deliberately to mislead the House. I can understand him doing it inadvertently, but any deliberate attempt—
  Mr. Speaker: Order. The hon. Gentleman must not say that the Minister deliberately misled the House. He may say that the Minister inadvertently misled the House.
  Mr. Ewing: For the sake of good order, I shall withdraw the "deliberately". During the period of postal mechanisation, the Union of Post Office Workers, as it was then—the Union of Communication Workers as it is now—willingly entered into arrangements with the Post Office whereby, in exchange for job security for those who are left in the industry after mechanisation, it agreed to shed 1,700 jobs. It does not matter a tuppenny damn what the Post Office says to the Minister. That was the position, and that is why the union feels betrayed.
  Mr. Trippier: I have been fair to the hon. Gentleman in allowing him to intervene on two occasions. I understand that, and what he said in his main speech. I am simply saying that the Post Office board says that it is unaware of any arrangement or agreement, and the Department of Trade and Industry is also unaware of such an agreement.
  A number of hon. Members have argued that the Government should intervene to prevent the closure of
  1032
  particular offices within their constituencies. I can obviously understand that, but when Labour Members seek to imply that the Government are somehow different for refusing to intervene in individual cases. I am bound to ask why they are so coy about telling the House of their successful intervention to prevent individual office closures during their term of office. How many times did the right hon. Member for Chesterfield intervene when he had responsibility for these matters? I understand why Labour Members are so coy about telling the House how many times the Labour Government intervened. We have heard a number of speeches from hon. Members who were members of that Government, and so had collective responsibility as Ministers within that Government. Not once did the Secretary of State for Industry in the last Labour Administration, or the one before that, intervene on any closure. They were pursuing the policy that this Government are pursuing now—that individual office closures are a matter for the Post Office board and not for the Government.
  An interesting question is which right hon. or hon. Member first thought of creating the Post Office board and forming the Post Office corporation. Surprise, surprise, it was the right hon. Member for Chesterfield—that flag-carrier of the lunatic Left, the headless dragon, the man who spends a lot of his time in the House trying to play the part of Pontius Pilate. He will have a great deal of difficulty in washing his hands of this one. He was responsible for setting up the board that had the delegated powers to deal with closures, collectively and individually. He will have to take his share of the responsibility for that.
  So much for the sincerity of the view expressed by Labour Members. The main feature of today's debate has been that it has exposed the hypocrisy of Labour Members who seek to condemn this Government for following policies that they pursued when they were in office. I have no doubt that they would pursue those policies again in the unlikely event of their ever regaining office.
  I and my hon. Friend the Minister thought that my hon. Friend the Member for York (Mr. Gregory) raised an interesting point on the service being made available before 9 am. I am sure that the board will look at that.
  The House should be clear that the Government are not closing post offices any more than the previous Labour Administration were.
  Mr. David Ashby: Is my hon. Friend aware that I have received a letter from the head postmaster of Derby, saying that the sub-postmistress in a village has resigned because only 10 pensions and 12 allowances were collected a week, and the Post Office has been unable to attract any applicants for this sub-post office, although it has advertised profusely? The sub-postmistress offered to open for three days a week, but, quite rightly, the Post Office does not feel that it should be following this course. One other point arises—
  Mr. Speaker: Order. The hon. Gentleman should be making an intervention, not a speech. One point is enough.
  Mr. Trippier: I am grateful to my hon. Friend for that intervention. It does not require any amplification.
  Some hon. Members have suggested that post office closures are a direct result of the financial and performance objectives set by Government. Indeed, some Labour Members have sought to suggest that such targets are some

  1033
  sort of wicked Conservative invention—ignoring the fact that the Post Office has had a financial target for 20 years and performance targets were first set in the late 1970s by the Labour Government.
  The essential rebuttal of that charge is that the benefits of the closures will not be realised during the period for which targets have been set. But, as my hon. Friend the Minister for Information Technology said earlier, the Government make no apology for pursuing the policy set out in the 1978 White Paper on the nationalised industries. The White Paper established a framework of financial discipline within which the Post Office is required to operate, notwithstanding the fact that it was a White Paper setting out the policy of the Labour Government.
  So what is this debate about? It is about the Labour Members seeking to claim that they, and they alone, care about pensioners, mothers of small children and all other users of post offices, and that they have some sort of monopoly on compassion. Mr. Speaker, that is the ludicrous fantasy of the Opposition. The plain fact is that there has been no change of policy since 1969.
  Of course this Government care. They care that the Post Office should be in a position to offer a wide range of services on behalf of Government Departments and other public sector bodies.
  The Post Office will not do that through charging prices that are higher than those charged by competitive organisations. The Government are not forcing people to have their pensions paid into their bank accounts. To remain competitive and ensure its future the counters business must remain efficient. That point was made by my hon. Friend the Member for Newark (Mr. Alexander). If that business remains efficient, that will bring benefit to the public, to sub-postmasters and sub-postmistresses and to Post Office staff. There is nothing new in this view. As I have shown, the need for efficiency and economy in the operations of the Post Office was recognised by the Labour Government in their 1969 Post Office Act.
  I must correct the view put forward by some hon. Members today that the Post Office is somehow mishandling the issue of individual closures. The Post Office goes to great lengths to ensure that all those with an opinion on a particular closure have the chance to make their views known—this was accepted even by the right hon. Member for Mansfield (Mr. Concannon)—and those views are considered carefully.
  It is the job of Her Majesty's official Opposition to oppose the Government, as their Leader keeps reminding them. They do not listen, but he keeps reminding them. I am deeply disappointed that some Labour Members have chosen to attack the Post Office board. Even the right hon. Member for Barnsley, Central and the hon. Member for Newcastle-under-Lyme (Mr. Golding) alleged that it does not care about the public that it serves. I know that such remarks will deeply offend the chairman, his board and his senior managers. I find it sad that hon. Members opposite should have stooped to such a low form of attack. We owe to all of these people a debt of gratitude. They have been dealing with a very difficult situation, particularly due to the strike at the Department of Health and Social Security in Newcastle.
  In conclusion, the post office counters business has made significant advances over the last few years. The Government recognise that. We also recognise that the counters staff deserve credit for much of this
  1034
  improvement, through their co-operation with management, in bringing in changes. But no one owes the Post Office a living. In the real commercial world there is effective competition for many of its services. If the counters business is to build on recent advances and to thrive, it will do so by offering good service at a price that the customer is prepared to pay. That is the way to ensure that volume is maintained and increased. That is the way to protect jobs. That is the way to fight closures. I urge my right hon. and hon. Friends to vote for the amendment.
  Question put, That the original words stand part of the Question:—
  The House divided: Ayes 208, Noes 348.

  Division No. 75]

  [7.11 pm

  AYES

  Abse, Leo

  Douglas, Dick

  Adams, Allen (Paisley N)

  Dubs, Alfred

  Alton, David

  Dunwoody, Hon Mrs G.

  Anderson, Donald

  Eastham, Ken

  Archer, Rt Hon Peter

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

  Ashdown, Paddy

  Evans, John (St. Helens N)

  Ashton, Joe

  Ewing, Harry

  Atkinson, N. (Tottenham)

  Fatchett, Derek

  Bagier, Gordon A. T.

  Field, Frank (Birkenhead)

  Banks, Tony (Newham NW)

  Fields, T. (L'pool Broad Gn)

  Barnett, Guy

  Fisher, Mark

  Barron, Kevin

  Flannery, Martin

  Beckett, Mrs Margaret

  Foot, Rt Hon Michael

  Beith, A. J.

  Forrester, John

  Bell, Stuart

  Foster, Derek

  Benn, Tony

  Foulkes, George

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

  Fraser, J. (Norwood)

  Bidwell, Sydney

  Freeson, Rt Hon Reginald

  Blair, Anthony

  Freud, Clement

  Boothroyd, Miss Betty

  Garrett, W. E.

  Boyes, Roland

  George, Bruce

  Bray, Dr Jeremy

  Godman, Dr Norman

  Brown, Gordon (D'f'mline E)

  Golding, John

  Brown, Hugh D. (Provan)

  Gould, Bryan

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

  Gourlay, Harry

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

  Hamilton, James (M'well N)

  Bruce, Malcolm

  Hamilton, W. W. (Central Fife)

  Buchan, Norman

  Hardy, Peter

  Caborn, Richard

  Harrison, Rt Hon Walter

  Callaghan, Jim (Heyw'd & M)

  Hart, Rt Hon Dame Judith

  Campbell, Ian

  Hattersley, Rt Hon Roy

  Campbell-Savours, Dale

  Healey, Rt Hon Denis

  Canavan, Dennis

  Hogg, N. (C'nauld & Kilsyth)

  Carlile, Alexander (Montg'y)

  Holland, Stuart (Vauxhall)

  Carter-Jones, Lewis

  Home Robertson, John

  Cartwright, John

  Howells, Geraint

  Clark, Dr David (S Shields)

  Hoyle, Douglas

  Clarke, Thomas

  Hughes, Dr. Mark (Durham)

  Clay, Robert

  Hughes, Robert (Aberdeen N)

  Clwyd, Mrs Ann

  Hughes, Roy (Newport East)

  Cocks, Rt Hon M. (Bristol S.)

  Hughes, Simon (Southwark)

  Cohen, Harry

  Hume, John

  Coleman, Donald

  Janner, Hon Greville

  Concannon, Rt Hon J. D.

  John, Brynmor

  Cook, Frank (Stockton North)

  Johnston, Russell

  Cook, Robin F. (Livingston)

  Jones, Barry (Alyn & Deeside)

  Corbett, Robin

  Kaufman, Rt Hon Gerald

  Corbyn, Jeremy

  Kennedy, Charles

  Cowans, Harry

  Kinnock, Rt Hon Neil

  Cox, Thomas (Tooting)

  Kirkwood, Archy

  Craigen, J. M.

  Lambie, David

  Crowther, Stan

  Lamond, James

  Cunningham, Dr John

  Leadbitter, Ted

  Davies, Rt Hon Denzil (L'lli)

  Leighton, Ronald

  Davies, Ronald (Caerphilly)

  Lewis, Ron (Carlisle)

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

  Lewis, Terence (Worsley)

  Deakins, Eric

  Litherland, Robert

  Dewar, Donald

  Lloyd, Tony (Stretford)

  Dixon, Donald

  Lofthouse, Geoffrey

  Dobson, Frank

  Loyden, Edward

  Dormand, Jack

  McCartney, Hugh

  1035

  McDonald, Dr Oonagh

  Robertson, George

  McGuire, Michael

  Robinson, G. (Coventry NW)

  McKelvey, William

  Rogers, Allan

  Mackenzie, Rt Hon Gregor

  Rooker, J. W.

  Maclennan, Robert

  Ross, Stephen (Isle of Wight)

  McNamara, Kevin

  Rowlands, Ted

  McWilliam, John

  Ryman, John

  Madden, Max

  Sedgemore, Brian

  Maginnis, Ken

  Sheerman, Barry

  Marek, Dr John

  Shore, Rt Hon Peter

  Marshall, David (Shettleston)

  Short, Ms Clare (Ladywood)

  Mason, Rt Hon Roy

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

  Maxton, John

  Silkin, Rt Hon J.

  Maynard, Miss Joan

  Skinner, Dennis

  Meacher, Michael

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

  Meadowcroft, Michael

  Smith, Cyril (Rochdale)

  Michie, William

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

  Mikardo, Ian

  Soley, Clive

  Millan, Rt Hon Bruce

  Spearing, Nigel

  Miller, Dr M. S. (E Kilbride)

  Steel, Rt Hon David

  Mitchell, Austin (G't Grimsby)

  Stewart, Rt Hon D. (W Isles)

  Morris, Rt Hon A. (W'shawe)

  Strang, Gavin

  Morris, Rt Hon J. (Aberavon)

  Straw, Jack

  Nellist, David

  Thomas, Dafydd (Merioneth)

  Oakes, Rt Hon Gordon

  Thompson, J. (Wansbeck)

  O'Brien, William

  Thorne, Stan (Preston)

  O'Neill, Martin

  Tinn, James

  Orme, Rt Hon Stanley

  Torney, Tom

  Owen, Rt Hon Dr David

  Wainwright, R.

  Park, George

  Wallace, James

  Parry, Robert

  Warden, Gareth (Gower)

  Patchett, Terry

  Wareing, Robert

  Pavitt, Laurie

  Weetch, Ken

  Pendry, Tom

  White, James

  Penhaligon, David

  Wigley, Dafydd

  Pike, Peter

  Williams, Rt Hon A.

  Powell, Rt Hon J. E. (S Down)

  Wilson, Gordon

  Powell, Raymond (Ogmore)

  Winnick, David

  Prescott, John

  Woodall, Alec

  Radice, Giles

  Wrigglesworth, Ian

  Randall, Stuart

  Young, David (Bolton SE)

  Redmond, M.

  Rees, Rt Hon M. (Leeds S)

  Tellers for the Ayes:

  Roberts, Allan (Bootle)

  Mr. Frank Haynes and

  Roberts, Ernest (Hackney N)

  Dr. Roger Thomas.

  NOES

  Adley, Robert

  Brinton, Tim

  Aitken, Jonathan

  Brittan, Rt Hon Leon

  Alexander, Richard

  Brooke, Hon Peter

  Alison, Rt Hon Michael

  Browne, John

  Amery, Rt Hon Julian

  Bruinvels, Peter

  Amess, David

  Bryan, Sir Paul

  Ancram, Michael

  Buck, Sir Antony

  Arnold, Tom

  Bulmer, Esmond

  Ashby, David,

  Burt, Alistair

  Aspinwall, Jack

  Butcher, John

  Atkins, Rt Hon Sir H.

  Butler, Hon Adam

  Atkins, Robert (South Ribble)

  Carlisle, John (N Luton)

  Atkinson, David (B'm'th E)

  Carlisle, Kenneth (Lincoln)

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

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

  Baker, Nicholas (N Dorset)

  Carttiss, Michael

  Baldry, Tony

  Cash, William

  Beaumont-Dark, Anthony

  Chalker, Mrs Lynda

  Bellingham, Henry

  Channon, Rt Hon Paul

  Bendall, Vivian

  Chapman, Sydney

  Bennett, Rt Hon Sir Frederic

  Chope, Christopher

  Benyon, William

  Churchill, W. S.

  Bevan, David Gilroy

  Clark, Dr Michael (Rochford)

  Biffen, Rt Hon John

  Clark, Sir W. (Croydon S)

  Biggs-Davison, Sir John

  Clarke, Rt Hon K. (Rushcliffe)

  Blackburn, John

  Clegg, Sir Walter

  Blaker, Rt Hon Sir Peter

  Cockeram, Eric

  Bonsor, Sir Nicholas

  Colvin, Michael

  Bottomley, Peter

  Conway, Derek

  Bottomley, Mrs Virginia

  Coombs, Simon

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

  Cope, John

  Bowden, Gerald (Dulwich)

  Cormack, Patrick

  Brandon-Bravo, Martin

  Corrie, John

  Bright, Graham

  Couchman, James

  1036

  Cranborne, Viscount

  Howarth, Gerald (Cannock)

  Critchley, Julian

  Howe, Rt Hon Sir Geoffrey

  Crouch, David

  Howell, Rt Hon D. (G'ldford)

  Currie, Mrs Edwina

  Howell, Ralph (N Norfolk)

  Dickens, Geoffrey

  Hubbard-Miles, Peter

  Dicks, Terry

  Hunt, David (Wirral)

  Dorrell, Stephen

  Hunt, John (Ravensbourne)

  Douglas-Hamilton, Lord J.

  Hunter, Andrew

  Dover, Den

  Hurd, Rt Hon Douglas

  du Cann, Rt Hon Sir Edward

  Irving, Charles

  Dunn, Robert

  Jenkin, Rt Hon Patrick

  Durant, Tony

  Jessel, Toby

  Dykes, Hugh

  Johnson Smith, Sir Geoffrey

  Edwards, Rt Hon N. (P'broke)

  Jones, Gwilym (Cardiff N)

  Eggar, Tim

  Jones, Robert (W Herts)

  Emery, Sir Peter

  Jopling, Rt Hon Michael

  Evennett, David

  Joseph, Rt Hon Sir Keith

  Eyre, Sir Reginald

  Kellett-Bowman, Mrs Elaine

  Fairbairn, Nicholas

  Kershaw, Sir Anthony

  Fallon, Michael

  Key, Robert

  Farr, Sir John

  King, Roger (B'ham N'field)

  Favell, Anthony

  King, Rt Hon Tom

  Finsberg, Sir Geoffrey

  Knight, Gregory (Derby N)

  Fletcher, Alexander

  Knight, Mrs Jill (Edgbaston)

  Fookes, Miss Janet

  Knowles, Michael

  Forman, Nigel

  Knox, David

  Forsyth, Michael (Stirling)

  Lamont, Norman

  Forth, Eric

  Latham, Michael

  Fowler, Rt Hon Norman

  Lawler, Geoffrey

  Fox, Marcus

  Lawrence, Ivan

  Franks, Cecil

  Lawson, Rt Hon Nigel

  Fraser, Peter (Angus East)

  Lee, John (Pendle)

  Freeman, Roger

  Lennox-Boyd, Hon Mark

  Fry, Peter

  Lester, Jim

  Gale, Roger

  Lewis, Sir Kenneth (Stamf'd)

  Galley, Roy

  Lightbown, David

  Gardiner, George (Reigate)

  Lilley, Peter

  Gardner, Sir Edward (Fylde)

  Lloyd, Ian (Havant)

  Garel-Jones, Tristan

  Lloyd, Peter, (Fareham)

  Glyn, Dr Alan

  Lord, Michael

  Goodlad, Alastair

  Luce, Richard

  Gorst, John

  Lyell, Nicholas

  Gow, Ian

  McCrindle, Robert

  Gower, Sir Raymond

  McCurley, Mrs Anna

  Grant, Sir Anthony

  Macfarlane, Neil

  Gregory, Conal

  MacGregor, John

  Griffiths, Peter (Portsm'th N)

  MacKay, Andrew (Berkshire)

  Grist, Ian

  MacKay, John (Argyll & Bute)

  Ground, Patrick

  Maclean, David John

  Grylls, Michael

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

  Gummer, John Selwyn

  McQuarrie, Albert

  Hamilton, Hon A. (Epsom)

  Madel, David

  Hamilton, Neil (Tatton)

  Major, John

  Hampson, Dr Keith

  Malins, Humfrey

  Hanley, Jeremy

  Malone, Gerald

  Hannam, John

  Maples, John

  Hargreaves, Kenneth

  Marland, Paul

  Harris, David

  Marlow, Antony

  Harvey, Robert

  Marshall, Michael (Arundel)

  Haselhurst, Alan

  Mates, Michael

  Havers, Rt Hon Sir Michael

  Mather, Carol

  Hawkins, C. (High Peak)

  Maude, Hon Francis

  Hawkins, Sir Paul (SW N'folk)

  Mawhinney, Dr Brian

  Hawksley, Warren

  Maxwell-Hyslop, Robin

  Hayes, J.

  Mayhew, Sir Patrick

  Hayhoe, Barney

  Mellor, David

  Hayward, Robert

  Meyer, Sir Anthony

  Heathcoat-Amory, David

  Miller, Hal (B'grove)

  Heddle, John

  Mills, lain (Meriden)

  Henderson, Barry

  Mills, Sir Peter (West Devon)

  Heseltine, Rt Hon Michael

  Miscampbell, Norman

  Hickmet, Richard

  Moate, Roger

  Hicks, Robert

  Monro, Sir Hector

  Higgins, Rt Hon Terence L.

  Montgomery, Sir Fergus

  Hill, James

  Moore, John

  Hind, Kenneth

  Morris, M. (N'hampton, S)

  Holt, Richard

  Morrison, Hon C. (Devizes)

  Hordern, Peter

  Morrison, Hon P. (Chester)

  Howard, Michael

  Moynihan, Hon C.

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

  Mudd, David

  1037

  Murphy, Christopher

  Speed, Keith

  Neale, Gerrard

  Spence, John

  Needham, Richard

  Spencer, Derek

  Nelson, Anthony

  Spicer, Jim (W Dorset)

  Neubert, Michael

  Spicer, Michael (S Worcs)

  Newton, Tony

  Squire, Robin

  Nicholls, Patrick

  Stanbrook, Ivor

  Norris, Steven

  Stanley, John

  Onslow, Cranley

  Steen, Anthony

  Oppenheim, Phillip

  Stern, Michael

  Oppenheim, Rt Hon Mrs S.

  Stevens, Lewis (Nuneaton)

  Osborn, Sir John

  Stevens, Martin (Fulham)

  Ottaway, Richard

  Stewart, Andrew (Sherwood)

  Page, Sir John (Harrow W)

  Stewart, Ian (N Hertf'dshire)

  Page, Richard (Herts SW)

  Stokes, John

  Parkinson, Rt Hon Cecil

  Stradling Thomas, J.

  Parris, Matthew

  Taylor, John (Solihull)

  Patten, Christopher (Bath)

  Taylor, Teddy (S'end E)

  Patten, John (Oxford)

  Tebbit, Rt Hon Norman

  Pattie, Geoffrey

  Terlezki, Stefan

  Pawsey, James

  Thatcher, Rt Hon Mrs M.

  Peacock, Mrs Elizabeth

  Thomas, Rt Hon Peter

  Percival, Rt Hon Sir Ian

  Thompson, Donald (Calder V)

  Pollock, Alexander

  Thompson, Patrick (N'ich N)

  Porter, Barry

  Thorne, Neil (Ilford S)

  Portillo, Michael

  Thornton, Malcolm

  Powell, William (Corby)

  Thurnham, Peter

  Powley, John

  Townend, John (Bridlington)

  Prentice, Rt Hon Reg

  Townsend, Cyril D. (B'heath)

  Price, Sir David

  Tracey, Richard

  Prior, Rt Hon James

  Trippier, David

  Raffan, Keith

  Trotter, Neville

  Raison, Rt Hon Timothy

  Twinn, Dr Ian

  Rathbone, Tim

  van Straubenzee, Sir W.

  Rees, Rt Hon Peter (Dover)

  Vaughan, Sir Gerard

  Renton, Tim

  Waddington, David

  Rhodes James, Robert

  Wakeham, Rt Hon John

  Rhys Williams, Sir Brandon

  Waldegrave, Hon William

  Ridley, Rt Hon Nicholas

  Walden, George

  Rifkind, Malcolm

  Walker, Rt Hon P. (W'cester)

  Rippon, Rt Hon Geoffrey

  Ward, John

  Roberts, Wyn (Conwy)

  Wardle, C. (Bexhill)

  Robinson, Mark (N'port W)

  Warren, Kenneth

  Roe, Mrs Marion

  Watson, John

  Rost, Peter

  Watts, John

  Rowe, Andrew

  Wells, Bowen (Hertford)

  Rumbold, Mrs Angela

  Wells, Sir John (Maidstone)

  Ryder, Richard

  Wheeler, John

  Sackville, Hon Thomas

  Whitfield, John

  Sainsbury, Hon Timothy

  Whitney, Raymond

  Sayeed, Jonathan

  Wiggin, Jerry

  Shaw, Giles (Pudsey)

  Wilkinson, John

  Shaw, Sir Michael (Scarb')

  Winterton, Mrs Ann

  Shelton, William (Streatham)

  Wolfson, Mark

  Shepherd, Colin (Hereford)

  Wood, Timothy

  Shepherd, Richard (Aldridge)

  Woodcock, Michael

  Shersby, Michael

  Yeo, Tim

  Silvester, Fred

  Young, Sir George (Acton)

  Sims, Roger

  Younger, Rt Hon George

  Skeet, T. H. H.

  Smith, Sir Dudley (Warwick)

  Tellers for the Noes:

  Smith, Tim (Beaconsfield)

  Mr. Robert Boscawen and

  Soames, Hon Nicholas

  Mr. Ian Lang.

  Question accordingly negatived.
  Question, That the proposed words be there added, put forthwith pursuant to Standing Order No. 33 (Question on amendments) and agreed to.
  MR. SPEAKER forthwith declared the main Question, as amended, to be agreed to.
  Resolved,
  That this House recognises that the future of the Post Office counters network will depend on its ability to compete successfully by operating efficiently and reducing the costs of its operation while having regard to the social needs of the United Kingdom; and fully supports the Post Office's efforts to secure by these means the future of an extensive and socially responsive network.

Housing Support Grant (Scotland)
7.25 pm
The Parliamentary Under-Secretary of State for Scotland (Mr. Michael Ancram): I beg to move,
That the draft Housing Support Grant (Scotland) Order 1985, which was laid before this House on 11th January, be approved.
It may be for the convenience of the House if we debate the following order and prayer with this order:
That the draft Housing Support Grant (Scotland) Variation Order 1985, which was laid before this House on 11th January, be approved.
That an humble Address be presented to Her Majesty, praying that the Housing Revenue Account Rate Fund Contribution Limits (Scotland) Order 1985 (S.I. 1985, No. 3), dated 4th January 1985, a copy of which was laid before this House on 11th January, be annulled.
Mr. Speaker: If the House agrees, so be it.
Mr. Ancram: Full details of the housing support grant settlement are set out in the report which accompanies the draft Housing Support Grant Order. Therefore, I shall not burden the House with an excessive amount of detail. However, I shall explain the thinking behind the proposals and also the limits which have been set out in the Housing Revenue Account Rate Fund Contribution Limits (Scotland) Order.
We have reached full agreement with the Convention of Scottish Local Authorities on the formula for the distribution of housing support grant this year. I should like to place fully on the record our thanks to the convention for its contributions to our discussions. In the housing support grant settlement for 1985–86, the Government have again aimed at concentrating resources on those authorities which require them. We have estimated eligible expenditure at £282 million and relevant income at £234 million. Housing support grant will therefore total £48 million which will be distributed among 23 authorities which we believe will incur deficits on their housing revenue accounts in 1985–86. We have of course left out of the reckoning the expenditure and income of authorities which could in our view generate a surplus.
As I have explained, the figure of £48 million reflects our best current estimate of the difference between eligible expenditure and relevant income. Housing support grant is of course, however, highly sensitive to changes in the level of interest rates. We shall therefore keep the situation under review. If in practice interest rates prove to be significantly different from our current assumptions, we shall bring forward an appropriate variation order in due course. The fact that we are today introducing a variation order in respect of the housing support grant for the current year, 1984–85, in the sum of £10·1 million reflects a similar undertaking given last year at this time. If the most recent movements in interest rates are sustained, a further variation order for the current year may in due course be required.
Labour Members will no doubt endeavour to present our housing support grant settlement proposals, and the rate fund contribution limits set out in the other order that we are debating today, as a direct attack on council house tenants, and as usual they will be talking rubbish. The decisions that we have made in previous years, and the figures in the orders before us today, reflect our continuing concern to balance the undoubted need for expenditure on housing against our responsibility to control public expenditure as a whole. It would, for example, be a waste

1039
of valuable resources, which have always been a matter of laughter for the hon. Member for Falkirk, East (Mr. Ewing), to pay grant to an authority at a level above that needed on reasonable assumptions to balance its housing revenue account.
In our estimation of expenditure, by agreement with the convention, we are again applying an average rate of interest to authorities' individual volumes of debt; and 10·4 per cent. has been assumed in the settlement. I repeat, however, that if differences in interest rates lead to significant differences in the level of authorities' loan charges we shall consider variation orders in due course.
The other main element of expenditure which we have to consider is the amount to be allowed for management and maintenance. In the 1984–85 settlement we allowed for an average expenditure of £262 per house—£226 million in total. Authorities, however, chose to budget for £284 per house—£245 million in total. However, no sound evidence has been presented to me of any need for a real increase in our provision for management and maintenance. As a consequence we have uprated the provision in last year's order by 4 per cent. to hold it generally constant in real terms at £272 per house—£232 million overall. Indeed, our stance on this expenditure has again been endorsed this year, with more than half of Scotland's housing authorities continuing to budget for a figure below that provided in our 1984–85 settlement.
On the income side, we are assuming for the purposes of the settlement that rents will increase by £1 per week over 1984–85 order levels, bringing rents to £12·59 in order terms. This assumed increase in rent matches our estimate of the overall average impact that the Government's decisions on housing support grant and rate fund contribution limits should actually have on council house rents.
This leads me to the Housing Revenue Account Rate Fund Contribution Limits (Scotland) Order which was also laid before the House on 11 January. It is right that we should consider this order at the same time as the Housing Support Grant Orders, since they are all closely linked.
It may be helpful to the House if I restate the reasons why we felt it necessary to take power in last Session's Rating and Valuation Amendment (Scotland) Act to limit the contributions which local authorities may estimate to make from their general rate fund to their housing revenue account in this way. The rate fund contributions meet the deficit on the account between local authorities' expenditure, mainly on servicing debt and management and maintenance, and their income from rents and grant. Over the past five years—and in spite of our efforts to persuade authorities to exercise voluntary restraints through the housing expenditure limits system—the rate contribution to housing has risen inexorably from £75 million, or £84 per house, in 1979–80 to £120·5 million, or £140 per house, in 1984–85.
The Government have a responsibility to take decisions about the total amount of resources which the nation can afford to devote to housing, within the general context of our objective of reducing public expenditure. We have, as I have already explained, reduced housing support grant in recent years in line with reasonable assumptions about authorities' expenditure needs and the amount of income which they might generate from rent and rates. I make no
1040
apologies for this. Authorities' decisions, however, to increase the resulting proportion of expenditure borne by the ratepayer—thereby keeping rents unnecessarily and artificially low—have had the unfortunate effect of limiting the share of public expenditure resources which could be made available for necessary capital works.
The result has been that in the present year alone local authorities in Scotland have forgone some £20 million which would otherwise have been available for much needed construction and improvement work in order instead to fund rent subsidies for council house tenants. Over the past four years, more than £110 million has been lost in this way. In the Government's view, this situation quite simply could not be allowed to continue. It places an intolerable burden on the ratepayers and, because it has led to the delay of much needed work on the housing stock, it is against the long-term interests of tenants themselves. It is bad for tenants and bad for ratepayers. On any view that made it unacceptable.
Our decision to ask authorities to budget for rate contributions to the housing revenue account not exceeding £89·5 million in 1985–86, as set out in the order before the House, has enabled us to issue provisional capital allocations on the housing revenue account totalling £267 million in Scotland next year. This figure is £40 million more than the final allocation of £227 million issued last March and represents in anyone's view a very substantial increase in real terms—particularly significant at a time when public expenditure elsewhere is necessarily being restrained. Local authorities will be able to spend the increased sum of £40 million on construction and improvement work, including tackling the problems of condensation and dampness. It is £40 million more work than possible this year. As a general guide, every additional £1 million of housing investment means that a further 42 small general needs houses, or 26 sheltered houses, can be built. Alternatively, 320 local authority houses can be modernised, or 60 properties which the local authority has acquired can be rehabilitated. Taken as a whole, this addition to the HRA is something which no reasonable observer can sniff at, and it is, I believe, an indication of a failure to understand the housing finance situation in Scotland so to do. The hon. Member for Glasgow, Garscadden (Mr. Dewar) sits in his seat laughing at the idea of £40 million more being made available to deal with problems of condensation and dampness. I trust that that will be noted by his constituents who suffer from such problems.
An additional feature of the system is that we have been able to introduce a new arrangement this year for any authority which budgets for a rate fund contribution below the prescribed limit. Where an authority's budget falls below its limit, we will be prepared to increase its capital allocation by an equivalent amount. Authorities will, therefore, have a real opportunity next year to increase the capital expenditure they can undertake even further, provided that they hold back on their rate fund contribution and then they can use it for dealing with dampness, condensation and so on. That is good for tenants and good for ratepayers.
In setting an aggregate limit to rate fund contributions of £89·5 million next year we have asked individual authorities to budget for a rate fund contribution 10 per cent. below the guideline issued for housing expenditure limit purposes last year, or not to exceed their actual budgeted figure, if that was lower. We have consulted

1041
authorities very widely about the implications of the individual limits set, in line with the undertakings which we gave during the passage of the legislation last Session. In particular, we have held detailed discussions with the Convention of Scottish Local Authorities and we have received and carefully considered representations from over half of all individual authorities.
As a result, we are convinced that the limits proposed in the order are fair and reasonable. Authorities were—at their own request—given very early notification at the beginning of October of the provisional limits which we proposed to set. We then allowed a substantial period for consultation between October and the middle of December, when final decisions had to be reached to allow us to proceed with arrangements for making and laying the necessary order.
During the consultation period, we indicated that we would look particularly carefully at representations from authorities which believed that they were faced, as a result of the rate fund contribution limit proposed, with making a rent increase significantly in excess of the average, which we estimated to be slightly over £1 per week—provided that the excess rent increase did not result from the authority's own decisions to ignore housing expenditure limit guidelines in the past, or provided there were other special circumstances which required the authority to budget for a higher rate contribution.
Mr. James Wallace: The Minister has said that there was consultation. To what extent did that consultation have an effect on the Government? He said that the Government expect an average increase of just over £1 per week. In Shetland the proposed increase could be £7. In Orkney the required increase is expected to be 30 per cent. Neither of these councils can by any stretch of the imagination be taken to be the bastions of socialism that the Minister so often castigates. What sort of figures did he have before him if rent increases in these authorities are to be so much in excess of the average that he has talked about?
Mr. Ancram: If the hon. Gentleman had been listening to what 1 have been saying he would have realised and appreciated that we were judging it against a number of assumptions which were agreed by COSLA in the consultations—assumptions as to the nominal rent level which we were seeking, as to the interest rates and as to the management and maintenance costs uprated to meet inflation in this year. As I have said, we looked at the representations made to us. In many cases we found that the authorities thought that their rent increases would be much higher than £1, because in the past they had either ignored housing expenditure limits or had found that their management and maintenance costs were much higher than the average for Scotland. Obviously, we considered the matter, because in the event we concluded that only two authorities met the criteria that we had set, and merited a higher rate fund contribution limit. It may surprise the hon. Member for Orkney and Shetland (Mr. Wallace) to know that they were Orkney, and Badenoch and Strathspey. We also accepted the argument of Edinburgh district council that, in its particular circumstances, if it was to be treated fairly with all the other authorities, its rate fund contribution limit needed to be raised. That we did in December.
In the case of all other authorities that made representations, we concluded that either the authority did
1042
not face a rent increase significantly in excess of the average, or that if it did it was due to its failure to observe housing expenditure limit guidelines in the past, or to its including in its calculations an estimate of loan charges significantly higher than we thought reasonable, or to its intending to increase expenditure on management and maintenance by significantly more than the rate of inflation. As the hon. Member for Orkney and Shetland, who is a lawyer, will I am sure accept, where those circumstances applied, we did not think that any increase in the rate fund contribution limit was justified.
No doubt we will hear during the debate exaggerated claims from Opposition Members about the impact of rate fund contribution limits on council house rents. We have made clear our view that, making reasonable assumptions about loan charges and management and maintenance costs, we believe that the average rent increase in Scotland next year need be only slightly above £1 per house. That figure was not seriously disputed by COSLA when I met it in December.
Obviously, the rent implications for individual authorities would vary considerably around the average, depending on their own estimates of loan charges next year and on their proposed expenditure on management and maintenance. But I believe that, provided authorities do not increase expenditure on management and maintenance by more than the rate of inflation, few authorities in Scotland need face a rent increase next year of as much as £2 per house per week. I reject totally some of the exaggerated claims about the likely consequences for rents which we have heard from certain authorities in recent weeks. I will return to some of those claims later.
In the current year the average Scottish local authority rent stands at approximately £10·46. The rents of many individual authorities are lower still. In Glasgow. the average rent this year is only £9·75. In Aberdeen it is £8·90. In Dundee it is £8·82. That compares with an average local authority rent in England and Wales of £14·71. Yet in 1984 the average earnings of manual workers in Scotland were actually higher than those of their counterparts in England and Wales, and the proportion of that being spent on rents was considerably lower.
With over half of all households in Scotland in public sector rented housing, it is difficult to justify such low rent levels. If tenants have genuine difficulty in meeting their housing needs, a full and adequate scheme of relief is available to them through the housing benefit system. I am sure that the majority of tenants would accept that their rents must make a realistic contribution to the cost of providing their houses. Indeed, I believe that many of them would be happy to pay higher rents in return for a better service. Perhaps local authorities fear that a more realistic relationship between rents and the cost of providing the service might lead more tenants to question whether their landlords are providing value for money.
I am convinced that there is room for greater efficiency—with consequent rent savings for tenants—in the way that local authorities run their management and maintenance services. For example, if Glasgow brought its management and maintenance expenditure per house down to the average for the other 55 authorities, A would save the equivalent of a reduction in rents of £1·14 per house per week. If Edinburgh, which now spends more on management and maintenance per house than any mainland authority in Scotland, were to do the same, it

1043
could cut £1·70 off every tenant's weekly rent. These figures speak for themselves, and I hope that tenants will ask whether their landlords are giving them value for money.
Mr. Robert Hughes: Will the Minister stop using the phrase "management and maintenance expenditure" and instead differentiate between management expenditure, and repair and maintenance expenditure? It is the figure for the latter that should be taken into account.
Mr. Ancram: If the hon. Gentleman had listened to me, he would know that we have uprated last year's figure to keep it in line with inflation. Thus the management and maintenance assumptions of last year are being maintained in real terms.
We are concerned to reverse the present rising trend in rate subsidies to housing. Such subsidies contribute nothing to the provision or modernisation of public housing. They do not encourage efficiency. They benefit only the better-off tenant who has no need for subsidy, and they are wasteful of scarce resources. We have consulted widely, and at length, on the individual limits in the order before the House, and I am satisfied that the figures are fair and reasonable. In particular, I believe that the impact on council house rents, which I calculate will be to raise rents on average by little over £1 per house per week, is not excessive and is justified in present circumstances.
In the past few weeks we have heard several claims being made. In particular, we have seen press reports that Edinburgh district council
"is refusing to put up rents by the Secretary of State's average of £1."
That is not surprising, because the council does not need to. Calculations carried out by Shelter—hardly one of the Government's arch supporters, and a body that generally sets its figures on the high side—suggest in the briefing paper sent to Members of Parliament that Edinburgh could comply with its rate fund limit and increase its management and maintenance costs in line with inflation with a rent increase of only 18p.
I think that ratepayers and tenants have a right to ask what the greatly increased expenditure that Edinburgh claims is needed is for. I have pointed out that Edinburgh already spends more on management and maintenance per house than any mainland authority; administration takes up a staggering £122 per house—more than 50 per cent. above the Scottish average. The plain fact is that Edinburgh has been very fairly treated indeed. We have revised its rate fund limit, and we have also increased its capital allocation on the HRA block by 50 per cent. this year.
Mr. Gavin Strang: The Minister does not seem to realise that Edinburgh's council rents are much higher than the rents of other Scottish cities. Indeed, I hope to be able to refer to that later. Furthermore, the hon. Gentleman does not seem to realise that Edinburgh's housing stock has been massively neglected in recent years. Hon. Members on both sides of the House have witnessed that. More expenditure is drastically needed.
Mr. Ancram: The hon. Gentleman has made my point for me. I have just confirmed that we have increased Edinburgh's HRA block by 50 per cent. this year. If that
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is not a substantial increase, I do not know what is. That has been done to enable Edinburgh to look after its stock. The hon. Gentleman made a valid point in saying that Edinburgh rents are high. But that is precisely why the district council is talking nonsense when it says that it is being required to impose excessive rent levels.
I have heard what Edinburgh has to say. but if Edinburgh chooses to go outside the law we can conclude only that it is doing so for purely dogmatic reasons. In due course I am sure that voters will take note, and that they will act accordingly. But for the more immediate future let me make it clear that if Edinburgh or any other local authority decides not to budget for rate fund contributions to the housing revenue account within the limits set by the Secretary of State they should be in no doubt that my right hon. Friend will take all possible steps open to him to ensure compliance with the law. The principal powers open to him are his default powers under section 211 of the Local Government (Scotland) Act 1973 under which —if following an inquiry he considers that an authority is in default—he can press for an order of specific performance from the Court of Session. Failure by the authority to comply with such an order of the court would constitute contempt of court, with all the penalties that that entails; and in certain circumstances individual councillors can be required personally to make good illegal expenditure incurred.
We have, however, as do the people of Scotland, a legitimate interest in the official stance of the leadership of the Labour party on this issue—the question of the breach of the law. Parliament has a right to know where the Labour party stands on the question of breaking the obligations placed on local government by this democratic Parliament. The hon. Member for Garscadden has been asked this before, and I am offering him the opportunity tonight to make his position clear. Those of us who have tried to follow the stance of the Scottish Labour party through the media must confess to being confused. On the one hand, it apparently does not condone law breaking—how comforting, if I may say so. On the other hand—and it is beginning to sound like the Liberal party in this—it supports councils in breaching statutorily imposed limits, or so it would seem.
But I understand that our Labour leaders in Scotland have reconciled their position in some amazing stretch of legal principle founded upon the belief that only proof of illegality, whatever the prima facie nature of the act, should merit their opprobrium and condemnation. What a miracle of twisted morality. What in effect they are saying is, "Do what we think is wrong with our blessing, and we will not withdraw that blessing and replace it with condemnation until we are told it is wrong and when it is too late to stop you. We will lead you firmly from behind." That is the message of the Labour leadership in Scotland to Labour councillors. What an abdication of leadership. What a run for cover from the threat of militant disapproval. What a farce.
The hon. Member for Garscadden is an honourable and reasonable man. I hope that he will take this opportunity to tell the House that his party has been misreported in the media. I trust he will tell the House that his party respects the law, that his party accepts the democratic decisions of Parliament unless and until they are changed and that he calls on his supporters in local government to respect the law and to abide by it. If he is honest, he cannot sit on the fence, he cannot lead from behind and tonight he cannot

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cavil. Today he has an opportunity to set the record straight. Does he in the true principles of democracy state that the law must be obeyed and that he will give no comfort to those who seek to break it, or does he subscribe to that dangerous path that supports its breach? He can wriggle no longer, for the question is simple and the answer in honesty is unavoidable.
It is in the confidence that Her Majesty's Opposition can only back the law determined by this Parliament that I commend these orders to the House.
7.52 pm
Mr. Donald Dewar: I do not know about my hon. Friends, but I was not terribly impressed with all that. There was a slight lack of continuity, I thought, about the hon. Gentleman's remarks. They had been very carefully prepared. I thought there was a great scarcity of argument for the Under-Secretary to remark, "I am satisfied that the figures are reasonable", and to conclude all argument and all discussion on that note does not seem to me to be entirely convincing.
I regret that the Secretary of State for Scotland did not open the debate. I say that not as a matter of protocol or etiquette—after all, some of my hon. Friends might think that he would not be missed in this or any other debate—but because this is a rather unusual event and we are not engaged in a run-of-the-mill outbreak of bickering between Government and Opposition, the kind of trivial arguments that sometimes mark debates in this place.
In these orders and in the Housing Revenue Account Rate Fund Contribution Limits (Scotland) Order we have a real and unwelcome departure from accepted practice and a real shifting in the balance of power between central and local government. I fully accept that on many occasions in the past we have had disappointing and sometimes plain bad housing support grant settlements. Very often over the last few years we have had some driech and dreary testimonies to the indifference and, if I may say so, insensitivity of Ministers who just do not seem to be able to grasp the reality of the crisis that is facing district councils and housing authorities in Scotland.
At this time there is no doubt that discontent is sharpening into dissent, and legitimate argument is reaching the point of escalating into confrontation. In that situation I do not think that it is satisfactory that some unfortunate junior Minister is put up to read a departmental brief in a thoroughly unsympathetic and, it seems to me, uncomprehending way. One of my hon. Friends was calling, "Bring back Russell Fairgrieve" — at least he wrote his own speeches. I can think of no fairer criticism of the efforts of the hon. Member for Edinburgh, South (Mr. Ancram).
Why do we protest? First, I wish to address myself to the figures and to the housing support grant settlement. We know of course that this year it is £48·2 million, a new low, and I believe—and I think I will carry a great deal of support across the range of opinion in Scotland—that is an insult when measured against the housing needs of the nation. When we remember that in 1979–80 it stood at £213 million and that it reached £228 million in the second year in which the hon. Gentleman was in St. Andrew's House, to see it now at £48·2 million marks the complete inadequacy of the Government's response to Scotland's housing needs. What we see in terms of the housing
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support grant is a remnant, a battered remains of the Government's contribution. As for the district councils, there are only 23 survivors. Thirty-three in some miraculous way have been given a surplus manufactured on improbable assumptions and based upon the arithmetic of make-believe.
The Under-Secretary in a sense used an interesting phrase in that regard when talking about surpluses. He referred to authorities "which could in our view generate a surplus". That may be the view of the Minister, but the artificiality of the figures that are used—the deemed amounts for maintenance and repairs, the deemed rent income — bears no reality in many cases to what is happening in local government in Scotland. It gives an air of complete unreality to these damning calculations which have resulted in the quite catastrophic slump in support to the housing revenue account. Even among the rump which have survived—those who are still receiving housing support grant — a large number of authorities are suffering greatly. Glasgow, which of course receives the biggest share of what remains, will receive £24·8 million in the coming year. Five years ago it received £52·2 million. As a Member of Parliament representing Glasgow I know nothing—and I put this as gently, as negatively, as I can— in the housing conditions of Glasgow that could justify that kind of catastrophic slide in the Government's commitment and their help and support.
Of course, it is not just the great conurbations that are suffering. Banff and Buchan authority is down about £700,000, and no doubt the hon. Member for Banff and Buchan (Mr. McQuarrie) will have views upon that The authority of the Minister's Parliamentary Private Secretary, the hon. Member for Moray (Mr. Pollock), comes down from £1·68 million to £980,000. Argyll and Bute authority, which is represented by the Under-Secretary of State, the hon. Member for Argyll and Bute (Mr. McKay), loses close on £500,000, which is a not insignificant sum, certainly for a district council of that size. Everywhere the situation is the same. One cannot take that kind of money from the maintenance of the housing stock without a substantial and worrying impact on all concerned.
The Under-Secretary, perhaps understandably, given that he had such a thin and miserable case on the current expenditure side, tried to make a good deal of the capital expenditure plans for the coming year. I am not sure that his figures compare like with like. I would think that £244 million to £270 million was a fairer comparison on the HRA side. Of course, these are figures in cash. Perhaps the hon. Gentleman would like to look at his Down White Paper on public expenditure which was published yesterday. After all, we are not looking at the capital side, and presumably he dragged it in as some sort of camouflage exercise for the purposes of the debate. The hon. Gentleman will observe that between 1984 and the next financial year the revenue expenditure of local authorities on housing is budgeted to drop from £111 million to £98 million. On the capital side, there will be a drop from £295 million to £260 million. The Minister will say that much of that is due to the private sector, the non-RHA, decline. I accept that, but he cannot get away from the fact that his White Paper shows that on both revenue and capital there will be a cut of about 15 per cent. between this year and next year. That seems to give the

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lie to and to undermine the spurious and specious claims that the Government have shown concern for the housing problems of Scotland.
Mr. Ancram: The hon. Gentleman seems to have great difficulty in understanding the figures on the HRA. Will he accept that housing authorities in Scotland have been given consent to spend £227 million this year? On the figures that I have announced today, they will be able to spend £267 million next year. That is a cash increase of £40 million, which will be spent on precisely the problems that the hon. Gentleman is talking about.
Mr. Dewar: I suspect that the Minister is omitting some factors. There was almost certainly an addition and the hon. Gentleman usually boasts about such additions during the financial year. The figures that I gave come from the Government's White Paper. I am not manufacturing anything. The Minister is doing the manufacturing and, in his desperation, he is reduced to arrogant sneering about the mental powers of others. He is in a poor position to make such comments.
Knowing some of the problems involved—I talk to the people involved and look at what is happening—I find it offensive for the Minister to suggest that the scourge of dampness in public sector housing in Scotland could be dealt with by a minor adjustment in the spending priorities of local authorities. That sort of statement trips too easily off the Minister's tongue. If he thought about it, he would recognise that he is being, at best, misleading and is, at worst, putting up a dishonest smokescreen to hide the reality.
The impact of the housing support grant settlement and the cuts that I have referred to will be frightening. We shall see the housing stock deteriorating and standards falling. The struggle in many areas is to maintain property in a wind and watertight condition. The Under-Secretary said that there is no sound evidence that we need more money for repairs of council houses in Scotland. He should visit almost any large housing scheme, certainly in west central Scotland and, on the evidence of my briefer acquaintance with other areas, almost any other part of the country.
I often feel sorry for the staff of housing departments who can see the problems and are often under siege from tenants who are suffering from the problems. Those staff know that they do not have the resources to provide the solutions that they would like to provide. I am even sorrier for the tenants who have to live with faults and defects that affect the quality of their lives. I have anger and contempt for a Government who, in the face of all the evidence—hon. Members should just read the Select Committee report on dampness — pretend that the problem is nothing to do with them and is not of their making.
Leaving for a moment the size of this year's settlement and moving on to the rate fund contribution limits order, our second objection is that the Under-Secretary failed to address himself to the points of principle behind that order.
I agree with the Minister that the housing expenditure limits system was unsatisfactory and involved a complicated and unjust series of penalties related to rent levels. We are glad to see the back of that system, but it is a perverse ingenuity for the Government to come up with a solution that is even worse. Housing expenditure limits should have been scrapped and not replaced.
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I believe that the Government's intention is to try to control rent levels in Scotland. That is an important departure, because I presume that the Minister intends to keep the machinery in place and that, year after year, we shall see rents forced up in an unacceptable manner.
District councils have many important functions, but I do not think that anyone would disagree that, basically, they are housing authorities. It is an essential power of a housing authority, and one of the reasons why its councillors are elected, that it can set its own rent levels. Soon, rents, rates and the pattern of housing expenditure, particularly now that guidelines are virtually mandatory—because of the way in which the general abatement works and the apportionment of the general abatement—will be dictated by men from St. Andrew's house.
The power of the Secretary of State is increasing. In the interests of local democracy, it ought to be diminishing. That is not merely a partisan party point, though it could be presented as such. I believe that my view is shared by COSLA, whatever the colour of the politics of various councils. My impression at yesterday's lobby organised by COSLA's district councils policy committee—I concede that many people were talking about the rate support grant as well as housing matters—was that Liberal councils, independent councils and even Tory councils —councillors of Eastwood and of Bearsden and Milngavie specifically asked to be associated with the lobby—did not like the fact that their powers are being undermined and that the balance of power is being tipped in favour of the Scottish Office.
I do not want to read a constitutional lecture, and I would probably not be competent to do so, but I make the simple point that one of the strengths of our country is that we have competing and balancing centres of power. That has been true of our government structure in Scotland. If we weaken the power of local government against central Government, we shall remove an important safeguard.
When we protest about the rate fund contribution limitation system, which is being used for the first time, it is not just because of the effect on rents. It is also because we believe that it is wrong and objectionable. I hope that the Minister will reply to those important matters.
The new scheme will force up rents. That is what the Government want to do and, to be fair to the Under-Secretary, he made no bones about that. The Government claim that the system will increase rents by just over £1. We all deal in averages, but I suspect that that average may turn out to be too low. The Minister conceded that in many areas rent increases will be considerably higher than that. For example, the rate fund contribution limitation will add about £1 to rents in Glasgow. On top of that come the cut in housing support grant and the effects of inflation. Glasgow tells me that it is looking at an increase of £2·20 or perhaps more. The hon. Member for Orkney and Shetland (Mr. Wallace) has referred to Shetland's startling figure of £7. There may be special circumstances there—the council has a big modernisation programme under way—but that is still a very large sum.
Even the Government's own figure is twice the going rate of inflation. I do not believe that we ought to hijack the traditional and central power of district councils to allow Ministers, who represent a rump of opinion in Scotland, to do a bit of unjustified social engineering. There is no doubt that it is a matter of social policy—we heard about the English comparisons and about wage

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rates in Scotland. I am unimpressed by those arguments and I believe that tenants will also be unimpressed. If rents are far too low in Scotland, why is the housing benefits scheme, constructed by this Government, extended to over 60 per cent. of council house tenants in Scotland? In the light of that one startling fact, how can it be claimed that rents are too low? By how much will that 60 per cent. figure increase if we allow the Government to push up rents as they suggest? The whole system is arbitrary and unreasonable, as is shown by the concept of a 10 per cent. cut across the board.
Edinburgh's rate fund contribution is £47 per house. The city has a legacy of neglect and inadequate services. Its rate fund contribution is half the average in Scotland and less than a third of the contribution of many of the larger councils in Scotland. What is the point of holding them down at that level, which is out of line with practically every other council in Scotland, and certainly every other comparable council? It makes no sense and the Minister must know that it is nonsensical.
The nominal rate fund contribution for Glasgow was £29 million and it is to be reduced to £26·5 million. Everyone knows that it was in fact £35 million in the current year. Therefore, £8·5 million is to be found from rents. A measure of the pass to which things have come is that Glasgow has raised in the Court of Session an action against the Secretary of State claiming that the order is ultra vires. That does not affect the debate because the proceedings have not reached the stage where they impinge upon the sub judice rule. The summons has only just been served.
The Minister preaches to me sanctimoniously about the rule of law. I think that there might have been a case for staying the Government's hand until the Court of Session had decided the outcome of the case. It seems that it is a stateable case, and I say that as modestly as I can.
The Minister spoke about consultation, but we know that one of the factors that brought the Glasgow case to the courts was the way in which Glasgow's representations about the considerable blow that the settlement would have on the rate fund contribution limit were met. They were answered by a stereotyped letter in which "Glasgow" had been written hurriedly in ink. That showed that the answer was being sent to all authorities irrespective of their cases.
I hope that the House will recognise that we feel strongly about this matter. I believe genuinely that the monstrous business is unnecessary. The housing revenue account between 1978–79 and 1985–86 shows that the Government's contribution to housing support grant in Scotland — that is the conglomerate housing revenue account—has decreased from 39 per cent. to 7 per cent. In other words, the Minister has cut his contribution to almost nothing.
The percentage of the housing revenue account that is met from rents, which are apparently such a worry to Conservative Members, has increased in the same period from 47 to 80 per cent. The Government's contribution has decreased massively while rents have increased massively. That is the trend and it is one that makes nonsense of the Minister's more excitable claims and those of his colleagues. I accept that the rate fund contribution has increased, but only from 14 per cent. to 18 per cent. It has been held steady over the past three years, and if the Minister has his way it will come down to 13 per cent.
The rate fund contribution has been largely static. There has been very little movement in that area while
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rents have been increased to meet a larger and larger share of the general burden on the revenue side. Total housing resources in cash terms this year as against last year will decrease by £71 million. There will be a decrease of £30 million in the rate fund contribution, of £14 million in the housing support grant and of £27 million in the capital account overall.
Mr. Barry Henderson: I do not follow the hon. Gentleman's figures. He has talked about the rate fund contribution having been decreased. The extent to which there is to be a rate fund contribution to the housing revenue account has been reduced. If we encourage local authorities to pay a substantial rate fund contribution, one of the effects will be to diminish the amount to be paid in housing benefit by the general body of taxpayers but not ratepayers.
Mr. Dewar: The hon. Gentleman has misunderstood at least some of the figures that I have recited. I was saying that the rate fund contribution has increased only marginally while rents have been increased massively. At the same time, the Government's contribution has been reduced massively. The overall resources available for housing have decreased by about £71 million. I accept that the rate fund contribution can be a controversial issue.
I understand that the local authority within the constituency of the hon. Member for Fife, North-East (Mr. Henderson) is facing a 37 per cent. increase in its rates in the coming year, although it is within the Government's guidelines. The hon. Gentleman is interested in helping the ratepayer by cutting the rate fund contribution, but if we really want to help the ratepayer we should do so by concentrating properly on the effects of revaluation. We should do so by stopping the savage reductions in the rate support grant which are facing so many councils at the same time as large rates increases. We should not do so at the expense of council house tenants by means of an artificial and unnecessary reduction in the rate fund contribution.
Mr. Michael Forsyth: Will the hon. Gentleman deal with the central point? By raising rents rather than increasing the burden on the ratepayer we shall move away from a system which is regressive, which makes those who cannot afford to do so pay towards a system that puts the burden on those who can pay. It is wrong for the hon. Gentleman to attack the Government because they are moving away from a system that subsidises council house tenants who may have large incomes to one that protects ratepayers who do not.
Mr. Dewar: I accept that the hon. Gentleman is obsessed with the tax burden generally and would like to see it cut. I am not sure about the equity of his proposition that the entire burden should fall on the comparative minority of tenants who do not receive housing benefit. I am not greatly attracted by that proposition. That shows the difference of approach between us, which we shall have to argue about on a wider stage.
This collection of orders illustrates a mean-minded approach which is likely and, I fear, intended to make council housing a less attractive option than it was. I fear that there are those in the Conservative party—I need look no further than those on the Conservative Benches—who feel that council housing should be a fall-back option or a safety net for those who are not fortunate

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enough or confident enough to be able to scramble successfully in the private sector. That is not a concept of public sector housing which commends itself to my right hon. and hon. Friends or to the majority of those in Scotland.
Councillors are bitter and disillusioned, as are many tenants and ratepayers generally. After all, tenants are ratepayers and that should not be forgotten. Council house tenants do not live in ghettos. They pay their rates and taxes and deserve fair consideration. The Minister should not underestimate the pressure on councillors from public opinion in Scotland, which they much more fairly represent than Ministers. No one on the Opposition Benches seeks confrontation. None of my colleagues wants to see local authorities and the Government at loggerheads and facing a complete impasse, which will necessitate the creaking and oppressive machinery of coercion coming into play. I do not want to share the Minister's vision of section 211 inquiries, Court of Session actions, surcharges and all the other procedures.
Mr. Ancram: I do not want that either.
Mr. Dewar: At least we have that in common. We should be considering how we can best avoid that happening. I will not encourage or support those who find themselves in defiance of court orders. That would not be proper and could not be done. Councils are entitled at this stage and are right to stand their ground and to put their point of view to Ministers, but if there is no response from the Government we could end up with confrontation. That will be a tragedy which no one wants.
Who can make the greatest contribution to avoiding that confrontation? That can come from Ministers, who are presently insisting on an unreasonable set of propositions which bear no reality to the situation that is faced by district councils. I say to the Secretary of State, his satraps and his mouthpiece for the day that if he wants to show a little common sense he will best do so by withdrawing from the brink, by recognising the housing needs of Scotland and by not forcing councillors into a position where choice becomes impossible. They should not be asked at his behest to betray the interests of those who elected them and to whom they are answerable.
Misery and more misery are offered by this clutch of orders. The orders offer poorer services and higher rents—people will pay more and get less. I believe that the housing support grant settlement as outlined is hopeless and inadequate. The rate fund contribution limitation is misconceived and oppressive. The Opposition want none of it, and we shall vote accordingly.
Mr. John Home Robertson: On a point of order, Mr. Deputy Speaker. In the light of what has been said, it would be intolerable if the Under-Secretary of State, the hon. Member for Edinburgh, South (Mr. Ancram), were to reply to the debate. Have you any way of ensuring that the right hon. Member for Ayr (Mr. Younger), who calls himself the Secretary of State for Scotland, faces the music?
Mr. Deputy Speaker (Sir Paul Dean): The hon. Member makes a political point. It is not a point for me.
8.20 pm
Mr. Barry Henderson: I listened with great interest to the hon. Member for Glasgow, Garscadden (Mr. Dewar).
Mr. Willie W. Hamilton: On a point of order, Mr. Deputy Speaker. I should like to clarify a point for future reference. If the Minister who opened the debate, the hon. Member for Edinburgh, South (Mr. Ancram), seeks to speak at the end of the debate, must he receive the permission of the House?
Mr. Deputy Speaker: Because the hon. Member for Edinburgh, South (Mr. Ancram) moved the motion, he does not need the leave of the House to wind up.
Mr. Henderson: It is astonishing how some people who feel bested in an argument have to find other ways of venting their frustrations.
The capital allocations, particularly for the HRA block, made available to local authorities are probably as much as most local authorities could reasonably have hoped for at present. I believe that the non-HRA block is not as generous as the HRA block and is more important in certain areas than in others. I should like my hon. Friend the Under-Secretary of State to examine more carefully the determination of non-HRA block for individual local authorities and to consider whether better criteria would lead to an improved allocation of non-HRA block funds which are more scarce.
I quarrelled with the hon. Member for Garscadden about rate fund contributions. It is appropriate to move from rate fund contributions to housing revenue accounts as rents generally begin to reflect costs and housing benefit is a more effective way of helping those who need help. Housing benefit is a cost ultimately met by the general body of taxpayers, not by the specific ratepayers of a local authority.
Mr. Jim Craigen: The fact is that local authorities, other than new towns and the Scottish Special Housing Association, must meet 10 per cent. of the cost.
Mr. Henderson: When there is a substantial rate fund contribution to the housing revenue account to depress rents and to save having to pay housing benefit, the local authority is responsible for 100 per cent. of that cost. It is sensible to move to a position in which one can get away from rate fund contributions to the housing revenue account.
The purpose of helping with housing costs is to meet the needs of people rather than to satisfy ideas about particular types of houses deserving subsidies. People, not houses, should receive help.
I have some sympathy with the point raised by the hon. Member for Aberdeen, North (Mr. Hughes) in an intervention when he distinguished between management costs and maintenance costs. I should like my hon. Friend the Under-Secretary of State to reflect more on the answer he gave off the cuff to the hon. Member for Aberdeen, North. There is no doubt that some of the costs which come under the heading of maintenance and management are grossly excessive. There are fantastic and inexplicable differences between local authorities. An analysis of the reasonableness or otherwise of management and

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maintenance costs would be helped if we could start by distinguishing between the costs of management and administration and the costs of maintenance.
Mr. Robert Hughes: The housing revenue account for the Aberdeen district council shows that management costs and repair and maintenance costs are identified separately.
Mr. Henderson: The more these matters are broken down, the more helpful it is to analyse what is sensible.
I should like my hon. Friend the Under-Secretary of State to consider the possibility of giving an element of support in our housing policies to recognise that local authorities have responsibilities for housing not related specifically to their council estates. I have in mind the monitoring of all housing conditions, advising about housing generally—not necessarily related to tenants—and examining some aspects of coping with homeless persons and community provision for non-council sheltered housing. I appreciate that those are not major expenditure items compared with the main items that must be considered in running council housing estates, but they show up when budgeting is tight, especially when a local authority is at the margin of eligibility for housing support grant. I take at random the case of the North East Fife district council which last year did not expect to receive housing support grant. To the council's pleasant surprise, during the year it received the small sum of £17,000 in housing support grant. That proves that the district council was at the margin. It would be helpful if we recognised the non-council housing costs of local authorities in determining the support available from the Exchequer.
I hope that some of my points will be borne in mind when the Government are seeking to determine the future appropriate levels of housing support grant and housing allocations generally.
8.27 pm
Mr. Hugh Brown: I shall not follow the remarks of the hon. Member for Fife, North-East (Mr. Henderson). His contribution about non-housing support grant seemed a little jumbled. To use the parliamentary jargon, I believe that the speech by the Under-Secretary of State should have been entitled, "Line 1, 'delete Lothian regional council and insert Edinburgh district council'". His speech had no substance and gave no indication that he understood some of its points. When the Under-Secretary of State was questioned by my hon. Friend the Member for Aberdeen, North (Mr. Hughes), the hon. Gentleman seemed confused about the two elements in the housing support grant. I give the Under-Secretary of State credit for one thing: attack is the best form of defence, and the hon. Gentleman did his best. I hope to demonstrate that the hon. Gentleman was wrong on both counts.
I do not wish to be too personal, but I have always thought that the Under-Secretary of State was slightly guilty of using slick language. That came through in his speech when, for example, he said that COSLA was in full agreement on the formula. We all know what that means, but the Under-Secretary of State wished to convey to those outside the Chamber that COSLA agreed with the settlement. That is entirely different. I know that the hon. Gentleman can wriggle out of that accusation. When the Under-Secretary of State was accused of attacking council
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tenants, he said that that was rubbish. We shall demonstrate that this measure is an attack on council tenants.
I object to the Under-Secretary of State saying, "We shall hear exaggerated claims from the Opposition". That might be all right for a press note. I have never been guilty of exaggeration in this place — [Interruption.] The Under-Secretary of State uses an omnibus approach which sounds good in debate. I personally resent that if only because on this occasion there is absolutely no need for us to exaggerate.
We have been inundated with representations. I shall claim a few moments' injury time to save others having to give the information again. Detailed representations backed up by facts and figures and well documented cases have come from the city of Glasgow council, the Strathclyde housing liaison group, the Scottish local government information unit, the Scottish Federation of Housing Associations, Shelter, and the Convention of Scottish Local Authorities. The largest delegation of local authority representatives that I have ever seen has come here to lobby Parliament. I hope that no one will be cynical enough to ask why so many people need to come to London at the ratepayers' expense. I see the Minister nodding already.
I have the greatest admiration for the Secretary of State — [HON. MEMBERS: "Why?"] I will put the boot in then. Representing an east end constituency in Glasgow I felt a certain obligation to attend a luncheon in Glasgow, on Friday held on behalf of his former company. I put it to any Conservative Member thinking of trying to make capital out of the large number of local authority representatives here this week that the cost of that was nothing compared with the lunch in Glasgow on Friday. I did not spend a lot of time there as I had to go on a housing meeting, but I am not trying to be virtuous about that. I do not complain about that lunch, but I hope that no one will make cheap, unworthy points about the cost of lobbying Parliament. We should appreciate the frustration of so many councillors and their need to feel that they can make representations in that way. I welcome the large number of representatives who have come to the House and the representations that they have made.
I know that it is a sign of age to be constantly looking backwards, but from time to time I feel obliged to draw attention to the needs of the so-called deprived areas. The argument about local democracy has been very strong in the representations made in the past couple of days. The Government are interfering with the rights of locally elected representatives to carry out policies and provide services as the people who elected them wish.
Some of those who criticise the Government for interfering may be unaware that that is traditional Conservative Government policy. The 1972 legislation not only interfered with local authorities and rent levels but specified annual amounts. That legislation, which was taken through the House by the Secretary of State for Scotland, included the ultimate phasing out of all subsidies. So there is nothing new about the policy, if such it may be called, now being pursued by the Government. They are trying to do the things that they were unable to do in 1972 because they had no basis for assessing the real housing needs of the people of Scotland. The result then was that the Clay Cross martyrs had to be rescued in England and their Scottish counterparts had to be rescued

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by my right hon. Friend the Member for Glasgow, Govan (Mr. Milian) from the penalties that the Conservatives sought to impose.
Previous housing legislation from Conservative Governments required Glasgow and Clydebank—
Mr. David Lambie: And Saltcoats.
Mr. Brown: Saltcoats is always worth mentioning in a housing debate, but Glasgow and Clydebank were actually taken to court for refusing to revise rents upwards. There is nothing new about Government interference of this kind. The sad fact is that all the examples are in periods of Conservative Government. The Conservatives are incapable of treating local authorities with respect or showing any confidence in them. There are faults on both sides, of course, and there is not time to analyse this in depth, but Conservative Governments seem incapable of reaching understanding with local authorities in Scotland.
Having received so many submissions, I intended to make a speech without citing any figures. So far, I have succeeded. I wish, however, to draw attention to another slick presentation by the Government. I give credit to the Conservative Government of 1970–74 for bringing forward the concept of housing associations as a genuine attempt to provide some means of replacing the dwindling private rented sector. Since then, there has been all-party recognition of the work done by housing associations and the need to support them. We have now been told in a very slick presentation that next year the housing associations' percentage of total housing resources is going up. How dishonest can Ministers be? How can they present the situation to the public in that way when the actual resources available to housing associations will be cut? It is no use the Minister shaking his head. We all know that figures and percentages can be juggled. I do not even remember the figures, but the presentation was blatantly dishonest.
It is pathetic for the Minister to try to deny that housing authorities face major problems. He shakes his head again, but if he does not deny that there are massive problems — dampness, multi-storey blocks, system-built houses and other problems that scream out for large amounts of money — the resources being made available are certainly utterly inadequate to meet the situation. The Government should come clean and admit that this is yet one more example of authorities being required to fit into the Government's public expenditure programme and do the best that they can.
Finally, I hope that the Minister will look sympathetically at the par value co-operative idea in Glasgow. If his answer is no, clearly I do not wish to hear that today, so I merely ask him to go away and consider this. It is a complicated matter and I do not wish to spend time on it now, but I hope that I offend no one when I say that in this context, as with housing co-operatives, the much maligned Glasgow district council is in the vanguard, albeit having been virtually forced into it due to lack of resources. Nevertheless, it is an imaginative idea and deserves support. It is not cheap. I accept that the Minister will have difficulties with it. However, I hope that he will consider the idea sympathetically. It is not a trick designed to get around the provision in the Tenants' Rights, Etc. (Scotland) Act 1980 giving every tenant the
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right to buy. At least in my eyes, that is not the main purpose of it. It is a genuine attempt, where there are limited resources, to give people hope.
I can give the Minister details. Calvay crescent in my constituency is a disaster area where there is no likelihood of resources being made available in the conventional way. I beg the Minister to consider the idea sympathetically and perhaps in due course help Glasgow by pushing forward the idea of a housing management concept that will give more people pride in their own area.
Lastly, there is the question of the peripheral estates. There is a leak in The Guardian today. The Government are subject to leaks at present, but this one seems well informed. It is about the future of improvement and repair grants. I imagine that the idea of par value co-operatives has been promoted in Glasgow as a means of getting into the private sector account. There is no deviousness. That might have been one way of escaping from the capital restrictions in the housing revenue account side and using some private sector money for improvements in private sector. I hope that we shall not hear bad news about cuts in even that area of housing expenditure. I give the Government credit for allowing reasonable resources for that in the past couple of years.
The Government do not have a housing policy. Although I do not intend to make any public announcement, I intend to make a decision about my future in due course and so I do not need to worry unduly about pressures from any quarter inside or outside the House. There is not enough fundamental thought about the whole of society at present. People are having to apologise for an economic system that cannot find useful work for almost 4 million people. It may be said that Socialism is not the answer.
Mr. Michael Forsyth: Socialism was not the answer.
Mr. Brown: I have no time for the small minds of people such as the hon. Member for Stirling (Mr. Forsyth). Under this crazy, outdated economic system, even the best educated people from Eton and Ampleforth—
Dr. Norman A. Godman: What about Fettes?
Mr. Brown: Even the best educated people cannot produce an economic system that uses the wealth of talent and skills available to the benefit of all our people.
Within the confines placed on us we are trying to argue for more public expenditure on housing. I would not claim that we can solve every problem by flinging money at it. However, we have to look at the conditions in which people are living in the deprived areas. It is obscene to argue that tax cuts should be a priority in the Budget. I feel humble at times when I see the conditions in which we ask people to live and then listen in the House to academic arguments from accountants to the effect that tax concessions lead to social justice and will improve the economic system. We all know that the biggest tax concessions will go to the wealthiest.
I beg Ministers to consider the problems. I have visited Pilton, Craigmillar and Western Hailles. The Secretary of State for Scotland has visited Provan once in his lifetime. Perhaps he should visit us again and see the deep social problems of drug-taking and so on that arise in deprived areas. Housing expenditure not only creates jobs but helps people. I wish that more resources were available for it.
8.45 pm
Sir Hector Monro: It is always a pleasure to follow the hon. Member for Glasgow, Provan (Mr. Brown). I am glad that he did not go over the brink and say that he is to leave the House. I very much hope that he will not do so. I should be as sorry to lose him as I should be to lose my pair. The hon. Gentleman's experience is most valuable and we have listened to him with interest.
The debate follows the publication yesterday of the White Paper on spending, which emphasises the importance of containing inflation. Local authority expenditure is public expenditure, and therefore we must consider it in terms of inflation. However, I welcome in the White Paper the increased expenditure in real terms on the National Health Service and on social security. That aspect of the White Paper nails for good the constant criticism from Opposition Members to the effect that we are cutting those two valuable services.
Increases in the number of doctors, nurses, dentists and other specialists have been dramatic. We should highlight that increased expenditure when debating subjects such as housing. Today we are debating housing and housing support. We are not debating rate support grant. We shall deal with that tomorrow.
The three orders mark out the pattern of local authority revenue spending on housing. I am glad that there is agreement within COSLA on the formula, although there is not yet agreement on the settlement. However, if a group of Ministers and local councillors understand the formula, that is certainly a step in the right direction. I have been totally at a loss to understand the rate support grant and housing support formula for several years. I am glad that someone is beginning to see the light.
The two grant orders set the proportion of subsidy to be provided by the Government, and the rate fund contribution order limits the amount of money to he transferred to the housing revenue account from the rate fund by certain authorities. The Minister explained his point of view. It is obvious that the district councils are far from happy. The figures — we shall deal with them much more thoroughly tomorrow in terms of the rate support grant and the rates that will be payable by residents in local authority areas — are very critical. From the figures that the Minister has given, on a stand-still budget —and we must accept that it could be possible to have a stand-still budget—the rate increases bandied about in the press and elsewhere are very much exaggerated. We must allow a percentage for revaluation, but the figures of 30 per cent. or 40 per cent., when balances and other resources have been taken into account, will turn out to be far in excess of what will in fact be levied.
I appreciate only too readily the difficulty that faces councillors in Scotland, but it is not new. During all of the years when I was a councillor we had to accept extreme constraints from the finance committee and the finance convenor. We always had to pare down many of the projects that we would have liked to carry forward and show ratepayers that we were developing the quality of life in the area. Housekeeping and budgeting tightly is not new.
Perhaps my hon. Friend the Minister could say a little more about the assumptions upon which he calculates the housing support grant. The grant is nearly £48 million and I think that I heard him say, amid the hubbub from the
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Opposition, that, in the light of changes in interest rates, he will probably have to introduce a variation order, as he is empowered to do under the Housing (Financial Provisions) (Scotland) Act 1978. Will the order be introduced in the early days of the financial year or will local authorities learn about it in the autumn?
I was interested in what my hon. Friend the Minister said about supervision and management. I strongly welcome his decision to increase the housing capital allocation to Nithsdale to £3·25 million, following representations from the council, me and my hon. Friend the Member for Galloway and Upper Nithsdale (Mr. Lang), as it will enable a start to be made with the complete renovation of a substantial number of flats in the Lochside area of Dumfries. They are of post-war construction but, sadly, have fallen far below acceptable modern standards. It is right that the district council should renovate them as soon as possible.
In regard to what my hon. Friend the Minister said about management, the additional funds, which I hope will be available, are important as it no use rebuilding that area of Lochside if we do not institute a much improved standard of management so that the flats do not fall into such disrepair again. I hope that the terms of the order will allow that.
As for the rate fund contribution for housing expenditure limits, we know that the housing revenue account is balanced by income from rents, contributions from the rate fund and the housing support grant. While the housing support grant has been diminishing, the rate fund contribution in many authority areas has been rising—hence the limits order stemming from the 1984 rating and valuation legislation. My hon. Friend the Minister can now set an overall limit, but has he done that arbitrarily on an assumption or is there a formula that has been agreed by COSLA?
Housing capital allocations are vital as they cover the improvement, construction and repair of council housing. I am glad that it is up by £43 million, or 19 per cent. That includes the apportionment that has been made to cover condensation and dampness. I was not a member of the Select Committee that made the inquiry, although I was a member of it when it concluded the report and published it, so I listened to the arguments of members of the Committee on the contentious issue of whether a house is damp or suffering from condensation. It is right for my right hon. Friend the Secretary of State to have made a start in this important matter because we have a much longer way to go than £16 million will make an impression on in the first year. There should be a rolling programme for 10 or 20 years to eliminate this detrimental aspect of local authority housing. As the Select Committee made clear, we must emphasise education because condensation is not understood by as many tenants as I should like. They frequently blame dampness when the problem arises from their reluctance to open a window or two during the day.
Overall, we have made a substantial advance in housing improvement. I am glad that my hon. Friend the Minister was able at the end of last year to give a substantial additional sum of £110,000 to Annandale and Eskdale district council, as improvements are crucially important. The Government are granting almost the entire bid of Annandale and Eskdale on the housing revenue account block of £2·82 million. That is welcome news. The non-housing revenue account allocation falls substantially below the council's bid, which was an increase of 90 per

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cent. on last year. Nevertheless, I note from my hon. Friend's letter, dated 21 January which I received yesterday, that the council can transfer resources from the housing revenue account to its non-housing revenue account if it wishes to do so. That is helpful.
The improvement of houses is perhaps the most important issue that we should consider today. I hope that my hon. Friend the Minister will say a little more about where we stand in regard to the percentage grant and the amount of resources that are available. We could improve our housing stock even more rapidly. That would help the construction industry and help reduce unemployment as well. I know that my hon. Friend was able to give a little additional money at the end of last year but more would be valuable.
We should consider the sale of council houses, as it is an important issue in regard to resources. We have a long way to go to make as much impact on the sale of council houses as I should like. There are two district councils in which I am interested. The first, Annandale and Eskdale, has 4,958 houses of which, according to a recent parliamentary question, it has sold only 319 or 6·4 per cent. The second, Nithsdale, has 8,589 houses of which it has sold only 683, or 8 per cent. Both figures are much below those of equivalent districts in Scotland. Although both councils have fulfilled their statutory duties, they could go out on a real selling drive to encourage tenants to purchase their houses. Mortgages are available. They would then have more resources to put into housing.
I have been much impressed by the excellent work of housing associations, especially in sheltered housing. Anything that my hon. Friend the Minister can do to help them keep up their rate of construction would be most valuable in the longer run. Housing associations have a cash limit of £90·7 million, but think that the number of completed houses will begin to fall after this year. If we can reverse that trend, so much the better.
The Minster has a difficult job to produce these orders within the financial targets. We must have an overriding view that winning the battle against inflation is of prime importance. The Minister has done a fine job in balancing a most complicated financial issue. When district councils appreciate what he has done on housing—I emphasis housing because we have a different debate tomorrow on the rate support grant — and that he has made a substantial amount of assistance available to housing authorities this year, they will strongly support these orders.
8.59 pm
Mr Robert Hughes: During Scottish questions a week ago my hon. Friend the Member for Dunfermline, West (Mr. Douglas), in an ironic exchange, said that the Secretary of State for Scotland was pretending to be Generous George. In reality the proper description of him is Gauleiter George. In truth he is an arrogant, overbearing, subordinate wielder of authority on behalf of the Prime Minister.
Never since the inception of the office of Secretary for Scotland in 1885, nearly 100 years ago, has anyone arrogated to himself such dictatorial powers. He is interfering in the rights and duties of elected local authorities in a manner which goes well beyond any reasonable attempt to influence policy matters of elected
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councillors. I accept, and always have, that central Government have a locus to seek to influence the policy of a local authority. However, on national policy, whether the establishment of comprehensive education, which I like, or tenants' right to buy, which I dislike, statute is the proper way to express that influence. But influence on local issues should be achieved, if it is to be achieved, by consultation, discussion and agreement. If agreement cannot be reached, providing the authority is not in breach of statutory responsibilities, the issue under discussion must be left to local judgment. At the end of the day the local electorate is the final arbiter.
What I have said is particularly apposite to the rate fund contributions to the housing revenue account, which the Secretary of State seeks to limit. In that case, he is directly intervening in the management of a local authority's affairs. He seeks directly to impose rent increases on all local authority tenants, irrespective of the judgment of elected councillors and of local conditions. Provided a local authority is not in breach of its statutory obligations, the local decision must prevail.
The Secretary of State must adopt that criterion. He has, and always has had, reserve powers under statute to bring to judgment a local authority that is behaving unreasonably and disregarding its legal responsibilities. The idea of a public inquiry is obnoxious to all, but if it is done purely on the basis of judging a local decision and in an objective manner, at least it allows the local authority publicly to explain itself. What is especially obnoxious is that the Secretary of State is compelling authorities to arrive at a certain figure. If it is not reached, he argues, there is a prima facie case that the authority is in breach of statute. That is not necessarily so.
Open public scrutiny of the housing revenue accounts of local authorities shows clearly that the Secretary of State has not taken proper regard to the financial problems to be faced. Unlike my hon. Friend the Member for Glasgow, Provan (Mr. Brown), I shall quote some extensive figures. I wish to quote the figures for Aberdeen, not because Aberdeen is in a unique position, but because its accounts are fairly typical. The 1984–85 expenditure figures in the housing revenue account show loan charges which are split into two different elements: instalments of debt at just more than £3 million, and interest payments at more than £15 million. That gives a total of more than £18 million. Interest payments are virtually five times the amount of debt repayments, and amount to more than 50 per cent. of the total expenditure on housing in Aberdeen. Total loan charges amount to almost 60 per cent. of total expenditure. The next highest sum on the expenditure side is the cost of repairs and maintenance, not management and maintenance, which is just more than £6,600,000. That is about one third of total expenditure. The figure for the following year is roughly similar.
Instalment payments must increase by £500,000, interest charge payments must increase by about £1·25 million, and payments for repairs and maintenance are estimated to increase by about £1·33 million. The increase in costs next year as compared with this year will be just over £3 million, of which £1·75 million is completely outwith the control of the local authority. The sum that is within the authority's control for repairs and maintenance represents what a prudent authority believes to be necessary to maintain the standards of an ever-ageing housing stock. If there were no repairs and maintenance in 1984–85, debt repayment would be 14 per cent. of the

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housing budget and interest charges would be 68 per cent. Therefore, 82 per cent. of housing costs would go simply to service debts incurred from building houses in years gone by. For 1985–86, the figure is estimated to be 83 per cent.
Even if there were no repairs and maintenance payments next year, the authority cannot escape from the fact that it must meet 80 per cent. of its housing revenue costs. There can be no default on those payments. The idea that the local authority has been profligate in respect of its housing budget is nonsense.
The Secretary of State's response to the financial problem is twofold: first, to reduce the housing support grant; and, secondly, to limit the rate fund contributions. He has set a limit for Aberdeen of £6,015,000, which is almost £3 million less than the previous year and far short of the budget forecast for next year. If that shortfall is met only by rent increases, rents in Aberdeen will have to increase by £3·86 a week. If not, there will be a savage cut in repairs and maintenance, which I know from my experience and from the experience of my constituents are extremely necessary in large parts of Aberdeen.
The Secretary of State seems to believe that tenants in Aberdeen can afford such increases, but he is completely wrong. He is one of those who believe that Aberdeen is an oil E1 Dorado. Let me disabuse him of that idea. Already 44 per cent. of tenants in Aberdeen receive housing benefits, and the figure is rising. Unemployment in the city is far from rosy, despite the favourable comparisons with other parts of Scotland. I concede immediately that many other areas in Scotland have far more serious unemployment. However, in the centre of the city — in the constituency of the hon. Member for Aberdeen, South (Mr. Malone)—in the Ferryhill area, which I know extremely well as I represented it on the council at one time—
Dr. Godman: A fine councillor, too.
Mr. Hughes: As they say in the courts, I am obliged to my hon. Friend. Unemployment in the Ferryhill area is 15·9 per cent. It is the worst pocket of unemployment in the Grampian region. Three other areas in the city are among Grampian region's six top blackspots for unemployment. In a decade of so-called oil boom in Aberdeen. 35 per cent. of manufacturing jobs have been lost. With such a background, we would expect the Secretary of State to have a sympathetic approach and to make available more finance for housing. The reverse has been the case, because he is making a much smaller financial contribution.
The most recent figures—I shall not return to those balmy days when a Labour Government gave full support to the local authorities—show that in 1982–83, housing support grant in Aberdeen was 27 per cent. of the income of the housing revenue account. In 1983–84, that figure was reduced to 13 per cent. In 1984–85, there has been a further reduction to 6 per cent., and in 1985–86, the figure will be 2 per cent. My understanding is that the following year there will be no housing support grant.
Hon. Members can say that it is all very well to quote clever statistics and percentages, but that we should say what they mean in money terms. In money terms, this means a reduction from the 1982–83 housing support grant of £8,670,000 to £802,000 in 1985–86. One does not have to be a mathematician to see that this is a fantastic cut in income to local authorities.
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The picture that I have set out for Aberdeen is indicative of Scotland as a whole. Since 1979–80, housing support grant has reduced from £213 million to £48·2 million in 1985–86. Some 33 housing authorities will get housing support grant. The interesting thing about that is that these non-qualifying authorities account for 63·4 per cent. of the Scottish housing stock. Where is the great support for local authority housing about which the Secretary of State boasted?
In 1979–80, the housing support grant represented 39 per cent. of the income of the housing revenue accounts. By 1985–86, that figure will be down to 7 per cent. By contrast, rents as a proportion have increased from 47 per cent. to 74 per cent., and the proportion is likely to go even higher the year after that. The Secretary of State is making a despicable attack on those least able to afford it. All this is designed for one purpose alone—to provide money for the Treasury. Council tenants in Scotland will not be the beneficiaries of the tax-cutting bonanza.
I remind the House that I was a member of the city of Aberdeen council from 1962 to 1971. I make no bones about saying that those were happy days. We had furious arguments, among ourselves in the Labour group, often, in the spirit of vigorous party political debate, in the council chamber, and fairly frequently with the Scottish Office, even with a Labour Secretary of State. There is one major difference between those recent years and the present. The issues that we were discussing and debating then were on the pace of developments—how best we could go, how best to deal with the problems facing the people of the city of Aberdeen. I give credit to our Tory opponents in the council chamber in those days, because they also wished to see the city thriving and prosperous. It was common ground that we should provide the best education, health, welfare, housing and leisure facilities. We did all those things, although we should have liked to do more.
In these days, the pressures and problems are worse. Discussions are about how councillors can meet the Government's guidelines laid down by edict, about how the councils can meet the statutory housing obligations, given the dictatorial cash limits of the Secretary of State for Scotland. I do not know how they can maintain their sanity when trying to deal with this problem.
In many respects, the growth of the standard of living of our people, the improvement of the environment, the eradication of disease, and the widening of educational prospects were the result of the full flowering of local government and democracy. The Secretary of State is destroying local government, and if he does not understand what this is doing to our people, he is even more ignorant than I thought he was.
9.13 pm
Mr. Gerald Malone: I am pleased to follow the hon. Member for Aberdeen, North (Mr. Hughes). I shall deal with one or two of his points later. I am grateful for his basic honesty in pointing out that hon. Members on both sides of the House have different objectives in public housing. There is no secret about that. I share the view of many of my colleagues that the provision of public housing in Scotland represents too high a percentage of the total housing stock.
I welcome the move to greater private ownership. In a sense, it is a difference in philosophy in this respect that divides the House. There can be no doubt that the direction

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of the Government's policy is a matter of balance. We have got out of balance in the way in which we finance our public housing. We have reached the stage when the burden on the taxpayer in general is too great. The contribution of those who benefit from public housing has become proportionately too small. This imbalance has developed over a substantial number of years, and, in my view, the Government are correctly taking steps to correct it.
My hon. Friend the Parliamentary Under-Secretary of State for Scotland says that in order to meet overall the targets for Scotland which he has set in these orders council house rents will, on average, have to go up by £1. The alternative way of dealing with the matter that was proposed by the hon. Member for Aberdeen, North would mean that in Aberdeen rents would have to be increased by more than £3. One is still referring, in the specific case of Aberdeen, even if it chooses simply to increase rents to meet these targets, to a rent that is lower than that which is to be found in many other parts of the United Kingdom. It is worth putting some of the figures on record.
In Scotland, council house rents take approximately 10 per cent. of a family's income, whereas in the remainder of the United Kingdom the average figure taken by council house rents is 16 per cent. I do not believe that we should attempt to reach parity, but when the Opposition speak in such emotional and excited terms I believe that it is worth trying to gain a sense of proportion and to bear these figures in mind.
Mr. Wallace: To apply an objective test to the argument of the hon. Member, can he tell us what will be the public subsidy to council house tenants after the orders are passed compared with the subsidy that is given in the form of tax relief on mortgages to the owner-occupier?
Mr. Malone: The answer is that it varies from authority to authority. It is important to bear that in mind. It is also important to bear in mind that when we encourage the sale of the stock of council houses there are many council house tenants who put themselves in the position of owner-occupiers. When one espouses the policy of encouraging private ownership, as do this Government, it is important to give some form of encouragement. I remind the hon. Member for Orkney and Shetland (Mr. Wallace) that, even within the context of those remarks, the assistance that is given by tax incentives of that kind has been reduced dramatically in real terms during the term of office of this Government. It has been brought into balance in line with the view of the Chancellor of the Exchequer that we should have a fairly neutral tax system. It cannot be done at once, but it is moving in that direction.
Mr. Craigen rose—
Mr. Malone: Perhaps I may be allowed to continue.
I should like to put one or two points about this matter to my hon. Friend the Minister in the hope that he will deal with them in his reply. I want to concentrate upon one or two matters. One relates to eligible expenditure, in particular interest charges. When assumptions are made in his calculations about the interest charges that should be met by local authorities, the Chancellor of the Exchequer fixes a rate that takes into account the potential of capital receipts from volume sales of council houses. I understand
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that he does this for the straightforward reason that it is within the power of local authorities to reduce their borrowing by adopting an enthusiastic policy of selling council houses. Is it, in my hon. Friend's view, fair that many local authorities enthusiastically adopt this policy and reduce their debt while many other local authorities do not do so? When these overall interest assumptions are made, are these matters taken into account?
Mr. Robert Hughes rose—
Mr. Malone: I shall give way to the hon. Member when I have finished making this point.
The hon. Gentleman mentioned the overall borrowing figure of Aberdeen district council and the substantial amount of money that has to go to service that. Aberdeen district council has chosen to sell 4·7 per cent. of its housing stock, well below the percentage of a large number of local authorities in Scotland. If it wants to reduce that item of relevant expenditure — interest charges — it has the solution in its hands. It could continue to sell council houses more enthusiastically than it does and so reduce that item of expenditure.
Mr. Hughes: The hon. Gentleman must address himself to the contradiction in what he and his hon. Friend the Under-Secretary of State are saying. His hon. Friend is saying that if the council sells council houses, money will be available to spend on repairs and maintenance and the eradication of damp. If it uses the money to try to reduce some of its capital indebtedness, it obviously cannot do what his hon. Friend suggests. If he imagines that the sale of council houses can extinguish the debt which he has mentioned, he must be aware that the only way to do that is to sell the lot.
Mr. Malone: There is nothing wrong with increasing substantially the number of council houses to be sold in Aberdeen. The hon. Gentleman has not managed to contradict the fact that it would give Aberdeen district council the chance to reduce what is an enormous on-cost from the eligible expenditure which it undertakes. There is no sense in which that can be reasonably denied.
There is another area in which many councils can reduce their expenditure. When we talk about management and maintenance and repair and maintenance—I concede that Aberdeen district council is extremely careful to differentiate between those two elements—a lot can be said for many Scottish local authorities reducing repair costs.
Before the hon. Member for Aberdeen, North tries to intervene again, let me put one point on the record. By and large, Aberdeen district council operates a relatively efficient repair and maintenance service. It is relatively cost-effective compared with many local authorities in Scotland. But I trust that my hon. Friend the Under-Secretary of State will be taking whatever steps he can to encourage local authorities to reduce even further the costs of repair and maintenance which vary so much throughout local authorities in Scotland and which in some areas are completely unreasonable and inefficient.
It is important to point out to local authorities, when they justifiably look at such matters with a great deal of anxiety, that part of the solution to the problems that they face in making their budget balance lies well within their own hands.
Some mention has been made during the debate of increases in capital expenditure on housing. I endorse what

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was said by my hon. Friend the Member for Dumfries (Sir H. Monro) in welcoming that. It is important that we devote as much as we possibly can in straitened circumstances to the improvement of the housing stock. However, it is also important that local authorities should take up many of the new initiatives that are available. It is important that if the private sector offers solutions to such problems they should be welcomed with open arms rather than rejected on a point of political dogma.
I hope that many Scottish local authorities will look to the scheme that is presently being operated by the South of Scotland Electricity Board, which is offering an integrated service for multi-storey buildings whereby they can be rendered free from damp. It also encourages the cost of the provision of electricity to be added to the rent. There is a system that can usefully go towards the eradication of what I concede, as is clear from the Select Committee report, is a problem of peculiar difficulty in Scotland.
We have already heard many words from the Opposition tonight about our policy being offensive. What I find to an extent offensive is some attempt to justify the recreation of a policy whereby public expenditure goes up on council and local authority housing when it is that policy of high expenditure with lack of proper control that has resulted in the housing stock with which we are having extreme difficulty today. It cannot be claimed that high public expenditure has been a success, otherwise we would not be faced with great difficulties with multi-storey buildings, dampness and all the rest of it which arose during a period of extremely high public expenditure. I do not pretend to accept the suggestion of the Opposition that what we are saying—that there should be an ordered balance away from central funding of local authority housing towards tenant funding—is offensive or wrong.
This is nothing more than a way of attempting to move marginally the balance of expenditure. I believe that it underlines the essential difference between the two sides of the House, but it does not undermine what I see genuinely as a common concern that we have a good housing stock and that a large number of houses paid for by public funds are not left derelict and empty because people do not want to occupy them. The fundamental difference between us is that we see the provision coming from a different source. I believe that it can best be provided by choice in the private sector and the increase in influence that the tenant will have. That, unfortunately, does not seem to be the motive of the Opposition. Their motive is to increase again the stranglehold that they and their followers had over the public housing stock. That is what they seek to achieve in opposing the order.
I have great pleasure in supporting the order. My hon. Friend has undertaken a difficult balancing task and he has done it exceptionally well.
9.26 pm
Mr. Gordon Wilson: I follow the hon. Member for Aberdeen, South (Mr. Malone) with considerable regret because I do not think he has done justice to his constituents with regard to housing. Of the two views that have emanated from Aberdeen in the debate I prefer that of the hon. Member for Aberdeen, North (Mr. Hughes). I have disagreed with the hon. Member for Aberdeen, North on many occasions, particularly on constitutional matters, but this evening our views coincide. He referred to the Secretary of State as a
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gauleiter. My German is limited, but I think that is the equivalent of a regional administrator. That is exactly the role that the Secretary of State occupies.
Earlier today when I met the delegations that had come down it was difficult to try to explain to them that, although I appreciated their position, the debate did not offer much to them, because the decisions that we are discussing were taken several years ago under the public expenditure White Paper. Those decisions were taken not by the Secretary of State for Scotland, whether he be a gauleiter, a colonial administrator or even a Cabinet Minister, but by the Cabinet as a whole under the aegis of the Treasury and the Prime Minister. Effectively, the decisions taken several years ago in regard to public expenditure on housing that we are implementing under the orders will be enforced upon the people of Scotland by an English majority, which will come pouring in to vote when the Division bells ring. That is what we must realise.
Furthermore, when we look at the White Paper that was published only yesterday we find that there is even greater room for worry about what might happen in the public housing sector in years to come. We find that the decline in public expenditure on the housing account is of the order of 10 to 15 per cent. spread over the three years to 1988. I suspect that in the next two or three years we shall have a considerable number of these debates when we see the amount of money being reduced steadily and when in our constituencies week by week or fortnight by fortnight we see the problems mounting as people demand repairs and cannot get them. That is where the Scottish Office is out of touch with what is happening. It was significant that the Under-Secretary of State referred to the English situation. The Scottish Office's policy seemed to be to bring Scotland into line with England, regardless of the methods used and the hardship caused. Indeed, great hardship will be occasioned.
I confess that the issues involved in the rate support grant and the housing support grant are so complex that I do not fully understand them. The Convention of Scottish Local Authorities has stated:
"The factors used to determine each Authority's eligibility or otherwise for HSG continue to ignore the actual position of housing authorities."
In other words, the Secretary of State's decision can be entirely arbitrary and it is difficult for those in the know to work out the reasons for it. However, it has been suggested to me that political motivation is involved. That possibility should not be ignored. After all, if the system cannot be explained clearly to people, the motivations of those who operate it, particularly when they provide insufficient funds, will be questioned. If they are providing more expenditure than people had expected, there is not the same criticism.
The whole system involved in local government reminds me of the comment that was made about the Schleswig-Holstein affair, to the effect that it was so complex that those who understood it were either dead, in a mental hospital — or perhaps in this case, in the Scottish Office. The system is certainly beyond my understanding. Year after year district councils have faced reductions in the resources available for the services that affect many of their citizens. In 1980–81, the rents in Scotland provided about 50 per cent. of housing costs. The figure for 1985–86 is likely to be about 80 per cent. if the Government's intentions are carried out.

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This year, the rent increases on average will be at least twice the prevailing rate of inflation. But that is only an average, as in many other areas the £1 suggested as the average will be considerably exceeded. I understand that if Dundee follows the lines laid down by the Minister, the rent increase could be double what he suggests as being the average.
It must be borne in mind that if the money has to be found from tenants, rate bills will rise, and so they will be hit twice. The Government do not seem to care that public sector housing in Scotland is in urgent need of repair and modernisation. Yet that is what happens when we do not spend money on property. It is bad business not to spend money on maintenance, because eventually the bills will become bigger. I should have thought that Ministers who sponsor, in particular, the private sector would be aware of the facts of domestic life.
We know that about 350,000 of our people still live in damp houses. However, capital expenditure on housing has been reduced by about 40 per cent. in real terms since 1980. In 1983, the number of housing starts and completions in the public sector was the lowest for decades. It is all very well for the Minister to say that that work can be taken up by the private sector. That may often be true with regard to general family housing, although there are shortages in certain types of family housing. But the private sector will not meet the demand, for example, for sheltered housing. Moreover, the increased expectations of elderly tenants cannot be met. A report was recently handed to me from the Scottish Council for Single Homeless, suggesting that the situation in Dundee is critical with regard to the provision of houses for single persons.
I shall show how the orders will affect Dundee. In the coming year the city will receive no housing support grant. Indeed, it has not received any for the past two years. To cushion the effects, the rate fund contribution to housing revenue in the city, which was £6·9 million in 1983–84, will now, as a result of the Secretary of State's powers, be reduced to £4·9 million. That will have a traumatic effect on the administration of the housing stock in the city. It will result in rents going up steeply on the one hand and in a drop in service on the other. If one takes the rate of modernisation, it would be a long period before the work could be done.
The housing authority has brought to my attention the problems that it has. Deterioration of the fabric of the housing stock is widespread, as are harling defects to flat roofs. Structural defects are apparent in non-traditional house types, types which the Scottish Office in previous generations wished upon local authorities at the time. Window replacement is needed on a large scale. I receive many complaints about this from my constituents. We talk about cold climate allowances and suchlike, but it would help if we had windows that kept out the draughts and mitigated the heat loss. Some 16,000 tenants in Dundee suffer to a lesser or greater degree from dampness. Over 3,000 houses have not been modernised since they were built 50 years ago. Houses built after the war are in need of modernisation.
Rewiring to a modern standard is required in 17,000 houses. One can make all sorts of adjustments in relation to repairs from time to time by doing spot repairs and deferring the problem to later years when one hopes that
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more cash will be available. I wish to impress upon the Government that deficient wiring is a safety risk and should have some priority. These are the problems that are affecting individual tenants in the city of Dundee. From the other delegations that I have met, I understand that their position is the same if not worse. A general problem is building up.
I have been impressed that the Government during the last year have managed to gel together a coalition of people of all parties in the district councils and the regional councils against their policies. Given the nature of the party loyalties and the differences of opinion that exist—the vigorous debate to which the hon. Member for Aberdeen, North referred — it is a remarkable achievement on the part of the Secretary of State and his Parliamentary Under-Secretary.
I have one suggestion for the attention of the Minister to which I hope he will give consideration. It has been put to me that under the present system, whereby allowances are announced at the last moment, housing authorities are not permitted to conduct a rolling programme where they are assured of a certain fairly high proportion of the money they require. Cost savings would be made if housing authorities were able to plan in advance, do things on longer contract or undertake larger jobs than they are at present able to carry out. I suggest that some kind of rolling three-year programme might be worthwhile considering from the point of view of the accountants in the Minister's Department if not those who work in the Treasury.
We are dealing with a fundamental political problem. The Government are not administering Scottish housing from a Scottish viewpoint; they do not need to take account of public opinion in Scotland; they do not need the majority support of Scottish Members of Parliament. From these constitutional facts of numbers stems our whole problem, in my view. The Minister said that he was giving as much as the nation could afford. I for one do not accept that distinction. Nor do I accept that the £12 billion that is going into the Treasury this year from our oil resources should not be deployed towards Scotland to meet our problems.
Mr. Albert McQuarrie: United Kingdom oil.
Mr. Wilson: If the hon. Gentleman disagrees, it draws a correct distinction between his attitude and mine and my willingness to see that Scottish money is put to the betterment of the Scottish people.
9.38 pm
Mr. Gavin Strang: Listening to the Under-Secretary of State when he opened the debate, one was aware of a huge chasm between what he was saying and the views of the vast majority of the elected councils in Scotland. What he said bore no relation to the resentment that exists in these councils. This resentment exists in Labour-controlled councils but to a significant extent also in councils where the Labour party is not in control. One wonders whether the Government appreciate the depth of resentment at their policies. I understand that the Secretary of State has refused to meet COSLA to discuss its important grievances.
We are witnessing a systematic attack on local authority housing. The Government are pursuing that attack

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viciously and decisively year after year. The figures in the Government's public expenditure plans for the next financial year show what has been happening in recent years. The Government are making massive cuts in housing expenditure in Scotland. In 1985–86, the Secretary of State intends to spend £598 million on housing in Scotland, compared with £734 million in 1979–80—a cut of 49 per cent. in real terms. In other words, the Government have halved public expenditure on housing in Scotland. No wonder so much damage is being done; no wonder the housing stock has deteriorated so much; no wonder there is massive unemployment among workers in the construction industry.
The Government are obsessed with encouraging the sale of council houses. It is reasonable to suggest that they are deliberately pushing up council house rents to try to force as many tenants as possible to buy their houses.
Opposition to the Government's policies comes not only from Labour-controlled councils. There is also opposition from Conservative councils which deeply resent the fact that they are ceasing to be autonomous councils and are becoming mere agents of the Government. The Government fix their expenditure, they have taken powers to fix their rates and they are even taking powers to fix the amount that councils can contribute to the housing revenue account from the rates. That means, in practice, that the Government are even fixing council house rents.
The Government are pre-determining all those decisions and are removing from elected councillors, whether Conservative, Labour or any other party, the opportunity to make a judgment on the extent to which housing should be supported from the rates or from rents.
Mrs. Anna McCurley: Does the hon. Gentleman believe that everything spent in local government should be rate borne? Is that his alternative?
Mr. Strang: No. I think that the hon. Lady understands what I am saying. If she is in any doubt, she should speak to some of the councillors, including Conservative councillors, who have come to Westminster to speak to us.
Edinburgh is experiencing the effects of a massive neglect of our housing stock. Anyone who knows anything about housing in the city — and the Under-Secretary must surely know something about that—knows of the enormous deterioration that has taken place because of the below average spending on repairs, maintenance and improvements by the city council when it was under Conservative control.
When the Select Committee on Scottish Affairs visited Edinburgh, hon. Members from west central Scotland were appalled and amazed at the situation that the Conservative council had allowed to develop on some of the city's housing estates. Only recently a tenant succeeded in taking the council to court and proving it guilty on the ground of not providing a house which was wind and water tight. The elected council had failed under landlord legislation to provide the basic necessities in the council house concerned and was not prepared to provide alternative housing. I could continue at length to bring out the enormity of the deterioration in Edinburgh's housing.
It is from that base that the newly elected Labour council in Edinburgh has taken control. I have not the slightest doubt that one of the reasons why the Labour
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party took control of Edinburgh for the first time—it was a remarkable and historic result — was the resentment among council house tenants and others throughout the city at the neglect and callous indifferences of successive Conservative administrations to public services, especially council housing.
To its credit, the new Labour Edinburgh city council has put forward a bold programme to tackle the years of housing neglect. In the time that is left to me I shall concentrate on the expenditure which it hopes to make through the housing revenue account. Its programme will be implemented over a period of years. It has been submitted to the Scottish Office and no doubt it is considering it. The expenditure which is budgeted in the housing revenue account for 1985–86 is £47·5 million. Where is the money to come from? A part of it will come from the rate fund contribution.
As my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) has said, the Government intend to limit Edinburgh's rate fund contribution for the housing revenue account to £2·8 million, which is roughly £49 per council house. That must be compared with £158 for Aberdeen, £159 for Glasgow and £125 for Dundee, an average of £105. How can the Government justify limiting Edinburgh's rate fund contribution to such a derisory figure?
The Minister has told us in the past and again this evening that he wants to see council house rents forced up to pay for the maintenance of council housing. Council house rents in Edinburgh are massively higher than rents in other Scottish cities. They are about £5 a week higher than rents in Aberdeen and Glasgow. They average about £14 compared with £10 in Glasgow and about £9 in Aberdeen and Dundee. There is no case for increasing rents any further. It would be unfair and unreasonable to expect council house tenants to pay higher rents to meet the programme which Edinburgh district council has put forward.
Edinburgh is in an impossible position. It has inherited huge neglect and it has submitted a programme to tackle it and the Government are specifically and explicitly denying the council the powers and opportunity to implement it. I hope that the Minister will reconsider Edinburgh's position. I hope that he will judge fairly the monstrous unfairness that faces Edinburgh. The council has a historical legacy of deterioration in its housing stock and yet it is faced with limitations and the imposition of a straitjacket.
I hope that the Government will think again. The Labour-controlled Edinburgh district council wants to tackle the housing problems and it has a mandate to do so. I hope that it will be allowed to go ahead and resolve the problems. Surely the sensible and statesmanlike approach would be for the Government to say that the Scottish Office and the city council should consider the council's proposed housing budget and programme and calculate how it can be implemented to improve the quality of Edinburgh's housing.
9.49 pm
Lord James Douglas-Hamilton: I listened with great interest to the hon. Member for Edinburgh, East (Mr. Strang) who criticised the sale of council houses. By last year about 3,500 council houses had been sold in Edinburgh, about 1,000 of them in my constituency. That is an example of the demand. The hon.

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Member for Edinburgh, East and I were present when the Select Committee on Scottish Affairs went to Edinburgh to examine the problems of dampness in council houses in west Pilton and Craigmillar, in our constituencies.
I should like to address myself to the problem of Orlit housing. This problem occurs in not only my constituency but many other parts of Scotland. Types of houses which are generally accepted to be defective in Scotland include Lindsay — in the Ayrshire council area — Blackburn Orlit, Boot, Dorran, Myton-Clyde, Orlit, Tarran, Tarran-Clyde, Tee beam, Unitroy, Whitson-Fairhurst and Winget. Those are examples of the widespread problem.
Now that the Housing Defects Act 1984 is on the statute book, it is obvious that, if funds are to be provided to do up a tenement in which some people own houses while the public owns others, they should be provided for the whole tenement. It is essential to have a co-ordinated and coherent approach combining the public and the private sectors so that the job is done efficiently and promptly.
Mr. Craigen: Does the hon. Gentleman regard the housing defects legislation as defective because it does not extend to public sector tenants?
Lord James Douglas-Hamilton: I followed up this matter vigorously. I can answer the hon. Gentleman by saying that on 20 December 1984 I tabled a question to the Secretary of State for Scotland asking him
"what allocation is being made to local authorities in respect of defective housing including Orlit housing and Blackburn Orlit housing."
The answer stated:
"in reaching decisions on individual authorities' provisional capital allocations on HRA block, the fullest consideration has been given to their statements of need in this regard, as contained in the forward capital programme which authorities have submitted. The increase of £43 million in next year's capital allocations on this block should allow scope for authorities to undertake realistically phased programmes of remedial work according to the priority they attach to this particular aspect of housing need."
The last paragraph was significant. It stated:
"The provisional allocations announced this week are not intended to cover authorities' financial liabilities under the Housing Defects Act 1984. The intention is to consult authorities during the course of 1985–86 with a view to issuing appropriate supplementary allocations." — [Official Report, 20 December 1984; Vol. 70, c. 329–30.]
I refer especially to the words "appropriate supplementary allocations". It would be helpful if the Minister said more about that supplementary allocation. It is essential for this matter to be dealt with effectively and to be seen through to a successful conclusion as soon as practicable. We know what will qualify in the private sector— any building designed before 1960 in the categories mentioned which have prefabricated, reinforced concrete load-bearing components. The Act came into effect on 1 December 1984 and remains operational for a 10-year period. The maximum grant will be £14,000. It is essential to ensure that the measures in this connection are undertaken as vigorously in the public sector as in the private sector. I should be grateful to the Minister for making a statement about that.
Housing authority waiting lists can be lessened by the housing associations. I know that my right hon. Friend the Secretary of State has made available £100 million this year. I hope that we will work towards a target of building houses. About 18 housing associations operate in my
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constituency, and all of them differ from each other. I believe that it would be invidious to mention them all, but I single out one that has made an especially outstanding contribution—the Margaret Blackwood Home for the Disabled. I believe that the hon. Member for Orkney and Shetland (Mr. Wallace) visited that home some time ago. Although the housing associations represent only 1 per cent. of the total housing stock in the public sector, they could make a substantial contribution to that sector. It is also fair to add that many of the housing associations in my constituency put up the houses concerned very recently.
I should be grateful if the Minister would check the figures given by the hon. Member for Edinburgh, East as my information is slightly different. According to the public expenditure White Paper, average rents in 1982–83 were £13·58 in England and Wales and £8·94 in Scotland. I understand that the effect of the orders before us would be an average increase of £1— about 10 per cent. —bringing rents in Scotland to about £11·50 compared with an average of £14 south of the border. Bearing in mind that the average weekly wage is slightly higher in Scotland than in England, that seems fair and reasonable in the circumstances. I hope, however, that the Government will take strong, decisive action in relation to Orlit houses.
9.56 pm
Mr. Allen Adams: I hope that the Minister will take a good look at me, because he sees before him an unrepentant dogmatist. I believe in dogma. Someone once said that truths become dogmas when they are disputed, although I appreciate that that may be above the Minister's head. It was dogma, philosophy and the belief in a better world that created a better world by knocking down the slums of the Gorbals, Macalpenn, Castlehead and Paisley. The belief and the vision must be there first. Only then can one carry things through.
The history of Scotland is very different from that of England. In the middle of the 19th century we had substantial immigration from Ireland. Central Scotland also had significant immigration from the highlands as well as minor immigration from Latvia and Lithuania. At the beginning of the 20th century there was also substantial immigration from Italy. Scotland was also one of the first industrialised nations. Like Lancashire, we were heavily involved with the textile industry. This resulted towards the end of the 19th century and the beginning of the 20th century in some of the worst housing in Europe. It was reckoned that in 1910 the slums of Glasgow were second only to those of Vienna. At the beginning of the first world war, as a direct result of extremely bad housing, my area had the highest death rate in Europe from tuberculosis.
That is why in the early 1920s, when the Labour party gained control of the Scottish local authorities, it embarked on a massive council housing programme. In 20 years my authority built 20,000 council houses. Even in the mid-1950s, when I was 13, I remember going along Canal street to Campbell high school and seeing the warrens, the turret staircases, the outside toilets and the single ends that still existed even then. Things had been even worse 20 or 30 years previously. One reads of people in the Gorbals and in the east end of Glasgow living three or four to a room and two to a bed.
Therefore, there was very good reason for council housing in Scotland, and it improved immeasurably the lot

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of many people. We should thank the men of vision who went before us who built those houses and made life so much better for so many people.
Unlike England, Scotland has, over the past 30 or 40 years, become used to the principle of council housing. It is probably not well known in England that Scotland has more council houses per head of population than the Soviet Union. To attack council housing, to blame council tenants and to suggest constantly that they are not paying enough rent is to attack not just a minor part of the population but 70 or 75 per cent. of it.
It being Ten o'clock, the debate stood adjourned.

BUSINESS OF THE HOUSE
Ordered,
That, at this day's sitting, the Motion relating to Financial Assistance to Opposition Parties may be proceeded with, though opposed, until any hour.—[Mr. Durant.]

Housing Support Grant (Scotland)
Question again proposed.
Mr. Adams: In Scotland, council housing amounts to some 70 per cent. of the housing stock. Conservative Members represent what is in Scotland only a minority view. It would be interesting to see what the result would be if only Scottish Members were allowed to vote tonight.
Not only on this issue but on many others, the Secretary of State for Scotland is looking more and more like a puppet of an English Government — not a United Kingdom Government—who are trying to impose their will on a people who are unwilling to be imposed upon.
What the Conservatives believe is that the council tenant in Scotland has paid far too little for too much for too long, and that their buddies have paid for it. Conservatives have a pathological hatred of council tenants. They believe that those who have a little more than most people have paid too much to subsidise the council tenant. That is the underlying attitude apparent in speech after speech.
I am an unrepentant dogmatist. If it was up to me, those people would pay a damn sight more. We hear the proprietors of superstores in the centres of Glasgow, Edinburgh, Aberdeen, Dundee and Paisley bleating about the terrible burden of rates. We should look at their profits. Lonrho and the House of Fraser could pay much more in rates. Furthermore, the very people who complain about their rates will turn up at my surgery the next week and complain that they cannot get grannie into an old folks' home. If they paid more in rates, we could build more old people's homes. They are hypocrites to a man.
Council housing has many faults. The Labour party has not done everything correctly. There is too much bureaucracy, and many council tenants are still dictated to as they should not be. When I served on the council, we were told that it was council policy that people must not paint their front doors in certain colours. They were not allowed to fix a light swithch to the wall. With the Scottish Special Housing Association, the situation became ludicrous. One had to make an application before one could bang a nail in the wall. Those faults have been admitted.
No one suggests that everything is perfect. None the less, council housing in Scotland achieved the termination of the single end and the outside toilet, the end of rickets, dysentery and — in my own constituency — of
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tuberculosis. The slums and warrens built by mill owners in my constituency towards the end of the 19th century were still in existence in my lifetime, and they were appalling. They cost many lives and much misery. They were not conducive to nice or comfortable living. The Labour party did away with them and made life much better for many people.
It might be argued that things could have been done differently and that we might have built houses for sale 60 or 70 years ago, but none of us can rewrite history. We made housing better and it is perhaps best left alone, for we are now merely selling off the best of the stock. Houses in the worst areas of my constituency such as Furgusly Park and Shortway, which are known to same Conservative Members, will never be sold. All we are doing is denying the people who live there the right to move to a better house because the better stock has been sold.
My local council has asked me to make some comments about grants. It suggests that most councils in Scotland are trying to channel money into specific areas such as the adaptation of houses for the elderly and the disabled. As the former chairman of Strathclyde social services committee, I know that much money is needed to adapt houses for the disabled and the chronically sick.
Many councils in Scotland are now saying that they would like to preserve their town centres to keep the character of Scottish towns and cities. That involves money to bring the buildings up to standard. Such money has not been made available in sufficient quantities until now. If we do not make more money available, we shall lose much of our heritage. I am worried about that because it is possible to walk through high streets from Elgin to Lands End and see a sameness creeping into our towns and cities. I should like money to be made available to stop that.
Ultimately, it comes down to spending £1 now to save having to spend £2 in 10 years. Not spending money now is a false economy. As Harry Truman said, "Save a buck and sacrifice the people." No doubt the Minister will come out with facts and figures when he winds up, so I should like to mention a few now. When the housing support grant was initiated, it gave Renfrew district council £6·5 million. Renfrew now receives nothing. In anybody's language that is a drop of £6·5 million. Housing support grant in Scotland for 1979–80 was £228 million—it has dropped to £48 million in 1985–86. In plain language, that is a substantial drop. I calculate it to be a decrease of 79 per cent. and yet, over the same period, the retail price index rose by 75 per cent. The housing stock of 38,000 homes in my area will deteriorate rapidly as a result. Indeed, it already has. I ask the Government to reconsider and to make more money available.
10.8 pm
Mr. Charles Kennedy: It will come as no great surprise to the House, least of all to the hon. Member for Paisley, North (Mr. Adams), if I say that my principal raison d'être for being in politics is to oppose completely the type of dogmatism of which he spoke. Nevertheless, I go along with much of what the hon. Gentleman said.
It is fair to argue that the policy of selling council houses, which I support, leaves local authorities with an increasing residue of houses, especially in urban areas but also in rural areas, that are less likely ever to be disposed

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of, and certainly not without vast sums of public money being spent on them first. It is therefore ridiculous that the Government should cut public investment when there is rising unemployment in Scotland and when the construction industry could put many people back to work quickly.
Despite the contributions from Conservative Members and despite the Minister's attempt at an ebullient speech, we need only look at a report in The Scotsman of 12 December for proof that difficulties exist. In a report entitled, "Housing hopes undermined", Mr. Donald MacLennan, director of the Scottish Federation of Housing Associations, is quoted as saying that the associations' initiatives are being "stifled completely" by the Government's present decision. It involves a cut of more than 40 per cent. on the figure which the associations were awarded for 1983–84. Mr. MacLennan is reported as saying:
"The plan we put to the Minister and which is being looked at by the Housing Corporation is now almost stillborn."
Among other things, the plan focuses on the expansion of housing association programmes in Scotland to at least 7,000 units per year. Given the waiting list figures and the social service figures, of which the Under-Secretary of State with responsibility for health will be aware, and the problems which both those sets of figures highlight, it is extremely surprising that the Under-Secretary of State with responsibility for housing should turn a blind eye and deaf ear to the housing associations' genuine arguments. That underlines what many hon. Members see at constituency level, which is, a continuing erosion of housing stock and its quality, and of local government responsibility, local power and democracy.
I find it a little difficult to agree with all the comments made by the Labour party spokesman, especially when he defends to the end the role of COSLA. I do not criticise COSLA, but it seemed from his speech that the Labour party had never attempted to restrain local spending, which more recent political experience shows not to be the case. Some of the criticisms from the Labour Front Bench do not stand up to full, vigorous, political scrutiny.
I wish to address myself to the anomalies in the system of housing support. That is a cautionary expression to use for such support from the Government to Scottish local authorities. Local democracy is highlighted by the confrontation which both Front Benches predicted. It is a shame that both Front Benches are willing to make such a great issue of, and to score points from each other about, that. I subscribe to the type of approach described by the hon. Member for Glasgow, Provan (Mr. Brown). He said that there was more merit in making sensible points based on the merits of a case than in making blanket statements, which do not ease the position.
It is like the teachers' dispute. It may be easy for the Scottish Office to attack the Opposition, and for the Labour party to strike back, but at the end of the day it is children's education that will suffer. The Secretary of State nods in agreement. In exactly the same way, the confrontation which his policies are leading to, and to which the Labour party, although apparently not the Labour party spokesman, tonight is willing to give measured support will do no one any good, least of all the tenants. It would be only sensible for the Government to have the common sense and, indeed, the political humility
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once in a while to modify and improve their policies so as to reduce the possibility of local authorities breaking the law or entering into activities which the Scottish Office and perhaps the bulk of Scottish opinion would find unacceptable. The fact that the Minister was apparently unwilling to do so tonight will not make it easy for the Secretary of State, if the legal confrontations build up in the months ahead, to lay all the blame at the feet of local authorities. He should remember that the legislation which gives rise to the problem was initiated by him, or at least in his name by St. Andrew's house in Edinburgh.
Once again, those at the lowest end of the income scale, be that state income or remunerative income through employment, must bear the brunt of the Government's policies. The Minister said that housing benefit should not be overlooked, but he must acknowledge, as did the former Minister of Social Security—the hon. Member for Brent, North (Dr. Boyson)—especially in relation to England and Wales but also to Scotland, that the housing benefits system is a complete shambles. During the past eight to 12 months especially, all hon. Members will have heard of elderly constituents—people who have never been in debt and who consider it utterly unacceptable to be in debt — being placed in a position of apparent indebtedness to local authorities because of foul-ups in the housing benefit system. The Minister cannot rely on what has been shown, and admitted by the DHSS, to be a deficient system to try to justify the increases in rent which council house tenants must face.
There are still many anomalies in the system. My hon. Friend the Member for Orkney and Shetland (Mr. Wallace) intervened in the Minister's speech to mention such anomalies in Shetland and Orkney? That example typifies a problem that is common to other parts of Scotland. The local authority in Shetland has had much-needed capital expenditure of £3·4 million consented to this year and about £4 million next year, which will lead to an increase in debt charges of £650,000. That is the equivalent of an increase of £4·80 a week in rents. The Government cannot have taken that into account when they fixed the housing support grant for the area, despite what is claimed in the order, for it appears to drive a horse and cart through the regulations that they are setting up elsewhere.
We have discovered exactly the same problem on Skye. I appreciate that Skye and Lochalsh district council is one of the few in Scotland whose budget this year is increasing in real terms. The problem there is that if the authority levied the assumed rate fund contribution, which was estimated by the Minister, it would be open to penalty under the other provisions of the regulations.
Obvious difficulties remain. Like the hon. Member for Dumfries (Sir H. Monro), I have a specific inquiry about the variation order which I hope that the Minister will answer. It results from representations that I have received from the Skye and Lochalsh district council about some distinct problems that it is facing. It has done comparatively well with capital allocation and with improvement and repair grants, but the increased level of capital allocation—an increase from £1·06 million to £1·5 million—means that the council faces a greater burden in loan charges. The recent increase in interest rates is bound to complicate and add to the problems.
The increase is liable to be about £22,000 a year, and for Skye and Lochalsh district council, that is the equivalent of a rents increase of 50p a week. Will the

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Minister say whether the variation order will take account of that, and will specifically make up for that differential? If that is not the case, the maintenance and repair budget will have to be further cut to meet the additional demands that the £22,000 will put on the council. That £22,000 must seem a ridiculously low figure to many hon. Members in comparison with their local authorities, but for Skye and Lochalsh, which already meets the low stock rating of having under 3,000 local authority houses, it is a significant figure. The council is still grappling with the cuts to which it was subjected last year. I should appreciate any answer that the Minister can give on this.
This problem highlights the difficulties of time lag and updating in the system of regulations. As the chief executive of the district council said to me in a recent letter before the debate about loan charges:
"it seems surprising that SDD did not take the trouble to check their own information on Capital Allocations being issued when preparing the grant distribution calculations."
There is an of administrative difficulty, which has been causing my local authority, and I suspect, others, some difficulties.
The Minister's package is not satisfactory. He must know, from his own constituency as much from the pleas that he hears from every part of Scotland, that this is not
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a realistic policy to pursue at a time of rising unemployment, particularly in the construction industry, and of increasing waiting lists for council houses. The right to buy may be a great system to argue for, and may be a laudable system for which to aim, but it cannot be pursued at the expense of the majority who will continue to be dependent on local authority housing.
It is insufficient and inadequate to say that the better end of housing stock should be sold off, as it will be snapped up into the private sector first. That will leave diminished and depleted resources with which the council has to grapple with increasing problems as a result of Government policy leading to higher unemployment and greater levels of deprivation. Increasing problems confront local authorities, particularly in housing programmes. I have asked the Minister some specific constituency questions. My right hon. and hon. Friends and I do not support these orders, and the Government will not have our vote for these thoroughly discriminatory measures.
Mr. Speaker: Order. I understand that the Opposition Front Bench speaker wishes to speak at 11 o'clock. I hope that it will be possible to call all of those hon. Members who wish to speak in the time that is available before 11 o'clock.
10.25 pm
Mrs. Anna McCurley: As a former history teacher I was absolutely fascinated by the history lesson that was given to the House this evening by the hon. Member for Paisley, North (Mr. Adams). If we had to follow his dogma, it would mean that we should have to vote either for the Greens party or the Blues party from ancient Rome, because we should be grateful to the Romans for giving us central heating. It is that kind of belief that pervades the attitude of the Labour party towards council house tenants in Scotland: that they should be eternally grateful to the Labour party for what it has done for them.
What amazes me in any debate on Scottish housing is that a certain amount of amnesia overtakes the Opposition. If the Opposition had reliable memories, they would be more inclined to congratulate the Government upon their housing policy rather than to castigate them. We should compare the position in Scotland before the Conservative party introduced enhanced housing improvement grants with the dramatic change for the better by the improvement of tens of thousands of properties since then. The problem is that success does not always bring its own reward. The Opposition, whose record on housing is still an ugly legacy in Scotland, is urging the Government to do more of what the Opposition never did or, indeed, could do.
Mr. Lambie: The Minister said that at the beginning of our debate.
Mrs. McCurley: I shall deal with the point made by the hon. Member if he cares in a minute or two to make an intervention from a standing position.
Mr. Lambie: I have been listening to the debate since it began. The hon. Member has just come into the House to speak.
Mrs. McCurley: I have been listening to the debate for a substantial amount of time. I feel that had I not removed myself for but a few minutes in order to partake of a meal — [Laughter] — I should not be in such fine and aggressive fettle as I am in now. Part of the reason for the Opposition's failure lies in their rigid determination to keep council house rents at an uneconomic level and, through rates and taxes, to make others pay for what in the end amounts to a guaranteed share of the vote at any election.
Many council tenants are in the lower income bracket. Because we fully understand this, the Government, through housing benefits, are continuing to provide reasonable accommodation at a price those tenants can afford. We have discussed many times how few people, particularly in parts of the west of Scotland, contribute at all to the cost of living in local authority accommodation.
Mr. Kennedy rose—
Mrs. McCurley: I shall give way in a moment. Equally, there are those living on the financial margins in the private sector, either in private rented accommodation or in owner-occupation, who find the burden of high rents, taxation and rates well-nigh intolerable and who are supporting those in local authority households with higher incomes or multiple incomes that are much higher than
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those they command. They also have fewer outgoings and enjoy the security that comes from knowing that repairs are not necessarily going to cost them anything.
At a time when we are faced with the choice either of soaring inflation, as in the 1970s, under a Labour Government or of the prudent management of finance in the public sector to keep inflation down to the minimum, it is only right that the Government should exercise a restraining influence upon local authorities who over-spend. If there is likely to be a rent increase that is more dramatic than the expected average, the reason is generally because rents were calculated to be too low in the first place.
In all the increases that are proposed—and they are minimal—Scottish tenants will still have a better deal than their English and Welsh counterparts. Average rents in England and Wales have consistently been higher than those in Scotland; as well, the average weekly wage in Scotland is slightly higher than the figure for England and Wales. Thus, for the current year the £1 increase will bring average rents in Scotland to about £11·50 compared with an average of £14 south of the border. In percentage terms this means that rents will represent roughly 7 per cent. of average earnings in Scotland compared with 10 per cent. in England and Wales.
However, as my right hon. and hon. Friends know, it is never my policy when I speak in the House only to give bouquets but occasionally to throw a few brickbats. I wish to take up two points with the Minister. As he is well aware, one of the major problems is the maintenance of local authority properties. Although I have a great desire to see additional sales of local authority housing and still think that some Scottish local authorities are obstructive and have been dragging their heels on assisting people to buy their own houses, I do not wish to penalise householders who choose to remain in the public sector. I do not think that anything in the Government's housing policy would support that, but I do not want local authority housing stock to be regarded as second rate or the tenants to be regarded as second rate citizens.
While I applaud the Government's specific increase of £43 million for the current year for construction, modernisation and repair—and I hope that construction will be not just in the regular housing sector but in the specialist sector—the additional £16 million set aside specifically to deal with dampness is disappointing. This may be the time to tackle dampness on a greater scale, especially when there is a recession in the trades that would be involved. The figure of £500 million that is quoted frequently is not realistic and cannot be justified as a total for curing the problem of dampness in council houses in Scotland.
Simple and cheap remedies which have been mentioned by the hon. Member for Ross, Cromarty and Skye (Mr. Kennedy) in the Scottish Grand Committee might be used by a local authority which, with flair and imagination, could identify cases where more radical treatment was necessary. A total of £16 million represents less than £750,000 to authorities such as mine in Inverclyde where a massive effort is required to deal with the problems of dampness. Proper maintenance of the housing stock is as much in the Government's interest as it is in the interest of local authorities.
Can the Minister tell us why for the second year running Inverclyde district has been hit so badly in relation to comparable authorities such as Dumbarton, Stirling and

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Dundee? We have been told that the average rent increase in Scotland will be £1·22 or 12 per cent. on 1984–85. According to calculations Inverclyde tenants will be asked to pay an increase approximating to £3·04p or 33 per cent. This seems to be a dramatic increase in comparison with comparable local authorities and it requires some public explanation. I have no doubt, that the Minister will give a proper justification for the increase. But whether it satisfies Inverclyde is another matter.
10.35 pm
Dr. Norman A. Godman: It is always interesting to speak after the hon. Member for Renfrew, West and Inverclyde (Mrs. McCurley), when she has made one of her speeches about Inverclyde. I am sure that she will agree that there are many more housing problems in Greenock and Port Glasgow than in Kilmacolm and Gourock. However, I agree with her that we need a proper explanation from the Minister about what she termed a dramatic increase in council house rents in Inverclyde.
The Minister's speech was smothered with figures, but he did not detail the extent of housing need in Scotland. I should like him to give some of those facts tonight. For example, how many people are on the waiting lists in Scotland? How many elderly people are waiting for sheltered housing in Scotland? How many people are living in overcrowded conditions, or in damp houses? I derive no satisfaction from the debate, because it will not improve by one jot the lot of council house tenants in my constituency. Many of them live in difficult and miserable conditions. Many of them also live in badly designed houses that are submerged in large and ugly schemes. Many of them too have had to suffer for decades because their houses were designed by architects who lacked both imagination and ingenuity, and apparently sympathy and compassion as well. Those architects regard the local authorities rather than the council house tenants as their clients.
Today thousands of citizens live in houses that are barely adequate. Often others live in houses that are grossly inadequate and hence make life a misery.
Mr. Michael Forsyth: Will the hon. Gentleman give way?
Dr. Godman: No. It is much too serious an occasion for that. However, I would have given way if the hon. Gentleman had been in the Chamber for as long as I have.
Nowhere is this dismal state of affairs more evident than in Inverclyde. I have to add that I am primarily talking about council houses in Greenock and Port Glasgow, rather than those in Gourock and Kilmacolm. In Inverclyde 6,000 houses are infected with dampness. That figure shows a slight reduction over the past few years, due to the remedial work undertaken by the Inverclyde district council. But the Government and that council must do much more.
The scale of the problem and its attendant misery cannot be radically reduced in the near future without more help from the Scottish Office. It is amidst those dismal circumstances that council house tenants in Inverclyde have been advised that they may well have to pay a good deal more in rent. It seems that Inverclyde is being singled out for severe treatment by the Secretary of State. Why are we witnessing such apparent vindictive treatment? I have
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been told by his hon. Friends that vindictiveness is not part of his personality. Is he angry with the Inverclyde administration? I can assure him that I believe that that august and austere publication Militant would affix the label "moderate" to the present Labour administration of Inverclyde.
Inverclyde district council has been instructed to reduce its present deficit per house from £220·20 to £125. Other district councils, while suffering, are not suffering to that extent. Inverclyde council tenants face a much higher rent increase than tenants elsewhere. In addition, the Inverclyde district council faces the withdrawal of housing support grant amounting to £51·36, giving a total increase of £148, that is, and increase of approximately £3 per week. Therefore, the circumstances in Inverclyde will be much worse than elsewhere in that tenants will face rent increases of about £3 per week more than the tenants of other authorities.
I believe that the Secretary of State received a letter earlier this week from the chief executive of the district council, Mr. Ian Wilson. In an earlier letter to the Secretary of State, the chief executive pointed out—and I am sure that he will not mind my quoting from the letter:
"Now that the details of the Housing Support Grant for 1985/86 are known, it is confirmed that our tenants face an average increase in excess of £3 per week. The Council views those level of increase as quite unreasonable and in view of the fact that it does not in any way affect central financing of our expenditure asks the Secretary of State most urgently to reconsider this matter."
I ask the Secretary of State on behalf of the Inverclyde council house tenants to exercise his discretion so that the rent increase that those tenants will have to pay will not be nearly as high as now envisaged. I believe that he has discretion vis-à-vis the rate fund contribution limitation figure. I ask him to do this in the interests of the tenants of Inverclyde district council.
10.47 pm
Mr. Willie W. Hamilton: At this late hour there is not much point in going into detailed arguments even on a constituency basis, so I will satisfy myself with one or two generalities.
The first generality is the undeniable fact that in the last five years public expenditure on housing, which is the most important social service that we have, has been slashed by the Government more than any other single service.
The second generality is that any Scottish Member of Parliament who met the representatives of the local housing authorities yesterday of all political persuasions will agree with me from my long experience in the House that never has there been a bigger deputation and never has there been a more unanimous one. The representatives were unanimous in their condemnation of the Government's refusal to face the realities of the housing problems in Scotland.
There is a yawning gulf of understanding between the local authorities at the sharp end of the problem and the Government in their ivory towers, whether they are in Whitehall or in St. Andrew's house. It is a staggering gulf that has to be bridged. It could be, but the Government obviously have no intention of bridging it. Their philosophy is a simple one that has been expressed by other hon. Members. They simply do not believe that it is any part of the Government's responsibility to finance in any way the housing requirements of any single family in

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the country. The result is that the subsidy in the form of tax concessions to the private owner-occupier goes into hundreds of millions of pounds a year while year by year the subsidy to the generally poorer people in council houses has diminished to nil in many local authorities in Scotland. The present situation is that the local housing authorities simply cannot cope with the problems.
The Under-Secretary will recall that in the recent debate on acid rain, I said that people in houses, hospitals or schools with lead piping were being poisoned day by day. I asked what the Minister was doing about it. The hon. Gentleman said that he would write to me. I am still waiting for the reply. What progress is being made on lead, on condensation and on asbestos? Every local authority knows about those problems. The Government must know about them, but they are doing damn all about them.
Virtually everyone who took part in yesterday's lobby—Tories, Liberals, ratepayers and all the others—said that there would be a great temptation for them to defy the law, because they could not obey the law and carry out the mandates given to them by their electors.
The Under-Secretary made great play of the rule of law. It is an important matter, but we need no lessons from Conservatives about the importance of obeying the law. That highly respectable organ of the press, The Sunday Times, said in a recent article:
"Financial fraud has taken place on a staggering scale in the London insurance market. But the Director of Public Prosecutions has yet to bring a single case before court. White collar criminals are laughing at the law. While the DP dithers, the financial fraudsters are sunning themselves on the Marbella beaches"—
wherever they are—
"Investors have been cheated of up to $500 million."
The Government know that; the Law Officers know that, but they are more interested in chasing humble, democratically elected Labour councillors, and Tories, throughout Scotland.
Hundreds of thousands of companies—I guess that Conservative Members are directors or great shareholders in them — are defying the law. Two of every five companies in Britain are disobeying the law by not presenting their annual reports or accounts according to the law. What are the Government doing about that? Precisely nothing. Even the Prime Minister's son was caught at that. It was only when the Sunday press got hold of him that he quickly sorted himself out. God knows where he is now.
The Government have a different approach to council house tenants. Lady Tweedsmuir and Tom Galbraith called them second-class citizens and shiftless council tenants. Conservatives regard council tenants as worthless and believe that they should stand on their own feet. When we say that rents will go up by more than £1 a week, Ministers say that 60 to 70 per cent. of council tenants receive rent rebates or housing benefits. But those benefits are paid for out of the public purse, so that what the Government save in one area goes out in another.
All this is part of a redistribution of the national wealth. We shall see it again in the Budget. The exercise is designed to take from people who have too little to give handouts in the Budget to those who already have too much. That is what it is all about. I agree with those who take the view that there is a fundamental cleavage in philosophy on these matters. The Opposition regard
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housing as something of fundamental importance to so many that it cannot be left exclusively to the laws of the market. There must be Government intervention and public financing. I venture to prophesy that by the end of the Parliament there will not be one local housing authority in Scotland that will be receiving one penny piece of public money for its housing programme.
I am aware that my hon. Friend the Member for Falkirk, West (Mr. Canavan) might want to participate in the debate, but I shall mention the Kirkcaldy find. The Under-Secretary of State spoke to me in the Corridor the other day. He said, "Willie, I am doing awfully well. I have found a few pennies in the kitty for the Kirkcaldy district council." That money will not give the council's houses a coat of paint. Let me thank the Minister for nothing. The council will have its representatives running around to find a few houses on which to spend the small amount that has been found in the kitty. The council wants tens of millions of pounds and its problems are small compared with those of other local authorities in Scotland.
Mr. Ancram rose—
Mr. Hamilton: No, I shall not give way. I am just getting into my stride. If the local authorities break the law, I hope that they will do so together without exception. If the Government continue to behave in such a dictatorial manner and continue to show such lack of understanding, there will come a time when the authorities will have no alternative but to do so. My hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) says that the answer lies with the Government and that they must face the problems more realistically. He argued that if they do so there will be no confrontation. The responsibility is theirs.
A White Paper was published yesterday setting out public expenditure over the next two or three years. It sets out a wonderful prospect. After five years of "successful" Tory Government rents, rates, gas prices, electricity prices, coal prices and school meal charges are increasing. Every price that can be mentioned is increasing as a direct consequence of the Government's policies. This is what the press is saying, and it has analysed the White Paper. At the same time, unemployment is increasing remorselessly and is exceeding 4 million. How can the unemployed attempt to meet the problems of housing and education, for example, with their increasingly worthless incomes? I hope that the Minister will see reality.
The Government can find more cash. I think of the 1,200 folks on the Falkland Islands who are about 8,000 miles away. We are to spend £2,000 million on them in the next three years, but to what end? There are 5 million folks in Scotland. If we shifted them out to the Falklands, we would get their problems solved. Prefabs are being built on the Falklands at a cost of £30,000 each. The money' and resources are available and only the will is lacking to direct them to the right areas.
10.54 pm
Mr. Albert McQuarrie: In view of Mr. Speaker's request, I shall endeavour to keep my remarks short.
Mr. Dennis Canavan: Get off your knees.
Mr. McQuarrie: I shall ignore that comment.
I take issue with the hon. Member for Edinburgh, East (Mr. Strang) for whom I have the greatest respect. He said

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that the Conservatives were forcing up council house rents to compel tenants to purchase their council house. That is a lot of rubbish. Hansard of 22 November 1984, c. 273–5, clearly shows that the percentage of council houses sold between 1 April 1975 and 30 September 1984 is less than one would have expected. For example, Strathclyde with 460,000 public sector houses in stock at 30 September 1979 sold only about 11,000 houses — 2·5 per cent. Sales of public sector houses have seldom reached double figures in local authority areas generally.
Hon. Members have referred to the state of council houses and their period of disrepair. The hon. Member for Greenock and Port Glasgow (Dr. Godman), who is not in the Chamber—
Mr. Wallace: He has been here all night.
Mr. McQuarrie: I am merely commenting. If the hon. Member for Greenock and Port Glasgow had examined council house construction under successive Governments, he would have found that the houses were approved by the central Government of the day according to the Parker Morris standard. The houses are now defective because they were not properly constructed in the first place by the architects. The houses became defective because the Parker Morris standard did not reach the building standard suitable for Scotland's climatic conditions.
We can see the shamble of houses in Glasgow which for many years did not receive proper attention. That happened under Labour Administrations even when councils received housing support grant. Councils did not use that grant properly. We should remember the houses that were demolished.
Dr. M. S. Miller: What would the hon. Gentleman know about it?
Mr. McQuarrie: I remember this well enough to know all about it. Houses were demolished by a Labour department. The cost of building those houses was three times what it would have cost for the private sector to do the job. The standard of workmanship was such that some of the management had to be dispensed with. That is why many of the houses in Scotland are in a state of disrepair. The first of these public houses were constructed in 1945 after the second world war. They were constructed badly and were never maintained. I conjoin management and maintenance. Most of the council estates—whatever the political colour of the local authority—are overmanaged and undermaintained. That is one of the greatest problems. No one at the top will take the decision to remove the unnecessary people. There are far too many top brass and not enough workers doing the job. That is why so many construction workers are unemployed.
To Glasgow's credit, during the past two or three years scaffolding has been put up. An excellent job is being done to refurbish many of the tenements. Glasgow is effectively and efficiently using the money the Government have given through housing support grant. [Interruption.] The hon. Member for Falkirk, West (Mr. Canavan), who is laughing, has probably never set foot in the parts of Glasgow that are being refurbished. The Glasgow council is doing an excellent job, but Glasgow city council and other local authorities should continue to do that job.
I agree entirely that the Government should take action to alleviate dampness. It is nonsense to say that £60 million
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is sufficient even to start curing the dampness problem. I go so far as to say that my hon. Friend the Member for Renfrew, West and Inverclyde (Mrs. McCurley) was wrong to say that it would not take £500 million. Having been in the business for many years and as a member of the relevant Select Committee I believe that for the whole of Scotland it will certainly take £500 million to cure the dampness problem.
I commend the orders to the House.
11 pm
Mr. Jim Craigen: I am glad to know that the hon. Member for Banff and Buchan (Mr. McQuarrie) is something of a firebrand when it comes to curing dampness in Scotland, because the Government are doing precious little about the problems facing local authorities and the suffering of their tenants.
I thought that one reason why the Secretary of State did not open the debate might be that the provost of Kyle and Carrick had suggested that he should not, but my hon. Friend the Member for Cunninghame, South (Mr. Lambie) has pointed out that since he erred in his election campaign for the provostship he is no longer chairman of the Ayr Conservative association and has indeed been expelled from the party because of his concern about rents and local services.
These three orders amount to an abysmal prospect for Scottish tenants in 1985. The housing support grant of £48·2 million is a mere one sixth of that available in 1980–81. That means that two thirds of local authority housing stock is now outwith Government financial aid and the majority of Scottish authorities now receive no direct Government aid towards housing problems compared with the situation five years ago when all 56 Scottish authorities qualified for housing support grant.
The variation order for 1984–85 has already been overtaken by events. The Chancellor of the Exchequer has imposed a minimum lending rate of 12 per cent. That means that for the remainder of the current financial year those local authorities that still receive housing support grant could be out of pocket to the tune of about £16 million. Edinburgh district council pointed out today that since the rate fund contribution limit was fixed interest rates have risen to the extent that its housing account costs may increase by about £2·1 million. The variation order reflects the increase in interest rates last summer, but there have been two substantial increases in recent weeks.
The final straw is the new rate fund contribution order limiting to £90 million the general rate fund contribution to those authorities that choose to have one. As the contribution was running at about £120 million in 1984–85, that means a real cut of about £30 million in housing resources.
The Secretary of State is taking all the power that he needs effectively to fix rent levels in Scotland, and behind the skirts of the local authorities because he refuses to introduce a national rent level. He is manipulating HSG, the rate fund contribution and all his other powers in order to make the local authorities do what St. Andrew's house wants.
The hon. Member for Dundee, East (Mr. Wilson) referred to the complexity of the orders. I believe that the complexity is largely deliberate. It is hoped that we will find it difficult to understand how little the authorities are

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to receive. Only in algebra and in the twisted minds of Tory Scottish Ministers does a combination of minuses result in a plus.
The three orders present decay and disaster for Scottish housing in the foreseeable future. The housing support grant is mean-minded, the variation order is already inadequate and the rate fund contribution limitation order can only be described as vindictive. Decay and deterioration lie ahead for more housing in Scotland as a result of the orders.
The orders also show the disdain with which Tory Scottish Ministers view Scotland's 850,000 council tenants. My hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) talked about the possibility of the ghetto. The Government seem determined to pincer the local authority housing sector into a ghetto, and the council tenants with it. At a time when the Scottish building industry is in despair about the lack of work, and thousands of building workers are idle, it seems shortsighted in the extreme that the Government do not do more to generate employment and business opportunities within Scotland's construction industry.
Last Friday I met the Scottish construction industry group. I discussed with representatives of both sides of the building industry some of their anxieties about the prospects for the next 12 months. We are not yet seeing the full effects of the changes made in October 1983 reducing grants for home improvements from 90 per cent. to 50 per cent. There is a lead time before the effects of such changes are seen.
We have heard about capital allocations and the £16 million for dealing with dampness. That money is not being handed out to the local authorities. They are being given permission to borrow it, and are expected to earmark £16 million for the eradication of dampness.
Ministers at the Scottish Office do not last long in housing. In March 1983 the Minister's predecessor with that responsibility, the hon. Member for Eastwood (Mr. Stewart), said in a press release:
"Glasgow…gets an extra £5 million in the next financial year…This should enable the District Council to cover in full the cost of carrying through its entire programme for the eradication of dampness and condensation in one year if it so chooses."
That was said before the Select Committee chaired by my hon. Friend the Member for Cunninghame, South reported and certainly before the Scottish Development Department produced its own memorandum to that Committee, which admitted that about £150 million would be required in Scotland in the foreseeable future. It is an interesting introduction of hypothecation from a Minister who constantly told us, during discussions on clause 8 of the Rating and Valuation (Amendment) (Scotland) Act 1984, that he did not want hypothecation and that no one else wanted it. He now thinks it worth while to introduce it.
I listened with rapt attention to the hon. Member for Edinburgh, West (Lord James Douglas-Hamilton) talking about the Housing Defects Act. It seems that the Scottish Office wants to earmark £3 million. Edinburgh district council says that the full potential cost of buy-back or repair to be met through an authority's responsibilities under the Housing Defects Act 1984 to those who bought their homes will amount to £3 million, but that it will cost £17 million to repair the remaining homes in the public sector. As the hon. Member for Edinburgh, West said,
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numerous council tenants live cheek by jowl with those who have bought their homes. It is difficult, if not impossible, to isolate work that must be done for those who have rights under the Housing Defects Act 1984 from those who were excluded and lack parity.
The Government are determined to raise rents to an extent that I can only regard as excessive and unreasonable. The hon. Member for Renfrew, West and Inverclyde (Mrs. McCurley) might well be satisfied that her local authority is one of six that will have to raise rents by £3 per week, but my hon. Friend the Member for Greenock and Port Glasgow (Dr. Godman) made it clear that he does not share her view. There might be a larger proportion of their Lordships in Scotland than in England and it is difficult to draw comparisons on wage levels between England and Wales and Scotland. I suspect that there are sharper divides in incomes in Scotland and that the average is blunted because of the way in which averages are calculated.
The Secretary of State for Scotland (Mr. George Younger): Come on!
Mr. Craigen: The Secretary of State asks me to come on—if only he would come on for Scotland's tenants. That is what we are asking for. We want him to look after the interests of tenants in Scotland. He must have handed out a few briefs to his Back Bench colleagues. I exclude the hon. Member for Banff and Buchan because I know that he would tear up any ministerial brief. The trouble is that some of the Secretary of State's colleagues read only the good bits in the brief. They ignored the bits that will sting the tenants whom they represent.
The hon. Member for Aberdeen, South (Mr. Malone) said that it is all a matter of balance and talked about housing finance. I do not think that he knows that many local authorities, and the money they spend, help the private sector as well as council house tenants. If he wants Scotland to be on all fours with England and Wales, he should consider why we need a Scottish Minister with responsibility for housing. Come to think of it, we could do better without this one. Public expenditure on interest relief is a form of negative public expenditure. Now that it is running at £2·75 billion in the United Kingdom I suggest that we have an open-ended subsidy irrespective of a person's income. The more he borrows, the more interest relief and tax that he does not have to pay. It is time for a reappraisal of the top end of the income scale.
We had representations this week from the Scottish Council for the Single Homeless. Some of the things going on up and down the country are a moral outrage. Young people are being driven from their homes. The orders make provision for hostel and lodging accommodation. It would be interesting if the Minister would comment on that aspect, because it tends to be ignored.
The hon. Member for Fife, North-East (Mr. Henderson) thinks that everything would be hunky-dory if we were all on housing benefit. Forty-five per cent. of households in Scotland are on housing benefit, compared with 35 per cent. in England and Wales. There is a disparity there. It should not be overlooked that housing benefit relates to individuals and is not a subsidy to a housing authority.
The orders represent higher rents, reduced maintenance and repair of Scotland's housing stock, longer waiting lists and greater homelessness. They also mean more

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joblessness in the construction industry and more bankruptcies among wee builders. These orders paint a prospect for 1985 of despair, decay and disaster in many sections of Scotland's housing stock.
11.16 pm
Mr. Ancram: I have listened to the hon. Member for Glasgow, Maryhill (Mr. Craigen) on many occasions, but his speech tonight gave me the impression that his heart was not in it. Until the end of his speech, when he mentioned the percentage of people in council houses in Scotland receiving housing benefit, it bore so little relation to reality that there was little on it for me to answer. I am not surprised about that. When he compares the Labour Government's record on housing with this Government's achievements since 1979, it is not surprising that he lacks the confidence to make a stronger case.
I remind the House that between December 1975 and March 1979, when the Labour party was in Government, the reduction in the number of below tolerable standard houses was 24 per cent. Between March 1979 and March 1984, when the Conservative party was in office, it was 44 per cent. We are proud of that record.
Unlike the hon. Member for Glasgow, Garscadden (Mr. Dewar), the hon. Member for Maryhill mentioned the number of people on housing benefit. He knows, even if his hon. Friend does not, that money spent on housing benefit goes into housing, as much as any other money for housing does. Since 1979–80, that figure has increased from £32·4 million to £70·4 million in the current year.
Mr. Robert Hughes: That is disgraceful. The Minister should be black affronted by what he has just said. The sum spent on housing benefit since the Tory Government have been in power is a shame and a disaster, and shows the poverty that he has inflicted on the Scottish people.
Mr. Ancram: The hon. Gentleman has shown precisely what the difference is between the Labour party's policy and ours. We believe in subsidising people in need, not in subsidising every council house and tenant. That is precisely what the orders are about.
In the short time remaining to me, I shall try to deal with some of the specific points raised in the debate. The speech of the hon. Member for Garscadden was, understandably, general, and I covered many of his points during my opening speech. He mentioned the action being taken by Glasgow district council against my right hon. Friend. Although I do not wish to say too much about it now—he will understand that it would not be proper for me to do so—I must tell him that I am surprised by the terms of Glasgow's court action. Needless to say, my right hon. Friend rejects completely the suggestion that his actions were ultra vires. My right hon. Friend made a full and careful consideration of all the factors mentioned in Glasgow district council's letters of 21 and 30 November and 28 December when reaching his decision not to increase the rate fund contribution limit for Glasgow district council—
Mr. Norman Buchan: On a point of order. Mr. Deputy Speaker. We have listened to a long extract from a letter from the Secretary of State for Scotland, who happens to be in the Chamber. Can he not stand up and speak for himself?
Mr. Deputy Speaker: The hon. Gentleman knows that that is not a point of order.
Mr. Ancram: The hon. Gentleman did not attend the whole debate, and he may not wish to hear the answers to some of the relevant questions that were asked.
The hon. Member for Garscadden also mentioned Glasgow's rent increase. In considering the rent increase that Glasgow proposes, one must take account of the fact, as we did—the hon. Gentleman obviously did not—that Glasgow imposed a rent freeze for the current year, and is planning to increase expenditure on management and maintenance by considerably more than the rate of inflation. This explains the disparity in our views.
I was a little disappointed by what the hon. Member for Glasgow, Provan (Mr. Brown) said about housing associations, and I was amazed to hear the allegation made by the hon. Member for Ross, Cromarty and Skye (Mr. Kennedy), because within the total allocation this year my right hon. Friend has preserved, and increased marginally, the proportion to the housing associations in recognition of the value that we place on their work. For the hon. Member for Ross, Cromarty and Skye to say that their allocations had been cut by 40 per cent. defies explanation, because for the third year running, housing associations will have more than £100 million to spend. That is a considerable sum.
The hon. Member for Provan asked me whether I would consider sympathetically par value co-operative proposals in Glasgow. I am sympathetic to those imaginative proposals, provided that they are likely to lead to a real and lasting transfer of ownership and control from the district council to the tenants. Several problems remain to be considered, but in general I am sympathetic.
My hon. Friend the Member for Dumfries (Sir H. Monro) asked about interest rates. I said that we shall consider bringing forward a variation order for an increase or decrease in housing support grant as appropriate in due course. He asked about timing. He must appreciate that the variation orders are not there to react to every movement in interest rates. They are there to correct the position once it becomes apparent that the original estimates are wrong. My hon. Friend also asked whether the rate fund contribution limits were set arbitrarily. The formula of asking authorities to reduce rate fund contributions by 10 per cent. from last year's limits, or to hold to their budgeted figure, if that is lower, was discussed in principle with COSLA, which was unable to suggest an alternative approach. In fairness, I should say that it did not like the outcome of this formula. The fairness of the formula is manifested by the fact that the rent increase assumed within it is on a par with that assumed in this housing support grant order.
My hon. Friend the Member for Edinburgh, South—[Interruption.] I was always very proud of my ability to play my own trumpet, but on that occasion it was not deliberate. My hon. Friend the Member for Aberdeen, South (Mr. Malone) asked whether, in setting allocations for authorities, we take account of the varying enthusiasms for council house sales. The answer is yes, because we assume that authorities will generate receipts from sales within an average of seven months, and those that complete within that time have stronger allocations than those who do not.
The hon. Member for Dundee, East (Mr. Wilson) made a number of points, and I was rather suprised to hear him of all people talk about cash for the HRAs, because we have given Dundee district council a provisional gross allocation on the HRAs for this year of £7·8 million. This

1091
represents a 19 per cent. increase in the council's allocation for the current year, and meets 82 per cent. of Dundee's bids for HRA resources on that block. I would have hoped, in the light of constraint on expenditure, that he would at least be prepared to accept that that was a major allocation.
The hon. Member for Edinburgh, East (Mr. Strang) made a number of points about the situation in Edinburgh, but, as I spoke earlier about Edinburgh, I do not want to say too much about it now. There are a number of things in what he and the council have said that we find puzzling. It is clear from Edinburgh's capital programme, which has been made available to us, that it plans to spread expenditure evenly. Planned expenditure on condensation and dampness in 1985 totals only £1·93 million in the plan. Our earmarked allocation of £4·7 million should enable Edinburgh to accelerate measures to tackle this problem over and above what it had already decided to do.
My hon. Friend the Member for Edinburgh, West (Lord James Douglas-Hamilton) asked a number of questions, in particular whether I could give him the figures of rent and wage comparisons between England and Scotland. The average Scottish local authority rent is £10·46 a week, and the average Scottish earnings for a full-time manual male worker aged 21 and over is £156·20. In England, the equivalent figures are £14·71 and £152·40.
Mr. Canavan rose—
Mr. Ancram: I am not giving way.
Mr. Canavan rose—
Mr. Deputy Speaker (Mr. Ernest Armstrong): Order. The hon. Member for Falkirk, West (Mr. Canavan) can see that the Minister is not giving way.
Mr. Ancram: My hon. Friend also asked some questions about the Housing Defects Act. We have advised councils that in setting provisional capital allocations, we have taken no account of expenditure that will be incurred through this Act, but we have made provision at a later stage, when the council is better able to assess the need, to make supplementary allocations should that need arise.
My hon. Friend the Member for Fife, North-East (Mr. Henderson) put his finger on the nub of the debate. When we examine what the Opposition's case has been, it becomes clear that their policy does not hold together. Many of the speeches that have been made tonight were saying that we should subsidise house rents whether the tenants need that subsidy or not, at the expense of dealing with problems such as dampness and condensation.
The Opposition's first argument is that subsidy should be paid regardless. That is why they oppose the HSG order, which is based on the calculation of need. Subsidy for everyone, whatever the cost is their policy, and it can be justified only by short-term political expediency. Who should pay for these subsidies, according to the Labour speeches that we have heard? In opposing the rate fund contribution limits, it is clear that they believe that the ratepayers should pay to these general subsidies to council housing. In our debate tomorrow I believe that we should remember well who it was who tonight tried to protect the interests of ratepayers and who it was who tried—
Mr. Canavan rose—
Mr. Deputy Speaker: Order. The Minister is obviously not giving way.
Mr. Ancram: The question remains as to how they will achieve it. We have had no answer tonight from the Opposition about breaches of the law. The effects of these orders together, alongside the announcements we have made on provisional allocations, bring a balance to Scottish housing that is needed. They ensure that within the available resources money is being spent where it is most needed. Those who need help are getting it and ratepayers are not being asked to bear an undue burden. With confidence I commend these orders to the House.
Question put:—
The House divided: Ayes 317, Noes 190.

Division No. 76]

[11.30 pm

AYES

Adley, Robert

Corrie, John

Aitken, Jonathan

Couchman, James

Alexander, Richard

Cranborne, Viscount

Alison, Rt Hon Michael

Critchley, Julian

Amery, Rt Hon Julian

Crouch, David

Amess, David

Currie, Mrs Edwina

Ancram, Michael

Dorrell, Stephen

Arnold, Tom

Douglas-Hamilton, Lord J.

Ashby, David

Dover, Den

Aspinwall, Jack

du Cann, Rt Hon Sir Edward

Atkins, Rt Hon Sir H.

Durant, Tony

Atkins, Robert (South Ribble)

Dykes, Hugh

Atkinson, David (B'm'th E)

Edwards, Rt Hon N. (P'broke)

Baker, Nicholas (N Dorset)

Eggar, Tim

Baldry, Tony

Emery, Sir Peter

Batiste, Spencer

Evennett, David

Beaumont-Dark, Anthony

Eyre, Sir Reginald

Bellingham, Henry

Fairbairn, Nicholas

Bendall, Vivian

Fallon, Michael

Bennett, Rt Hon Sir Frederic

Farr, Sir John

Benyon, William

Finsberg, Sir Geoffrey

Bevan, David Gilroy

Fletcher, Alexander

Biffen, Rt Hon John

Fookes, Miss Janet

Biggs-Davison, Sir John

Forman, Nigel

Blackburn, John

Forsyth, Michael (Stirling)

Blaker, Rt Hon Sir Peter

Forth, Eric

Body, Richard

Fowler, Rt Hon Norman

Bonsor, Sir Nicholas

Fox, Marcus

.Bottomley, Peter

Franks, Cecil

Bottomley, Mrs Virginia

Fraser, Peter (Angus East)

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

Freeman, Roger

Bowden, Gerald (Dulwich)

Fry, Peter

Brandon-Bravo, Martin

Gale, Roger

Bright, Graham

Galley, Roy

Brinton, Tim

Gardiner, George (Reigate)

Brooke, Hon Peter

Gardner, Sir Edward (Fylde)

Browne, John

Garel-Jones, Tristan

Bruinvels, Peter

Glyn, Dr Alan

Bryan, Sir Paul

Goodlad, Alastair

Bulmer, Esmond

Gorst, John

Butcher, John

Gow, Ian

Butler, Hon Adam

Gower, Sir Raymond

Carlisle, Kenneth (Lincoln)

Grant, Sir Anthony

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

Greenway, Harry

Carttiss, Michael

Gregory, Conal

Cash, William

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

Channon, Rt Hon Paul

Griffiths, Peter (Portsm'th N)

Chapman, Sydney

Grist, Ian

Chope, Christopher

Ground, Patrick

Churchill, W. S.

Grylls, Michael

Clark, Sir W. (Croydon S)

Gummer, John Selwyn

Clarke, Rt Hon K. (Rushcliffe)

Hamilton, Hon A. (Epsom)

Cockeram, Eric

Hamilton, Neil (Tatton)

Colvin, Michael

Hampson, Dr Keith

Conway, Derek

Hanley, Jeremy

Coombs, Simon

Hannam, John

Cope, John

Hargreaves, Kenneth

1093

Harris, David

Mayhew, Sir Patrick

Harvey, Robert

Mellor, David

Haselhurst, Alan

Merchant, Piers

Havers, Rt Hon Sir Michael

Meyer, Sir Anthony

Hawkins, Sir Paul (SW N'folk)

Miller, Hal (B'grove)

Hawksley, Warren

Mills, lain (Meriden)

Hayes. J.

Mills, Sir Peter (West Devon)

Hayhoe, Barney

Miscampbell, Norman

Hayward, Robert

Moate, Roger

Heathcoat-Amory, David

Monro, Sir Hector

Heddle, John

Montgomery, Sir Fergus

Henderson, Barry

Moore, John

Heseltine, Rt Hon Michael

Morris, M. (N'hampton, S)

Hickmet, Richard

Morrison, Hon C. (Devizes)

Higgins, Rt Hon Terence L.

Morrison, Hon P. (Chester)

Hill, James

Mudd, David

Hind, Kenneth

Murphy, Christopher

Hogg, Hon Douglas (Gr'th'm)

Neale, Gerrard

Hordern, Peter

Needham, Richard

Howard, Michael

Nelson, Anthony

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

Neubert, Michael

Howell, Rt Hon D. (G'ldford)

Newton, Tony

Howell, Ralph (N Norfolk)

Nicholls, Patrick

Hubbard-Miles, Peter

Norris, Steven

Hunt, David (Wirral)

Onslow, Cranley

Hunt, John (Ravensbourne)

Oppenheim, Phillip

Hunter, Andrew

Oppenheim, Rt Hon Mrs S.

Hurd, Rt Hon Douglas

Ottaway, Richard

Irving, Charles

Page, Sir John (Harrow W)

Jenkin, Rt Hon Patrick

Page, Richard (Herts SW)

Jessel, Toby

Parkinson, Rt Hon Cecil

Johnson Smith, Sir Geoffrey

Parris, Matthew

Jones, Gwilym (Cardiff N)

Patten, Christopher (Bath)

Jones, Robert (W Herts)

Patten, John (Oxford)

Jopling, Rt Hon Michael

Pattie, Geoffrey

Joseph, Rt Hon Sir Keith

Pawsey, James

Kellett-Bowman, Mrs Elaine

Peacock, Mrs Elizabeth

Key, Robert

Percival, Rt Hon Sir Ian

King, Rt Hon Tom

Pollock, Alexander

Knight, Gregory (Derby N)

Porter, Barry

Knight, Mrs Jill (Edgbaston)

Portillo, Michael

Knowles, Michael

Powell, William (Corby)

Knox, David

Prentice, Rt Hon Reg

Lamont, Norman

Price, Sir David

Latham, Michael

Prior, Rt Hon James

Lawrence, Ivan

Raffan, Keith

Lawson, Rt Hon Nigel

Raison, Rt Hon Timothy

Lee, John (Pendle)

Rathbone, Tim

Leigh, Edward (Gainsbor'gh)

Rees, Rt Hon Peter (Dover)

Lennox-Boyd, Hon Mark

Renton, Tim

Lester, Jim

Rhodes James, Robert

Lewis, Sir Kenneth (Stamf'd)

Rhys Williams, Sir Brandon

Lightbown, David

Ridley, Rt Hon Nicholas

Lilley, Peter

Rifkind, Malcolm

Lloyd, Ian (Havant)

Roberts, Wyn (Conwy)

Lloyd, Peter, (Fareham)

Robinson, Mark (N'port W)

Lord, Michael

Rost, Peter

Luce, Richard

Rowe, Andrew

Lyell, Nicholas

Rumbold, Mrs Angela

McCrindle, Robert

Ryder, Richard

McCurley, Mrs Anna

Sackville, Hon Thomas

Macfarlane, Neil

Sayeed, Jonathan

MacGregor, John

Shaw, Giles (Pudsey)

MacKay, Andrew (Berkshire)

Shaw, Sir Michael (Scarb')

MacKay, John (Argyll & Bute)

Shelton, William (Streatham)

Maclean, David John

Shepherd, Colin (Hereford)

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

Shepherd, Richard (Aldridge)

McQuarrie, Albert

Shersby, Michael

Madel, David

Sims, Roger

Major, John

Skeet, T. H. H.

Malins, Humfrey

Smith, Sir Dudley (Warwick)

Malone, Gerald

Smith, Tim (Beaconsfield)

Maples, John

Soames, Hon Nicholas

Marland, Paul

Speed, Keith

Marshall, Michael (Arundel)

Spence, John

Mates, Michael

Spencer, Derek

Mather, Carol

Spicer, Jim (W Dorset)

Maude, Hon Francis

Spicer, Michael (S Worcs)

Mawhinney, Dr Brian

Stanbrook, Ivor

Maxwell-Hyslop, Robin

Stanley, John

1094

Steen, Anthony

Waddington, David

Stern, Michael

Waldegrave, Hon William

Stevens, Lewis (Nuneaton)

Walden, George

Stewart, Andrew (Sherwood)

Ward, John

Stewart, Ian (N Hertf'dshire)

Wardle, C. (Bexhill)

Stokes, John

Watson, John

Stradling Thomas, J.

Watts, John

Taylor, John (Solihull)

Wells, Bowen (Hertford)

Taylor, Teddy (S'end E)

Wells, Sir John (Maidstone)

Terlezki, Stefan

Wheeler, John

Thomas, Rt Hon Peter

Whitfield, John

Thompson, Donald (Calder V)

Whitney, Raymond

Thompson, Patrick (N'ich N)

Wiggin, Jerry

Thorne, Neil (Ilford S)

Winterton, Mrs Ann

Thornton, Malcolm

Wolfson, Mark

Thurnham, Peter

Wood, Timothy

Townend, John (Bridlington)

Woodcock, Michael

Townsend, Cyril D, (B'heath)

Yeo, Tim

Tracey, Richard

Younger, Rt Hon George

Trippier, David

Trotter, Neville

Tellers for the Ayes:

Twinn, Dr Ian

Mr. Robert Boscawen and

van Straubenzee, Sir W.

Mr. Ian Lang.

Vaughan, Sir Gerard

NOES

Adams, Allen (Paisley N)

Deakins, Eric

Alton, David

Dewar, Donald

Anderson, Donald

Dixon, Donald

Archer, Rt Hon Peter

Dobson, Frank

Ashdown, Paddy

Dormand, Jack

Ashton, Joe

Douglas, Dick

Atkinson, N. (Tottenham)

Dubs, Alfred

Barnett, Guy

Dunwoody, Hon Mrs G.

Barron, Kevin

Eastham, Ken

Beckett, Mrs Margaret

Evans, John (St. Helens N)

Beith, A. J.

Ewing, Harry

Bell, Stuart

Fatchett, Derek

Benn, Tony

Faulds, Andrew

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

Field, Frank (Birkenhead)

Bermingham, Gerald

Fields, T. (L'pool Broad Gn)

Bidwell, Sydney

Fisher, Mark

Blair, Anthony

Flannery, Martin

Boothroyd, Miss Betty

Foot, Rt Hon Michael

Boyes, Roland

Forrester, John

Bray, Dr Jeremy

Foster, Derek

Brown, Gordon (D'f'mline E)

Foulkes, George

Brown, Hugh D. (Provan)

Fraser, J. (Norwood)

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

Freeson, Rt Hon Reginald

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

Freud, Clement

Brown, Ron (E'burgh, Leith)

Garrett, W. E.

Bruce, Malcolm

George, Bruce

Buchan, Norman

Godman, Dr Norman

Caborn, Richard

Golding, John

Callaghan, Jim (Heyw'd & M)

Gould, Bryan

Campbell, Ian

Gourlay, Harry

Campbell-Savours, Dale

Hamilton, James (M'well N)

Canavan, Dennis

Hamilton, W. W. (Central Fife)

Carlile, Alexander (Montg'y)

Hardy, Peter

Carter-Jones, Lewis

Harrison, Rt Hon Walter

Cartwright, John

Hart, Rt Hon Dame Judith

Clark, Dr David (S Shields)

Hattersley, Rt Hon Roy

Clarke, Thomas

Haynes, Frank

Clay, Robert

Healey, Rt Hon Denis

Clwyd, Mrs Ann

Hogg, N. (C'nauld & Kilsyth)

Cocks, Rt Hon M. (Bristol S.)

Holland, Stuart (Vauxhall)

Cohen, Harry

Home Robertson, John

Coleman, Donald

Hoyle, Douglas

Concannon, Rt Hon J. D.

Hughes, Robert (Aberdeen N)

Cook, Frank (Stockton North)

Hughes, Roy (Newport East)

Cook, Robin F. (Livingston)

Janner, Hon Greville

Corbett, Robin

John, Brynmor

Cowans, Harry

Johnston, Russell

Cox, Thomas (Tooting)

Jones, Barry (Alyn & Deeside)

Craigen, J. M.

Kaufman, Rt Hon Gerald

Crowther, Stan

Kennedy, Charles

Dalyell, Tarn

Kinnock, Rt Hon Neil

Davies, Rt Hon Denzil (L'lli)

Kirkwood, Archy

Davies, Ronald (Caerphilly)

Lambie, David

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

Lamond, James

1095

Leadbitter, Ted

Rees, Rt Hon M. (Leeds S)

Leighton, Ronald

Roberts, Allan (Bootle)

Lewis, Ron (Carlisle)

Roberts, Ernest (Hackney N)

Lewis, Terence (Worsley)

Robertson, George

Litherland, Robert

Robinson, G. (Coventry NW)

Lloyd, Tony (Stretford)

Ross, Stephen (Isle of Wight)

Lofthouse, Geoffrey

Rowlands, Ted

Loyden, Edward

Ryman, John

McCartney, Hugh

Sedgemore, Brian

McDonald, Dr Oonagh

Sheerman, Barry

McGuire, Michael

Sheldon, Rt Hon R.

McKelvey, William

Shore, Rt Hon Peter

McNamara, Kevin

Short, Ms Clare (Ladywood)

Madden, Max

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

Marek, Dr John

Silkin, Rt Hon J.

Marshall, David (Shettleston)

Skinner, Dennis

Maynard, Miss Joan

Smith, Cyril (Rochdale)

Meacher, Michael

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

Meadowcroft, Michael

Soley, Clive

Michie, William

Spearing, Nigel

Mikardo, Ian

Steel, Rt Hon David

Millan, Rt Hon Bruce

Stewart, Rt Hon D. (W Isles)

Miller, Dr M. S. (E Kilbride)

Strang, Gavin

Mitchell, Austin (G't Grimsby)

Thompson, J. (Wansbeck)

Morris, Rt Hon A. (W'shawe)

Thorne, Stan (Preston)

Morris, Rt Hon J. (Aberavon)

Tinn, James

Nellist, David

Torney, Tom

Oakes, Rt Hon Gordon

Wainwright, R.

O'Brien, William

Wallace, James

O'Neill, Martin

Wardell, Gareth (Gower)

Orme, Rt Hon Stanley

Wareing, Robert

Park, George

White, James

Parry, Robert

Wigley, Dafydd

Patchett, Terry

Williams, Rt Hon A.

Pavitt, Laurie

Wilson, Gordon

Pendry, Tom

Winnick, David

Penhaligon, David

Woodall, Alec

Pike, Peter

Wrigglesworth, Ian

Powell, Raymond (Ogmore)

Young, David (Bolton SE)

Prescott, John

Radice, Giles

Tellers for the Noes:

Randall, Stuart

Mr. John Maxton and

Redmond, M.

Mr. John McWilliam.

Question accordingly agreed to.
Resolved,
That the draft Housing Support Grant (Scotland) Order 1985, which was laid before this House on 11th January, be approved.

Housing Support Grant (Scotland)

  HOUSING SUPPORT GRANT (SCOTLAND)
  Resolved,
  That the draft Housing Support Grant (Scotland) Variation Order 1985, which was laid before this House on 11th January, be approved.—[Mr. Ancram.]

Orders of the Day

  Consolidated Fund (No. 2) Bill
  Order for Second Reading read.
  Question, That the Bill be now read a Second time, put forthwith pursuant to Standing Order No. 113 (Consolidated Fund Bills), and agreed to.
  Bill accordingly read a Second time.
  Question, That the Bill be now read the Third time, put and agreed to.
  Bill accordingly read the Third time, and passed.
  11.44 pm
  Mr. Nigel Spearing: On a point of order, Mr. Deputy Speaker. Can you confirm that while, of course, Standing Order 113(1) permits the procedure we have just been through, Standing Order 113(2) would permit, if the Government so wished, a motion for the Adjournment to be moved to enable us to debate any matter which any hon. Member wished to raise? This is the first time, as I understand it, that the Consolidated Fund Bill has been used in respect of a Supplementary Estimate. Can you confirm that in this instance it is likely that the Adjournment will not be moved so that if the Procedure Committee reconsiders the procedure for Supply and wishes to consider this precedent which separates the Consolidated Fund Bill from any discussion it can do so? Can you confirm, Mr. Deputy Speaker, that my interpretation of the Standing Order is correct?
  Mr. Deputy Speaker (Mr. Ernest Armstrong): The hon. Gentleman is quite correct, and I am grateful to him for giving me notice that he would raise a point of order.

  Opposition Parties (Financial Assistance)
  11.45 pm
  The Lord Privy Seal and Leader of the House of Commons (Mr. John Biffen): I beg to move,
  That the Resolution of the House of 20th March 1975 shall have effect from 1st January 1985 with the substitution of the following paragraphs for paragraphs 2 and 7 of that Resolution:
  '(2) That for the purpose of determining the annual maxima of such assistance the following formula shall apply:
  £1,500 for each seat won by the party concerned plus £3 for every 200 votes cast for it at the preceding General Election, provided that the maximum payable to any party shall not exceed £450,000.'; and
  '(7) That claims under these arrangements shall be made monthly, and that the annual maxima shall be applicable to claims made in respect of expenses incurred during any one calendar year.'.
  I think it is appropriate if I open this debate by briefly reminding hon. Members of the background to these proposals.
  This scheme, was first introduced in 1975 by Mr. Edward Short, now Lord Glenamara. It was deliberately strictly limited in its scope. It was, and is, related solely to financial support for the parliamentary work of the Opposition parties here at Westminster. Historically, it has been mainly used towards the costs of running the offices of the leaders of the Opposition parties and also research support for Opposition spokesmen.
  There are, I suppose, two well-defined views on state financial aid for political parties. A number of hon. Members are opposed to any such assistance, whether it be for activities at Westminster or beyond. On the other hand the opposing view was expressed by the majority of the Committee set up by the Government in 1975 under the chairmanship of Lord Houghton. This view argued that the state aid to political parties should extend widely, and include general activities at and between general elections, as well as work at Westminster.
  The proposals now before the House are a compromise between the positions I have indicated. As I have said essentially it is confined to activity at Westminster, and to Opposition parties.
  The House will wish to know a little more about the financial structure of the proposals in the motion. The formula used has always been based on a combination of seats won by the party at the preceding general election plus a sum for every 200 votes then cast for it. The entitlement has, from the beginning, rested on a minimum qualification of a party having had one Member of Parliament elected at the preceding general election and having secured at least 150,000 votes: and there has always been a maximum payment, which was originally £150,000 a year.
  The sums and the maxima used in the formula have, however, been raised three times since the scheme was first introduced. Since 1 January 1983 the maximum has been £323,000 and the formula has been £1,080 for each seat plus £2·16 for every 200 votes. The present proposal would, if approved, raise the sums payable under the formula to £1,500 per seat and £3 for every 200 votes: subject to an annual maximum of £450,000. It is intended that those figures should apply for at least the remainder of this Parliament.
  The Labour party would accordingly receive, under the proposed new formula of £1,500 a seat plus £3 for every
  1098
  200 votes, just over £440,000; the Liberal party about £88,000; the SDP about £62,000; and the remaining smaller parties about £40,000 between them. This means that each party will receive the same proportionate increase in the amount of assistance that it receives.
  A further, minor, change proposed is that, in future, claims by the parties for amounts due under these arrangements should be made monthly, rather than quarterly as at present. This is primarily a matter of administrative convenience.
  These increases are substantial; almost 39 per cent. greater than the amounts that have been payable since January 1983. I can assure the House, however that the proposals result from a consideration of the current present costs of the services which the scheme is meant to cover. Furthermore, the new levels are meant to last at least for the duration of the present Parliament.
  The House will recognise that the cost of other aspects of support services has also increased very considerably in recent years. For example, if these arrangements are approved, the maximum amount of financial assistance given to the Opposition parties will have risen threefold since 1975. During the same period the operating costs of the House of Commons Library increased fivefold.
  Moreover, the amount paid to hon. Members in secretarial and research allowances over the same period has increased by eight times. I do not think, therefore, that the proposals can be said to represent a significant increase in the patronage available to the Opposition parties.
  Nevertheless, it is essential that this important parliamentary issue, involving, as it does, an aspect of a significant political principle, should stand and be decided on its own merits. This present motion does at least enable this to be done.
  My personal view is that it is right to treat any increase in state aid for political parties with the utmost caution. But I do not believe that the proposed increases depart from this tradition of measured agnosticism.
  In the final analysis, however, it is not for Ministers alone to lay down what is a proper level of support for Opposition parties. The amounts in question are presented to the House for an open and explicit expression of opinion.
  I have accordingly merely attempted to set out the general background. It is now for the House to decide.
  11.51 pm
  Mr. Peter Shore: The Leader of the House was right to remind us of the background of these proposals, and we are all indebted to him for his very clear exposition.
  The motion is concerned only with the continuity of those arrangements first made in March 1975 and which have been endorsed and re-endorsed in 1978, 1980 and 1983. Tonight, as on all previous occasions, the aim of the motion is to update the cash formula to take account of increased costs, principally the earnings and numbers of those employed by the Opposition parties, to assist them in the performance of their parliamentary duties.
  As the Leader of the House has reminded us, there are, of course, those who believe that there should be no state funding whatever for parliamentary Opposition parties, and there are those who are convinced that, if Opposition parties are to be both more effective and less dependent

  1099
  on their institutional backers, then state financing should be greatly extended. But neither of these viewpoints is reflected in the motion before us tonight.
  It is, as I say, simply an updating of the original proposal of 20 March 1975 which, as the then Leader of the House said,
  "is concerned solely with the question of whether a measure of financial assistance should be made available to Opposition parties to assist them in their parliamentary work here at Westminster".—[Official Report, 20 March 1975; Vol. 888, c. 1869–70.]
  The House decided then that such financial assistance should be made available, and it was, of course, the Conservative party, then in Opposition, which was the principal beneficiary.
  There is no reason to believe that assistance with parliamentary work is required less in 1985 than it was a decade ago. Indeed, most would accept that the volume and complexity of business coming before Parliament and the pressures upon Parliament from outside are all still increasing.
  The need for the Leader of the Opposition to have an office and a staff, the need for the parliamentary party collectively to have a small staff to service its meetings and its various committees and the need for shadow Ministers to have some assistance in their continued scrutiny of ministerial measures—these needs are not, I think, seriously challenged. Nor, although it is outside the terms of the motion, is the need for Back-Bench Members of Parliament to have a measure of research assistance too.
  What is open to question is the adequacy of the cash amount that is to be made available. In the 1983 Top Salaries Review Board No. 20, the Plowden committee concluded:
  "Although the adequacy of the financial assistance involved under the 1975 arrangements is a matter for the House and Government to decide, we believe that it should be based on a realistic assessment of need; and the sums involved should be regularly up-dated".
  The Plowden committee did not lay down what was a realistic assessment of need, but it is at least relevant to draw attention to the findings of the management consultants whom the Plowden committee employed that a full-time research assistant, which, in their view, all shadow Ministers required, would need to be paid about £10,600 per annum at November 1982 prices. I assure the House that nothing like that sum has been made available to shadow Ministers and the present increase, helpful as it is, will have only a small effect.
  We also have to note the words of the Leader of the House that the new levels are meant to last at least for the rest of this Parliament. Nevertheless, I welcome the motion and commend it to the House.
  11.55 pm
  Mr. Ivor Stanbrook: If we are to save the Labour party from its impending demise—I speak out of a concern for the future of the party—we must assist it to retain its place as a major political party. Therefore, we must find the best way by which the Labour party can raise funds for itself and its cause. Clearly the best way would be to raise money from its individual members and thereby enable those who support the party to demonstrate that fact by their subscriptions, and give them an interest in what happens to their money after they have contributed it.
  1100
  It could be said that the existing system, under which the Labour party depends on assistance from trade union funds, is satisfactory for it, but it seems from recent history that it is proving unsatisfactory. I commend a more democratic system, based on the principle of one man, one vote.
  Mr. Eric Forth: Does my hon. Friend agree that if political parties drew their primary financial support from their supporters in the country the alliance parties would be able to expect a large amount of financial assistance from the support that they claim to have in the country? That would strengthen my hon. Friend's argument that parties should provide their finances from that direction.
  Mr. Stanbrook: I will not go down that path. because the principle applies to every political party. It could be said that the Conservative party derives too low a proportion of its funds from individual membership subscriptions and too much from donations. We should all learn that a democratic party, functioning well, should, as far as possible, raise funds from individual members through donations and subscriptions. Best of all, the money should be raised through personal contact on the doorstep between members of the party—even up to the level of Members of Parliament—and those who give the money.
  The one way of financing political parties that should not be encouraged is financing by the taxpayers. There are great dangers in that system.
  Mr. David Winnick: As the hon. Gentleman says that Opposition parties should not be financed in the way proposed, do I take it that he opposed and voted against the original proposal in 1975, which resulted in his party being financed in that way?
  Mr. Stanbrook: It is a cheap argument to ask someone who proposes an argument on its merits, "What did you do when the scheme was brought into existence?" I do not think that there is much to be said about the consistency argument. If we are to judge an issue on its merits, we must allow for the fact that sometimes our knowledge and experience increases, which leads us to change our opinions. There is nothing wrong in changing one's opinions. It so happens that I have always been opposed to the public funding of political parties.
  Mr. Biffen: My hon. Friend voted against the proposition when it was last before the House.
  Mr. Stanbrook: I am obliged to my right hon. Friend. To raise funds for political parties through the financial support of individual members of the parties is the healthiest way of proceeding. Unless political parties at least have that as their objective, we should not consider any means of assistance such as that which is before us. I am talking about all parties. I am not confining my remarks to Opposition parties.
  All Opposition parties are labouring under considerable financial difficulties, especially in financing their research work in this House. I understand that that is the basis of the compromise settlement which has passed successfully through the House in the past few years. I accept that there is a stronger argument for providing assistance to the research offices of the parliamentary parties and for providing assistance for the staffing of the leadership of the parties. That assistance provides a service to Parliament

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  itself because it enables us all the better to perform our functions as members of parties rather than as individual Members. Although I am against the principle of public funding of political parties, I recognise that there is a stronger argument for servicing the party leaderships' offices in this place by public funds.
  It is undesirable that by passing a motion of the sort that is before us every so often we should get into the habit of agreeing that public funds should be used to finance political parties. It is with that in view that I make my contribution to the debate. If we fail to look forward to the time when all political parties can rely on the support of their members, we shall be travelling in the opposite direction and the parties will become dependent upon public funds.
  Mr. Jack Dormand: I am grateful to the hon. Gentleman for giving way for the third time in what I hoped would be a short speech. It seems that the premise of his argument is wrong. We are not talking primarily about funding political parties. The logic of the hon. Gentleman's argument is that the Government should run the country's business on what the Tory party can raise as a political party. Surely that is a total misconception. We are discussing the Opposition parties in constitutional terms and not as political parties. If the hon. Gentleman is advancing the narrow argument that I understand, he must apply it to the Government of the day. The Government of the day are a Tory Government and, according to the hon. Gentleman's argument, the Tory party should raise the Government's money. That is clearly preposterous. The Government of the day have millions of pounds at their disposal, and rightly so. Surely it is incorrect to say that the Opposition should be limited to what the individual parties can raise.
  Mr. Stanbrook: I do not accept that argument. The party that provides the Government of the day is in a different and separate constitutional position from the parties that make up the rest of the House. It is not possible to say that when a Government are in power—they are vested with executive responsibility for the government of the nation—they should rely upon sources that are privately available to them. That would be wrong. The power to tax all the people is one that is vested in the party which wins a general election, and only because of that, under our democratic system. It follows that the parties that do not have the endorsement of a parliamentary election so as to obtain a majority of the seats in the House are in a different position. They do not have responsibility for the government of the country but they have a responsibility to provide good and effective opposition. If the word "constitutional" were changed to "parliamentary" relating to the functions of a political party in the House, there would be an argument. I would disagree with that argument, because I believe that there is a dangerous tendency to rely on public funds. Those who are strongly opposed to support for political parties other than their own strongly object to providing money from their pockets through taxation to support political parties. What an individual does by way of donation is a matter for him.
  I suppose that there is an argument for saying that individual taxpayers may, if they wish, agree to be taxed at the rate of 1p above the normal standard rate and that the revenue received should be devoted to the party of their choice, endorsed in their income tax return. I believe that that solution has been adopted in some countries.
  1102
  I used to be connected with Nigeria which found itself in difficulties when it had regional self-government in the 1950s.
  Mr. John McWilliam: On a point of order, Mr. Deputy Speaker. Where do the points now raised by the hon. Member for Orpington (Mr. Stanbrook) arise in the context of this debate? The debate is about funding Opposition parties, not funding of political parties.
  Mr. Deputy Speaker (Mr. Ernest Armstrong): The hon. Member for Orpington (Mr. Stanbrook) is not out of order. I shall tell him if he is out of order.
  Mr. Stanbrook: I thought that the House might be interested in this point because it is relevant. This will be my last point.
  When people in Nigeria began political parties for the purposes of regional self-government, they found it difficult to raise funds. As members of the various assemblies were elected, they were obliged to contribute 10 per cent. of their salaries to the national party funds. For some years, political parties in Nigeria were financed in that way. The money came ultimately from the taxpayer, and therefore I believe that scheme was highly objectionable.
  That system is understandable in a young, new democracy with a Government and Opposition starting from scratch, but we are not in that position. Britain is a mature democracy which believes in one man, one vote.
  Mrs. Gwyneth Dunwoody: One person.
  Mr. Stanbrook: It believes in one person, one vote. I am obliged to the hon. Lady. That means that we should all try to raise political funds for political parties —including for their parliamentary activities — from individual subscriptions from the membership of the party.
  I do not oppose the motion, but we should bear in mind that the objective should be to do without this money from public funds and to rely upon individual subscription.
  12.8 am
  Mr. A. J. Beith: I feel that I am in a reasonably comfortable position to rebut In a few sentences some of the points made by the hon. Member for Orpington (Mr. Stanbrook). My party has to raise most of its funds from individual donations and has sought to contest much of the institutional funding of British politics which is carried out without the consent of trade union members or shareholders. I agree with the direction of support for political parties which the hon. Gentleman seeks, but I do not agree with him in opposing any kind of state assistance. That is not the issue for debate tonight. We are discussing whether the parliamentary activities of parties represented in the House should continue to be supported and whether that support should take account of increasing costs in recent years. That is all we are about.
  I was reminded of the late Keith Wickenden who, when a Member, did not merely oppose the funds we are discussing but said that the Conservative party should repay the £615,000 which it had extracted from those funds while an Opposition party. He admitted that that was the logic of the case and that if the Conservative party changed its mind it would have to give the money back.
  I was also intrigued to hear the hon. Member for Orpington advocating the Militant Tendency policy of

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  political activists tithing their incomes to support their parties. Supporters of the Militant Tendency have clearly found a new friend in that respect.
  We are debating whether reasonable cost increases should be made in the amounts paid under the formula originally devised by Lord Glenamara, then Mr. Short, to assist parties in this House. It is not, of course, the only form of assistance. The official Opposition have long had other forms of direct support—civil servants employed in the Opposition Whips office, for example, the salaries of some of its members, and so on—which do not apply to other Opposition parties. This is the one aspect of assistance that is applied to all the Opposition parties according to a formula.
  As Lord Glenamara said when he introduced the formula, the burdens on Opposition funds are not in direct proportion to the number of Members that they have in the House. They are more likely to reflect the number of votes that they have in the country, which is why that factor was included in the formula.
  Each Opposition party may set out its own claim for an alternative system, but the fact remains that costs have risen and staff have to be considered. We are talking about the salaries of people who work in this place alongside other staff whose salaries are protected by other arrangements, whether by increases in Members' allowances or by Civil Service linked salaries as in the case of Clerks and other staff of the House. Those who work for the parties represented here deserve some recognition of their needs. The object of the increase is to provide for that end and for other cost increases to be met through one increase which is meant to serve for several years.
  I welcome the Government's proposal. I think that it is reasonable and I hope that it will be supported not just by Opposition Members but by the whole House in a spirit of recognition that the democratic process depends upon the work of the parties in this House.
  Question put and agreed to.
  Resolved,
  That the Resolution of the House of 20th March 1975 shall have effect from 1st January 1985 with the substitution of the following paragraphs for paragraphs 2 and 7 of that Resolution:
  '(2) That for the purpose of determining the annual maxima of such assistance the following formula shall apply:
  £1,500 for each seat won by the party concerned plus £3 for every 200 votes cast for it at the preceding General Election, provided that the maximum payable to any party shall not exceed £450,000.'; and
  '(7) That claims under these arrangements shall be made monthly, and that the annual maxima shall be applicable to claims made in respect of expenses incurred during that one calendar year.'.

  Mr. D. T. W. Forsyth (Compensation Claim)
  Question proposed, That this House do now adjourn. —[Mr. Peter Lloyd.]
  12.12 am
  Sir Geoffrey Johnson Smith: I hope that my hon. Friend the Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs will shortly appear. The House never ceases to surprise me with its moods and the swiftness with which it sometimes disposes of its business. In the meantime, I am grateful to my right hon. Friend the Leader of the House for returning to the Front Bench.
  The complex subject of this debate originates as long ago as 1957 when the then Government made their ill-fated attack on Egypt. The immediate effect on British residents in Egypt was summary expulsion and confiscation of all their property and assets. Many of those people, including the Forsyth family, the head of which lives in my constituency and on whose behalf I speak, had settled in Egypt, working for British companies and responsible for sales and other matters in an important market for British goods and services. The Forsyths acted for such top companies as British Leyland, Rolls-Royce, Daimler and BSA.
  I see that my hon. Friend the Parliamentary Under-Secretary of State is now present. He and I share many interests, not just in matters of political philosophy. We are both Sussex Members and my hon. Friend's constituency now includes East Grinstead which I represented for many years. He comes new to his appointment and this is the first time that I have been in a position to welcome him to the responsible position that he now holds in the Foreign Office.
  In saying that, I ask my hon. Friend to remember that I do not take up causes lightly. One does not often take up an Adjournment debate of this kind or question the veracity, strength or skill of important services of the Crown or those whom it employs. Tonight I am questioning not the veracity of the Foreign Office but its determination, and the manner in which it has conducted its business through its agents. My hon. Friend the Minister comes new to his responsibilities. I ask him to bear those comments in mind.
  Sudden deportation and confiscation of property had a catastrophic effect on the livelihood of the Britishers. A system of compensation was set up in acknowledgment of that fact. Happy relations now exist between this country and Egypt, a country which, both before and after the Nasser regime, has always been considered to be a good friend of ours. Good relations were restored with the 1959 agreement, signed by to two Governments, which was meant to restore law and order, and fairness, with regard to compensation, for those British nationals who had been affected as a consequence of the Suez affair.
  The trouble stems from the 1959 agreement, however, and more particularly from the interpretation and implementation of its terms. The Forsyth family appreciate the fact that rights are not conveyed to individual citizens by agreements between states. However, the Government entered into the treaty to safeguard the property interests of the British citizens upon

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  whom Egyptian wrath and revenge had understandably fallen in reprisal for the use of military force against Egypt by the then British Government.
  The Government have obligations and a strong moral duty towards the British subjects involved. Regrettably, I do not think that the Government have fulfilled their responsibilities adequately. Too often, in reassuring correspondence with me, the Department has shown the face of Dr. Jekyll. Those more personally affected have seen the face of Mr. Hyde.
  The first move of the Foreign Office was to introduce a private company to conduct the necessary procedures in Egypt. The company was called Toplis and Harding. It sounds like a television serial. The Government were well aware that that company, destined to handle the property of absent owners at a total value running into tens of millions of pounds, was newly formed and had a capital of only £500. Throughout the resulting chaos the Government remained detached, although deeming it necessary to provide public funds to sustain the company in circumstances that one can only call deplorable.
  The financial support continued despite the fact that the company itself was sequestrated by the Egyptian authorities because of financial irregularities in the conduct of its affairs. I do not want to seek parliamentary privilege, but I could go further and describe those financial irregularities in more graphic terms. As losses mounted to the clients of the creature created by the Foreign Office, there was no Government intervention. Indeed, dismayed Britishers were advised to seek redress, by their own means, through the Egyptian courts.
  The principal bone of contention is the former home near Cairo of the Forsyth family, a property having a substantial value in Egypt. I see that my hon. Friend's advisers have just taken up their positions. I choose my words advisedly. The company was a creature set up by the Foreign Office as an agent designed to do what the British Government had agreed to do as a result of the agreement with the Egyptian Government, and the Foreign Office walked away from its responsibilities. The company was subject to a degree of financial irregularity that the Foreign Office should have spotted much sooner.
  After the official Egyptian confiscation of the Forsyth property it was taken over by Egyptian military forces—here we see how life is lived in other countries—and later provided as a residence for an Egyptian High Court judge. The influence of that judge was great, because his brother was Vice President of Egypt, and head of the Egyptian armed forces, General Hakim Amer. The judge died in 1972 and General Amer died in circumstances similar to those in which Field Marshal Rommel died. The family of the judge remain in occupation of the Forsyth property until now but ceased to pay any rent as from 1966. Instead, they laid claim to outright possession of the property using forged documents. They put forward a further claim to ownership on the grounds of so-called "prescriptive rights."
  These events have been the subject of litigation in Cairo for the past 10 years. I do not want to make a mockery of the debate—Forsyth is Forsyth, but there is a "Forsyth Saga." That is the scale of my correspondence, let alone that of my constituent, Mr. Forsyth, who has carried on at great expense to himself and with much pain and agony to his family. Some 50 court hearings have been postponed or adjourned in that time. The delays have caused repeated
  1106
  representations by Ministers to their Egyptian counterparts. The astonishing fact is that representations have been made three times at the level of Her Majesty's Secretary of State for Foreign and Commonwealth Affairs—by my noble Friend Lord Carrington, by my right hon. Friend the Member for Cambridgeshire, South-East (Mr. Pym), and by the present Foreign Secretary. On other occasions, representations have been made by my right hon. Friend, our distinguished Leader of the House, but the Egyptians have failed so far to respond in a fitting or satisfactory way.
  What has gone wrong? It seems that there has been a conspicuous failure on the part of the Government to adhere to the terms and conditions of the 1959 agreement in a straightforward manner and to ensure that Egypt, as co-signatory, does likewise. Egyptians have sought to exploit and to benefit by holding on to property to which they are not entitled. They even held on to money that was unjustifiably been extracted by the Egyptian fiscal administration from the family's private bank account to the tune of £35,000. That is the behaviour of ordinary individuals in Egypt.
  The Forsyth family took advice from solicitors and it was argued, inter alia, that the Government were entitled, under the terms of the 1959 agreement, to insist on the property being restored to the Forsyth family with vacant possession. The Government, by their failure to insist on their rights under the agreement, have deprived the Forsyth family of the right to live in their own home. Instead of facing up to this argument, the Foreign Office has sought to hide behind a form of renunciation which had been signed by my constituent's father, who is now deceased, when a compensation payment had been negotiated through the Foreign Compensation Commission.
  I should like to go into some detail as it is important. It is a legal matter. I refer to the claim by the Forsyth family that, when the late Mr. Forsyth was invited to sign the form of renunciation, it was not represented to him by his solicitor that, in signing the form, it was the intention that he would thereby exonerate the Government from discharging their obligations to recover vacant possession of the villa, according to the terms of the agreement. On 2 October 1965, the late Mr. Forsyth signed a form of renunciation stating, inter alia:
  "I hereby renounce and surrender all claims by me arising out of the measures of Egyptianisation and sequestration so far as they have affected my interests in the property set out in Schedule A to the renunciation."
  Schedule A defines the late Mr. Forsyth's interest as
  "capital depreciation of a villa at"—
  it then gives the address. His son's submission is that that letter of renunciation did not effectively deprive him, or his late father, of the right to require the Government to enforce the 1959 agreement made between the Government of the United Arab Republic and the Government of the United Kingdom in so far as that agreement provided for the return of all sequestrated British-owned property to its owners.
  In other words, in so far as the compensation included the payment of capital depreciation, it was understood to mean compensation for irrecoverable loss of value resulting from the sequestration measures. There is a loss of value to the property because it is occupied by a tenant. As far as the late Mr. Forsyth could see, that could have gone on for years. How was he to know?

  1107
  The Foreign Office should recognise that there was no provision in the 1959 agreement for the payment of monetary compensation where the loss could be made good by the return of the property or, in lieu, of vacant possession. Even if it could be said that the form of renunciation effectively extinguished such a right in favour of the Forsyth family, the late Mr. Forsyth was not advised of that before he signed the renunciation form, nor did he intend that he would thereby prejudice his right. Why should that be?
  Perhaps the advice that the late Mr. Forsyth was given was faulty. He was represented by solicitors, who had on their staff a person who, before he joined them, had been a member of the Foreign and Commonwealth Office, and the FCO'S legal adviser in Egypt. It is suggested that that person created the concept of compensation, without any legal foundation, but as a formula agreed with the Foreign Compensation Commission. A man cannot go from being a legal adviser in the Foreign Office to advising an independent citizen, because he is bound to be in favour of the interpretation of the Foreign Office. I do not make a charge of dishonesty, but my constituent should be independent of the Foreign Office, as should have been Toplis and Harding.
  It is not totally incomprehensible why my constituent has fought his case for many years. I sympathise with his view that the Foreign Office should not appear to hide behind a form of renunciation of claims in such circumstances. It is no good saying that it is a matter for the Egyptian courts. We are concerned about an agreement between the British and Egyptian Government which was signed in 1959. The Foreign Office should insist that the Egyptian Government fulfil their obligations by arranging for the property to be handed over to Mr. Forsyth immediately.
  The action was not justiciable in the English court. My constituent cannot take the Foreign Office to court. There are no means of judging which legal interpretation is correct, whether that of the Foreign Office or of my constituent. The Minister will be advised by his legal advisers, whom I have heard say to his predecessors that they are right. However, others disagree profoundly with the interpretation of the Foreign Office.
  How can my constituent get justice? The matter has been allowed to continue for too long. If a public inquiry could be held I would ask it to look into Toplis and Harding, which handled my constituent's case and which was in reality a creature of the Foreign Office, and to examine how well the Foreign Office behaved. Was it too distant? Toplis and Harding's record was appalling, and the FCO should not have tolerated its inefficiencies and practices. As I mentioned, subsequently it was accused of dishonest practices.
  An inquiry would reveal how difficult it is for citizens to obtain redress in such matters. The Parliamentary Commissioner cannot deal with it. So prolonged were the activities of Toplis and Harding that by the time my constituent could sue, he had run out of time. He is right, therefore, to feel frustrated.
  The Government are dealing with a country with which we are now on friendly terms. It is a recipient of British financial help in many areas, including trade, culture and defence. Why cannot the same care and understanding of Egypt's special needs be extended to my constituent,
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  whose family was a victim of hostilities initiated by his own country? I beg my hon. Friend to assure me that the Government will make full representations along the lines I have suggested.
  12.29 am
  The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Tim Renton): I understand the deep concern of my hon. Friend and neighbour in Sussex the Member for Wealden (Sir G. Johnson-Smith) for the cares of his constituent. After all, I inherited many of them from him at the last election in East Grinstead. They still speak with great affection of the way in which he looked after them. Therefore, I fully understand that it is because of his strong passion for the worries of Mr. Douglas Forsyth that he has raised this matter on an Adjournment debate. He spoke passionately about the problems which his constituent, Mr. Douglas Forsyth, and his late father have faced in securing redress and compensation for property losses in Egypt, and I have much sympathy with what he said. But I must tell him, as he knows well, that there has been voluminous correspondence on this subject over the years. My hon. Friend's constituent has been assiduous in keeping his problems and concerns before us, and my hon. Friend has been equally assiduous.
  We have much sympathy for Mr. Forsyth, and we acknowledge that he has encountered great difficulty in securing repossession of the villa which he owns in Heliopolis outside Cairo. But I hope to demonstrate that there is much common ground between the Government and my hon. Friend on this matter.
  The Forsyth family were not alone in the losses which they suffered in 1956. Most of the British community in Egypt suffered similar misfortune following the conflict of that year. Many British people were expelled from Egypt and had their property sequestrated. It was against that background that the Government reached an agreement with the Egyptian authorities in 1959, which provided for the payment of compensation and the return of British property to its former owners.
  The villa owned by Mr. Douglas Forsyth's father was, as my hon. Friend said, sequestrated in 1956. It was then let by the Egyptian Sequestrator General on 1 May 1957 at a low rate on an agreement which provided for 15 days' notice of termination on either side. The villa was desequestrated by the Egyptian authorities on 1 March 1960, under the terms of the 1959 agreement, but the Sequestrator General did not give the tenant notice to quit at that time. As a result, the tenant remains in occupation to this day. As my hon. Friend is aware, tenants have considerable legal protection in Egypt, and it is extremely difficult to secure their eviction.
  As to the effects of the form of renunciation, I assure my hon. Friend that we do not rely on that form in deciding what representations to make. We have made many representations irrespective of the effect of the form of renunciation that was signed by Mr. Forsyth's father.
  I must place it on record that the Forsyth family has not been ungenerously treated in the matter of compensation. Mr. Forsyth submitted several claims to the Foreign Compensation Commission under the provisions of the Orders in Council relating to the distribution of the compensation that had been received from the Egyptian Government. A total of £79,914 was awarded to him as a result and accepted by him in full settlement of his

  1109
  claims. We do not defend Toplis and Harding. We reached a settlement with Mr. Forsyth in part because of the failure of Toplis and Harding to act properly.
  Included in the total was a payment of more than £3,000 in settlement of a claim for loss in value of his villa resulting from the fact that it had been returned to him with a sitting tenant. The total of nearly £80,000 compensation was a considerable sum 20 years ago. and I should mention that Mr. Forsyth's late father also received a grant of ?30,000 from the Egyptian Grants Committee for the comparative hardship he suffered as a refugee from Egypt.
  The correspondence that the Foreign and Commonwealth Office has received from my hon. Friend's constituent shows that there has been some misunderstanding of the position of the Foreign Compensation Commission. I take this opportunity to clarify this. The FCC was established under the Foreign Compensation Act 1950 with two principal functions. The first is the administrative function of registering claims. The second is the judicial and administrative functions involved in awarding and distributing payments of lump sum compensation received by Her Majesty's Government from other Governments.
  In exercising the latter function, the Commission has the task of inviting claims to participate in such compensation, judicially determining these claims, deciding which are admissible and which are to be rejected, and finally distributing the moneys among the successful claimants. Although the Secretary of State for Foreign and Commonwealth Affairs retains some responsibility for its work and funding, the commission is wholly independent of the Government when it acts in its judicial capacity in determining claims.
  The members of the commission and its staff have always tackled the difficult tasks assigned to them with dedication and conscientiousness. In connection with these Egyptian affairs, they received no fewer than 9,000 claims, made 15,000 adjudications and determinations and distributed to claimants sums in excess of £31 million. This was no small achievement and it must be said that most claimants were very grateful for their work.
  My hon. Friend touched on the interpretation of the 1959 agreement. My hon. Friend's constituent and his lawyers contend that the Egyptian Government are in breach of the 1959 agreement because the sitting tenant was not removed before the family's villa was returned to them. As my hon. Friend is aware, I have received different advice on this particular point. The two view points have been set out fully in the correspondence that has taken place. It has not proved possible to harmonise these views, and I do not think it would serve any useful purpose on this occasion to re-state the different positions. Nevertheless, I emphasise that this difference of view has not lessened in the slightest degree the pressure that we have exerted on the Egyptian Government on behalf of Mr. Forsyth.
  My hon. Friend has understandably referred to the expense and frustration that his constituent has suffered, both as a result of not having possession of his villa, and as a result of the court action in Egypt. I sympathise with much of what my hon. Friend said. In the court case for full possession of the villa, his constituent has been engaged in a legal action that has lasted over 10 years. We are all familiar with the law's delays, but this delay is undoubtedly too long.
  1110
  My hon. Friend referred to the Forsyth saga, but in reading this file I was reminded more of Charles Dickens' "Bleak House" and the problems in the last century of getting cases through Chancery.
  We have told the Egyptian authorities of our feelings on this point and have asked them to do what they can to encourage those responsible for the administration of their courts to speed matters up.
  There is, however, a strict limit to what any Egyptian Government can do to help us or our citizens in the case of an action that is before the courts. The courts in Egypt are as proud and jealous of their independence from the executive arm of Government as our own courts are.
  Sir Geoffrey Johnson Smith: My submission is that we should not leave this matter to the courts. Is this not a matter that, under the agreement of 1959, should be dealt with on a Government-to-Government basis?
  Mr. Renton: That brings us back to the interpretation of that agreement, on which there is a difference of opinion. It is not appropriate to go into that further now.
  I leave it to my hon. Friend to imagine what the reaction of a court in this country would be were we as a Government to seek to interfere in anycase before them that involved a foreign national. I suggest that the reaction of the court would be robust, and rightly so.
  It is also important to remember that the court case initiated by my hon. Friend's constituent is not without its complications. His constituent's father did not himself take any court action in this connection. It was only five years after his father's death in 1969 and some 14 years after the official desequestration of the villa that his constituent started the court action. That itself was quite a delay. As I understand it, the case has been complicated by counter-actions on the part of the tenant which had to be disposed of before the case of my hon. Friend's constituent could be resolved.
  In the event, despite the delays, some progress has been made. Mr. Forsyth's ownership of the property was reaffirmed by the courts in October 1981. The courts have appointed a legal expert to help them unravel the facts of this case. In October of last year the court assessed the rent which the tenant should pay for the villa from 1 December 1969 to 31 December 1984. These are small but important gains. There is now a prospect that the legal expert who inspected the villa on 5 January—two weeks ago—will submit his report in the immediate future and that the case itself may be settled during the course of this year.
  The Government are doing all they can to help my hon. Friend's constituent in this matter. We shall continue to do so. We believe that the best method of helping is through diplomatic representations. We hope they will prove effective.
  As I have already indicated, we have made many representations to the Egyptian authorities on behalf of my hon. Friend's constituent. His case has been mentioned during the course of the most recent ministerial visits to Egypt. For example, my right hon. and learned Friend the Secretary of State mentioned it when he saw the Egyptian Foreign Minister in January 1984. The British embassy in Cairo are in constant touch with Mr. Forsyth's legal adviser about the progress of both court cases. We have done, and will continue to do, everything we can to help him.
  If my hon. Friend would like to bring Mr. Forsyth to meet me to talk about this matter, I should be ready to see

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  my hon. Friend and to meet Mr. Forsyth at the same time, but on that occasion I do not believe that it would be profitable to have a debate about the strictly legal issues which are at present before the Egyptian courts. I hope that my hon. Friend will accept this point.
  The Government have been very active on Mr. Forsyth's behalf. We have brought his concerns to the attention of the Egyptian Government on many occasions, but it is, alas, neither within our gift nor that of the Egyptian Government to settle the matter of full
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  repossession and control of his villa. That case is before the Egyptian courts and it will be determined there, but we have made it very clear to the Egyptian Government that we feel there have been too many delays in reaching a decision—
  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 eighteen minutes to One o'clock.

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Preamble
The House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Derby.

School Computers
Lord Orr-Ewing: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government how many computers are now in use in schools in the United Kingdom and how many teachers have been trained to instruct in their use.
The Earl of Swinton: My Lords, it is estimated that some 80,000 microcomputers are now in use in United Kingdom schools and that at least 120,000 teachers have been trained to instruct in their use.
Lord Orr-Ewing: My Lords, while thanking my noble friend for that good news may I ask him whether it is not true that, as a result of this imaginative policy, Britain's schools now have more computers per pupil than any other nation's? If that is so, does not this mean that the present generation of school attenders will be better equipped than their predecessors to get jobs in the expanding sunrise and service industries?
The Earl of Swinton: My Lords, I do not know of any league tables, as it were, of the amount of computers in other countries, but I can say that we have far more microcomputers than people think. For instance, a recent survey has indicated that secondary schools have on average 8.7 microcomputers, and we estimate on the basis of reports some 1.2 microcomputers per primary school. I would agree entirely with the latter question that my noble friend asked: I am sure that this does indeed equip youngsters for employment in some of the newer industries.
Baroness Lockwood: My Lords, is the Minister aware of the studies by the Equal Opportunities Commission and other bodies which indicate that girls get less than a fair share of experience on the microcomputers in schools? Can he tell us if this side of the problem is taken into account in the teacher training programme; and if not, why not?
The Earl of Swinton: My Lords, I was not aware of that. It would surprise me if that were in fact true and I shall take great pleasure in looking into it and coming back to the noble Baroness about it if it is the case.
Lord Harmar-Nicholls: My Lords, is my noble friend aware that, while his first reply is very commendable in many respects, many people will hope that this obsession with computers and such-like will not interfere with paying real attention to developing the natural talents of reading, writing and arithmetic in the young people of today?
The Earl of Swinton: My Lords, I really do not think that it is a question of a choice between the two; I think the two can go hand in glove.
Baroness David: My Lords, may I ask the Minister if the Government have a sustained commitment to microtechnology in schools? Will the resources be made available for the purchase of new data and retrieval systems, because there will be a constant need for updating? With local authorities pinched for cash there will be a need for more Government grants from either the Department of Industry or the Department of Education. May we hear whether the Government really are committed to producing more money for this programme, of which I thoroughly approve, for the future?
The Earl of Swinton: My Lords, the original Government scheme was a pump-priming exercise and I think has worked very well. Many schools, and indeed many LEAs, have also bought extra equipment and it is hoped that, with the basic equipment that is available at the moment, schools and LEAs should be able to build on this from their own resources.
Baroness Carnegy of Lour: My Lords, would my noble friend agree that the next step is that computer learning should take place under all subjects across the curriculum? Will he confirm that this is now under way, especially within pilot courses for 14 to 18 year-olds which are being run by more than 60 local authorities, supported by central Government through the Manpower Services Commission?
The Earl of Swinton: Yes, my Lords, I would agree with that. In fact much of the spending on equipment purchased for projects under the TVEI is for new technological devices.
Baroness Masham of Ilton: My Lords, may I ask my noble kinsman whether there are adequate computers in special schools and in schools with handicapped and disabled children, because computers are of great benefit to these children?
The Earl of Swinton: Yes, my Lords, this is a very large field in which the disabled can benefit. I think my noble kinswoman might be interested to know of two examples, rather surprising examples, in which the microcomputer can help. They are the physically handicapped—by enabling them to produce texts for the first time; and also those with severe learning difficulties, those with severe mental handicaps—enabling them to learn simple life skills such as how to dress themselves. Both these areas of work are included under the Government's Microelectronics Education Programme.
Lord Blease: My Lords, is the Minister aware that his reply will be studied with interest by persons concerned with regional development, particularly persons in regions concerned with economic development training and education? I am thinking in particular of persons in Northern Ireland. May I further ask the noble Earl whether he can indicate the comparative regional figures, and especially those for

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Northern Ireland, Scotland and Wales? If he does not have those figures readily available, will he undertake to publish them?
The Earl of Swinton: My Lords, the figures that I gave were for the United Kingdom and included Northern Ireland. I shall write to the noble Lord if I can obtain detailed figures—if such are available.
Lord Kilmarnock: My Lords, is the noble Earl as satisfied with the Government's record on books as he is with their record on computers?
The Earl of Swinton: My Lords, yes.
Lord Molloy: My Lords, is the noble Earl the Minister aware that in the United States the authorities introduced computers to children when they were at an extraordinarily early age? That was an experiment involving very young children, and those children have taken to computers remarkably well. Is that the situation in Great Britain? If not, is this not a point which our own Department of Education might examine?
The Earl of Swinton: My Lords, I believe that the situation in this country is exactly the same as in the United States.
Lord Alexander of Potterhill: My Lords, far from the point raised by the last questioner, will the noble Earl secure that the children in our schools reach an adequate personal standard in numeracy and literacy before they embark upon a course in computers?
The Earl of Swinton: My Lords, I do not often agree with the noble Lord, Lord Alexander of Potterhill, but I shall do so on this occasion. Some children with very severe learning difficulties are motivated by computers. Because of computers, they can often find the encouragement to help them in their basic reading and writing skills. I feel that the two go together.

Euthanasia
2.45 p.m.
Lord Broxbourne: 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 have given, are giving or propose to give consideration to a review of the law relating to euthanasia; and what has been, or will be, the nature and scope of such review.
The Minister of State, Home Office (Lord Elton): My Lords, the question of mercy killing was reviewed by the Criminal Law Revision Committee in their report on offences against the person, published in March 1980, and had been reviewed earlier by the Royal Commission on capital punishment in 1953. Both reports concluded that a distinction in law between mercy killing and other offences of homicide could not be recommended. The Government, while
220
acknowledging that there may be individual cases in which killing is done wholly from motives of compassion, accept this view.
Lord Broxbourne: My Lords, may I thank my noble friend for that reply? Is there not a case for further inquiry now? While all would, or should, accept the paramount necessity of safeguards against abuse, was there not a natural sadness when recently a respected judge felt it necessary under the present law to send somebody, whom he described as "Christian and compassionate", to prison for harkening to the entreaties of a friend in distress? Is it not something of a paradox that whereas suicide ceased to be an offence in law more than 20 years ago, it is still a crime to assist another? Will my noble friend have regard to the growing sentiment among thinking people, of which there was recent evidence in a powerful plea in the Sunday Times (a responsible organ not known for its radical views), for the need for review, revision and rationalisation of the law? Will the Government institute an expert and representative inquiry?
Lord Elton: My Lords, my noble friend has referred to the case, I take it, of Mrs. Hough, who found herself in a most difficult and distressing situation with which we sympathise. But we do not believe that the general law should be framed in a way which might allow less scrupulous people to act for financial gain, from malice, or from other base motives against those rendered vulnerable by age or illness. I have reminded my noble friend of two full reviews of the law in this respect. I would remind him also that they revealed substantial difficulties and disadvantages in the way of the reform that he advocates; and that Bills with a similar purpose were refused a Second Reading by your Lordships' House in 1969 and again in 1975—by 85 votes to 23 on the latter occasion.
Lord Elwyn-Jones: My Lords, may I ask the Minister, with the greatest respect, whether he does not consider that in view of the life and death issues raised by euthanasia—religious, moral, and theological—Question Time may not be the best occasion for discussing those grave matters?
Lord Elton: My Lords, if the noble and learned Lord is seeking to shorten my interrogation, I agree with him.
Lord Jenkins of Putney: My Lords—
Noble Lords: Order!
Lord Boothby: My Lords, may I be permitted to ask a brief question?
The Lord Bishop of Norwich: My Lords, notwithstanding his comments, is the Minister aware that the Prelates on these Benches and in fact the Church at large were particularly encouraged by the Government's very sympathetic understanding of the Church's concern for the sanctity of human life when this question of euthanasia was last raised in this House? I had thought that it was in 1976, but I bow to the greater wisdom of the noble Lord, the Minister.

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Is the Minister also aware that the growing support by the Government for the hospice movement, rather than for euthanasia, has also been noted with much gratitude by the Church? Finally, will the Minister take note that the same principle of the sanctity of human life, which is at the very heart of the Judaeo-Christian tradition of our country, is again raised in an acute form in the Warnock report, concerning the control on experimentation on live human embryos? Clearly the Minister will not want to comment on that aspect in detail at this stage but it is all of a piece in terms of the matter before us.
Lord Elton: My Lords, I am grateful for the right reverend Prelate's recognition of the support of Her Majesty's Government for the hospice movement. There are some 90 hospices in this country at the moment, of which about 50 per cent. receive some kind of Government grant, and there are more than 100 home-care teams as well. We share the views of the established Church on the sanctity of human life, but the right reverend Prelate is right to anticipate that I cannot comment on the Warnock Report.
Lord Jenkins of Putney: My Lords, will the noble Lord allow me to quote briefly a few words from the Sunday Times?
Noble Lords: No, No! Question!
The Lord President of the Council (Viscount Whitelaw): My Lords, I think the House would not expect the noble Lord to quote—even though briefly, which I question. Therefore, I hope he will ask a question. We have a long debate in front of us, and we do not want to go on for too long.
Lord Jenkins of Putney: My Lords, I was about to ask the question whether I might be allowed to quote briefly from the Sunday Times.
Noble Lords: Order, order!
Lord Jenkins of Putney: Very well, my Lords, I will not quote, but I do recall—
Noble Lords: Order, order!
Lord Jenkins of Putney: My Lords, is the noble Lord aware of the fact that his noble friend and I recall a Sunday Times editorial of 14th December 1984 which said that this issue had been swept under the carpet and that it was about time the Government took it out and had another look at it? Is he further aware that there are a large number of people who recognise that, although this is a difficult and complex issue, it is about time we had another look at it, and that his noble friend is entirely right in that view?
Lord Elton: My Lords, I am now aware that there was an interesting article in that newspaper, but I am not aware that it is yet time to review the law.
Lord Kinnaird: My Lords, can my noble friend please tell us whether, should any noble Lord making an inordinately long speech apparently succumb to the
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heat of the television lights, that would be classed as euthanasia?
Lord Paget of Northampton: My Lords, surely we are treating this subject in a somewhat frivolous manner. We as Peers have privileges. One of those privileges we have as human beings is the privilege of choice, which, alone out of creation, has been given to man.
Noble Lords: Question!
Lord Paget of Northampton: My Lords, the ox lives and dies because it has no other choice. We have a choice, and that choice is given to us by the Creator. To deny us that choice is tyranny.
Noble Lords: Question!
Lord Paget of Northampton: My Lords, my question is this. The case we have in mind has involved sending a woman to prison for not agreeing with us. This is the behaviour of an inquisition, and not a court of law.
Lord Elton: My Lords, if I can infer a question from what the noble Lord has said, I would answer it by saying that the people who the noble Lord seeks to help are, by definition, weak and defenceless. If he opens those of them who wish to die to the hands of the merciful, he also exposes those who are afraid to die to the hands of the merciless.
Lord Mishcon: My Lords, on a somewhat lighter note, does not the healthy appearance of your Lordships' House this afternoon indicate, as indeed do your Lordships, that anyone trying to obtain euthanasia for this House will have an uphill task?
Lord Elton: My Lords, the shorter and more pithy the House makes its exchanges the longer its expectation of life will be, I am sure.
Lord Boothby: My Lords, may I ask a 10-second question? Does the noble Lord not think, in a century which has seen more people killed than any other, that at the end of the day individuals in that century have a right to choose whether to stick it out a little longer or to call it a day? Surely that is reasonable considering that science can call it a day so quickly and painlessly.
Lord Elton: My Lords, I repeat that it is the view of Her Majesty's Government that life is sacred. The choice that the Government have is how best to protect those who wish to continue to live from those who wish that they should not.

BBC External Services: Grant-in-Aid
2.55 p.m.
Lord Tordoff: 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 cuts were made in the spending of money on the BBC External Services in 1982 and what was the effect.
The Minister of State, Foreign and Commonwealth Office (Baroness Young): My Lords, there were no cuts in the grant-in-aid we made available to the BBC External Services in 1982: on the contrary, there was a 13 per cent. increase over the level for 1981. However, in 1982 some services—for example, to Malta, Italy and Spain—were either cut or reduced. This was mainly to offset the cost of the expanded capital programme introduced in 1981, in particular to improve audibility; and at the same time, as a result of international events, other services—for example, to Latin America, Poland and Afghanistan, for which some additional finance was provided—were increased.
Lord Tordoff: My Lords, I am grateful to the noble Baroness for that somewhat confusing Answer—confusing because her predecessor, the noble Lord, Lord Carrington, in an interview on Channel 4 (whatever that is) said in August last year:
"When I was Foreign Secretary I was told I had to save some money on the overseas services of the BBC. I think that was really totally counter-productive and the money saved was trivial compared to the amount of damage done".
Does the noble Baroness not agree that damage was done by cutting out the Spanish services on that occasion, and particularly half the Spanish services to Latin America just immediately before the Falklands? In the light of that, can she say why it is necessary for the Government once again to cut the revenue spending—not the capital spending, but the revenue spending—of the overseas service at this time? The noble Baroness will correct me if I am wrong, but I believe, it has been cut by between £1 million and £2 million in the current year.
Baroness Young: My Lords, the fact is that the External Services of the BBC have maintained broadcasting levels of between 720 and 725 hours a week among 36 and 37 languages ever since 1982. That is something we all applaud, and we recognise the great value of the BBC External Services. At the same time, over £100 million has been committed to the audibility programme for the period 1981 and 1991.
As regards 1985–86, the grant-in-aid will be approximately £90 million. This represents a maintenance of the previous year's allocations, increased by the inflation factor, plus an additional provision of £900,000 to increase the implementation of the audibility programme and a further £700,000 to help the BBC meet some of its increased costs resulting from the 1984 pay awards.
Lord Tordoff: My Lords, if I may come back just once more, is it not the case that the noble Baroness's right honourable friend the Foreign Secretary, in November last in another place, said that he would be looking for savings of about 1 per cent. of the total expenditure on the overseas services?
Baroness Young: My Lords, it is true that the total increase is not quite as great as was originally intended, but it does represent an increase. We believe that it will be possible, with the extra help we have given to the BBC, for it to meet the economies for which we have called in all organisations, the BBC included.
Lord Strabolgi: My Lords, are the Government aware that in addition to the services mentioned by the noble Baroness as being cut the French and Brazilian services were also halved? Do the Government think that the BBC World Service, in English, is a substitute for the many people in other countries who have no knowledge of our language and who wish to hear the voice of Britain in a language they can understand?
Baroness Young: My Lords, as the noble Lord will understand, priorities within the BBC's External Services change from time to time, but the figures I gave for the overall time and number of languages in which External Services are broadcast have remained constant since 1982.
Lord Hatch of Lusby: My Lords, is the noble Baroness aware that since 1950, in total hours per week of external broadcasting, this country has fallen from first to fifth and is now just above North Korea, Albania and Egypt? Is this the way in which this Government are intending to project the influence of this country abroad in view of the fact that there are millions of people abroad who look to the BBC to learn the truth of what is happening in the world?
Baroness Young: My Lords, the Government are very glad to acknowledge the value of the work that the BBC External Services do, and have done for a very long time. In fact, in the present economic circumstances the amount of grant to the BBC has been increased this year, as I have already indicated, and this is in recognition of the value that we place on the services that it provides.
Lord Hill of Luton: My Lords, does the noble Baroness accept, first, that in the past 10 years there have been nine cuts in the operating expenditure of the BBC, as distinct from the capital expenditure; and, secondly, that those cuts have resulted in a loss of income of over £5 million of operating expenditure, plus £1 million due inevitably to the fall in the value of the pound? Now that we are presented with the proposal for a tenth cut in operating expenditure—the tenth cut in 11 years—is it not time that we recognised the immense value of the BBC to this country and its standing in the world? Why should we have, year after year, these cuts in operating expenditure? This year's proposal, I think that the noble Baroness will agree, happens to coincide with the decision by the Americans to increase their expenditure on overseas services.
Noble Lords: Speech!
Lord Hill of Luton: Finally, has the time not come, unwelcome though it may be to say it, to end this annual reduction in operating expenditure, bearing in mind the immense services that are rendered by the BBC External Services in terms of the life, culture and democracy of this country?
Baroness Young: My Lords, I recognise the value of the great amount of service that the noble Lord has given to the BBC. I do not accept the statements that he has made about the figures. I have already indicated to the House that there has been no cut in the grant to

225
the BBC this year; the increase is not quite as large as it might have wished. If one looks at the figures for the preceding five years, one sees that there has been an increase in the grant to the BBC each year. It is for that reason that the total number of hours broadcast and the number of languages have remained approximately constant for the past five years.
Lord Kennet: My Lords, do the Government agree that the English language itself is one of the most precious capital assets of this people which invented it; and while the Government cannot probably sell it off for the benefit of Government expenditure on current account as they do with so many other capital assets, it would still be necessary to maintain a decent level of public expenditure on its use and, indeed, its teaching by all media abroad?
Baroness Young: Yes, my Lords. I have already said to the House that the Government greatly value the work of the BBC External Services, both the broadcasts in the English language and in foreign languages. It is for that reason that the amount of money available to the BBC has increased each year.
Lord Winstanley: My Lords, does the noble Baroness recollect—
Noble Lords: Next Question!
Lord Winstanley: —that on the last occasion when your Lordships' House debated this subject, in 1981, noble Lords expressed their views loud and clear but the Government ignored them? Does she think that if we were to debate the subject again in these new circumstances, it is possible that this time the Government might listen to us?
Baroness Young: My Lords, the Government always listen to your Lordships' House. I hope that the figures that I have given will indicate to the noble Lord and to his colleagues that, indeed, the BBC has been protected in the context of the Government's overall expenditure targets.
Viscount Whitelaw: My Lords, I think from the noises that I hear from behind me—and in front of me, and on every side of me—that I should be interpreting the views of the House correctly if I suggested that this very important Question has had a good run and that we should now pass to the next one.

North Sea Oil Revenues
3.4 p.m.
Lord Ezra: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they consider that they have made effective use of the surplus earnings from North Sea oil.
The Chancellor of the Duchy of Lancaster and Minister for the Arts (The Earl of Gowrie): Yes, my Lords. North Sea revenues have helped to reduce
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Government borrowing and so contributed to the reduction in inflation and the achievement of sustainable growth in output. In addition, a considerable part of the public sector's overseas debts have been repaid and overseas assets—valuable in the longer term—have been built up.
Lord Ezra: My Lords, is the noble Earl aware that most of the countries of the world which have benefited from surplus oil earnings, including those in the developed regions, have devoted a large part of those earnings to expanding their infrastructure and their industrial capability? Does he not believe that there is a strong case for pursuing such a policy in Britain today?
The Earl of Gowrie: My Lords, it is precisely because the Government recognise that that they have been doing exactly what the noble Lord suggests.
Lord Campbell of Croy: My Lords, is my noble friend aware that oil is likely to be produced from the British Continental Shelf for at least another 40 years, provided that incentives remain, although the annual rate of production will be declining after the 1980s? Will the Government continue, with these revenues coming in, to give priority to the health and personal social services as proposed in the White Paper on Public Expenditure which was published yesterday?
The Earl of Gowrie: My Lords, my noble friend is, indeed, right and that is the case. North Sea oil will be a very important part of our economy for a long time to come. It enables us to get on with the job of making major structural changes in our domestic economy while preserving our welfare services.
Lord Stoddart of Swindon: My Lords, does the noble Earl agree that during the past five years £80 billion from this country has been invested abroad to provide jobs in other countries, while unemployment in this country has soared to 3¼ million? Did he note on Monday a report from the OECD showing that among the other industrialised countries this country had the lowest rate of investment not only in industry, but in infrastructure as well? When, for the sake of the British people, who seem to be the only ones not benefiting long-term from North Sea oil, are the Government going to alter their policy and invest in Britain?
The Earl of Gowrie: My Lords, I can think of no single thing that the Government have done since their period of office that I personally approve of more than the freeing of exchange controls, as was urged on us by a Minister in the previous Government, the noble Lord, Lord Lever, a predecessor of mine as Chancellor of the Duchy of Lancaster. The fact is that we have been turning one valuable asset into another by taking up positions in other countries. Britain has been a global economy since the reign of the first Elizabeth, and this is essential to the future of our children and, indeed, to employment in this country.
Viscount Trenchard: My Lords, does my noble friend agree that we should thank the Almighty, or the oil companies, for the fact that North Sea oil came on stream when it did, when the country, after two

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decades of fool's paradise, was near bankrupt? Does he further agree that the Government should be congratulated on spending some of the money that they were able to make available on increasing incentives, through tax reductions, to re-create wealth and to do that in support of small and growing businesses on which future wealth will depend, and on spending unprecedented sums on training for industry as competitive conditions require it today?
The Earl of Gowrie: My Lords, while welcoming very warmly indeed my noble friend's supplementary question, I rather suspect that he may be anticipating his speech in the forthcoming debate; and I imagine that we shall be returning to this topic quite shortly.
Lord Diamond: My Lords, does the noble Earl's first Answer mean anything more than the simple fact that the Government have been using the proceeds of a most valuable national asset to meet current expenditure? When will the Government cease this preposterous practice of selling off the family silver to pay for the groceries?
The Earl of Gowrie: No, my Lords; it means nothing of the kind because, as the noble Lord is well aware, Government spending in capital terms has not been falling.
Lord Kaldor: My Lords, is the noble Lord aware that, just as North Sea oil—
Noble Lords: Order!
Lord Kaldor: My Lords, is the noble Lord aware that the fact that North Sea oil came on stream at the very time when the new Conservative Government brought in restrictionist measures, most of them in the monetary and fiscal field, made it very difficult for our partners in the European Community to pay for oil except by driving up the value of the pound to a point which was very detrimental to British industry? If, instead, they had expanded the economy in that time, it would have been possible for us to use the North Sea oil money to build up our manufacturing structure, infrastructure and so on.
The Earl of Gowrie: My Lords, I am sorry that for a brief moment the noble Lord, Lord Kaldor, was, I think, in danger of turning into an overseas asset! I am aware, and indeed most of the House are aware, of the interesting letter which the noble Lord wrote to The Times on this subject this morning. The fact of the matter is that the British economy is now growing and expanding and North Sea oil is a very substantial contributor to that fact.
Lord Rochester: My Lords, will the Government consider using some of the earnings from North Sea oil in ways which might enable energy-intensive industries like the chemical industry to benefit the country by adding value to oil production?
The Earl of Gowrie: My Lords, that is an interesting suggestion in terms of conserving energy and getting
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better value for money out of our assets, and I will indeed consider it.
Lord Jacques: My Lords, is the Minister aware that, in spite of the wealth we have from the North Sea, our expenditure on the infrastructure compares very unfavourably with the other members of OECD?
The Earl of Gowrie: My Lords, I am not aware of that and I do not believe it.
Lord Bruce of Donington: My Lords, if the noble Earl is not aware of it, will he kindly do the House the honour of reading Working Report No. 17 published by OECD 10 days ago, which gives the figures which even he ought to be able to understand?
The Earl of Gowrie: My Lords, I have read it and I suspect that my comprehension is a great deal more precise than the noble Lord's.

Social and Economic Policies
3.12 p.m.
Lord Beswick Lord Beswick rose to call attention to the need for Her Majesty's Government, in this new year of 1985, to develop economic and social policies which unite the nation; which aim at directly creating employment rather than reducing taxation; which give new life to national pride in our welfare state and encourage motives of social responsibility rather than self-interest; and to move for Papers.
The noble Lord said: My Lords, the Motion which I am privileged to move is intended to provide an opportunity to look at the state of the nation in human as well as economic terms. I hope that we can take time to consider what sort of society we would like ours to be.
My first point is that in this highly integrated society an extra effort is needed, through constructive discussion, to get the widest possible agreement for policies which affect us all. I greatly admire the readiness with which the noble Earl, Lord Gowrie, brings his intellectual gifts so readily and generously to friendly debate here and we all acknowledge that our Leader, the Leader of our House, always prefers agreement if that is possible. But above them is the right honourable Lady, the Prime Minister. We recall the right honourable Lady's statement that she believes in consensus but a consensus based upon her convictions. This attitude to power she emphasised in a television interview just before Christmas, when, in answer to a question as to whether she ever listened to others, she said, "Yes, I listen carefully and then I explain why I believe I am right".
Current differences are not simply about market forces, nor even monetarism. It is the extreme and intolerant way in which these concepts have been shaped into a cult or culture that is at the root of so much of today's discontent and disunity. This criticism cannot now be brushed off as a party point. There are Conservatives, who have earned great respect in our public life, and there are leaders of our established Church who ask for what Mr. Francis Pym calls in his recent book, "the politics of consent".
Can we not now in this House say that the assumption of infallibility is an unacceptable face of democratic Government? The Prime Minister's attitude is scarcely justified by conspicuous success in our economic affairs. Certainly the inflation rate has been brought down. But curbing inflation is not an end in itself; it is a means to an end. Those tragic tribes in Ethiopia have no problem with inflation. Some percentages have been quoted and doubtless will be quoted again to show how well we are doing. But the inescapable facts are that at the beginning of this New Year our pound sterling slumped to an all-time low; the unemployment figures reached an all-time high, and for the first time within our memory we show a deficit on our overseas trading account in manufactured goods.
The stark figures of the unemployed sadden us all, on all sides of the House. But what gives me even greater cause for concern is the feeling, supported by facts, that the essential basis of a genuinely sound economy and society is being weakened and not strengthened by current attitudes and politics.
The Chancellor has been massaging his accounts with thousands of millions of pounds of these transient oil revenues—I am told, £14,000 million in one year. Then there are the thousands of millions of pounds from the sale of national assets. These enormous sums, over and above normal revenues, never before available to Governments, have now come into the Treasury. They could be used for building the future: more basic research; wider and deeper technical education; long-term investment in industry; increasing the housing stocks; replacing the sewers; building the roads to the East Coast ports and attending to those bridges and hospitals which NEDO says urgently need repair.
But it is in this situation that the Prime Minister has said that taxes should be cut: not a positive provision for our national future but tax gains. Some say that service industries will benefit. No doubt the financial services will get quite a boost. I have spoken before in this House about the growing imbalance between the effort and resources devoted to trading in money and that put into the actual creation of real wealth. This imbalance becomes ever more pronounced in the Western world.
Professor Tobin, in his 1984 Fred Hirsch lecture, said this:
" I confess to a suspicion that we are throwing more and more of our resources, including the cream of our youth, into financial activities that generate high private rewards disproportionate to their social productivity".
There is all the difference in the world between genuine savings, proper investment, prudent banking, on the one hand, and the plethora of parasitic money dealing, internally and across the exchanges, that has grown up since the war, all facilitated by the margins provided today by absurdly high interest rates and encouraged, too, by this current culture that short-term gains for self, however made, will somehow result in long-term gains for society.
It is true that, since the days when we came back from war and helped lay the foundations for our new welfare state, there has been a great increase in wealth production. But that makes it all the more saddening, all the more difficult to understand, why there should
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be now so much talk of the need to retrench. Proper economy, yes; a campaign for efficiency because we are proud of the service, yes. That is one thing. But cuts because we are told public expenditure is, by definition, a burden, are demoralising.
Last year, I saw a notice in the local paper which read,
"In the interests of economy, flowers will not be planted this year in the following public parks".
How extraordinary that, in this increasingly clever world, with new-found energy resources, with microchips, computers and automation, we cannot afford to plant flowers in certain public parks! But of course the cuts go deeper, and yesterday's White Paper, whatever the noble Earl says, is a catalogue of cuts. A consultant cardiologist at the King's College Hospital wrote to The Times on 20th December saying:
"The latest round of cuts … has just closed one of our wards … It is not putting it too strongly to say that patients may die as a result of our being unable to accept them. This letter should not be interpreted … as a special plea for cardiac patients. All my consultant colleagues are facing the same difficulties".
That conscientious professional was constrained to add that:
"ultimately it is the Minister of Health and beyond him the Prime Minister … who stand responsible".
Is it not just possible that somewhere we have some priorities wrong? A recent American report stated that a prosperous American family would now expect to own three to five television sets, sophisticated stereo systems, play-back units, Betamax, video discs and video games. If we get those promised tax cuts, no doubt more among us will move nearer to that splendid way of life. But can the consultants at King's College Hospital and elsewhere look forward more confidently to the days when hospital wards will not be closed over an extended holiday period?
There is this evidence of wrong priorities. But are we not also encouraging self-interest instead of social responsibility? Mr. Milton Friedman lays it down that the role of the state should be to protect property, enforce contracts, control the money supply, maintain internal law and order and promote external security. Beyond those limits, the theory is that individual choice should prevail. But this Government now intervene beyond those limits. Social engineering was once dismissed as a Leftist concept. But this Government now practise it in a big way.
The Cheltenham affair is relevant. At GCHQ the Government offered a bribe of £1,000 to those who would give up trade union membership. They lost a great opportunity to take a step forward in responsible trade union behaviour. They offered and could well have negotiated a no-strike agreement. Some Japanese firms have already shown this way forward in British industry. Here was a chance to go forward in the public service. But, no. The Government preferred to spend public money to create non-unionists.
Or take council house sales. There is a good economic case for home ownership. There is also a case for a stock of public housing for those who need to rent. But there is no good case for selling off public property at such cut prices. Encouraging to buy is one thing. I am for it. But bribing to buy is another. Six hundred thousand local authority houses have now been sold. Even allowing for owner-occupation prices,

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the average sale must have been £5,000 per house below the market price. In other words, some £3,000 million of public assets has gone in the furtherance of a political cause.
Then there is the case of the BT flotation. In the December debate, criticism was made about the money lost through under-pricing. The Minister replied:
"In my view £2,000 million, not merely £1,000 million"—
note the words "not merely"—
"would have been cheap at the price".[Official Report, 12/12/84; col. 346.]
Cheap in what sense, my Lords? And to secure what? An extension of share ownership, we are told. How far did this take us to national unity? How many unemployed bought shares? How many on supplementary benefit? And how many of the buyers will also be sellers for an easy profit? The millions of pounds spent on commissions and advertising was money spent on encouraging not social responsibility but self-interest or, to put it more crudely, selfishness. What if this same self-interest motivates the BT unions when the next pay claim is put forward? How can we counsel restraint when all the propaganda has encouraged stagging and the creation of a body of shareholders whose purpose is not to put effort into that organisation but to get what they can out of it?
Here again, an opportunity has been missed. Suppose that those millions spent on share pushing had gone instead on research and education about new forms of employee and consumer participation and a new relationship between Whitehall and public sector management which gave greater scope for managerial initiative. Could that not have been a more constructive investment in the future of our genuinely united nation?
There is increasing evidence here and elsewhere that this emphasis on self-interest and the drive for that competitive cutting edge can have consequences that none can welcome. Even with extra public expenditure on bigger police forces, we shall not prevent those thrown out of work from sharing the same instincts as those in work. In this country, the Henley Centre for Forecasting last year predicted that
"the middle-class home of the 1990s will be a luxurious electronically controlled fortress which the owner will be reluctant to leave".
This is not a prospect that pleases me. I am suggesting that we need changes in national leadership which will direct us to something more hopeful. New technologies must mean industrial changes, but we should be developing with urgency new social techniques and criteria to ensure optimum benefit from those changes. We shall not, for example, secure lasting benefit nor ensure national unity by concentrating Whitehall propaganda on dividing the miners. If we talk proudly of an increased gross national product, I am suggesting that we should be more concerned with what kind of product. We should give up talking of public expenditure as a burden and proudly develop a carefully monitored contribution to the quality of life. If there is a choice between tax cuts and productive employment, then we should say firmly that we choose the latter.
I am saying, too, that if we are considering our potential effort, our total national capacity, we should recognise that there is a huge fund of energy and expertise that will respond to motives warmer and wider than self-interest. The lads I saw in the television pictures marching in that cold, harsh light to make the final assault in the Falklands were not spurred on by the prospect of a quick profit in the stock market. Their commander was not someone brought in from the outside at an inflated salary. Those people among us who subscribed over £20 million in a matter of days for Ethiopian relief were not motivated by self-interest. There is, then, this hopeful side of human nature, of British human nature. If our national policies appealed to it more directly and could be seen to apply more fairly, our total effort could respond and we might even get that competitive cutting edge more quickly.
I should like to think that much of what I have tried to say is consistent with that new moral effort for which the noble Earl, Lord Stockton, called in his memorable maiden speech. If we could take agreement that far, then in further debate and maybe with more time and fewer distractions, we might make progress towards defining the practical measures which such agreement calls for. Meanwhile, my Lords, I beg to move for Papers.
3.30 p.m.
The Earl of Gowrie: My Lords, the noble Lord, Lord Beswick, is experienced in government and in industry, and he is also, as we have just heard, a wily debater. But I am afraid that his Motion asks us to tilt once again at those airy and familiar windmills of British political debate: uniting the nation, for one thing. I am from Ireland, and I am married to someone from Germany. I know how immensely fortunate Britain is in that even the fiercest arguments here take place in the context of one nation. Like other countries, Britain has immense problems, and I shall not duck them this afternoon. But there is no evidence of disunity on most of the central issues of the day.
Then there is the idea in the Motion that employment is created, rather than won or earned. Then there are the doubts cast on the Government's commitment to the welfare state. Yet since coming into office the Government have more than doubled cash spending on health. Some doubts! As to separating the notions of self-interest and social responsibility, that is of course a pretty subjective issue. I for one find it a rather bogus choice. I am a bit suspicious of paternalism, of people who know what is best for other people. Gladstone's great adage about letting as much money as possible fructify in the pockets of the people is still, in my view, the best way towards economic health and prosperity in a free society.
So while we on this side welcome Lord Beswick's initiating this debate we must, I think, look beyond the Motion to more solid questions about the state of our economy and where it is going. I shall outline the strategy and report on progress. My noble friend Lord Whitelaw will deal with major specific issues when he comes to wind up.

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The Government's economic programme was put to the nation in 1979. It received solid support. This support was reaffirmed, to put it mildly, in 1983. It is in all essentials the programme which the Government will put to the electorate again later in this decade. I believe it will continue to receive solid support. This is because the programme has delivered great gains to the economy already, and it will deliver many more if we hold to it.
I believe it is quite wrong to say that there is not consensus on the fundamentals of this programme. Every test of opinion suggests wide agreement that Britain earns her living in the real world of markets, and politicians who turn their back on markets have not been doing well in recent years, as the Labour Party has found to its cost. People in this country are mostly well aware of when they are buying foreign goods. They are mostly well prepared to buy British goods if they are good value for money. British industry is responding to this and it is becoming more competitive.
But people are also deeply worried at the scale of unemployment, which is at record levels in so many countries. So are the Government. Therefore most of my speech will deal not with the gains of the last few years—the credit side of the ledger, so to say—but with the immense challenge of unemployment. The scale of unemployment, which has been decades in the making, is a measure of how far still we have to go. It is not an argument for changing course, for throwing away all the hard-won progress of the last five years. But while people are rightly anxious about unemployment, few of them believe any longer that you can spend or borrow your way out of it. Why should they? They have been told that you cannot by Mr. Callaghan, as well as by the Prime Minister, by Mr. Hattersley in a recent speech, as well as by the Chancellor. They have been told it by Dr. Owen. We all know that winning markets at home and abroad is the only sure route to greater sustainable levels of employment.
I mentioned progress in the economy and the gains made. It weakens, in my view, rather than strengthens criticism of the Government and Opposition not to acknowledge these. Gains on inflation are sometimes acknowledged, and, to be fair to the noble Lord, Lord Beswick, he did so. But gains in terms of recovery and growth are rather less often mentioned. These are of course linked with getting inflation down, which is why we must strive to get it lower still. Continued recovery is essential to the new jobs on which we shall increasingly depend during this period of great sea changes in the labour market due to technology, population changes and many other factors.
Let us look at the balance sheet of the British economy at the present time. We have experienced the worst slump since the war. But since 1981 we have embarked on what will soon be the longest post-war recovery. In 1983, gross domestic product was up 3 per cent.—the best record in the Community. May I say to the noble Lord, Lord Beswick, that you need that kind of increase to meet the demands of the caring services, to which he drew attention? Profits on the stock markets—share pushing, as he rather
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dismissively described it—bring taxes for those same caring services as well.
Last year GDP slipped to just over 2½ per cent., but only thanks to the "own goal" of the dispute within the National Union of Mineworkers. Please note that I am choosing my words very carefully. This tragic and unnecessary dispute is between miners and miners. Other unions are not supporting the executive of the NUM, in practice. There is no winter of discontent. There has never been effective parliamentary support for the strike and there is less and less support outside Parliament. There is national unity in respect of this dispute as well. As the dispute runs down we should go back to the higher pattern of growth. How much depends on how fast. We are all anxious for it to end quickly. It has been a tragic and expensive affair—heart-breaking, as my noble friend Lord Stockton said in his maiden speech. It is, indeed, heart-breaking that so great a union could have been so misled. Nevertheless, there are heart-warming signs that courage and common sense will end this strike; and a powerful signal is going out at home and abroad that this nation and its Government, unlike our three predecessors, are not being defeated or even deflected by large, Left-led, public sector monopoly trade unions.
In spite of the setback of the dispute, confidence in continued recovery goes on being turned into solid progress. Investment last year was at record levels. It is set to grow by large amounts this year as well—a remarkable 15 per cent. in the manufacturing sector, according to the CBI. Even in this last, difficult week the Stock Exchange topped the legendary 1,000 barrier and a lot of that money will find its way into higher investment. Exports—excluding oil—rose by 12.5 per cent. in the quarter to November, between 1983 and last year. Productivity has been rising very fast. Company profitability is expected by the CBI to rise this year to levels which have not been experienced since the 1960s—that period which was acknowledged by my noble friend Lord Stockton, again in that remarkable speech so free from nostalgia, as belonging to an altogether different world.
The European Commission's regularly published surveys of producer and consumer attitudes show our economy to be the most optimistic of the Community. As to demand for goods and services, just look about you, my Lords. Look at the shops or the share performance of retailing. I do not just mean in London or the South-East. Overall demand is surprisingly buoyant all over the country: in Liverpool, Newcastle and Glasgow as well as here. The great exception is in the areas affected by the miners' dispute. Wages are keeping well ahead of inflation—too far ahead for the unemployed indeed—and we have of course one of the largest workforces in work in Europe.
Three things are remarkable about this record of recovery and growth. Two of them are welcome; one of them is not. It is welcome that growth has been taking place against a background of falling rather than rising inflation. That is really the essence of the Government's economic programme. Inflation is a tax that guarantees that the money you have earned is worth less by the time you have banked it, or reinvested it, or distributed it to your partners, or paid it

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out in wages, or just gone out and spent it. Sustained growth with falling inflation has been the aim of every single Government since the war. This Government are unique in having brought it off for nearly four years in succession. This aim of every Government since the war has been achieved for four years in succession. We have further to go, as I freely acknowledge, on very many fronts; but we are quite determined that that record will continue. As recent events have shown, we shall not hesitate to take whatever action is required to achieve it.
Then it is welcome that the evils of what used to be called "stop-go" have so far been avoided: violent accelerating and breaking rather than smooth driving of the economy. The noble Lord, Lord Beswick, tried to make much of recent movements in sterling. I do not altogether blame him for this as it has been a difficult week for the Government, and the Opposition have not been singularly successful at seizing the initiative in the House of Commons, as I expect we shall now have to learn to call it. But I would remind this House that during the period of recovery we have had three hiccups involving sudden rises in interest rates such as we have just experienced. There is no avoiding erratic changes in exchange and interest rates in an uncertain world—a world, moreover, in which international financial markets are ever more closely linked. But provided the Government carry through and convincingly affirm their central strategy—as we have—there is no need for these episodes to threaten recovery or inflation. Nor would joining the EMS help. This is on account of technical reasons with which my brief here is stuffed, but of which the following is a crude approximation: sterling is a petro-currency and the other EMS currencies are not. The time may come to join the EMS, but in the Government's view it is not now.
The unwelcome thing—and it is very unwelcome—is this. It is not welcome that even with sustained growth and lower inflation, unemployment has continued to rise. Of course sustained growth is delivering new jobs to this economy. It will go on doing so. Not going for sustainable growth will deny us new jobs. But these have not been delivered at anything like the rate needed to replace the jobs that have been lost or to cope with a growing labour market. Jobs that have been lost for a whole variety of reasons: loss of markets at home and abroad through uncompetitiveness; management failures of marketing or design; unions wanting pay rises unmatched by productivity; Governments indeed covering up the consequences of failure by reflating; population changes; commodity price increases; more competition in the world at large; technology; or failure to invest in technology. The reasons do not matter to the unemployed—except in so far as we all must learn from mistakes. What matters is what we do for them.
I have already dealt with the Government's overall strategy: to use all the methods at our command to see that growth is as little eaten into as possible; to see that the fruits of growth are not eaten away by the maggots of inflation. To this end we need to keep strict control over public spending and borrowing. Let me say to the noble Lord, Lord Beswick, and the House that of
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course there is nothing wrong with public spending; but like all spending it has to have some relation to what you are earning. There is nothing wrong with borrowing. But you have to pay for it, and you have to pay for it at a rate which attracts the loan in the first place. Noble Lords cannot urge the Government to borrow more and at the same time complain that interest rates are too high. I hope that subsequent speakers in the debate will be too wise to fall into that trap.
I accept however most profoundly that, given the special problem of unemployment, this overall strategy is not enough by itself. We therefore intend also to continue with two very important policies to help unemployment and to ease the position of those who are suffering this biggest headache and heartache of our otherwise much healthier economy.
First, there are the special employment measures on which we are spending £2,000 million each year. I was one of those responsible for changing the youth opportunities programme to the youth training scheme. The YTS is much better. It has a long way to go but at last we are beginning to rationalise training in this country. Training is good for our economic future and it also postpones entry into the labour market of many young people. I wonder how many of your Lordships really want your children or grandchildren to seek paid employment while they are still in their vulnerable teens. It is also demonstrably clear that such really worthwhile employment measures as the YTS, the community programme and the enterprise allowance scheme are far more effective in taking people off the register than any other kind of public spending. I hope that this debate will recognise that fact as other recent debates in your Lordships' House have done.
No less important is our determination to try and reduce the employment trap—where you are only marginally better off working than you are remaining on benefit. We are, as the House knows, planning to peg public spending, but only at present levels in real terms. Even so, the burden will remain large in relation to our present wealth, which is why growth in public spending will jeopardise recovery. If we spending Ministers—and I am sharply aware in the Arts that I am one—allow him, the Chancellor will no doubt try to continue his policy of raising tax thresholds, and that helps the poverty trap as well. If he is able to do this, the gap between benefit and work will widen in time. That will not solve unemployment. But it will help over time. Not doing so will hinder. Lower taxation also means that some people in work can take lower pay rises and still have the same increase in take-home pay. Lower pay rises mean more jobs. A change of only 1 per cent, to the average level of wages will in time make a difference of no fewer than 150,000 to 200,000 jobs. As at Question Time we had some exchanges about the OECD report, perhaps I may say that in an OECD report this fact is recognised and tax cuts, in the interests of thresholds, are urged upon us.
As to the argument in the noble Lord's Motion that this money—assuming public spending allows the Chancellor to find it—is better spent on the infrastructure, two things are conveniently forgotten by opponents, including I am sorry to say by the noble

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Lord, Lord Beswick. One is that public capital spending is already taking place on a massive scale. This is true whether you think of roads or gas pipelines, hospitals or other programmes—and that could be higher if some local authorities would wrestle with control over current costs—even if you think of my own little neck of the woods where the new British Library building may turn out to be the most expensive public building of the century.
The other thing that is often conveniently forgotten is the capital intensive nature of modern engineering. I am sure that your Lordships are all much too busy to spend time loafing about watching other people build motorways, mend sewers or extend airports. But if you do, you will not find many unemployed youngsters from inner cities working for £40 a week on these projects, or many middle-aged welders from declining industries working for £80 a week. You will find skilled machine operators on well over £200 a week. All this means that the tax way and the special measures way are the surest roads to more jobs for the unemployed. I most respectfully challenge noble Lords who take a different view to cost their proposals carefully in this debate, showing long-term jobs gained for public monies spent.
I must make an end—and indeed it is uncommonly close in here for the time of year! I look forward to the debate and to no less than two alluring maidens—indeed, the prospect of the right reverend Prelate the Bishop of Birmingham gives a whole new meaning to the phrase "the Church militant". I do not doubt that the Government will be told that there are alternative routes to sustained growth: import controls, incomes policies, and the like. I would only ask the House to recognise that such alternatives have appalling downside costs and that most have been tried and failed.
I do not doubt that the Government will be called doctrinaire. I would only say that our strategy appears to me to be strikingly close to that of Mr. Healey and the noble Lord, Lord Barnett, following the IMF period—a strategy that was patently bringing results before they lost their nerve. Then they doubled the public sector borrowing requirement, unleashed the winter of discontent, issued post-dated cheques for public sector pay, and were promptly thrown, as they deserved to be, decisively out of office.
Our national fortunes depend on getting on with the hard graft of earning our living, winning back lost markets at home and abroad and not paying ourselves more than we earn. That is more a matter for industry of all kinds than for the Government. What the Government can and must do is to create the conditions in which industry and commerce can prosper. We must also do all we can to mitigate the social and personal costs of the overdue changes through which our economy is passing. We shall not let up in either endeavour, and we ask others not to let up as well.
3.55 p.m.
Baroness Seear: My Lords, we on these Benches have always recognised and supported the Government's determination—their right determination—to reduce and to conquer inflation. We remember—and
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this is often conveniently forgotten in other parts of your Lordships' House—the misdirection of resources, the anxiety and the fear in all sections of society created by high levels of inflation, and we must know too that those who suffer most from inflation are those who are least able to bear the strain. So we have welcomed the Government's constant determination to reduce inflation and are glad that they have so nearly succeeded in meeting the target that they set themselves of getting inflation down to 4·5 per cent. in 1984.
Where we part company with the Government is in the extent to which today the Conservative Government are dominated by dogma. The noble Earl, Lord Gowrie, rightly said that he would be told that the Government are doctrinaire. Indeed, this is a doctrinaire Conservative Government of a kind unknown in this country. The Conservative Party is the party of pragmatism. Indeed, its enemies said that it lacked any principle except the principle of a determination to get into power and to remain in power on a pragmatic policy. Now we have a Conservative Government with principle and it is a thousand times worse.
Indeed, a strange transformation has come over British politics. It used to be the Labour Party which was the doctrinaire party obsessed with dogmas. Those dogmas, starting but by no means ending with the dogma of public ownership of the means of production, distribution and exchange, until experience told us the results of the application of that policy, still remain the dogmas of the Labour Party. But the difference is that today the only people in the Labour Party who really believe them are the far Left of that party. Indeed, the centre and the Right of the Labour Party might properly be described as a secular version of the Bishop of Durham, except that the Bishop of Durham is more frank about his attitude to dogma.
No, it is in the Conservative Party that there is this devotion to dogma, although not of course throughout the whole of the Conservative Party. There are what have been called the "wets" and the "drys". I would prefer to talk about the Tory "Samaritans" and the Tory "Pharisees". The Tory Pharisees believe that salvation is to be found by strict adherence to the law—I was about to say, but it would be too awful a pun, to the law the "profits". But what a strange dogma, what a strange rule by which to be governed! That dogma is the dogma of monetarism and of reliance on market forces—the belief that if you follow monetarist doctrine, if you allow market forces to have their way, then all will come well in the end. Of course, it is sensible to control monetary supply. We on these Benches have always been in favour of following market forces in so far as it makes for good results in the long-run, but not in a doctrinaire and absolutist way.
There is no doubt that the Government are dominated by this belief and it means that they fail to tackle the problems which Government have to tackle in all their many aspects. It is only in the comfortable areas of academia that, other things being equal, it is possible to talk about economic matters. In real life, alas! they never are. Every problem that the

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Government have to face—or nearly every problem—has an economic, a social and a political aspect, and the job of Government is so to manage affairs that all aspects are held in focus and the social consequences of economic change and the political implications are fully taken into account, and an estimate is made of those consequences at each stage.
Therefore, every economic change should be seen in relation to the effect it has on the major social issues, especially the social issue of unemployment. It is because the Government are so dominated by their economic theories that they are unable adequately to grasp the social and political aspects of the problems we face. As the noble Earl, Lord Gowrie, admitted, in consequence they have failed, and failed woefully, to deal with the issues of unemployment, which continues to rise, and rise, and rise.
We on these Benches say: take all these aspects into account, and in the position in which you now find yourselves adjust your policies so that you meet both social and political objectives as well as economic objectives. Of course we do not believe that you can spend your way out of these problems. That was the false doctrine of the Labour Party from which they have not yet sufficiently dissociated themselves.
We do not believe those people who thought that Keynes would have said, "Spend your way out". They have always forgotten, those popular neo-Keynesians, that Keynes was dealing with problems in a day when there was no threat from inflation. When there is no threat from inflation, then, indeed, Keynesian policies can be made to work. Of course now that the Government have had so much success in the reduction of inflation, the time is coming when it is possible to embark on a higher degree of spending along Keynesian lines which it would have been quite wrong for them to have done until inflation had been reduced to present levels.
We say: be prepared to spend more on capital infrastructure. We are not saying that the reduction in taxation is wrong in so far as—and this is an important reservation—it deals with taking the low paid out of the tax level. It is absurd that we are taxing people at a rate which knocks on 40 per cent., because you must add national insurance contributions to income tax. We are taxing people at a level of pay which is little above the social security level at which ordinary people are expected to be able just to survive, and then as soon as they move into employment they are expected to pay a marginal rate of 40 per cent.
There can be no sense whatsoever in continuing with that policy. It is not a criticism of the unemployed, as has been suggested, to say that this should be changed because it discourages them from looking for work. That may or may not be the case. But it is certainly right to say that that situation should be removed because it is grossly unfair and ridiculous that people at that level of income should be expected to make so large a contribution to the Government expenditure.
Do not let us forget, when we are crying out for subsidies to decaying industries, that those subsidies are being paid to well-paid workers out of the pockets of people who earn a great deal less than the workers
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in those industries. But, my Lords, is it not possible—no, I shall not put it as a question; obviously it is possible that you can take the lowest paid out of tax without giving tax benefits to those who are better off. There is no absolute reason why you have to have the existing bands of tax in their present position.
You do not have to make the rich richer by changes in taxation if your main aim is to see that the low paid no longer have to pay tax. We urge the Government to take the low paid out of tax, but to see to it that there is no immediate benefit in the pockets of the better off, if for no other reason than the divisive effect that that most surely would have, though also because there are far better things to do with the money than to see that the rich get richer.
My Lords, infrastructure, indeed; capital expenditure. There is a world of difference in borrowing to pay for capital development. Since when was it considered wrong to borrow to pay for capital development? That is totally different from borrowing to pay for consumption. I find it an odd application of the economic doctrine of the Conservative Government that, as my noble ally Lord Diamond is constantly pointing out to them, they sell the family silver to pay for current consumption, but will not borrow for capital investment. That seems a curious reversal of the way in which normal business people conduct their normal business.
All right; the noble Earl, Lord Gowrie, has said that infrastructure development is not particularly labour intensive. But there are many forms of building and capital investment which in fact will employ a considerable number of the unskilled and semi-skilled. It is, as your Lordships know, the unskilled and the semi-skilled who to a quite disproportionate extent make up the long-term unemployed; and it is the long-term unemployed about whom your Lordships' House should be, and I believe is, particularly concerned.
So infrastructure expenditure and capital investment will have to take place sooner or later, and as we all know, if you delay that kind of essential capital expenditure, it only costs you more in the long run. By such action we shall do something to dent the unemployment problem. We are not pretending that you can get rid of it; of course you cannot. But you can do something to improve it.
In particular, it is especially disappointing that the Government are cutting back on maintenance grants for housing improvements. Where house improvements do not take place the value of the house rapidly deteriorates, and beyond a certain point that deterioration is alarmingly fast. It is a waste of our resources not to go on with the best possible level of house maintenace. That surely is an area in which the semi-skilled and unskilled can be usefully employed and taken out of the ranks of the long-term unemployed.
Again, education is an investment. I should be the first to agree that there are many aspects of education which need reform, but it is ridiculous to cut back on technical education and, indeed, on the wider education that gives a greater understanding of the economy and society, when we are moving into an age in which beyond any shadow of doubt we need a

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highly educated, versatile population. In the short-term view you can make savings on education, but in the long-term view this is about the most false economy that you could possibly make.
Again, looking at the political, social and economic aspects together another change which we in this country would wish the Government to make, and to make quickly—I believe that the noble Earl, Lord Gowrie, though he disclaimed it today, is nearer to our point of view on this matter than perhaps he is willing to admit—is to recognise that there is no longer a good reason for delaying our full entry into the European monetary system. Such a move would give greater stability to the pound. It would give Europe as a whole a greater ability to deal effectively in relation to the dollar.
But perhaps more important is the political significance of this. We have trailed our feet in relation to Europe. We have not been good Europeans. There are Gaullists in this Government. The time has surely come to show that we are taking our part in the European monetary system; that we are prepared for a change in attitude; that we are prepared to help to give that leadership to Europe which we so failed to give 15 years ago, and have failed to give ever since.
With this there are economic and social consequences which we could begin to forge: improvements in the internal markets of Europe, which would be of the greatest help to our manufacturers here; improvements in transport throughout Europe. Large sums of money are wasted because of the continuing nationalism which dominates Europe and which, with good leadership, could be done away with. The development on a European scale of schemes of research and development could begin to challenge the leadership of America and Japan in these all-important areas of high technology. But we need to show leadership here, and the Government are again trailing their feet. They said before that they could not go in because the pound was too high. They are saying now, I suppose, that they cannot afford to go in because the pound is too low. At what point will it be right to go in, or is it because of their Gaullist prejudice they do not want to go in at all?
These are just some of the things that we would do to begin to give this country opportunities for greater social development and greater stability. But we do not for one moment deny that none of these things by itself will deal adequately with the problem that exists.
The noble Earl, Lord Gowrie, has attempted to paint a very rosy picture of the way in which the economy is developing with the one exception, which I know he is sincere about, of the deplorable level of unemployment. But there are other and darker sides to the economy in relation to our competitors. Why have we so poor a share of the American market? Why are we not increasing our share of the markets throughout the world? Why are we finding that many of our competitors, not in countries with low standards of living but in countries with a relatively higher standard of living than ourselves, are being more successful and are recovering faster than we are?
One can find figures which show that we are doing fairly well at certain points, but it all depends from what level one has started. Some of that increased level
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of improvement in productivity is simply a measure of the low level from which this country started in comparison with the levels of our competitors. It is a pretty false argument if one says that this proves that we are now well on the way to recovery. The fact is that the future is not at all rosy unless we make some fundamental changes of the kind that it is difficult to get the people of this country to accept. They will only accept them if there is a broad basis of consent.
The noble Earl, Lord Gowrie, said that there was consensus in this country. I wish I could believe him. I wish he would go to the North of England and listen to the things which are said there. There is not the level of consensus that both he and I would like to see. There is no foundation for it in our political system. The noble Earl, Lord Gowrie, claimed that the Government had been returned to power with the overwhelming support of the country. They were returned on a minority of votes, and the noble Earl, Lord Gowrie, knows that well.
As long as that system is continued, Parliament will not reflect the views of the country as a whole and, therefore, will not have the support of men and women throughout the country. I will not go further on that as this is not the debate in which to do it. I could, as the noble Earl, Lord Gowrie, knows, win that argument hands down. But that is just one way in which we have divided ourselves. We are a divided society, and we have to take active steps to see that that is put right.
Again, we need the greatest possible collaboration between the Government at the centre and the local authorities, the people out in the country. What have this Government done? What a singular achievement it is to have alienated even the knights of the shires in local government when it comes to achieving collaboration between the centre and the locality!
In industry, we need the greatest possible collaboration and the highest degree of participation. What have the Government done to build that kind of participation in industry for which many of us have worked for so long? It is true they have done something by way of wider share ownership, and that we welcome and are glad to see; but there is a long way to go.
We need a much greater degree of consent for unity: and where are we to make the changes that have to be made? Where is the leadership for that coming from? I was astonished to see the Labour Party put down a Motion asking for unity—the party which came to strength by playing on class conflict and never loses an opportunity to play on class conflict today! They know a great deal about the absence of unity. Poor Mr. Kinnock! I felt so sorry for him: that miserable face on the picket line at 5 o'clock in the morning. And it was not only the cold that made him look so unhappy! He cannot even control his own party in another place, let alone throughout the country. Divided? Yes, indeed, there are divisions, but not the old divisions that the Labour Party was built on and continues to believe in. Let them take a leaf out of the pages of the Chinese book. The Chinese have told their members not to take too much notice of that brilliant old man buried in Highgate. He was a brilliant thinker in his time, but the sociologists would say that his field work was a bit defective and the time has come to think again—and in less divisive terms than exist today.

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We hear from the Labour Party the old messages based on the old worn-out doctrines. They are the voices of yesterday's men. The reason why they cannot possibly lead to unity is because they represent sectional interests. When the Alliance was formed the wise men of the media told us that we could never achieve anything because we did not represent a sectional interest. It is our proudest boast that we do not. A party not based on sectional interests is what this country needs to move to unity.
4.16 p.m.
The Lord Bishop of Birmingham: My Lords, I find myself in somewhat of a dilemma. Despite the noble Earl's expectations about the Church militant, I understand that the tradition of this House requires that a maiden speech should be non-controversial. On the other hand, I am speaking to a Motion which evidently invites controversy. Perhaps therefore I may stand back a little from the Motion and reflect on some of its underlying themes: the unity of our nation, the resurgence of national pride in the welfare state and an encouragement of the motives of social responsibility. In that case it seems hardly appropriate for someone like myself to discuss whether employment is better created by increasing public expenditure or by reducing taxation. In either of these cases there seems no realistic hope of a return to the full employment which our cities enjoyed a bare decade ago.
Must not people be offered useful work to do, especially young people, even if they cannot be employed gainfully? In my See city of Birmingham today some 5,000 16 to 18 year-olds are unemployed—almost the same figure as last year—despite a 5 per cent. rise in the numbers of those on training schemes. The tragedy of empty young lives will be felt by all Members of this House. We should perhaps recognise that we are entering a period of economic and social change in our country, comparable in some ways with the times of the enclosures or of the industrial revolution. Whichever way we look, we see change occurring at an unprecedented speed. There are many more women at work. There are far more retired persons. The electronic revolution is already radically altering the nature of work, making it more capital intensive. Only last week I went round a factory in the Black Country where four men make 2 million litres of paint each year. There is fierce competition from new industries in Eastern countries which seems likely to grow. We are living in an increasingly pluralist society. There are among us huge social changes, especially in the institution of marriage.
As a nation most of us dislike change and we find ourselves without clear aims for a future society without really worthwhile goals to uplift the spirit of men and women so that they will want to contribute their best to the common good. It is somewhat melancholy to reflect as we approach the 40th anniversary of VE Day that war can unite a nation and bring out the best in people while a long period of peace such as we have enjoyed tends to make us self-centred and bring out our divisions. And we are not without those today.
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The latest edition of Social Trends records that 90 per cent. of our population believes that ours is a racially prejudiced society. Whatever the tragic coal strike is due to, it is—at least in part—a struggle of North against South, so it seems. According to statistics, the rich are getting richer and the poor are getting poorer. Dare we forget Disraeli's novel Sybil where Egremont said that our Queen reigns over the greatest nation that ever existed. And he was corrected. She reigns over two nations, he was told, the rich and the poor. Fortunately, however, we are far removed from the bitterness of those hungry 'forties of which Disraeli wrote. One great step forward in our social provision has been the so-called welfare state, with which our Motion is concerned today, that complex network of health and social services which tries to meet human need at its most acute points.
Our form of the welfare state is somewhat different from that which has evolved on the continent of Europe and in Scandinavia; but it was made possible by an era of full employment and great economic growth. The noble Baroness mentioned Lord Keynes. The Beveridge welfare state and Keynesian full employment went hand in hand; they needed one another. The welfare state, with its transfer of incomes to those who spent it on consumer goods, actually helped in those days to maintain full employment. And in those days there were far fewer women competing in the labour market. A larger proportion of the population was of working age. Today, like most other countries in Western Europe, we have recession and the large number of unemployed that the noble Earl mentioned; and so our welfare state, like theirs, is in trouble.
Unless we print more money or raise the level of taxation—and already our level is high—we can only increase benefits by cutting down on other expenditure. In fact, a higher proportion of our national income, statistically speaking, is going into the welfare state today than when it was first set up—and yet there is a large number of those who badly need more than they get. For all the improvements that could and should be made, can we not all take pride today in our welfare state and the transfers of income that it still effects? Is it not a real attempt in a free-enterprise economy to meet basic human needs? However, we need to clarify its aims and its goals. Should there be transfers of incomes from group to group, such as from the healthy to the sick, from the employed to the unemployed, from the young to the old? Or should there be a vertical distribution from high-income brackets to low-income brackets? Even more important, is the welfare state there for the security of individuals (as it began) or for the reduction of inequality, as some would prefer it to become? In our situation today is there room for a new concept of the national income where the unemployed receive not so much supplementary benefits as compensation for the impossibility of finding work?
These questions of social justice are important in seeking a sense of national unity. There is more opportunity today for consensus to appear through discussion in the media. Conflict itself is inevitable and can be creative providing that it is open and informed and leads to consensus. The sense of unity that a nation feels is based largely on a consensus over

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values—and despite our pluralistic society that consensus is possible. The sense of unity in a nation does not depend upon its economic standing or its materialist success. It is something intangible and spiritual, an inner feeling that the nation has worthy goals which inspire individuals to contribute their share to the common good.
We need to feel that we are creating a just, participatory and sustainable society. We need to feel that each individual person has a role and a purpose in our society. We need a sense of adventure for the strong, a creative outlet for aggression and enterprise. We need equally compassion for the powerless. We need a new vision for Britain in a new age, a Britain which, despite its troubles, is still, as we have heard, increasing its wealth year by year in terms of GDP and which, if it develops its potential, can still lead the world no longer of course in material prosperity but in something far more important in true human fulfilment. If it were to be generally believed that the goals of our national policy were specifically framed to promote the true fulfilment of our people, this in itself would release vast spiritual and moral energies and help to make our dream a reality.
4.27 p.m.
Lord Cledwyn of Penrhos: My Lords, it is my pleasant task to congratulate the right reverend Prelate the Bishop of Birmingham on his first speech in this House and to say that he lived up to his reputation of being interesting and stimulating and, of course, eloquent as well. He has raised matters of great importance and by so doing he has enhanced our debate. We all look forward to hearing the right reverend Prelate many times in the future.
Like other noble Lords, I am grateful to my noble friend Lord Beswick for tabling this Motion and for his thoughtful opening speech. It was also very timely because, as he said, it gives the House the opportunity to look very carefully at Government policies at the beginning of a new year. The Government's promises, the Government's performance, the Government's prospectus—all these are matters of acute concern to the House and to the general public, I am bound to say at the start that I did not recognise the euphoric scene which was painted by the Minister for the Arts in his opening speech. My noble friend Lord Beswick, appealed for policies which will unite the nation; and he is right to do so, for Britain has not been so divided for many years.
In 1979, the Conservative Party said that they were going "to reunite a divided and disillusioned people". We remember the Prime Minister's exhortations outside No. 10 Downing Street. Today, my Lords, the divisions are far greater than they were then and they are the direct result of Government policies and also of the clumsy and inefficient way in which the Government have tried to carry them out. I regret to have to say that this Government have become notorious for their unwillingness to consult those people who are affected by their actions; and this has contributed to our national problems. The gulf has widened between the well-off and the less well-off under this Government, between the North and South of this country. It was, indeed, former Conservative
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Prime Minister and leader of the Conservative Party, Mr. Edward Heath, who said the other day—and I quote him:
"In economic terms, the North does now begin at Watford".
There is also, as the noble Baroness, Lady Seear, has said, the division which has developed in the last few years between central government and local government. Measures have been taken by the Government without adequate consultation with the elected authories. It is no use Ministers fobbing this off by referring to Labour-controlled authorities, as they invariably do. They should know that there is deep disquiet and resentment among local councils of all political complexions. This is a tragedy because these councils, with encouragement and the normal resources, could assist the Government to resolve some of their problems. Then there is the division between the public sector and the Government. The Government have interfered with a heavy and unsympathetic hand in their affairs. Finally, there is the gulf between those who are still fortunately at work and those who are unemployed.
The Government have now had nearly six years to fulfil their promises to unite the nation, to deal with unemployment, to secure adequate investment in industry and in general to strengthen the economy. How have they performed? To be fair to them, they have achieved one of their objectives: inflation is down to a relatively low figure. But that has been achieved at a very high price indeed. The almost fanatical pursuance of monetarist policies without regard to the consequences has brought our country to a critical position. Let me make this plain. This criticism is not made by my noble friend Lord Beswick alone, or by this side of the House alone; it is made by a broad spectrum of opinion, including Conservative leaders such as Mr. Edward Heath, Mr. Pym, Sir Ian Gilmour, Mr. Geoffrey Rippon and, significantly, by members of the Cabinet as well, such as Mr. Peter Walker, as well as by responsible bodies who are not unfriendly to the Government such as the CBI, and by the Trades Union Congress. I could quote them all at length, as noble Lords in all parts of the House know perfectly well, but their views are too well known by now to make that necessary.
The noble Earl, Lord Gowrie, spoke of the challenge of unemployment, and I wish to deal with what he said because this is very much in the minds of every one of us in this debate. In my view, unemployment at the present level is the most dangerous and the most divisive of all the consequences of Government policy and it must be borne in mind that out of the three-and-a-quarter million people out of work about 370,000 have been out of work for more than three years, 700,000 for more than two years and 1,047,000 for over a year. That is the tragic picture. Again, the estimate is that 63 per cent. of 16 and 17 year-olds will not have found paid jobs by the end of December and that 40 per cent. of the total unemployed are under 35 years of age.
Statistics are inadequate to convey the gravity of the position or the implications of this for the future of our country, and I welcome—we all welcome—the steps taken by the Government to provide training for young people, such as the youth training scheme to which the noble Earl, Lord Gowrie, referred. But let

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me repeat to him and to the House what I have said before, that while training is important, and indeed vital, it is no substitute for a job which carries hope for the future. Unemployment at any age—at 20, at 30, at 50 or more—is a bitter experience, but for those young people upon whom our future as a nation depends it must have very serious implications indeed. My noble friend is therefore right to say that economic and social policies which bring Britain to this pass must be condemned.
We all know what the Government's response is to these criticisms and we have heard some of these again from the noble Earl this afternoon. First, they remind us that there is a world recession and that therefore we must expect some of the consequences of that. Secondly, they say quite rightly that inflation is down and that industry is leaner and fitter. It is certainly leaner, but I am not sure that it is fitter. Our manufacturing industry is at an all-time low and bankruptcies have reached a record high: 13,406 bankruptcies in 1983. The fact is that the "lame duck" argument, used by so many Ministers to describe industries which are in financial straits, is not fair or valid because many old-established industries with reasonable management have been forced to close down over the last four years. That has gravely weakened job resources in so many parts of the country.
I also welcome industries which come into this country from overseas, if they provide jobs for our people, and I support Ministers who travel abroad looking for jobs for Britain. We must not forget however that British ingenuity, British skill and adaptability and British hard work are still here; but they need encouragement and at times they need Government help and investment. Other countries do this, but too many of our able young people go abroad and too many British inventions and discoveries are exploited abroad and not here at home. It is a sad thing that, for the first time, our imports of manufactured goods exceed our exports. "The workshop of the world" is not doing so well these days, and it is difficult to detect the recovery which the noble Earl, Lord Gowrie, claimed in his speech.
The Government have argued over the last two years that the service industries will take up redundancies from manufacturing. This is a point that needs looking at rather more carefully. I believe that it can, if over-stressed, become misleading because while service industries like tourism can make an increasing and important contribution, they are not a substitute in quality or numbers for jobs lost in manufacturing industry. I think that before the Government repeat this claim they should set up an independent inquiry to look into its full implication.
Again, the Government are fully entitled to point to the world recession and to its effects on our economy. Unemployment in western Europe is high and economic performance has not compared well with the United States, but the question for the Government is how Britain has performed compared with out competitors—a point made by the noble Baroness, Lady Seear.
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The noble Earl, Lord Gowrie, complained in a recent debate that I have not acknowledged the Government's achievements in winning markets and jobs. I do want to give credit to the Government where they make progress, because it is very much in all our interests that the Government should succeed and I would be very glad to praise them if I thought that their policies overall were succeeding; but I cannot see this as plainly as the noble Earl. I must come back to the OECD Economic Studies Report, which states quite firmly that Britain's tight fiscal policies are in part to blame for our poor performance. That is an objective assessment of the Government's performance. The latest OECD report again put us at the bottom of the international league in spending on investment and on infrastructure. I will return to that point in a moment.
The noble Earl referred briefly to the coal strike and I wish to say one word about that. Whichever way one views it, it has been a tragedy—a tragedy for the nation and a tragedy for the miners and their communities. Those areas which are vulnerable to pit closures, like South Wales, which I know so well, have been prepared to endure the hardship of a prolonged strike because they believe, first, that their pits were likely to be closed arbitrarily; secondly, that no measures have been prepared, or even thought of, to find alternative work in the community. It is a combination of very high unemployment and acute insecurity and mistrust which has created so bitter a reaction in those communities whose futures are at risk.
We all want to see an end to this strike and I believe that the Government have an obligation to propose an agenda which would form the basis of a negotiation. I believe that if both sides could move away from public rhetoric to private negotiation a workable formula could be achieved. I believe that it is the Government's duty to take positive action to that end now.
The recent sterling crisis has also demonstrated the Government's uncertainty. It seemed at one stage that the pound was to be allowed to plummet without any Government intervention, and Britain's standing suffered not only because the pound fell but also because the Government were seen to be inept and seemed not to care how low the pound fell. When the Government did act, it was with the panic of a housewife who smells her dinner burning. This is what creates lack of confidence: this and the fact that we are frittering away our North Sea oil revenues when the world knows that these will decline and cease in the foreseeable future. My Lords, £17 billion, roughly, in revenues from the North Sea: £17 billion spent on unemployment benefit. What sort of policy is that? The oil revenues which should be used to expand key industries and to create new ones are being used to pay unemployment benefit.
Let me say to Ministers that what I say about the Government's action reflects a very wide view which, again, includes supporters of the Government. Let me read from The Times, which is well known to be sympathetic to this Government. This is what The Times said about the sterling crisis:
"The Government is wholly to blame for the sterling crisis of this weekend, and within the Government the Prime Minister and the Chancellor must take the lion's share. The foundation stone of a strong currency—any currency—is confidence. It is a basic, gut

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confidence in this Government which is lacking and has been lacking fundamentally since the 1983 election and in particular since last year's budget".
Those are not the views of the Alliance parties or of the Labour Party, but the views of The Times newspaper.
The other argument advanced by the Government is that the proposals suggested by their critics (that is, by us, the Liberals and so on, and by a large section of the Conservative Party) have been tried but have failed—the "airy windmills", to use the elegant words of the noble Earl. This leads to the second part of my noble friend's Motion. We have suggested to the Government, as have many others, that if they have money to spare, as Mr. Lawson has said they will have at Budget time, they should invest this in the country's infrastructure. We say that this is necessary in itself and that it will also provide jobs, especially in the construction industry. But the Prime Minister, the Chancellor, the noble Earl and other Ministers in the Government have turned this down out of hand. The Chancellor, who said in 1983 that there was going to be a fall in unemployment last year, now says that he
"plans to introduce a tax cutting, tax reforming budget for jobs"
on March 19th, and that money spent on construction projects would only be a
"short term palliative".
That is the Chancellor's solution.
Most people appreciate a tax reduction, but where the choice is one between a big tax handout or an investment in the infrastructure at this time of economic and social uncertainty it would be at best foolish and at worst wicked to hand out the money. That has been tried before, and it did not work. My Lords, £3 billion has been paid out in tax concessions since 1979, but the consequences are as I have tried to describe them. It does not seem like good house-keeping to me. I believe that the Government should get their priorities right.
I quoted the OECD report, where all the evidence is that Britain's infrastructure is in dire need of attention. Then we have the CBI and the NEDC, who strongly believe that any available funds should be invested in jobs. Let me quote to the noble Earl, Lord Gowrie, a phrase from the report of the Institute of Fiscal Studies: namely, that £1 billion spent on tax cuts reduces unemployment by 30,000 in four years, whereas £1 billion spent on capital investment in the infrastructure would reduce unemployment by 185,000 in four years.
Noble Lords: For how long?
Lord Cledwyn of Penrhos: The quotation is clear. That is the view expressed by an authoritative body, and I think the Government ought to take account of it. We believe that that is the choice that the Government have to make: either tax cuts or investment in the infrastructure. The study on the infrastructure which was handed to the Chancellor on 9th January says—and, after all, the NEDC was set up to advise the Government—that there is a huge backlog of maintenance and renewal to be done on roads, on bridges, on water mains, on sewers, on housing and so on: and, make no mistake about it, these are absolutely vital to the future prosperity of Britain; there is no argument about that.
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We do not ask a great deal in this debate. We are pleading with the Government to be resilient. They could spend much more on these essential projects without sacrificing a great deal. Expenditure on capital programmes has not been greatly inflationary in the past, and need not be this time. Yesterday's White Paper, I found, was essentially depressing. This afternoon I appeal to noble Lords opposite who are members of the Cabinet—there are four in this House—to exercise their influence when these matters come up for decision in the Cabinet. It would help towards the kind of consensus which the right reverend Prelate the Bishop of Birmingham advocated.
My noble friend's Motion ends with a reference to the welfare state and social responsibility. These things tend not to be fashionable in these days, but they are vital to millions of people. My noble friend Lord Underhill is proposing to deal with these issues when he comes to wind up the debate this evening.
For all the reasons I have given there is a most urgent need to change course; to be resilient in tackling the crisis; to be prepared to listen to more than one opinion. We are asking the Government to heed the CBI and the NEDC, the private construction sector of industry and some of their own senior statesmen. The right reverend Prelate quoted Disraeli, and I shall do the same. He said:
"Finality is not the language of politics".
The tradition of politics in Britain is resilience; to aim for consensus, to get people to work together; in fact, in the words of the Conservative manifesto, "to unite the nation"—something they have signally failed to do. They have three years or so in which to find new solutions. We appeal to them to do so; and I most earnestly invite the House to support my noble friend's Motion.
[Interruption.]
4.48 p.m.
The Earl of Stockton: My Lords, I hope it will not be thought impertinent of me as a very new boy in your Lordships' House to extend my congratulations to the right reverend Prelate the Bishop of Birmingham. I have recently passed through the ordeal of making a maiden speech and I know how pleased he must be to have got over that hurdle. He can certainly feel happy that both in matter and in manner he has made a most distinguished contribution to our debate.
We have in this Motion drawn in very wide if somewhat Pecksniffian terms a range of subjects which would allow one to talk about almost any social or economic question. I propose in a short time today to refer mainly to matters which are most in our minds—unemployment and industrial revival. We have been through all this before. Sixty-three years ago I went to Stockton-on-Tees to stand for Parliament. The unemployment figure was then 29 per cent. Last November I went there to a party of my friends—the unemployment is 28 per cent. That is a rather sad end to one's life, but that is what has happened.
Whatever my noble friend, who spoke so admirably in the best defence of the Government I have ever heard made, may say about the standard of consumption in those areas which are suffering from I this terrible unemployment, that is largely because 60

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years ago the unemployed were kept on a Poor Law basis. Happily, they are now treated with much greater liberality. Nevertheless, the facts remain and the wheel has come full circle.
After the First World War the economic recession struck the world. That was four years after that war—in 1922. It lasted until rearmament and the Second World War. The problem was never solved—let us be frank about it. Everybody had all kinds of different views, which are now repeated today. Some of them objected—and I think rightly—to the return to the gold standard and the parity of the pound at 4 dollars 86 cents. I believe that the return to gold was a good idea, but not at that parity.
That development was forced upon the Government of the day—rather against the willingness of the Chancellor of the Exchequer, Winston Churchill—by the whole financial establishment; the bankers, the Bank of England, what are called the experts, and the writers in financial papers—all those great world commentators who always know what is best but happily forget later what it was that they recommended.
Then there was the same argument about expansionism or restrictionism. One of my oldest and dearest friends, Lord Keynes, represented—although not in the way he is now supposed to have done, but in a moderate form—an expansionist policy. That policy was opposed by the Government. One can almost hear the same phrases today in another place and in your Lordships' House that one heard 50 years ago.
After the Second World War, happily, a great industrial reaction did not take place. I rather expected it—I believe that many of us expected it. That it did not was perhaps because the Korean war gave a boost to the economies of Europe, or perhaps it was because of the generous act of Marshall Aid that allowed the nations of Europe to buy what products they needed from Britain. Anyway, that reaction did not come. We all said how clever we had been in avoiding that unemployment—we all did that. But when it goes against us, it is of course the inevitable forces of world powers, and so on. But it was all right then.
Ten years ago, it went wrong—not only here but all over Europe and throughout the capitalist world. Was it because of the sudden rise in the price of oil, which enormously increased the costs of manufacturing—with terrible results for the third world, which found it impossible to buy what it needed or to sell its own exports of raw materials? We do not know.
It is interesting to see how exactly the same arguments have been reproduced and the kind of action that has been taken. When this change struck the Labour Government, in the first case, they naturally followed what I believe are called neo-Keynesian policies; that is to say, permitting a reasonable amount of reflation—putting money into the infrastructure and all the rest of it. In having to put so much more money into the system, the Labour Government had to invent a restrictive policy of restraint on wages and on prices, to try to prevent this money from producing impossible inflation. They
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were not successful. As we know well, price policies and wage control policies do not succeed; they just create a great dam which, when it bursts, creates something worse than existed before. When that Labour Government went out of office matters had become very bad. The pound had declined to some terrible figure—to two dollars or something of that order. At any rate, it was a very low figure, and the Government were driven out of office.
Next, the Conservative Government came to power and they revived the restrictionist system, which meant cutting off all possible expenditure, raising bank rate to 18 per cent. interest by way of encouraging manufacturers, I believe, and then gradually—and one must give them this great credit—sacrificing almost everything to perhaps the first need (I am not saying it was not) of stopping runaway inflation, which would have ruined us and destroyed the whole social structure of our people. That is what they have done, but it has been at a very high cost. And now the argument goes on—backwards and forwards.
May I ask your Lordships—and I shall venture to keep the House for only a few minutes more—to consider another country which had the same problems; a country whose people are very similar to us and from whom I am proud to claim that I am half-descended. I mean by that, the United States of America and the American people. Four or five years ago, when the rather depressing reign of President Carter came to an end, the Americans were very much in the position that we are in now. Their economy was depressed. Unemployment was very high—terribly high. It stood at one person in eight. The economy was falling and there seemed to be not much hope.
Then President Reagan did a very wise thing—he dismissed all the academic economists in Washington. President Reagan said to himself, "This is absurd—let us look at the realities. Let us not talk about juggling with money but let us consider the realities of the creation of wealth". That is what we must do today. Happily for President Reagan, and unhappily for us, the monetarists were the first to be exiled. They were of course received with that courtesy with which we always receive refugees. They settled in Oxford, they settled in Cambridge, they settled in Whitehall—and it is rumoured that they even settled in Downing Street. They have done infinite harm because they have diverted our attention from what is really happening.
What is really happening is that the third industrial revolution is on its way. The first industrial revolution was based on coal and steam and brought great strength to the 19th century—with all its weaknesses as well. The second industrial revolution began at the end of the last century, when we changed from coal and steam to oil and the internal combustion engine; to the motor-car, the aeroplane, and the container ship. That was a complete revolution, affecting all forms of production and transport.
I was interested to ear my noble friend quote Mr. Gladstone's words to the effect that one of the chief objectives of government was to reduce taxation in order to allow the money to fructify in the pockets of the people. I am not surprised at that; I have long realised that the great figures in my old party have long I ago given up Toryism and have adopted Manchester

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Liberalism of about 1860. Apart from that, all this is completely out of date.
What have the Americans done? They have tackled the problem at its best. They have been the protagonists in invention, in development and in exploitation of the new technologies. They have done that on an immense scale. What is interesting is that, at the same time as all that is going on, they have reduced unemployment by means of the new wealth created. They have made 5 million new jobs altogether. The old plants do not employ more people. General Motors do not employ more people. Of course not. They employ fewer people because they have largely gone automatic. It is the new plant, the new methods and all that goes to build them, the new wealth built round them and the new service industries that have sprung up round them. Nor is this only in the field of atomic physics. Extraordinary biological developments are also going on which will revolutionise the whole structure of the world. And we are somehow out of it.
Of course, many of our leading, able industrialists are taking a full part, but not most of them. They are hardly conscious of it. We speak about the depressed areas, the north-east coast, shipbuilding, iron and steel and coal. Will they ever come back? No. That kind of shipbuilding is finished. It will in future be the container ship, with which we were so slow to press forward and which our harbours foolishly, in most cases, reject.
I ask your Lordships to reflect for one moment. Let us suppose that, by the wave of a magic wand, in one night all our plants and industrial production could be brought up to the level of the best. What would be the result? Another 1 million unemployed? I would say another 2 million unemployed. The industries would all become capital intensive and would all employ less labour. There is only one hope. Either we can sit by and do nothing, when we shall become just an obsolete country which is a nice place for tourists, but obsolete, or we must take part—a leading part—in what is happening and cannot be altered. The first industrial revolution was not brought about by governments, it just happened. It had terrible and harsh results when it took the loom and the wool from the cottage and put people into factories. There were terrible results when, under the aegis of men who were good Christian men but dominated by dogma and who allowed no interference by government, children worked for 12 hours in the factories or 12 hours underground. There were bad results, but in the long run, by the end of the century, this was the simple test: real wages and salaries had doubled and, in many cases, trebled. In other words, the standard of living of the mass of people was enormously improved.
The second industrial revolution, aided by two wars, had similar dramatic effects and the third, which is bound to come, is creeping forward. One question is: are we to be in it or to wait until we fall behind? My noble friend, who made such an admirable defence of the Government, spoke of some of the good signs. Exports have increased by some percentage in the past few months. Of course, if you halve the value of your money, you ought to be able to export. I am not very much impressed by that. More seriously, this industrial revolution is going to happen and the question is whether we are going to be in it.
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I think we can learn quite a lot from the United States. I was amazed when I was there some four or five years ago, at the end of the last Presidency, to find that this bouyant people were defeatist, had lost heart and hardly believed in themselves. They were very self-critical and were allowing themselves to be knocked about. Now their natural bouyancy and determination to press forward with what is new and created has taken control. We are told that they have too much debt and that they spend too much money. How can you have production unless you borrow the money to produce? I do not believe in the theory that you must first produce and then borrow the money. That is not what my grandfather did. He borrowed the money and then produced.
Anyway, on this new theory that has somehow gripped us that we ought to be afraid of things instead of pursuing them with all the energy we can, the monetarists have left us only one alleviation of their austere regime. They have invented the one new law that there is no difference between capital and income. Under this law, apparently, you can spend all your capital on current account. In the old days we had above and below the line. This new law is of great help because it at least gives us some alleviation from a very rigid rule. Of course, it may apply to governments but I am not sufficiently well up to know. It certainly applies to individuals. Some of the nicest fellows I have known in my life have experienced this confusion between capital and income, but they usually ended up in rather dreary lodging houses.
This is now the test. Let us stop these futile, purely theoretical, academic and economic arguments. Let us get back to the reality; the reality as it happens before our eyes, is happening all over the world. Incredibly, it is happening even in countries like Taiwan and North and South Korea. One can see more modern forms of industrial production there than one can see in England. It is happening, and it must happen here. We must not be the slowest ship in the convoy. We must be the leader of the convoy or, at any rate, make an attempt to regain the leadership we have had for so long.
It is for the next generation—it will not be for me but for my successors—to make the decision. Should we just slowly and majestically sink—not perhaps drastically or tragically but go slowly down like a great ship—or shall we make a new determined and united effort, putting, as far as we can, party aside? There must be parties, of course, but there can be co-operation and even national governments. Let us do the latter and then historians of the future will not describe the ending of this century as the beginning of the decline and fall of Britain but as the beginning of a new and glorious renaissance.
5.8 p.m.
Lord Taylor of Gryfe: My Lords, I am sure Members of your Lordships' House will bear with me in the difficulty of following a star performer. My first duty is, however, to congratulate the right reverend Prelate the Bishop of Birmingham on his maiden speech. As has been said, a maiden speech is an ordeal at the best of times, but in the special circumstances of this afternoon, it requires a degree of courage—a quality which the right reverend Prelate has never

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lacked in his distinguished career. I am happy to hear that he will make regular visits to your Lordships' House and give us the benefit of his wisdom and experience, although we cannot guarantee the same large audience that he has enjoyed today.
As Social Democrats and as members of the Alliance, we support the terms of this Motion. But, while we are not questioning the honest intentions of the noble Lord, Lord Beswick, we must question whether he represents the authentic voice of the Labour Party. His reasonable speech this afternoon is very far from the strident pronouncements of the Labour Party annual conference and hardly in keeping with the deep intolerance witnessed regularly on our TV screens which is practised by his militant allies and which has driven so many good people and good democrats out of the party to which he now belongs.
I was impressed, as I always am, with the lucidity and conviction of the noble Earl, Lord Gowrie. He speaks well, he speaks logically and he speaks with conviction, but I sometimes wonder whether he is living in the same world as I am. It is easy to rhyme off economic statistics; but, if one lives in Glasgow where I live, where one in three in unemployed, it is difficult to match statistics proving the success of the strategy with the events that I see in my daily life. While I admire the noble Earl, Lord Gowrie, I wonder whether sometimes in his quieter moments he sits down and asks himself, "Is it really working?". While the statistics that have been quoted are impressive, I am not sure that in the great cities like Glasgow, Liverpool and Birmingham the evidence that the economic strategy is working is apparent.
The Minister's was a good speech; but, if I may say so, the quality of the debate cannot be measured simply in terms of economic statistics. I thought that the right reverend Prelate was right when he said that this debate is about spiritual and moral values, the most reverend Primate the Archbishop of Canterbury, in a recent interview in The Times, said:
"I believe that people one day will wake up and see that this is not a decent sort of society in which we live".
The Motion raises fundamental questions about the nature of our society. It demands social policies that unite the nation. It seeks to encourage social responsibility. Perhaps the noble Lord, Lord Beswick (who I regret is not in his place) should direct his trade-union friends, as well as the Government, to that phrase about "social responsibility rather that self-interest".
Last weekend Dr. David Owen gave an interview in the Observer under the heading, "I am afraid for Britain", and there must be many in this House who share his anxieties. In the past few years we have witnessed a tragic decline in and a loss of respect for the values on which our democratic society depends. Democracy depends on a high degree of consent to and acceptance of certain principles held in common, such as respect for law and order and protection of the right of minorities. It cannot survive in a nation which is deeply divided on those fundamental matters. It requires the acceptance of the Christian principle that in our community we are members of one another.
That view is sadly at odds with the values that are presently encouraged by the two major parties in this
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country. The present Government exacerbate rather than alleviate conflict and equate consensus with weakness. The boast of the Prime Minister—and I quote—"I am no softie", is not the voice of the healing influence which our society requires. Equally, the intolerant militancy of the Labour Party has no relevance in achieving the national unity which the noble Lord's Motion demands.
Let us examine for a moment the main areas of tension. First, a democratic society must be seen to be fair in the election of its government. However, the electoral system of this country provides 61 per cent, of the seats in the House of Commons for only 42 per cent, of the votes—those who supported the Conservatives. Thirty two per cent. of the seats are held by Labour on 27 per cent. of the votes cast. The Alliance, with 25 per cent. of the votes cast, is given only 3.5 per cent. of the seats in the House of Commons. That is manifestly unfair.
It is difficult to reconcile our democratic pretensions with the fact that many of our citizens are denied the political representation which their votes would justify—yet the two major political parties in this country conspire to prevent our voice being heard. They have good reason to be afraid. In the seven by-elections since the General Election, 37 per cent. of the voters supported the Alliance; against that, 35 per cent. supported the Government and only 27 per cent. supported the Official Opposition.
I welcome the concern which has been expressed in all parts of the House about unemployment. How can we talk to people about observing social responsibilities—which means responsibility to society—when society has rejected them and made them feel unwanted? How can we defend a system in which more that 3 million of our fellow citizens are anxious to work yet, with so many things crying out to be done in our society in housing, building, new schools and hospitals, they have to stand idly by? That is totally indefensible.
An experience as a young man haunts me in these days. I lived in Germany as a young student in the 1930s. There were 8 million unemployed people in Germany in the period 1931–32. I can well recall the gaunt faces of men without jobs and without hope. Since Weimar democracy offered them nothing, they became desperate and sought desperate solutions. They became the victims of the demagogy of Fascism and Communism, and the world has paid a heavy price in the events that followed. If democracy is to survive in our country, it must be seen to be really caring about unemployment and must give people hope.
The other area of tension which commands our attention is industrial relations. Here again, the two major parties make no relevant contribution. We have the experience of GCHQ, with the lack of consultation. The appalling practice of bribing employees by paying them £1,000 each to leave their trade union is degrading. The appointment of Mr. MacGregor as chairman of the National Coal Board, whatever other qualifications he may have, revealed a serious insensitivity to the special circumstances of that industry. Whatever was intended by these events, they have created an atmosphere of confrontation.

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They have driven moderate and responsible trade union leaders into an indefensible position in the TUC. When they were seeking to build bridges, the Government slammed the door and provided a gift to the militants.
Having said that, we must confess that the trade unions themselves cannot escape some responsibility for our industrial decline. Some of them resist technological change on the false assumption that it is protecting their members' jobs. They are frequently prisoners of their class war traditions. Enlightened trade unionism in the German, American or Scandinavian model is required as an essential element to create more wealth. As has been so rightly said by the noble Earl, Lord Gowrie, and also by the noble Baroness, Lady Seear, unless we produce more wealth we shall not be able to finance the social services which we are now demanding.
Not all trade unionists are bloody-minded, but it is easy to understand resentment when they see a great British company collapsing with the loss of 50,000 jobs—men and women who have been declared redundant in the last decade—while four directors who had boardroom responsibility for the company departed with £750,000 between them.
To get Britain going again requires a new spirit of co-operation and understanding in industry, and both employers and workers will need to work hard to achieve this. It will not be done by legislation. It will be done in the boardrooms and on the shop floor. As has been said throughout this debate, unemployment is the great scourge in our society. All of us admit that this problem is not easily solved. Some of my other colleagues on these Benches will expand later in this debate on our proposals for investment without inflation.
I said at the beginning that this Motion raises important questions about the nature of our society. If we are to create the good society it must be based on an accepted sense of fairness. While we in our party support diversity in education, it is unacceptable that a minority should be able to buy privilege in education which almost guarantees their protection from the dole queue. Equal opportunities to reach high standards of education should be available as a right to all our young people.
We must treasure the health service but work hard to make it more efficient. Decent standards of health care should be available to all our citizens who need it. It will be sad in Britain if good standards can be purchased only if you have the money. I quoted St. Paul earlier and I return to his gospel. I recall his commandment:
"Bear ye one another's burdens and so fulfil the laws of Christ".
I believe that this must surely be the text to guide us in accepting our responsibilities for strengthening our social services.
We believe that if our people expect these things we should share a responsibility in making a contribution to society. There is an urgent, crying-out need for reviewing the opportunities for voluntary service in our society. The response to the Ethiopian appeal demonstrated that there is much good among the British people; it is not all violence and picket-lines. Yet there seems to be a lack of moral leadership which
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can stimulate the necessary activity and dynamism through voluntary service.
Before we witness any further erosion of the democratic principle, which we cherish and for which men and women have died, let us face the challenge of this Motion and confess that the new direction cannot be given by two tired old political parties. Our people in this country, if you listen to them, are tired of their squabbling and their ideological games while our country declines. I believe there is a great reservoir of goodwill among the British people waiting to be tapped. It requires a new force. Once again, in the words of the most reverend Primate the Archbishop of Canterbury,
"We need leadership in our national life which will unite us and not divide the nation".
If we do not get this, I believe, with David Owen, that we are right to be seriously concerned about the future of our country.
5.27 p.m.
Lord Roll of Ipsden: My Lords, may I begin by adding my tribute to the right reverend Prelate the Bishop of Birmingham on his maiden speech on an occasion which is clearly far from free of contention. He has managed very skilfully to preserve the tradition of an uncontroversial maiden speech but without loss of substance or eloquence. I am sure we look forward to many more of his contributions.
Whatever views we may take of the causes of our present discontents or of the appropriate remedies, I am sure we can all unite in thanking the noble Lord, Lord Beswick, for having given us the occasion, so early in the new year, to debate matters of grave concern not only for our economic prosperity but also for the health of our society. I cannot but agree that the signs of division are too clear to be ignored: division economically between the employed and the unemployed; division regionally between the relatively prosperous South and the depressed North and the inevitable consequences in the social sphere which are much more difficult to identify and to quantify but which in the long run are surely just as evil if not more so. There is another division which has not yet been referred to. That is division within families. There is enough prima facie evidence in recent research to show that this is yet another consequence of persistent unemployment.
As the noble Earl, Lord Stockton, has said, the progress of social security in the last 40 years has enabled us to escape the worst physical manifestations of the last great era of unemployment, the 'thirties We have not had hunger marchers descending on London. However, I fear that the social and psychological consequences, including the division within families to which I have referred, reproduce some of the uglier features of the 'thirties and I fear they will leave scars for many years to come.
I do not want to dilate on this aspect of the Motion, because I am sure many more noble Lords will wish to speak in it. I want rather to say something about the second half of the Motion; namely, about the economic policy to which the present situation points. Here let me say at once that I have no intention to engage in controversy about this or that act of the

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Government, this or that omission of action on the part of the Government, or indeed about the dramatic events of the last week or so. I have for long enough been reasonably close to the places at which decisions are taken to be as aware as any noble Lord can be of how difficult these matters are and how great are the pitfalls in economic policy.
I want rather to say something on the basic approach to economic policy, for unless this is corrected it is very unlikely that specific measures will produce the desired result. I hope very much that in what I am about to say on this point I shall have the agreement of the noble Earl, Lord Stockton, under whom I had the honour to serve on a number of important occasions. Here I am afraid I have to say, despite the warning of the noble Earl, Lord Gowrie, that I do feel some considerable concern about the doctrinal rigidity which seems to have become fashionable. This is in respect of an area of political action, the economic action, where it seems to me to be particularly unsuitable. Economics, despite its long history and creditable achievements, is not a science—and perhaps never will be—precise enough to provide a set of rigid prescriptions for specific action valid in all circumstances.
We are told nowadays, on very high authority, that macro-economic policy can do nothing about the level of economic activity and employment and that this can only be improved by micro-economic policies. If micro-economic policies include training schemes and measures to improve the mobility of labour, both geographically and occupationally, then of course I welcome them most wholeheartedly. But to believe that these alone can cope with the massive unemployment problem of today is surely fanciful. What is more important, to believe that macro-economic policy—by which I suppose is meant fiscal and monetary policy—has nothing to do with the level of activity, with growth and employment, is not only to ignore the results of economic analysis but it is to fly in the face of our own recent experience.
Curiously, taxation seems now to be included in micro-economic policy, leading to the proposition that tax cuts, as preached by the so-called supply siders in the United States, are endowed with an especially stimulating potency. Well, I am not against tax cuts at appropriate times. But what is claimed for them is surely far from certain. Can it really be contended that cuts in taxation in 1979 and 1980 which, I hasten to say, were entirely justified, and indeed belated corrections of failures by previous Administrations, have had such a stimulating effect on growth and employment that we now have 3·5 million unemployed? What is more important, can it be contended that the other element of macro-economic policy—namely, a restrictive monetary policy relying primarily on interest rates—had nothing to do with the subsequent decline in the level of economic activity and employment?
As I ventured to say in a debate in your Lordships' House as long as four and a half years ago, the trouble with interest rates, so to speak, is that they hit the guilty and innocent alike. Plans, projects and enterprises that appear perfectly rational and full of promise of profit at one level, or expected level, of
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interest rates, very quickly turn uneconomic and invalid at a higher level. And what about the consequent appreciation of the currency brought about by an influx of foreign funds in search of high yields? Do they not have disadvantageous consequences for our international competitiveness?
On the occasion of the same debate four and a half years ago, I had just come back from Australia. I had to report to your Lordships that one distributor of British motor cars told me that with an appreciation of sterling of 40 per cent. effectively—it went even higher after that—he could not sell a single British car. We hear a great deal about wages and international competitiveness. Of course, wages are a very important, though by no means the only element in unit labour cost. And, of course, unit labour cost is a very important, though by no means the only, element in international competitiveness. But what decline in unit labour cost and in wages would have been required to offset the blow to our international competitiveness caused by the appreciation of sterling in those years? Enterprises abandoned through being made uneconomic by high interest rates are not easily revived. And foreign markets lost through a sudden appreciation of sterling are very difficult to regain.
We are often told that we should look at the policy of the United States, particularly, since in the last two years or so, the American economy, as the noble Earl, Lord Stockton, says, has shown such substantial growth. Unemployment has declined—somewhat, at any rate—and the inflation rate has also been brought down. But is it really certain that these results have been brought about only by the tax cuts of the Reagan Administration? Or are they the result of the whole complex of a liberal—indeed, an all-too-liberal—fiscal policy both on the revenue and on the expenditure side, combined with a monetary policy that is only restrictive enough to prevent the worst inflationary consequences without killing off the stimulating effect of the fiscal policy? As the noble Earl, Lord Stockton, told us in his memorable maiden speech, is not this whole policy, with its huge budget deficit and its huge deficit on the balance of payments on current account, sustained by an enormous influx of funds from all over the world, including this country, and, incidentally, leading to the apparent paradox of a very strong currency?
The other country to which we are often referred as an example is Japan, a country that I have visited very frequently in the last 27 years. Indeed, I only returned from there last weekend. Let us look at Japanese policy. Japan has a very large budget deficit indeed. Japan has a marginal rate of personal taxation among the highest—perhaps it is the highest—in the developed world. I am not saying that we should imitate her in those two respects. I am saying, however, that these two factors do not seem to have militated against remarkable economic progress with unemployment and inflation hardly in existence. This is not doubt at least partly due to Japan's highly successful employment and incomes policy. Whatever may be the place for those policies in this country, they have certainly enabled Japan also to achieve a very remarkable improvement in her standard of living. Incidentally, this is, alas, an aspect of which we cannot be very proud when we read in the latest OECD report

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that, among the countries in the developed world, we stand in thirteenth place in that respect. It can also be argued, and, indeed, has been cogently argued, by a distinguished Japanese economist, that one of the most important factors—perhaps the single most important factor—in Japan's success, from the very earliest post-war days, has been a very carefully managed exchange rate policy.
This brings me to my final point—the role of sterling and the European monetary system. There may have been at least plausible arguments in the early stages for our hesitation over becoming full members. I confess that I have never been fully convinced. Indeed, I have always thought that the resistance was primarily due to a deep-seated prejudice against the whole European venture and arose from a sort of residual fear that we might lose yet another important aspect of economic sovereignty. I must confess that I have not seen much evidence of sovereignty in the recent development of the sterling exchange rate. At any rate, we have come a long way since. There was evidence already four and a half years ago that the system was stable and that it has conferred benefits on its members. That evidence has accumulated considerably since.
Your Lordship's House debated this matter a little over a year ago on the basis of a report from the Select Committee on the European Community. That report was prepared by a most distinguished group chaired by my noble friend Lord O'Brien of Lothbury—a guarantee, if he will allow me to say so, that profound and expert knowledge would be applied to this problem with thoroughness and objectivity. That report came to a generally favourable conclusion on our membership. When debated here, many, if not most, of your Lordships spoke in the same sense. Yet the Government, I am afraid, have done nothing.
We have now been told by the noble Earl, Lord Gowrie, in a recent answer to a question, and again today, that the reason is that sterling is now a petrocurrency. Frankly, I have no idea what that is meant to be. I suppose at one time one could have called us a Scotch whisky currency; the French franc a champagne and perfume currency; the D-mark a Mercedes and machine tool currency, and so on. If, by-this, is meant that the price of oil, or the expected price of oil, is the main influence on the rate of sterling, I claim that that is, at best, a gross oversimplification. Surely, the high appreciation of sterling in 1979 and 1980 was due much more to the high rates of interest prevailing in this country that produced an influx of money in search of high yields than to anything else. At any rate, no one has yet demonstrated convincingly why the influence of the price of oil on sterling argues against, rather than for, membership of the EMS. No, when the noble Earl, Lord Gowrie, speaks on this matter, what I hear is St. Augustine praying to the Lord to give him chastity and continence, but not yet. I think it is high time that St. Augustine's prayer was answered.
I do not say that the Government should replace one set of doctrines with another. By no means! What I am saying is that exchange rate policy, interest rate policy, the precise balance between taxation and expenditure on public capital investment and all the other paraphernalia of economic policy, including the attitude to, and methods of, wage settlements are not matters suitable to be elevated to points of dogma.
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The countries which are held up to us as examples of successful economic policy pursue all sorts of different mixtures of policy, and none of them at all like ours. So I am afraid that what is extolled as the only practical expression of economic wisdom is hardly to be found anywhere else. I beg the noble Earl the Minister and the noble Viscount the Leader of the House to urge upon their colleagues not to be bound by self-imposed doctrinal shackles, which in my view are quite wrongly equated with high principle, but to pursue policies which are appropriate to the circumstances in which we find ourselves.
5.41 p.m.
Lord Monkswell: My Lords, you may be aware that there are two types of maiden. There is the English version, which is the sweet young thing you want to embrace, and there is the Scottish version, which embraces you with daggers. Earlier we heard the approved English version. I sincerely hope that my contribution this afternoon will not be the Scottish version.
I must first of all declare an interest, a vested interest, in this debate. I am one of those fortunate people who work for my living; I have a job. In the way that most people understand the phrase, I am an employee, subject to the risk of unemployment in the way that millions of my fellow citizens are subject to the risk today. This is a debate about unity of the British people, about unemployment, and about pride in our public provision for public need. I am under strict instructions, as your Lordships will be aware, to be non-controversial, and for that reason I hope to stick to the facts of the situation as I see it. We must face these facts.
There are many divisions which affect us as a nation. The noble Earl, Lord Stockton, revealed a fairly shattering division. I should like to say that I was brought up as a Socialist, believing two things about the Tory Party. One was that its policies were always wrong and the other was that it was totally united. My illusions are shattered today because the noble Earl, Lord Stockton, has revealed to me, in very glowing terms, that the Tory Party is in fact terribly divided; and it is rather a shattering event for me to appreciate.
If we look at these divisions we may say, "Well, they may help the Government to govern us more easily, but in reality they weaken the fabric of our society". What dark forces have been unleashed to cause the divisions between North and South, between rich and poor, between the Irish and the English, and what wickedness has caused the division between the men of Yorkshire and the men of Nottinghamshire? One of the saddest divisions there is today is that between central and local government in those areas of our country where the need is greatest for more employment, for better housing, for better education, for better services for our frail and our elderly, where local voters elect councils to promote employment, to build houses, to educate children, to improve education, to improve the services and defend the services for our frail and elderly. They suffer financial penalties. They are forced by central Government diktat to cut the provision of services or are ultimately threatened with abolition.

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Another division is that between the employed and the unemployed. But in reality—and I hope to explain this to noble Lords—that division is a false division. Unemployment affects us in two ways—as individuals and as a community. As individuals, it starts with fear—fear of unemployment, fear of the sack. It might be called rationalisation, redundancy, early retirement; these are fancy names, but they mean the same thing—you lose your job. That fear can sap the strength of the bravest man in our country.
Then comes short-time working—that limbo state. Even if you are paid full wages, you sit at home doing nothing and you begin to wonder, "Am I going mad, or has the world about me gone mad?" It is at this stage that the happily married man will snap at his wife and children. The contented, hard-working employee will become disenchanted with his employer, will look elsewhere and lose interest in his job. You feel unwanted.
The next stage is when you are out of a job. Now you know that nobody wants you. You join the millions of others on the dole: the lucky ones. Well, they are not really lucky. They may have some redundancy money—sometimes more money than they have ever seen in their hands at any one time. But that will soon go. Then the real reductions in living standards start. People do not eat so well. They are worse clothed. They are cold. The psychological hurt goes on and on. They have more illness, and they die.
I wonder what the Government would say to the parents of the 18-year-old young man who has never had a job since leaving school at 16 and goes for a walk on the motorway; or what the Government would say to the widow of the 4 5-year-old man who is made redundant and sees absolutely no future for himself and his family; he parks his car in the garage, leaves the engine running, and is found the next morning. Would they say, "Sorry, there is no alternative?"
Unemployment also affects us all in a very direct way by reducing our standard of living. Some people think that what we have is rather like a pie or a cake, to be shared out: we will give some people more and other people will have less. But only people like Marie Antoinette can think of employment as a cake to be shared; and we remember what happened to her. In this country and in the world at large the goods and services which make up our material living standards are produced by human effort. If we have 10 per cent. of our population not working it means there are 10 per cent. fewer goods and services available to us all. We are all 10 per cent. worse off. We have only got to look around us to see that there is no end of work to be done which can benefit us all. Much of that work has been referred to previously: repairing the roads; repairing and rebuilding the sewers. I would go further and say that we need to build and rebuild whole industries.
It may be asked, "But is there the public will to embark upon such a programme to cut unemployment rather than to try and cut taxes for the better off?" For years now we have had disputes in industry about redundancy and loss of jobs. Some have involved large numbers of employees—indeed, thousands. But in the main they have been unsuccessful largely, I suggest, because of the will of
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those employees. But now we have a dispute in the coal industry where over 100,000 men have endured sacrifice and personal hardship for almost a year—and their families have also faced that hardship—to demonstrate their opposition to unemployment. They are not alone.
Yes, my Lords, I believe that there is a will in this country to embark united upon a crusade to reduce unemployment and to restore our pride in the public provision of service for the community—to rebuild roads and sewers; to build houses fit for British people to live in; to heal the sick; to take care of our frail and elderly; and to educate our children. My Lords, I beg your support for this Motion.
5.52 p.m.
Lord Boyd-Carpenter: My Lords, it is now my very pleasant duty on behalf of your Lordships to congratulate the noble Lord, Lord Monkswell, on the extremely impressive and moving maiden speech which he has made to us. From this side of the House it is particularly agreeable to see that the noble Lord came to address us this afternoon within 24 hours of joining us. It is reassuring to see so obviously loyal a member of the Labour Party feeling so great a concern and interest in this House. We all find it very reassuring. As regards what the noble Lord said about the personal tragedy of unemployment, I think he expressed what certainly I feel and what I think most of us feel: the humiliation, the feeling of being unwanted, which, given the present standard of social services, is in fact far the worst aspect of this curse.
Let me also, for reasons that he will appreciate, say how glad I was to hear the speech of the right reverend Prelate the Bishop of Birmingham. He will recall that he and I had a somewhat noisy controversy some years ago on the appropriate subject of Concorde. I am very happy to see in this House, and addressing us, so doughty and effective an adversary as I encountered in the person of the then Bishop Suffragan of Kingston. Perhaps the right reverend Prelate will recall that that matter concluded with the very entertaining words of his then superior officer, that great man Dr. Stockwood, then Bishop of Southwark, who as I understand it greeted the right reverend Prelate on his arrival for some service with the words, "Hello, Hugh. I gather you are neither a giver of peace nor lover of Concorde"! We certainly hope to hear the right reverend Prelate many times in this House.
Throughout this debate both sides of the House have called each other doctrinaire, and those on the Liberal and SDP Benches have called both sides of the House doctrinaire. As I understand it, "doctrinaire" is a term you use when someone advocates a policy with which you happen to disagree. If you happen to agree with the policy, it is all right. The other theme of the debate—going back to the original Motion and the admirable speech of the noble Lord, Lord Beswick—is the desire to "unite the nation". That is the type of emotional phrase which rings deeply in people's hearts—"How nice it would be if we could all agree"! But, my Lords, on what? Surely what is far more important than agreement on policy is that the policy itself should be right.
We are dealing, as my noble friend Lord Stockton said in his immensely impressive speech a few minutes

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ago, with the affairs of a great country at a very crucial time of its history. I suggest to your Lordships that it would be quite wrong to seek unity and all the goodwill that goes with it at the cost of not pursuing the policies which you are convinced are right and in the interests of the country. It is surely the duty of the British Government not to run about looking to see what type of policy would be generally popular—that is easy enough—but to pursue a policy through to the end which brings success to the country and which therefore enables them, in the words of the poet,
"To scatter plenty o'er a smiling land, And read their story in a nation's eyes".
As I say, so many good people adopt the attitude of "Let's get unity". I thought that it was best dealt with, as your Lordships may remember, by the late Ernest Bevin in words which he addressed about his then leader, George Lansbury. He said:
"The trouble about George is that he is always allowing his bleeding heart to run away with his bloody head"!
Your Lordships will forgive the adjectives. Those of your Lordships who knew that great man Mr. Bevin will appreciate that that was his method of speech. Surely what lies behind this debate is not whether you can get unity—I am sure that any of us could devise a policy which would do that—but whether you can get a policy which will do right and which will lead us, in the words of my noble friend Lord Stockton, into the third industrial revolution.
The two runners seem to be reductions in taxation or increases in public spending. But I must take issue with the noble Lord, Lord Cledwyn of Penrhos, when he said almost as an aside that this high and tragic level of unemployment was the result of the policy of Her Majesty's Government. The noble Lord knows that that is not so. He knows that quite different policies in other countries have equally caused their Governments to preside over distressingly high levels of unemployment. It really only obscures counsel and obscures a proper analysis of our problems to say, "Oh, it was caused by the policy of the Government".
Lord Cledwyn of Penrhos: My Lords, I am much obliged to the noble Lord for giving way. I made it quite plain that the international recession was a contributory factor. I did not blame it all on the Government.
Lord Boyd-Carpenter: My Lords, the noble Lord is quite right: he referred to the international recession, but he used the phrase that unemployment was caused by the policy of the Government. If the noble Lord will look at Hansard tomorrow he will see that that is what he said. I take it from the noble Lord's intervention that he now withdraws that observation?
Lord Cledwyn of Penrhos: No, my Lords—
Lord Boyd-Carpenter: My Lords, if the noble Lord does not do so, then his intervention was wholly pointless and a waste of time.
Lord Cledwyn of Penrhos: My Lords, I made it perfectly clear, and I hope that the noble Lord will do me the courtesy of reading Hansard tomorrow. I said that unemployment was due to the Government's
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policies, but was also due to the international recession. Both have contributed to it; but we are dealing today with the Government and their case. That is the difference, and that is plain.
Lord Boyd-Carpenter: My Lords, it seems absolutely plain. It seems plain that the noble Lord's intervention was wholly pointless. He made the remark which I attributed to him and which I shall confirm in Hansard tomorrow, and it is simply not true. It does not help us in our consideration of this matter, any more than did his references to the coal strike.
The noble Lord knows as well as anyone—I think that he represented a mining constituency when he was in the House of Commons—that the longer this strike continues, the more consumers of coal begin to think that it is an unreliable fuel from the point of view of supply and find that they can get on without it; and the longer the strike drags on, sadly, the more the number of pits that will have to close. I hope that the noble Lord, Lord Cledwyn, will reflect on that. The noble Lord, Lord Cledwyn, spoke about a division in the country. No one can speak more effectively on division than someone who is a leading officer of the Labour Party, which on this issue—as on so many others—is split absolutely down the middle.
I turn to the question of public spending as against tax cuts. The argument against increased public spending in general is that this is an experiment which has been tried at least three times since the war and has ended in failure, in inflation and in rising unemployment. It is no good the noble Lord citing other people in another place—or, as I think he rightly said and as we should now say, in the House of Commons—when they invite us to commit the same errors of policy as they themselves committed when they had power. We really must learn from experience. High public spending as a means of dealing with economic depression has been tried again and again, and it has failed on every occasion.
What about tax cuts? I think it was the noble Lord, Lord Monkswell, from the Opposition Benches who referred to tax cuts for the rich. Such changes in direct taxation as I hope and believe are in contemplation must necessarily involve people at the lowest end of the scale by the raising of the threshold. Those are precisely the people who stand most to benefit from escape from the poverty trap, the trap which means that when you leave unemployment benefit, free of tax, and start working for a little more, your take-home pay is hardly any the greater. Surely anyone who wants to see relief given there wants to see tax cuts.
As my noble friend Lord Gowrie on the Front Bench said, the other great merit of tax cuts is that they enable people to increase their take-home pay without increasing their wages, and therefore we benefit people without increasing the labour costs of British industry. Among other things, it is the labour costs of British industry which, by making us uncompetitive in the world, have to be attended to very seriously indeed. One cannot get away from the fact that, apart from the strike, it has been economic to import coal all the way from Australia and South Africa. It is not academic to point out that shipbuilding—which 30 years ago,

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when, as Minister of Transport, I was concerned with, was our pride and joy—is now a failure. Even great British shipping lines such as P & O and Cunard now go abroad for the building or refitting of their ships. It is worth noting that, by becoming uncompetitive, a good many of our industries have added to the level of unemployment.
Therefore, it seems that the sensible approach is reductions in taxation, which help not only on the wages front but which also help to encourage investment and saving. We have here the example of the United States of America which has cut taxation. Indeed, it was pointed out the other day that the two countries which have come best through the economic recession—the United States and Japan—are the two major countries which take a smaller proportion of the national income in taxation than any other country. The noble Lord, Lord Roll of Ipsden, referred to the marginal rate in Japan; but, on the other hand, Japan takes very little more than a quarter of the national income in taxation, whereas we take nearly half; compared with our almost 50 per cent., the United States takes little more than a third. One cannot ignore these things and if we are looking for the sort of enterprise which will take us into the third industrial revolution, which will cause the great new technologies to be exploited and used, we must make those who are asked to invest in these industries believe that if they are successful they will receive and keep a reasonable return on their money.
From the way in which some noble Lords opposite talk about tax cuts one would think that we are a low-taxed country. As I have said, we are taxed much higher than the Americans or the Japanese. Our highest rate of tax on earnings is 60 per cent., and to take 60 per cent. of any part of someone's earnings, however high they may be, is in some ways confiscation. But far more important than that is the stimulus which could be given, and would be given, by a substantial reduction in taxation towards that enterprise which we so much need. The choice of course is between using the money in the way in which my noble friend on the Front Bench has already mentioned when he quoted Mr. Gladstone saying:
"allowing money to fructify in the pockets of the people",
or letting the Government invest it. I think it is a matter of fairly common experience that if that money is available for investment in private hands, it is much more likely to be invested in a profitable concern which will endure and bring returns for many years, than if it is invested by Government in, for example, the DeLorean type of enterprise.
Therefore, I come down unhesitatingly on the side of a reduction in taxation. I hope that the Government will pursue this line. I hope that they will continue in their courageous approach with policies which it is quite right to say are not easy or popular and with policies that can easily be misrepresented. I submit to this House that these are the measures which in due time will bring us through our present troubles and will lead us to the sort of state of affairs that every one of us in this House wants to see. The Government are still at a fairly early stage in a long task. I should like to
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encourage them by quoting some words of Sir Francis Walsingham nearly 400 years ago:
"There must be a beginning of any great matter, but the continuing until the end until it be thoroughly finished, leads to true glory".
6.13 p.m.
The Lord Bishop of Norwich: My Lords, although it is not our custom to continue to congratulate maiden speakers, I should like to break the rule by adding my own words of thanks to those spoken by the noble Lord, Lord Boyd-Carpenter, because I thought that the remarks of the noble Lord, Lord Monkswell—who is now moving from the Benches to the Bar (the Bar not being the place where we drink but where we stand in this ancient House)—were most interesting, and I should like him to hear my thanks. In fact, I want to rush to the care and comfort of the noble Lord, Lord Cledwyn of Penrhos, who has now moved from the Bar to the Opposition Front Bench. I want to come immediately to his support because, having listened to the exchanges across the Chamber, and, from these Benches, speaking always only in the national interest, I should like to thank the noble Lord for what he said when he made the very positive point that he believed in congratulating the Government when congratulations were in order and complaining when complaints were in order.
Some time ago I read the book by the noble Lord, Lord Home of the Hirsel, on his experience in opposition. It taught me something about how we, as bishops, play our full part in the life of this Chamber. The noble Lord wrote:
"I had declared the approach to our function as an Opposition to be to give support for the Government when they acted in the national interest and implacable opposition when they did not. That was thought by an increasing number to be weak if not wet".
I think that that was the origin of the word "wet"; it goes back to the noble Lord's book. I think it was then that the word "wet" first entered into our parliamentary language. Lord Home said:
"I thought then, and I think now, that the essence of successful opposition in Parliament is timing, and that indiscriminate bludgeoning is boring to the great majority of thoughtful electors. Nor can a clarion call to the nation be made once a week".
It is not for me even to wonder whether some of the things we have been saying to each other would be called noble nit-picking today, because that is not a very parliamentary phrase, so I shall withdraw it. But it is important for us to take the particular view of trying to see what the Government are doing, of gaining a fair and full understanding of it, and then of commenting and commending or criticising. There is a sense there of when St. Paul was writing to young Timothy to tell him his business. He said:
"I exhort therefore, that, first of all, supplications, prayers, intercessions, and giving of thanks, be made for all men; For kings, and for all that are in authority; that we may lead a quiet and peaceable life in all godliness and honesty".
There is a sense in which we need to look at Government policies in that rather positive way.
Now that we have forgotten that the lights are still on and, for all I know, that the cameras may still be rolling, may I say that when we began this adventure of inviting the nation to see us in our discussions we felt it not proper to let them see us saying our prayers. Well, some things are sacred, and that may be it; but

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to me one of the rather wonderful moments each day is when we as a House come together as one Chamber, one House, in a way one Parliament, if you like, under God. I hope that when this is discussed later it may be in some way possible, without intrusion, for us to be seen at prayer.
I remember the historical analogy. It was considered that it was not suitable for the most sacred moment of the coronation to be seen on televison. I think that is understandable, but I just make the point. I believe that is one of the things that we as bishops are meant to do: we pray for the nation, and seek to speak in the national interest where we can.
Having said that, I think there are areas of real optimism in our national life and in government policies that I should like to encourage. It all depends how you see things—optimistically or pessimistically. When, 14 years ago, I became Bishop of Norwich, the television people asked me to speak to them in Norwich via a link-up, I being in London. I spoke to a charming girl called Jane who did a lot of work for us in Norwich on television. She said to me, "You are to be the new Bishop of Norwich. You have 550 medieval churches in the wonderful and great diocese of Norwich". I said, "Yes, that is true". "But", she said, "those churches are half empty". "Well, Jane", I said, "it depends on how you look at these things. If they are half empty, they are half full. Let us fill the other half". This is the view of either optimism or pessimism.
I want, therefore, to underline three things about Government policies which I believe to be in the right direction and which I hope can be increased, strengthened and deepened. The first is so obvious that I just touch on it in passing. We have not given enough credit to the fact that in the years in which this Government have been in power they have managed to hold to the anchor of all good Government fiscal policy, which is resolutely to tackle inflation. The fact that inflation stands at the figure it does today, that the money in our pockets buys the things which are needed by us all, whether we are rich or poor, in work or out of work, is fundamental to the unity of national life; and the conquest of inflation leads, therefore, to the greatest good for the largest number, whether or not they are in employment.
Secondly, I want to underline the great net, if you like, of social security. This is only really possible through containing inflation, through the responsible payment of taxes, and through a slowly growing and buoyant industry and resolute Government policies—policies which are not necessarily popular but which I believe to be necessary if the money is to be there to care for the social security situation. It is to me an extraordinary fact that in our national financial situation we are able to put 29·5 per cent. of our total financial product towards the care of those in need in all sorts of ways—by social security as well as in national health. I do not know how this compares with other nations, but we are surely glad of this; and if 12 per cent. only goes in education and 14 per cent. only goes on defence, the Government should be encouraged in this broad compassion and caring for all in need.
I want to touch on three areas which I know about from Norfolk, because although this is not meant to be
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a constituency speech it is much easier to speak from what one knows than about what one does not know. I have not added my support for my brother Prelate of Birmingham, who made his maiden speech with such pellucid ability, artistry and the great gifts which I have recognised all through my friendship with him, because it is not customary to keep on thanking maiden speakers. But it is important for your Lordships to know that you are now listening to the Bishop of Norwich and that the Bishop of Birmingham is sitting beside him, because in the councils of the Church we are constantly taken for each other. We are different people, although we stand shoulder to shoulder at this Bench speaking in the national interest.
Perhaps I may say one word about the youth training scheme, not because it has not been mentioned a lot before but because this is something where we actually can see the thing in action and in detail. I have been most encouraged by the way in which, in the church life of Norfolk and the part of Suffolk in my diocese, we really have entered into partnership with the Government in relation to the youth training scheme and the Manpower Services Commission. This is going so well that 50 per cent. of our youngsters during training are finding jobs during their first year, and at the end of the time the proportion of those going into work, particularly some of them who are not necessarily very clever people and are rather disadvantaged, shows that this is an important task. One of my industrial missioners said to me last night, when I was seeking advice from all my various workers in the diocese, "Whatever else happens, the youth training scheme must go on as an absolutely essential offer of hope, not just to the high-flyers but to the youngsters who have not very much going for them, who are getting anxious as they leave school, and who see this as something which will really help them tremendously".
I also want to underline the importance of keeping going in the other two areas, still fairly new: the enterprise allowance scheme and the community programme. The more we can give publicity to them the more useful they will be; the more people will come to know about them, and the more they will use them.
Running through all this is the spectre of helplessness by all of us to do something practical ourselves. Let me commend to you Pastoral Support for the Unemployed by the Revd. Julian Charley, who runs Shrewsbury House in Everton. I know about this because my son-in-law and daughter are on the staff there and work among very disadvantaged youngsters in Everton. That booklet shows the Church deeply involved in a local situation, Everton, and actually finding ways and means by which they enter into the minds of those who are out of work and see how they can come alongside them in their loss of freedom, in their sense of boredom, and in their slow loss of a certain dependence on themselves, which becomes weaker and weaker.
In my last minute—and I intend to stop at 12 minutes; 12 is a good sort of biblical figure: the Apostles and all that —I want to make a plea about the supplementary benefit situation and the £4 figure, which is all the first-rate, hardworking and

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conscientious members of our community who are on supplementary benefit are allowed to gain. I know such people. I believe that if that £4 were increased to £10 it would be of immense help to people who, through no fault of their own, are not in employment and who, because they are on supplementary benefit, have to fill in forms, report to officers and have the whole of their affairs looked at in such detail. I know them, and I know that if we could move from £4 to £10 then by that gesture the Government would lift that little corner of the weight of unemployment.
6.21 p.m.
Baroness Ewart-Biggs: My Lords, like the right reverend Prelate the Bishop of Norwich, I also cannot resist congratulating the two maiden speakers and saying how much I enjoyed both their speeches and how highly relevant to this Motion I found them.
From what has already been said this afternoon there is little doubt that my noble friend's Motion touches on something very fundamental. Previous speakers have clearly indicated that its purpose is to question whether the present policies are the right ones to make the best use of the skills and energies of the people of this country to produce the goods, while at the same time, maintaining the level of social and welfare services available at a time of high technology. It would seem to many of us that the onset of modern technology must release workers' time which should in turn be channelled into providing services to ease and enrich people's lives.
Based on that premise it is inconceivable to regard provisions such as adult education, residential care for the elderly, child care facilities and so on, as a drain on the economy when the real drain comes from the millions spent on unemployment and related benefits together with the loss of tax revenues and productivity from those who are willing and able to work but who are denied the opportunity to do so. The question is whether it is really acceptable that, while hundreds and thousands of men and women are in enforced idleness, the growing number of the elderly are not being properly cared for, nor are the mentally and physically handicapped. The crisis in housing has brought the number of homeless up to an unprecedented and horrifying level.
The OECD figures, though disputed by the noble Earl today, have been published and show that Britain comes bottom of the international league table in spending on investment, construction and infrastructure. Surely in the years to come this combination of circumstances will seem irrational and inexplicable.
However, even if the Government may be content with the present situation, and certain speeches today would show that they are, there is evidence that a growing number of the public is not. Indeed, the most recent issue of Social Trends published a couple of weeks ago reveals the following:
"Even amongst those with an annual income of at least £15,000 more than half thought the gap in income between the rich and the poor was too large".
The quotation continues:
"it seems that most people are particularly unsympathetic to the view that the rich in Britain are overtaxed".
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It was also reported that 90 per cent, supported the Government in setting up construction projects to create more jobs. Surely the Government should take note of the growing awareness that we live in a divided country.
Having commented on the broad principles underlying this Motion, I should like briefly, in respect to the long list of speakers this evening, to touch on one aspect of the Motion, which is the circumstances surrounding employment for women, especially those unskilled and semi-skilled women who, even at the best of times, have only one foot on the ladder and in times of recession tend to fall off it altogether.
First, the view that women should give way to men in an overcrowded labour market must surely be seen as divisive and discriminatory and contrary to the aspirations of a united society. A recent report entitled Women and Employment, by the Office of Population Censuses and Surveys, shows that the vast majority of women working want to work, enjoy their jobs and have high financial dependence on working. But the lack of opportunity to train for certain professions was high for them.
I will give one example which some of your Lordships may think is rather inappropriate. Of the local authority direct labour operatives in the construction industry, only 0·075 per cent. of those employed are women. Some of your Lordships may say that such work may be too heavy for women. I would ask them to try picking up a heavy baby, pushing a heavy pushchair, and bringing home the family shopping, before they decide that a few piles of bricks are light in comparison.
Secondly, there can be little doubt that the phrase "care in the community" has become a euphemism for women giving up their work to stay at home to look after elderly or sick relatives—a task which seems to be accepted as almost exclusively the responsibility of women rather than men. Indeed, the employment survey showed that 13 per cent. of the women questioned were responsible for people, other than their own children, who were dependent on them for care. The sort of attention these people require is not a cup of tea now and then but often involves many hours of time-consuming work and care.
Thirdly, the survey shows lack of child care facilities as one of the major obstacles for working women. Indeed, over half of those not working said that difficulties with child care was the reason. This is easily understandable when approximately only 1 per cent. of the country's 3 million under-fives attend council day nurseries, with another 22 per cent. in nursery education and 18 per cent. admitted to primary school. I am sure your Lordships will agree that these figures compare most unfavourably with the French record, which shows that 100 per cent. of their four and five year-olds are placed in nursery schools, with 88 per cent. of their three year-olds and 33 per cent. of their two year-olds. The French put a greater priority on child care for the under-fives and for the working mother.
Furthermore, our very low rate of child care provision can only be aggravated by the effects of Government control on local authority expenditure, for those local authorities which have the highest rate

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of provision are also faced with the severest penalties and rate-capping under the current Rates Act. As this provision is discretionary and there is no statutory obligation to provide child care facilities, this is an area where local authorities have been able to cut back to meet Government expenditure targets. There are numerous examples where local authority services have been cut in regard to day nurseries, nursery education or support services to the voluntary sector, or all three.
I must mention that the most recent attack on nursery education has come with the decision of the Inland Revenue to tax parents on their employer contribution for workplace nurseries. This is made even worse because six years' retrospective taxation is to be imposed on those parents who have used these nurseries in the past. That seems to me to be a totally negative measure and will probably result in the closure of most of these invaluable workplace nurseries.
Lastly, may I say a word about the single parent mother who has the dual role of being the breadwinner and the child-carer and is most keenly affected by these problems. It is now a well-known fact that the staggering rise in single parent families has meant that the proportion of people living in such families has doubled from 2½ per cent. to 5 per cent. This represents over two and a half million people. In certain areas local authorities find that one family in three is a single parent family. According to the report, these are the women who have a high financial stress and as many as 78 per cent. of them give financial necessity as their main reason for working.
I end by commenting on one particularly cruel anomaly regarding the child care facilities which affect single mothers who wish to take training courses. This concerns the two Government-sponsored national training programmes, the training opportunities programme and the youth training scheme. The problem is that neither of the two Government agencies involved, the MSC and the DHSS, will take responsibility for payment of child care costs for women while training—which means that those young, lone mothers with the courage and will to wish to attain new skills and find employment, instead of being a charge to the state, are either denied the opportunity of participating in a course or are penalised for doing so. Consequently, those young women determined to carry on with a course will be paying anything between £5 and £25 out of their MSC allowance of £41 -odd to put their child in a nursery or with a child minder. This extra expense can only mean that these families are doomed to live at an indescribably low level of poverty.
So, in many cases the very people for whom these schemes were devised—that is unskilled young women who wish to create for themselves something better and become self-reliant—are being penalised simply because they have children which they are struggling to bring up alone. That is indeed a cruel irony. It is as if society were saying to them, "Ah well, it's just too tough that you've got children. Therefore, you will have to forgo the opportunity of bettering yourself and them and stay on supplementary benefit". This utterly unfair discrimination persists even when there is a simple and inexpensive remedy, and a fair remedy, of,
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first, introducing a change in DHSS regulations, and then the introduction by the MSC of allowances which would be entirely in line with those they pay for meals and travel to cover child care expenses.
I have given this one specific example in order to reflect the part of my noble friend's Motion calling for policies which encourage motives of social responsibility. These are the policies which bring out the best in people, policies which, so to speak, touch the nice bit of Britain. It is the Government's failure, through their attitudes, values and priorities, which we on this side of the House deplore.
Viscount Massereene and Ferrard: My Lords, before the noble Baroness sits down, does she consider that a married woman with young children, who has a husband in lucrative employment, should go out and get a job; or does she consider that she should remain with the children?
Baroness Ewart-Biggs: My Lords, I think there should not be discrimination of job opportunities between men and women who have the same qualifications.
6.33 p.m.
Lord Camoys: My Lords, the present high level of unemployment, and in particular of long-term unemployment, is a matter of very great concern; and, as has been evidenced in this debate, there is no monopoly on this concern. As we have seen, it is shared by all political parties—indeed, by all human beings. I am sure that not only all Members of your Lordships' House but many outside will be very grateful for the opportunity which the noble Lord, Lord Beswick, has given us to debate these various issues. Personally, I have seen the hardships and the demoralisation which affects friends and relations who are or have been unemployed. Again, personally—and I hope your Lordships do not mind my being so personal—I have four children, all of whom will be seeking employment in the next 10 years; so I can honestly say that my concern is very deep, just as deep as that so compassionately illustrated by the maiden speech of the noble Lord, Lord Monkswell.
The quality of the national debate on this issue could, I believe, be so much improved if we could move on from this sterile question of who cares most. Critics of the Government too often take cynical delight in the opportunity to brand them as halfhearted and uncaring. But to do so really does no service to the unemployed. Indeed, it trivialises what is the most important issue before us. I have to say that to some extent I believe that the Government bring this sort of criticism upon themselves. Ministers who so readily stress their determination to keep control of inflation sometimes forget to impress upon the nation their equal and connected determination to conquer unemployment—and they are very much connected. Yet, with unemployment so high and showing little signs of falling, many people in this country today would say that the victory over inflation is but small consolation.
The difficulty is that the cure for unemployment does not lie entirely or even mainly in the Government's hands. There are many who will

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disagree with this point; those people, for example, who argued only two or three years ago that all that the Government needed to do was to bring down the exchange rate. Yet, now that the pound is down by half, I have heard no one suggest that we can expect unemployment to fall apace—certainly not the Government, as we heard this morning. It is certainly true that the strong pound made industry concentrate on raising productivity. The pity is that it took such severe pressure to stimulate the sort of reappraisal which is part and parcel of ordinary business practice in the successful economies of the free world. The need to improve productivity led to redundancies; and unemployment, therefore, has risen to levels not witnessed in Britain since the 1930s.
In analysing the underlying cause of this surge in unemployment, it is important to bear in mind the fact that over much of the period since the war the British economy was in steady decline. Over-manning, restrictive practices, bad management and bad marketing took their toll. By the end of the 1970s, Britain was close to industrial suicide. Rates of return on capital fell to levels that were, in real terms, dangerously close to zero. Wage demands paid no heed to falling profitability and attempts by successive governments, as we have heard earlier, to impose wage restraints were largely ineffective.
This unhappy catalogue is something for which today's unemployed are paying such a high price. The immediate economic prospects, I believe, are moderately good. Now that the pound is weak against the dollar and other currencies, there will be opportunities to boost exports. Interest rates have been rising but provided that the Government can re-establish their rapport with the markets, they should not need to rise much further, if at all. Much of what was fundamentally wrong with the economy has over the past three or four years been rectified. It is difficult to think of a single major company which has not emerged from the recession with its efficiency and management much improved. All of this is good news, as is the emergence of so many small businesses particularly in the high technology industries.
There is, however, a missing generation. Had the small-business sector flourished in the 1970s as it does now, had the larger companies taken the measures which they took so late, the necessary re-structuring of the economy to meet changing patterns of demand could have been much less painful. It would be a brave man indeed who would claim to be able to cure unemployment in Britain overnight. Before the last election, Her Majesty's official, and unofficial, opposition parties were full of such brave men. I notice recently, however, that there is a growing willingness on all sides to come to terms with reality and to begin a serious debate about the ways in which the level of unemployment can be reduced.
This is something from which we should all take heart. We can also take heart from the fact that the prospects of school-leavers have been much improved. For decades I believe Britain muddled along without a comprehensive training programme. It is an indictment of us all that unemployment among school-leavers had to rise to such very high levels before this situation received any serious
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consideration. The youth training programme really does represent the emergence of good out of adversity, and the Government deserve credit for the achievement, however belated.
I also welcome the measures of the Secretary of State for Education to raise standards in schools so that young people are better equipped to make use of the training available to them when they leave. However, I continue to wonder whether our school system, whether public or private, could not do more to prepare students for employment. I really believe that there is a serious need for further study on this point. So these are positive steps that have reduced or will reduce the unemployment problem. If further progress is to be made, however, the Government will need to apply the same singlemindedness which they have applied to the control of inflation; but we must also understand that the time scales are different. If Government control their own borrowing and refrain from printing money to accommodate the borowing of others, it is only a matter of time before inflation falls, and it may fall further. Governments are the main—though not the only—cause of inflation; and when they return to the paths of what I would call righteousness, they are usually rewarded remarkably quickly.
Responsibility for employment, however, is much more widely spread. Government can alleviate it; but effecting a cure is another matter. We hear much less of late about major reflation. That seems—nearly but not quite—to have taken early retirement. There are, however, two modern variants of this theme which I think we should address. The first proposition is that spending on the infrastructure of the nation will help to reduce the level of unemployment. The advocates of this approach see the repairing of the nation's roads and sewers, for example, as a remedy for its economic ills as well as helping its general health. This idea seems to me fundamentally misconceived. It is of course perfectly sensible to repair roads, railways, hospitals, and so on, and to add to them right up to the limit which can be afforded. But to expect that the act of spending money can not only allow the acquisition of goods but also make the spender richer is really straining the laws of economics too far. Spending money might make one happier; it certainly makes one poorer. The substitution of the word "investing" for the word "spending" is not enough to change this reality. Some of our wives might like to tell us that we should invest in jewellery; but the investment actually makes us poorer, nonetheless.
The second proposition is that a reduction in the level of income tax can create jobs. This idea is equally misconceived. Tax cuts will stimulate the private sector only to the extent that they are accompanied by public expenditure cuts. If they are achieved by borrowing or printing money, they will lead to high interest rates or inflation as surely as night follows day. And inflation—I think this view is commonly held in this House—is the great enemy of increased employment and of course it creates the most divisive forces that one can imagine, and understandably so.
If the Government really have public expenditure under control they can choose to cut taxes or plough excess income into public works. These options, in my opinion, should be compared on their respective

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merits; but nobody should imagine that either has much to offer the unemployed. Of the two, however, I would choose a cut in taxation. Income tax and national insurance, as we all know, bear heavily on the lower paid; and I would agree with previous speakers that a reduction in this burden should be a priority of economic policy.
Hand in hand with that, as has been mentioned earlier, should go a reform of the benefits system. At the moment, money taken with one hand from the lower paid is returned with the other as housing benefit, family income supplement or some other form of support. An initiative by the Secretary of State for Social Security to sort out this mess surely deserves our full support. I hope that the Budget in March will initiate a sustained programme to relieve the burden of taxation on the lower paid. I hope that it will also contain a package of measures which will help the long-term unemployed; for the Budget speech relates to macro-economic policy and since the causes of unemployment are essentially micro-economic, it seems to me to be perverse to look in that direction for a total cure. Rather, I believe we must look to continued trade union reform, to continued privatisation, continued pressure to eliminate waste and inefficiency in the public sector, much better training, much better management and greater concentration on producing the goods which people will want to buy. If Ministers want to do more, they could do worse than remind us at every opportunity to buy British, whenever the price and the quality of goods on offer so justify. I think there will be scope for that if the Government continue their policy.
6.44 p.m.
Lord Carmichael of Kelvingrove: My Lords, I think that my noble friend Lord Beswick has done us a great service today by choosing a subject such as this for a debate. He particularly attracted me to his Motion because he said that he wanted the Government
"to develop economic and social policies which unite the nation".
He wants the Government to turn over a new leaf in this year of 1985. I believe that almost everyone in the country, including in their hearts of hearts many members of the Government, really believes it is time a change was created. I sometimes feel that only the Chancellor and the Prime Minister really believe that the policy is working, although, in fairness, I must say that the noble Earl, Lord Gowrie, did seem to believe what he said in his speech.
My noble friend Lord Beswick stressed the importance of social policies which are all too often ignored in the cold economic equations that we get from this Government. I should like to give a current example: it is a small example in the macro-economic debate that we have been having but it is a slight illustration. It concerns the closing of post offices. The Government have demanded that the Post Office supply a certain rate of return on their capital, and although they are making a profit just now—that is, the post offices altogether—nevertheless post offices have to be closed if they do not meet a certain criterion in order to keep up this rate of return. This means that for a very large number of people—and very frequently in the areas concerned they are better known to Members on the Government side of the
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House than on this side—the standard of living and the quality of life in some of the areas will be considerably reduced.
Just over 20 years ago I made my maiden speech in the other place and it was during an unemployment debate. Because of that I thought I would look up what had been said—not what I had said, because maiden speeches are rather special things, but what others had said. Scottish unemployment was at the disgraceful level of 135,000, and everyone agreed that was an unacceptable level. Today the Scottish unemployment official figure is 350,000 but everyone accepts that a realistic figure is at least 400,000, and if we add to that 100,000 people who are in training schemes we reach the figure of half a million men, women and young people in Scotland alone without work and almost without hope of ever having regular work.
I remember one of the phrases used in that debate. One of the reasons I was checking up on it was that a Conservative Member of Parliament—he will be well known to many Members in this House although, alas, he is dead now—the late Sir Herbert Butcher, said:
"There is something wrong somewhere and human values are being debased".
He was speaking of the unemployment figures. How much more applicable are his words now! Not only are human values being debased but community values are being destroyed.
We have today in many parts of Scotland, and especially in the part of Scotland I come from, a male unemployment rate of over 35 per cent. In one or two fairly big pockets it reaches almost 50 per cent. The Government seem to me to be locked into simplistic economic theory which is slowly tearing our society to pieces. I may be over-simplistic, but I just do not believe that a society with 4 million unemployed nationally can be efficient, far less compassionate.
We must think of the social costs of enforced idleness, and, particularly in regard to the young, think of the corrosive feeling of alienation that is their lot. I live in a city which was one of the great industrial cities of the world, and certainly of these islands, up till a few years ago, and I am fearful of the future unless we can give people the opportunity to find a socially useful means of using their skills, their intelligence and their energies.
I should like noble Members of this House to go along to a local employment exchange or a local DHSS office quietly and anonymously. Do not telephone the manager and do not tell him you are coming on a special visit; just go along and mingle with the crowds. You will not be all that different because the unemployed now go right through society, from the people who thought they had good, secure jobs in junior and sometimes middle management but who now turn up at the labour exchange every day. I did it myself when I lost my seat at the last election. It is not a nice experience but it is well worthwhile going through it to see just what happens at these labour exchanges. Men and women, many of whom had good positions and a secure place in society, a secure role in society, now find themselves suddenly faced with empty lives.
But the most worrying group in my area are not those who had jobs but the young people, many well

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educated, many of them graduates, who have never even had a firm offer of reasonable, permanent work. They are keen; they are anxious to get work. They tell you that society has done nothing to help them and in fact treats them as an embarrassment, or sometimes even as a nuisance. I find it very difficult to offer them any hope.
So far in my part of the country we have had no communal violence as we had in Bristol, Liverpool and parts of London, and I very sincerely hope that we never have any, but I would urge the Government not to be complacent about this. When human values are being debased, what happens is that people who feel that they personally have been debased do not see why the rest of society's rules should apply to them. They have been virtually excluded from society. I do not believe that any Government can wave a wand and suddenly get rid of 4 million unemployed or find jobs for 4 million unemployed people in useful, worthwhile work, but I do believe that we can start giving people something to hope for.
There have been many suggestions today from different sides of the House about the sort of things that can be done. Of all the proposals, the most obvious one—it has been spoken about by responsible economists, if there are such people; because in today's debate we have had probably every possible shade of economic theory put forward—would be a gradual extending of the building and construction industry. While the noble Earl, Lord Gowrie, is quite right in saying that the big civil engineering works, the big dock works, the big roads, use very little labour and mainly capital, there is no doubt that one of the things we badly need to do is to look at our housing stock, which does not use huge capital investment, is very labour intensive and is very important to the nation, because it is slowly, indeed in some cases rapidly, deteriorating.
A great deal of rehabilitation is required. Housing repairs need to be carried out and the housing stock needs to be renewed. It is as I have said a labour intensive industry. Plenty of skill is available; plenty of material is available; the imports required are very low. Timber is about the only material which the industry needs to import. I believe that not only would a start be good in general for the infrastructure of the country and provide better homes for people to live in, but the very fact that something was starting, that there was a movement in an industry such as this, would give people hope.
Older people have told me—this is what worries me about the younger people just now—that when outdoor parish relief was first introduced in the 1920s for able bodied men (able bodied men were not until then supposed to get outdoor relief; they had to go to the poor house) the cynics in my part of the world where they had a nice sense of wit called it "society's fire insurance". That was the sort of term used. I am not sure whether the people of today, particularly the young, would be likely to accept placebos such as that.
The Government start from the wrong end. They seem to believe that their policies will ultimately be vindicated and that the suffering, disillusion and the loss of pride and hope today will be worthwhile when
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the re-construction of society has been completed. I think they are terribly and dangerously wrong and that, unless they include in whatever economic equations they are using now some recognition of the human values referred to by so many noble Lords today, particularly by my noble friend Lord Beswick who started the debate, they will create a society of which many will not really want to be part.
6.55 p.m.
Lord Thorneycroft: My Lords, I have really only three points to make. I want to say a word about sterling. I want to say a word about sterling because I think that the value of our money matters quite a lot. I do not stand here to criticise the Chancellor of the Exchequer: I have held that office myself. I know what pressures operate on a Minister in those circumstances.
As always, the attack on sterling was triggered from outside; the strong dollar and the weak oil market; but as always I think we ought to look closely at ourselves. Rather an odd debate has been raging in this country. One lot of gentlemen is arguing that we ought to spend very substantial sums of money on new capital investment; another body of gentlemen is arguing that we ought to have substantial reductions in taxation. I put the question to your Lordships as to whether we are really in a position to march very far down either of those delectable roads.
They are, at any rate, soft options. They are the cases which politicians love to argue; to spend more money—always a most attractive proposition; to reduce taxation—this is the way to get the votes. If we are going to talk about taxation—I do not want to be critical of the Government—I must say that I was brought up in days when you talked about it at the Budget. I think there would be something to be said for dropping the discussion on the tax side until at any rate a little nearer to the Budget and preferably only when the Chancellor rises at the Dispatch Box.
I think we ought to consider what we look like from outside. From outside, a holder of sterling sees a nation enjoying peak revenues from oil; enjoying a cash flow from the sale of capital assets; holding—hopefully—but not cutting expenditure; still only marginally competitive; emerging from a strike and having a huge debate as to how it should enjoy itself best. I do not think that that is a very satisfactory state to be in. I am encouraged by the noble Lord, Lord Camoys, who, in a very admirable speech which I was delighted to hear just now, pointed out that neither of the options would probably do a great deal of good to unemployment anyway.
In those circumstances, I make the point that the attack upon the Government is in my judgment wholly misplaced. The Labour Party and the Social Democrats alike and one or two from other quarters have urged that we should unite to demand more expenditure. I think that the noble Earl, Lord Stockton, will recognise my voice when I say that the remedy has generally been extremely doubtful, but in present circumstances and with the pressure that is on the pound at the moment, it would be a disastrous remedy and I think we ought to make that absolutely plain. I therefore congratulate the Government on

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standing firm, on upping interest rates, on holding expenditure and on the robust performance of the economy of which the noble Earl, Lord Gowrie, was able to give us an account in his opening speech. That is my first point.
My second point concerns the medium term. In my lifetime, the centre of gravity in politics has moved far to the right. Indeed, I often think that it has left me behind. Although not, I think, classified officially as a Tory "wet", I am known to suffer seriously from rising damp. I am still—and I say this to the noble Lord, Lord Beswick—a man who hankers after consensus. I seek always the agreement of other men if it can be achieved.
There is still room for Socialist governments in Europe. In France, there is Mr. Fabius, the Prime Minister, and there is Mr. Craxi in Italy. There is room in Spain and in Sweden. But I would draw the attention of the noble Lord, Lord Beswick, to the fact that in every country where there is a Socialist government actually in power, and actually charged with the responsibilities of government, they are pursuing policies which are much closer to Mrs. Thatcher than they are to Mr. Kinnock.
Lord Beswick: My Lords—
Lord Thorneycroft: I am not giving way, my Lords, because there are other people speaking in this debate, and I also have other points to make. The point I wish to make now is that there is far less room to manoeuvre between parties when they actually come to the business of government. They are all driven, sooner or later, much closer to one another. What political parties should be doing is battling for the centre ground. If I may say so with great respect to the noble Lord, Lord Beswick, and the Labour Party, I wish that they could join in battle for the centre ground. It is only when you have parties battling for the centre that consensus in any real form is possible. Therefore, I make that my second point.
My third and final point concerns the longer term. I believe that I find myself in some agreement with the noble Lord, Lord Roll—and not for the first time—in that I believe that good government is adaptable government. Static problems are relatively easy to solve. Unfortunately, they are few in number. Only a short while ago, what was our problem? It was that the pound was too strong. I seem to recall that the same officials from the CBI were to be heard on the radio in the morning pointing out the horrors of a strong pound and the desperate difficulties which confronted us in relation to exports and the rest. A week ago, the pound was falling through the floor.
It was not so long ago that I was making speeches about oil prices—explaining to bewildered audiences how, if the price of oil went up too far, it affected the purchasing power of all the underdeveloped countries of the world. It was tremendous how we longed to get the price of oil moving downwards. Now we have that situation.
Today, we are saying the dollar is far too strong and that the United States economy is far too vigorous. Let me reassure your Lordships that before we are all much older, all that will change. Someone there will find some ingenious method of getting rid of the deficit
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and bringing things down. Just think of what we shall be saying then; just think of the horrors that we shall see in that new situation of an America unable to purchase all the goods that we wish to produce in other parts of the world.
The point I wish to make is that governments do not live in stable conditions. They live in a kind of cyclone where things are changing every day around them. I agree that no single policy and no single doctrine—whether it is Socialism, or monetarism, or bimetallism, or anything else—can produce a solution to these problems. Particularly in this House we talk not about doctrines; we talk about objectives. We should seek what our objectives are—stability is one of them. A pound is a pound is a pound—and it is a pound whether it is in our own pockets or whether it is in a holder of sterling somewhere else. One does not sharply divide these things. I never agreed with Lord Wilson when he did so, and I should not agree if we did so at the present time.
I agree with the noble Lord, Lord Beswick, that we should seek unity. I agree that we should find great pride in our great social services. But we should find pride in ourselves as well. We should find a determination to kindle again within us that resolution which has served us in the past and which is the only characteristic that will achieve our objectives in the future.
7.5 p.m.
Lord Ezra: My Lords, I am delighted to be following the noble Lord, Lord Thorneycroft, with whom I had the pleasure of collaborating some years ago in trying to stimulate our exports. It is always a pleasure to listen to his ringing and reasonant tones.
We are all indebted to the noble Lord, Lord Beswick, for having launched us on this wide-ranging debate, during the course of which so many words of wisdom have been uttered. No doubt they will tend to dry up a little as the night wears on, because many of the earlier speakers will have mentioned some of the most important points. However, I should like to follow the theme introduced in the remarkable speech made by the noble Earl, Lord Stockton, when he spoke about the third industrial revolution and the role we should play in it. The word "role" reminds me also of the speech of the noble Lord, Lord Roll, in which he made some very practical suggestions as to how we should be proceeding from now on.
I fear that in making some suggestions for trying to establish a lead role in the third industrial revolution I have to start with the infrastructure. The infrastructure provides the basic services, and unless those are right then we shall have weaknesses in all the other things we do. Here I join with the noble Lords, Lord Thorneycroft and Lord Camoys, in deploring the emotive debate that is now going on about infrastructure expenditure, on the one hand, and tax reductions, on the other, as if, either way, we can find a solution to all our problems, but that somehow they are totally opposed things for us to do. I do not see that the problems can be tackled in that way at all.
What we need to decide in so far as the infrastructure is concerned is what sort of infrastructure we require. Do we have an

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infrastructure that is adequate to do the job? Let us be quite clear that we are not talking only about the individual citizen's use of the infrastructure: it is a vitally important ingredient in the success of industry, as the CBI has very often emphasised.
I feel that we should be quite disturbed about the state of our infrastructure because of the recent publication of the report by the NEDC. That is not a report which deals with the subject in general terms. The executives have, at the request of the National Economic Development Council, examined the state of our infrastructure with great care. They have come to the very disturbing conclusion that in dealing with the problem of the infrastructure there is not a proper depreciation policy and there is not a proper policy for repairs and renewals. This is just a practical issue. It is not a political issue, and it is not an emotive issue. What it demonstrates is that in this vital area of our national affairs the treatment which any business would normally apply to capital assets is not being applied.
The picture which that report reveals is indeed extremely disturbing. I take it that everything they have stated is valid. They presumably had no objective other than to reveal things as they were. For example, they state that,
"there appears to be no attempt at the appropriate level within central Government to base the case for annual allocations of funds on strategic assessments of requirements and priorities".
They go on to say that in many areas the present systems of resource allocations have led to backlogs of maintenance, repair and renewal which are not trivial. They then itemise some of the areas where these backlogs in essential repairs and renewals have built up to very substantial amounts.
For example, take hospitals. They say that the magnitude of the repairs and renewals which represent the backlog in that sector amount to at least £2 billion. A number of health authorities said that they would have to spend twice as much as they are doing at present on repairs and renewals in order to clear the backlog. In education, in many cases they found that the amount spent on repairs and renewals was 40 per cent. short of what was required. In housing, they stated that to repair the houses built in the 1960s, which was a bad building period in which errors were made, would require £5 billion. On roads, they found that the resurfacing is taking place at much longer intervals than is required to keep the roads in good condition. They found that similar considerations applied to water and to sewerage.
Therefore, what I would ask the noble Viscount the Leader of the House to tell us when he replies to the debate is: what will the Government be doing about this very important report? Unless we get our infrastructure right in the practical way in which they have referred to it—not on the basis of just trying to solve the unemployment problems with the infrastructure but of providing us with the basic services that we need—we shall find ourselves in great difficulty in getting into this improved economic situation which we all desire.
I next turn to our industrial situation. Here the big problem is that as a result of world circumstances, of
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policies which have been pursued internally and of other pressures, the size of our manufacturing industry has been substantially reduced. That is most vividly manifested in the very large net adverse balance which has presently built up in our overseas trade in manufactured goods. Until 1983 we were showing substantial surpluses in that trade. In that year it was about £2·5 billion. Then it turned rapidly, and is now running on the other side of the balance sheet at about £3 billion in deficit.
A noble Lord: It is £6 billion this year, my Lords.
Lord Ezra: My Lords, I am told it is £6 billion, and that is still worse. I have not seen the final figures. Whatever it is, the movement is adverse, and it is a reflection of our diminished industrial capability.
In previous debates on economic policy in this House I have been rather disturbed when Ministers, in responding to points of this sort raised from this side of the House, have tended to suggest that they do not put particular importance on manufacturing industry and that somehow the transfer of employment to the service side of the economy could compensate for any decline in the manufacturing side. That, patently, has not yet happened. Nor is it likely to, because by its very definition the service sector exists to serve and a very large part of it—perhaps as much as half—directly serves manufacturing industry.
If I were to be asked what are the steps that can be taken to build up our manufacturing industry again, I should like to make four very brief suggestions—and there could, of course, be more. First and foremost, I should be very happy to hear a ringing declaration from the Government that they attach the highest possible priority to seeing that our manufacturing industry is rebuilt to its previous size. I think the doubt which some of us have in our minds about Government attitudes towards the manufacturing sector of industry would to some degree be dispelled if such a firm statement were to be made.
Secondly, I think that in the fiscal area there are two things which seriously need to be done. To begin with there are likely to be difficulties in the level of capital investment in industry in the years 1986–87 as a result of the rapid reduction in those years of the investment allowances arising from the last Budget. This is a point which has been made very clearly by the CBI, which has shown what a serious dip in the level of industrial investment could take place if the capital allowances run down at the rate that is envisaged. Therefore, the suggestion which it makes, and which I fully support, is that that reduction should be made more gradually.
The second fiscal measure which I think could help industry and reduce unemployment is to adjust the national insurance contributions. Although the Government have quite rightly removed the National Insurance Surcharge, the charges for social insurance are still very heavy, and we ought to be reaching the point at which taking on more people does not impose any form of fiscal impediment. We should encourage firms, through the fiscal system, to take on more employees, rather than to do the reverse. Therefore, I recommend those two practical possibilities to help industry to get going again.

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Thirdly, I feel that we need to do very much more to stimulate existing industrial sectors to apply the new technologies. We must all have been struck by the report which the Japanese Ministry of International Trade and Industry (MITI) brought out recently in which they confirm the view which many of us may have held for years: that Britain is a very inventive nation but that it is poor at applying those inventions. They demonstrated that since the war about 55 per cent. of the most significant inventions have originated in Britain and only 22 per cent. in the United States, with as little as 6 per cent. in Japan. However, when one talks about the application of new technologies those figures are reversed. Therefore, I think a very serious drive is needed in this area. This would not necessarily involve public funds but could involve a real and positive lead by Government to reinforce what has already been done to make sure that the new technologies, the micro-electronic technologies, and all the new developments now being so rapidly devised, are more and more widely applied.
There are some examples, of course, of firms who have done this. Clark's, the shoe manufacturers, for example, have transformed their business prospects by computer-aided designs for shoes. The use of silicone rubber for producing tableware has totally changed the facility with which that can be done. There is a whole list with which I will not bore your Lordships. All that I shall say is that there is a vast array of inventive genius at the disposal of industry which is not being absorbed sufficiently fast.
The Earl of Gowrie: My Lords, may I say to the noble Lord that this list of successes is not boring at all?
Lord Ezra: My Lords, I shall certainly notify the noble Earl of some of them. Some are very exciting. There is the flexible manufacturing through micro-electronic control of a series of machine tools which gives enormously greater variations in shop-floor operations. Far from displacing labour, some of these applications have actually enabled firms which would otherwise have gone out of business to continue working. These new technologies have come to their aid. I should like to see something approaching a crusade to make sure that these inventions are applied in existing enterprises. That is the third step which I think should be taken.
The fourth, which is one of which I have had a good deal of personal experience, is the use of purchasing power. In this country about £100 billion of purchasing is concentrated in relatively few hands—departments of government, local authorities, nationalised industries and large-scale private sector manufacturing and distribution organisations. This purchasing power has in the case of some of the more enlightened enterprises been used to stimulate suppliers in this country, providing them with the goods and services they require on a competitive basis. Nobody is talking about buying British just for the sake of doing so. But the power of the large purchaser to stimulate a competitive response from a myriad of suppliers is very considerable indeed if such purchasers put their minds to it. My Lords, £100 billion is a lot of purchasing power. About 4 per cent. or 5 per cent. more of that purchasing power placed on a
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competitive basis in Britain would totally eliminate the present trade gap so far as manufactured goods are concerned.
I put forward those four practical suggestions as to ways in which we can take our prime place in the third industrial revolution. What I believe we should be doing now—and this is something that all of us should be doing—is to see whether, in addition to the success which the Government have had in combating inflation, the policies which they apply should now be widened to make absolutely sure that we get the sort of infrastructure that we need in a good state of repair and renovation and that we firmly adopt policies which will make the best use of the inventiveness which we undoubtedly possess in such as way as to put British industry back in the lead.
Lord Kaldor: My Lords, may I just add this as a footnote?—and the noble Earl, Lord Gowrie, may also be interested in it. I recently came across a report by a team from Ford of Britain which was sent to Japan to examine the methods of producing motor cars in the factory of a firm called Toyo Kogyo, with which Ford has a very close relationship. That report is a most fascinating document. It shows that Japanese technology is miles ahead, not only of the technology of Ford of Britain but of that of Ford of America.
7.24 p.m.
Lord Glenamara: My Lords, for the third time since I entered your Lordships' House, I wish to speak on unemployment. I listened very carefully to the speech of the noble Lord, Lord Thorneycroft, for whose wisdom I have great regard and for whom I have a great deal of affection. He congratulated the Government on the robustness of the economy but he had not a single word to say on unemployment, yet this is by far the biggest problem facing this country.
Lord Thorneycroft: My Lords, will the noble Lord give way?
Lord Beswick: My Lords, the noble Lord need not give way.
Lord Glenamara: My Lords, let me repeat what the noble Lord said. I am not giving way. Admittedly, in the red plush magnificence of your Lordships' House it is a bit difficult to remember, but out there in the cold there are 3¼ million of our fellow men who are denied the right to earn their livelihood. They, with their families, amount to about 6 million souls, all of whom are maintained marginally above the breadline by weekly handouts from the state. It is a remarkable coincidence that the cost of paying unemployment benefit, together with the loss of taxation income for the Treasury, come to almost exactly the same figure as our income from North Sea oil, which was quoted by my noble friend Lord Cledwyn. The whole of this providential but finite national windfall—which is rather like Britain winning the pools—has to be spent in maintaining this appalling mass unemployment in our midst.
Before the First World War there was an old song:
"We don't want to fight, but by jingo if we do,
We've got the ships, we've got the men, we've got the money, too".

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We have got the men and we have got the money, but we do not use the men and the money to fight obsolescent housing, to fight inadequate roads or even to fight for a bigger share of the world's export markets. We use the money to keep the men idle. I think that that is an idiotic way to run the country. There has to be a better way of doing it than that.
Never before has this country had the kind of income that it is enjoying in the 1980s. These years—the 1980s—should because of North Sea oil and gas, have been years of unparalleled affluence and prosperity for Britain, but they are not. They are what Mr. Heath called them in the other place a fortnight ago. They are years of shame—shame that we tolerate 3¼ million unemployed. They are years in which the rich are getting immeasurably richer and the poor are increasing in number and getting a great deal poorer. That could almost be the theme song for this Government: "The rich get rich and the poor get poorer, but in the meantime ain't we got fun"—like the fun, for example, on the first day on which British Telecom shares were marketed.
On that day the stags made an actual profit—not a paper profit: but by selling their allocations they made an actual profit of £324 million. Three hundred and twenty four million pounds worth of purchasing power was handed over to a small number of people in return for no service whatever. But they are not wicked people. They were doing exactly what the Government wanted and expected them to do.
From the Government Front Bench, the noble Earl regarded the sale of those shares as a great triumph and success; it was the high water mark of the refurbishment of capitalism by this Government. Under this Government, making money is the highest possible form of endeavour, while earning money is denied to 3¼ million of our fellow citizens. There is a great deal of difference between earning money and making money. When we talk about the unemployed, so often as politicians we tend almost to regard them as statistics in a ministerial employment publication. But they are men, women and children. They are men and women who are not getting enough to eat; who can barely pay their rent or their mortgages; who sometimes cannot pay their mortgages. They are men and women whose children are not adequately clothed or fed in this weather; young people in their late teens and early twenties who have never had a job; middle-aged men who have been paid off and who have little hope of ever getting a job again. They are men and women with the same dreams, the same hopes for the future and the same fears as we all have. They see their little lives running out quickly, and they are beginning to believe that they are not going to get very much out of them. We are talking about human beings like ourselves: men, women, and children—six million of them—six million living on the breadline in this great prosperous Britain of ours, which has the biggest income it has ever had. I make no apology for getting angry about this.
However, we still pride ourselves on being a Christian country. We pride ourselves that our law and our morality is based on the Christian ethic. One of the central themes of the Christian ethic is surely that we are parts one of another, that we are indeed our
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brother's keeper. If that is so, unemployment, this appalling blight in our midst, is the responsibility of each one of us individually and it is the responsibility of all of us corporately as a nation. I believe that at this point in time the nation is aware of that responsibility. I believe that at this point in time the nation is prepard to make sacrifices to put our fellow men and women back to work.
Only a government can mobilise the whole nation. Only a government can do that. This Government cannot do it unless they are prepared to change their attitude towards the phenomenon of unemployment. This Government are dedicated to the proposition that market forces will solve all our problems. They sit round the cauldron of the market place like a lot of witches. They throw into the cauldron all our problems: prices, even the health service, even the education service and unemployment. They all sit back and let it bubble away and they say to themselves, "If we wait long enough it will be sorted out in the market; it will all change to gold, all be transmuted and the golden age will dawn". This proposition is based on a premise which we in our party utterly reject. It is the premise that what principally motivates men and women is gain, profit. That is how the market works. We reject that.
We have different views about the strike but the strike has shown one thing: that thousands of men up and down the country are willing to endure great hardships for something they believe in passionately. There is much more to men and women than the desire to make money, the desire for gain. The market theory has failed—and failed dismally—to reduce unemployment. It will never succeed unless the Government are prepared to intervene—and intervene extensively.
May I demonstrate that by way of a very simple illustration? I am sorry that the noble Earl, Lord Stockton, has left. When he was Prime Minister I was a young Back-Bencher and I had a problem in my constituency about some threatened closures in a Vickers Armstrong's factory in Newcastle. I knew that a defence order for a certain tank, or an armoured vehicle, would avoid those redundancies. I tried all the defence Ministers and drew a blank, so, in desperation and not hoping very much, I rang up the Prime Minister's private office and asked if I could come and talk to him about it. Word came back almost immediately: "Of course; come along tonight after the Division".
I went to his room in the House of Commons at 10.30 in the evening. The two of us sat there until a quarter to 12 talking about employment and unemployment in the North-East because he was passionately concerned about it. Needless to say, we got the order for the tanks and we avoided the redundancies. For good measure, he sent to the North-East the present noble and learned Lord the Lord Chancellor, complete with a cloth cap but, more important, armed with considerable powers to assist industry in the region.
I believe that the Government must exercise constant vigilance about threatened closures and redundancies, look at them case by case and use their not inconsiderable powers to intervene wherever they can.

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I think the second thing the Government have to do is to abandon any plans they may have for giving tax reliefs to the well-to-do in this year's Budget. To do so when six million people are living on or just above the breadline would be an outrage; it would be obscene. What would happen to the money which the Treasury would forgo? Small tax cuts would be spent on consumer products and would suck in imports from Japan and elsewhere. Large tax cuts, if the recent pattern of investment shows anything, would flow overseas to the Pacific Basin, Singapore, Japan, Korea, Australia, America and West Germany and probably create jobs there. They would create very few jobs in this country.
I believe that if the Chancellor has any money to spare in this year's Budget he should do two things with it. First of all, he should initiate a significant programme of public expenditure projects, projects which have a small import content and a large labour content. One of the silliest things said over recent weeks was said by the Chancellor of the Exchequer when he said that our argument that this would create employment was witchcraft. If this is witchcraft, then let us have a lot more witchcraft. That is the first thing that he should do.
The second thing the Chancellor should do is to give some assistance to our exporting industries. He could do this in a number of ways which do not infringe EEC rules. For example, our industry is at a tremendous disadvantage compared with our competitors in the cost of fuel. On the six o'clock news last night, I heard a French official saying that the cost of electricity to industry in France was 40 per cent. lower than in Britain. Gas, electricity and water have been more than doubled in price by this Government, not because those three undertakings needed more income, but as an alternative method of taxation. They are at it again this year, demanding that the water authorities put up their prices far beyond anything that inflation justifies. They could make a major contribution to our exporting industries by reducing the price of gas, electricity and water.
I have another point. One of the most tragic aspects of unemployment in this country is the disparity between some of the older regions and the south of England. In the North-East of England, unemployment is overall 18·7 per cent. The noble Earl, Lord Stockton, quoted the level in his own constituency as 28 per cent. There are some towns in the North-East of England with 40 per cent. male unemployment. There are 39 unemployed for every vacancy on the books—I repeat, 39 for every vacancy.
The last time I spoke, I quoted a very menial vacancy at Newcastle airport helping to load petrol on to planes. Eight hundred men applied for that one vacancy. There is unemployment in the South and in the South-East and it is a tragedy anywhere, but the unemployment in the North-East of England, in Merseyside, in parts of Scotland and in parts of Wales is of a different degree and of a different character. It is deep-seated, structural unemployment.
This Government's response to that has been to halve the regional aids to industry—halve them. Last week they declared a temporary moratorium. What they should have done was to double them, not halve
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them. There was a foolish thing said by the Junior Minister, Mr. Lamont, when he said that they did not provide new jobs and the jobs they did provide were too expensive. Let me mention only one bit of regional policy now abolished by this Government and completely forgotten: the device of the industrial development certificate. Between 1964 and 1970, the IDC procedure, which costs nothing, produced 75,000 jobs in the assisted areas. It is one device that could be exactly quantified. Really, the Government must do more to assist the areas where there is this old, deep-seated, structural unemployment. As I have said, this Government can only tackle it if they change their attitude towards unemployment.
The question now facing us and facing the country is whether or not this Government are big enough and courageous enough to admit that they have been wrong and to change course. The much maligned Mr. Heath was courageous enough to do this. When he came to office in 1970, he brought out a White Paper called Policies for Public Spending. He discovered very quickly that they were the wrong policies. Without any hesitation whatever, he did a 180 degree U-turn and changed policy. Yes, he did, with the full support of his Government, some of whose members now sit on the Government side of this House. At least, they did not resign. And certainly he had the full support of his Minister of Education. The question now is whether she, in her present capacity as Prime Minister, will show the courage that Mr. Heath showed in the 1970s, admit that her policies, far from reducing unemployment, are increasing it, and change them.
7.41 p.m.
Lord Campbell of Alloway: My Lords, in following the long, angry and emotive speech of the noble Lord, Lord Glenamara, if I am neither angry nor emotive and try to be a little shorter, I hope that he will acquit me of indifference to the misery of unemployment or to the scourge of unemployment as such. For it appears that in the mind's eye of many noble Lords who have spoken in support of this Motion, there is a sort of Utopian oasis of full employment where toil is unrelated to productivity but everybody spends. This is but a mirage which all of us know vanishes at the touch of the IMF. If we are to move forward to take our place in the third Industrial Revolution, as my noble friend Lord Stockton suggests, it is idle to debate in blinkers, shutting our eyes to the stark reality of the facts of our own economic life as distinct from economies elsewhere.
If defensive action against the strength of the dollar and the weak oil market, which creates the sizeable debt interest problems to which my noble friend Lord Thomeycroft referred, renders immediate reduction of tax thresholds inopportune, this is but a matter of timing which in no way impugns the validity of the proposal as affording a positive contribution to the relief of unemployment. Indeed, the rectitude of the proposal was expressly affirmed by the OECD review to which the noble Lords opposite have already referred. As the criticism of Government policies transcends political preconceptions, one searches the fields to find the sustainable argument. But, my Lords, search as you will, you shall search in vain. All that

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you will find is a sort of bemused grasshopper jumping from one questionable assertion to another for no apparent reason.
The first assertion that is made—it is made in this Motion—is that instead of reducing the tax threshold we should spend our way out of unemployment on the back of a budget deficit, accepting the inevitable inflationary consequences. Spend on the infrastructure, spend on the welfare state, spend on housing, spend on major works, spend on what you will as if the fiscal option were in no way related, or was irrelevant to, unemployment policy! It is as if the spending option lay in antithesis as affording the only viable alternative, as if expenditure in the public sector were out of tune, unbalanced and inadequate. My noble friend Lord Camoys dealt with this in an admirable fashion. His analysis, I would respectfully suggest, is unanswerable.
As my noble friend Lord Gowrie said, reduction in tax threshold is relevant to productivity and in mitigating the poverty trap for those in work. It also provides an incentive to productivity for the work-shy who find the differential of perhaps some £5 to £10 a week too meagre to warrant the effort. Massive spending in the public sector is irrelevant to the achievement of any substantial or long-term reduction in unemployment. Indeed, it would put to the hazard the retention of stability of confidence in our money—surely already under sufficient pressure. These points were also made by my noble friend Lord Boyd-Carpenter.
It is said by way of criticism that we should create jobs for the sake of job creation without any assessment of need, cost, productivity, inflationary impact or long-term effect. It is said that by some process of social engineering along the lines of Vredeling or the Fifth Directive we should spread the toil around and that in order to do this, we should impose some sort of new social framework upon industry regardless of commercial effect. This is sheer economic fantasy. And this Government are not in business to finance fantasy.
It is said that our fiscal and economic policies are not working. But the record speaks otherwise. The November 1984 figures, published in December in The Times, show an export record of £6·45 billion, a return to surplus in our trade in manufacturing goods, a £278 million surplus on current account and a drop in the trade deficit since the previous month of October from £888 million to £122 million. As already stated—and truly stated—our GDP growth compares favourably with the rest of the European Community. It would have been considerably better but for the miners' strike—it is not too bad notwithstanding—because it was generally accepted at the Dublin Summit that our country was leading the rest of the European Community out of recession.
I speak of the facts; that is the only way to answer a charge. Investment for 1984 was 7·5 per cent. up on the previous year, and so total demand has increased to raise real production. Inflation has been contained at around 5 per cent., and this has led to the creation of more jobs. Confirmed by an independent source, the jobs manpower survey published on
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28th December concluded that now, today, as your Lordships debate, job prospects are the best for five years. There is the record and that is the answer: those are the facts.
It is said against the Government that our policies on employment are wanting in urgency, imagination and resilience. If the stagnant part of the pool of unemployment is the long-term unemployed—over one year; that is 1·2 million, 60 per cent. of whom have no manual skills—then at least the shift from 1½ million (I am using broad figures) for those unemployed for up to a year to about half a million for those unemployed for between half a year and a year, shows movement, and it shows movement in the right direction. Although part of the pool is, regrettably, stagnant, the whole pool is not. It is also apparent, although it has not been mentioned in your Lordships' debate, from the P45s that there is considerable mobility among the unemployed in transition, who are changing jobs at the rate of 7 million to 8 million a year; that is according to the October 1984 figures.
I agree with the noble Baroness, Lady Seear, when she says that the problem is the long-term unemployed. However, at a cost of £3 billion more in the current year, 700,000 are to be put on training schemes. One hundred and thirty thousand are to be put to work on community service in socially useful projects. Twelve hundred and fifty applicants a week can apply for grants to set up in business on their own, and there are loan schemes available for 10,000 more to provide further training facilities. Surely on an objective analysis, free from the emotive approach, this is a robust, relevant and fair response by the Government to this need.
In conclusion, I am tempted to say only this. Is it not perhaps rather curious, even quixotic, that those who evince an attitude of indulgence towards conduct calculated not to alleviate but to intensify unemployment should charge this Government with dividing the nation, should charge this Government with causing want of consensus, and should, on top of all that, complain that the Government have failed to make sufficient jobs available? I am going to resist the temptation to pursue that line, because it could debase the order of this debate and it could well obscure the essential issue. I, for my part, welcome this debate as an opportunity for the justification of the Government's policies on their merits.
7.56 p.m.
The Earl of Halsbury: My Lords, the subject which we are debating this evening has been a preoccupation for nearly all of us nearly all of our lives. That is why I should like to thank the noble Lord, Lord Beswick, for giving us an opportunity to think aloud to one another in the course of today's procedings. I am sorry he is not here to hear me say so, but doubtless he will read it in Hansard tomorrow.
My preoccupation began as a schoolboy when I was given the holiday task of writing an essay on unemployment, which had to be completed during the course of the summer holiday. My principle source of information, of course, was my father, and at this point in time I cannot remember in what words of wisdom he told me about it; but his vocabulary was

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not of today. He talked of such matters as the viscosity of labour, which meant nothing to me except the reluctance of people to leave home and go away to work somewhere else.
Nowadays we have a different vocabulary. Adversarian politics, as they are now called, are polarised between Keynesian demand management on the one hand and Friedmanian monetarism on the other. It is important to remember that Keynes developed his ideas against a background of deflation which no one could control and Friedman developed his ideas in terms of a background of inflation which no one could control. Because for Keynes inflation was over the horizon, because he was fighting deflation, he paid very little attention to it; and because Friedman was concerned with deflating he paid no attention to the resulting unemployment. But I believe that neither policy can be really adopted according to the letter of each and that there must be a middle course between the two of them which has regard both to inflation and to the need to give full employment. As far as I can see, from what I have listened to, the Government's blend of monetary and fiscal policies is a middle course which it is possible to pursue.
I now return to the days of my youth: no longer a schoolboy, but an adult. I came of age in June 1929 and I did not realise that all the signal lamps and danger signals were going unattended. Commodity prices were tumbling everywhere and the stock market index was soaring to high heaven. The bubble burst in the autumn when I had become an adult for approximately three months. The great deflation of the 1930s took everything into its grip. Half the money supply in the USA—M3, we call it today—simply evaporated into thin air. Demand dropped, unemployment soared, and of course we were affected by it, too. We had had, during the 1920s, never less than 1¼ million unemployed on a labour force of about 15 million in those days. By 1931 it had doubled—it was 2½ million—and by 1933 it was within 1 per cent. of the 3 million mark.
Then, suddenly, something happened. Roosevelt became President of the United States and introduced Keynesian demand management: the New Deal, a recovery programme based on unbalanced budgets, infrastructural investments—all that we have been listening to today—and the slogan which put new heart into people: "We have nothing to fear except fear itself". It worked, and it worked so well that the world learned a lesson from it, a lesson which it will never forget and few can think in any other terms.
This is a pity because the unemployment from which we suffer today is set in an inflationary environment, and whereas you can spend your way out of a deflation, you cannot spend your way out of an inflation by injecting still more money into a pool where there is too much already. That stopped people from rethinking it. People had forgotten that Roosevelt was fighting a deflation. We are fighting an inflation. The coupling of unemployment to deflation is fairly easy to understand, but the coupling of unemployment to inflation is a rather more elaborate mechanism which I shall not expound here. However, I want to say something about what happens if you allow that to take place.
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Imagine an economy in equilibrium—and by an equilibrium condition I mean that it is isolated from the rest of the world so that it can provide a model. It is supposed to be at full employment. Wages and surplus spent must balance the output of consumer goods from factories. Wages and surplus saved must be invested and balance the output of the capital goods industry. All is assumed at full employment. A system balanced in that way would not remain so because new investment always produces a higher level of productivity than old investment. Therefore if it were in equilibrium in one year, it would be necessary to introduce an adjustment the next year such as working shorter hours or lowering prices with increased consumption. It is isolated; it is not in balance with the rest of the world where of course a succession of unpredictable events is always throwing things out of balance. I have read—I do not know whether it is the case—that one of the reasons for the run on the pound last week was a rumour that Nigeria was leaving OPEC. That is the type of unexpected transient thrown into the system from outside with which we cannot cope.
Inflation can start anywhere. It can start by over-investing; it can start by too high wage demands. But it always induces a wage-based inflation at its final stage through people trying to compensate for the price rises to which they are subjected. The gross national product is, as to 70 per cent., made up of wages and salaries. So if you imagine a 10 per cent. inflationary increase in wages in my little model economy, that would produce a 7 per cent. increase in prices. If you then asked that that should be compensated for, you have 70 per cent. of 7 per cent.—that is, 4.9 per cent. or, say, 5 per cent. the next year; and the year after that it would be less and it would be dropping. But if you just do the arithmetic and work out what happens under those conditions for five years, you find that the original inflationary 10 per cent. becomes 20 per cent. over that five-year period.
However, if the economy were growing at 3 per cent., then the 7 per cent. which had to be compensated for would reduce to 4 per cent. The year after that there would be only 1 per cent. for which to compensate. You would bleed the whole inflationary situation out of the system in two to three years of self-discipline, but that, alas, has been the perniciously missing factor. The inflation goes on and on. Wage rises should be less than the price rises if inflation is ever to be bled out. But they are still running at 50 per cent. above the inflation rate—I repeat, they are still running at 50 per cent. above it. Indeed, 4.5 per cent. inflation may be very favourable compared to what it was some years ago—
Lord Ardwick: My Lords, may I ask the noble Earl a question? Is he advocating an incomes policy?
The Earl of Halsbury: No, my Lords, I am not advocating a policy at all other than that I think that the Government's middle of the road policy is about right. I am advocating self-discipline. People should not ask for more wages than are reasonable.
Lord Ardwick: My Lords, I am sorry to pursue the matter, but self-discipline is just exactly what an

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incomes policy is about and it has been consistently opposed by people on the noble Earl's Benches and by people on the Benches opposite.
The Earl of Halsbury: My Lords, my Benches do not have a policy of supporting or opposing anything. I must make that clear to the noble Lord. On the contrary, an incomes policy is precisely what self-discipline is not—it is the imposition of an external discipline and you fight it. Self-discipline means that you discipline yourself according to your own ideas of what is right and not the ideas of somebody else who is trying to impose them on you.
If we compare the 1980s with the 1930s we find that in 1931 unemployment was 2½ million. In 1933 it grazed 3 million and it was back to 2½ million by 1935. It never receded to its value in the 1920s until the war. There was a disastrous injection of deflation by the United States in 1929, and it took a decade to bleed that out of our system. The economy is sluggish in its responses and I think that it is wishful thinking to suppose that we are going to get rid of the present pool of unemployed as fast as the noble Lord, Lord Glenamara, should like, or as fast as I should like.
All benches sympathise with the plight of the unemployed, particularly the structural concentration of unemployment in local regions, particularly the devastating effect it may have, not on mature people, but on schoool-leavers whose character is not yet fully formed. It is absolute devastation. It is quite wrong to suppose that any party has a monopoly of sympathy for what is going on. What I am urging is that the situation must not be dealt with by complacency. The situation is not really as bad as the 1930s. We have 3¼ million unemployed out of a labour force of 26 million, whereas at that time they had 3 million unemployed out of a labour force of 15 million. Their unemployment figure was 20 per cent. and ours is, overall, on average about 12.5 per cent. But that is no excuse for complacency.
What do we need to do? We need a transfer from income to investment. That is the whole point. As I understand their arguments, the Opposition Benches want to have a monetary inflation to provide capital. It will not do so—it will merely raise more prices. The only way in which we can have capital formation is not to spend all our income. That leads to the primary accumulation of capital. It is the only way in which it can be achieved. Without self-discipline and not spending all our income we are conniving at a situation in which a 4.5 per cent. continuing inflation satisfies us, although it will halve the value of money within 20 years. It merely prolongs the whole unfortunate set up.
I am sorry that I have exceeded my 10 minutes; but I shall sit down as soon as I possibly can. One way of looking at the matter is in connection with the welfare state and the social contract. In bygone years the welfare state entered into a social contract which it cannot afford in times of crisis. The attempt to do so merely hinders recovery. That is one way of saying that we are over-spending our income and that is one reason why we do not get real investment.
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Who then should do it? Should it be the Chancellor or the private investor? I see no reason to suppose that the private investor would do it worse than the Chancellor, and I can think of many reasons why he might well do it better. I am sorry that the noble Lord, Lord Ezra, is not in his place to hear me say so, but I hope that your Lordships will pay attention to his words of wisdom. It is extremely important to try and get our manufacturing industries back on their feet again and in particular to go for a product mix which will not consist of things which we can export to people who can do without them in difficult days. Our trading position would then be a very sensitive one.
The great prosperity of the first Industrial Revolution, about which the noble Earl, Lord Stockton, spoke, was due to the fact that we were exporting goods that people wanted. The most important thing for any human being is to be alive and not dead. The conditions for that are that you have enough food, enough housing and enough clothing. We exported textiles all over the world, we taught the world how to build railways and we gave it what it wanted. I am rather dubious about this high technology. It is very great fun to play with; I have played with it myself. However, nearly all its products are items which one can do without in evil days, and I should not like to see our manufacturing industries over-wedded to it. I should like to see this country with a prosperous textile industry again because that is something that everyone wants.
8.10 p.m.
Baroness Fisher of Rednal: My Lords, we have witnessed the terrible consequences of the Government's monetarist policies on the economy each and every day since the Tory Party first came to power in 1979. Throughout Great Britain we have seen much of our industrial base seriously undermined and prosperous manufacturing areas like the West Midlands, where I come from, turned into derelict wasteland. Only this week there was a Question on the Order Paper about illness and suicide arising from unemployment. I am convinced that glue-sniffing, drug addiction and a more violent society have to be related to the boredom arising from the social deprivation and unemployment of our young people. The devil finds work for idle hands: that is something which I learnt many years ago.
However, the social consequences of unemployment are further exacerbated by the continual onslaught on our social services and our National Health Service, and one awaits with trepidation the announcement of the harshness that will result from the Government's review of social benefits. The Government may look upon tax cuts as a political Holy Grail. To the high income bracket that may be attractive, but it is no consolation at all to those unemployed receiving social security benefits.
The continuing rundown of industry threatens the living standards of those still in work. Fear of unemployment and a reserve army of labour is often enough to pacify a workforce into a submissive role. The attacks on working people and their trade unions have been horrendous; and in my view the

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Government seem hell-bent on the destruction of formal and informal institutions in which working class culture has been embodied and which is indirectly translated into political allegiance—a political allegiance which is against this Government.
Those in low-paid jobs (be it in the public services or whatever) and other disadvantaged groups of workers are usually the ones to bear the brunt of Tory Government policy. This Government are aiming at, and most of the speeches today from the Government Benches have been emphasising, the creation of a low-wage policy. We see privatisation taking place in the National Health Service hospitals. There, women are being asked to do much more work with a real cut in wages, with no holiday benefits, and are experiencing all the other actions that can be taken against those who are lower paid. Privatisation aims to undercut wages already being paid in those jobs which are low-paid jobs anyway.
We have the abolition of the wages councils. As we all know, they cater for the low-paid in society. Their abolition will mean that the people who are at present covered will suffer still further. It is this constant effort on the part of the Government to create this low-wage policy which is dividing people into two distinct groups. There is the group of people who we are calling low-paid. We all know that when we are measured in society it is very often the wage packet or the salary packet which brackets us as being important or not so important. Therefore, when we divide people off into low-paid groups we are making them feel less important as individuals.
The low level of investment in Britain's manufacturing industry and the absence of any Government strategy for boosting it to a much higher level is one of the greatest effects of the Tories' so-called recovery. The Government are now talking of a sustained recovery. I go to the West Midlands every weekend, and I do not see this sustained recovery. In fact, whenever I go to the city or the surrounding areas I become increasingly worried at seeing factory after factory being left empty. Great fires take place at these factories because people are using them for the wrong purposes, and this involves the expense of calling out the fire brigade to put these fires out. I walk round and feel so sad. I feel even sadder when I speak to the people who have been involved in creating the exports that used to come from the West Midlands. But the Government are talking about a sustained recovery.
It is hard to believe that a recovery can be built on the basis of a lower level of capital spending now than that which took place three years ago. Many of the goods with household names that we purchase and use in our homes are at the bottom of the league when it comes to capital spending on manufacturing investment. I wonder why. The Government should find out why these large household names, in which we take great pride, are not investing. Could it be, as I know has happened in many of the factories in the West Midlands area, that they are investing abroad in those cheap labour areas that are still available because it is essential that they get the products as cheaply as possible in order to maximise profits for their shareholders?
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It is perhaps time for us to pause and reflect on the long-awaited reconstruction of Dunlop, which is now being challenged on the share market. This private company, which is now part and parcel of a wrangle on the share market, has over the past few years declared over 20,000 workers redundant, many of them in the West Midlands area. The wrangle is going on about reconstruction. The wrangle should have taken place with those captains of industry four or five years ago to make their wares much more competitive.
In their election manifesto the Government promised the electorate that they could do better than Labour; they promised to cut unemployment, which they said Labour could not possibly do. I remember all the hoardings which told us that. They said that unemployment could be reduced in a market economy. I ask tonight: when do they intend to influence market forces to honour that commitment? That was a manifesto pledge. We find that the Government are quite quickly putting onto the statute book manifesto promises which came at a very late stage in the day. I am talking now about the abolition of the metropolitan county councils and of the GLC, which, as we have now learnt, was quite an afterthought in the manifesto but which is now a prime piece of legislation. Let us ensure that the Government also honour their election pledges and their manifesto promises on unemployment.
We are constantly being hectored by the Government on the themes of "nation", "our pride in the nation", "our duty", "our standards" and "our families". This masks the policy which the Government then follow, which encourages self-interest and competitive individualism, and which is anti-national ownership of enterprises. May I give two comparisons of how Government legislation operates in two different fields. The first is the deregulation of the bus services which we shall have on the statute book later in the year. With that deregulation of bus services we shall most likely get increased fares. We know very well that there are fears of lost services. The greatest concern is of course by the elderly, who fear that they will be the losers of that marvellous little card which they carry about, the free bus travel pass. We compare possible cuts in that direction with the individual tax benefits of the company car and the perks which go with that. Are the Government going to cut back on those things as they cut back on the bus traveller?
Another comparison is the cost of Trident, which is increasing each and every six months. The latest published figure is over £9,000 million to be further increased by 14 per cent. On the other hand we look at the local authority rate-capping, which means to local authorities and the people who live in those authorities—mainly in large cities of social deprivation—that we shall find that their services for the people, for the family, will be lessened, or not provided at all.
I see the time is running away and I am drawing to a conclusion, but what concerns me is how the courts are being used constantly by the Government against local authorities and, vice versa, by local authorities against the Government. While it is true that most of the local authorities which are being challenged are Labour councils, because they are in the areas of the

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greatest deprivation, we see in today's paper that a water authority chairman is now taking legal advice regarding an excess increase in water charges. This chairman is not a Labour councillor. He is a businessman appointed by a Government Minister to look after the needs of the water consumer, but even he feels that there is a need to take legal advice about Government legislation.
I close with a remark which was written by Beveridge in 1944. He wrote:
"It may be that cattle must be driven by fear.
Men can, and should, be led by hope".
What causes me the greatest concern is that this Government will completely dash all hope for the unemployed, and all hope of developing the economic and social policies which would unite the nation.
8.23 p.m.
Lord Orr-Ewing: My Lords, I have noticed in this debate that the average speaking length is 15 minutes. If we go on at this rate we shall not finish until the early hours of the morning. I am sure that that is not desirable in the House of Lords, and not desirable for all those who serve us outside. Therefore, I shall try to keep to the standard which others, and particularly the two main speakers in admirable speeches, have set of 10 minutes. It means one has to drop some of the courtesies which are normal in this House in referring to the previous speaker, and I apologise on that score.
I have to refute one point. I was disappointed that in the admirable opening speech which the noble Lord, Lord Beswick, made to his Motion, there was no reference at all to the wealth creation before you reap the benefits in social services. The noble Lord wants to restore the social services, to restore the "national pride" in our social services, but if you do not create the wealth you do not have social services, you do not have education, you do not have hospitals, and you do not have houses. That is the theme which the Government have set: you have to create the wealth first, and then you will improve the social services.
I think it is a fact—and I am proud of it—that since this Government came to power, despite the tremendous recession which has affected our manufacturing and other industries, particularly in the switch from the old industries to the modern high technology industries—from the sunset industries to the sunrise industries—they have managed to spend more in real terms on our social services.
Lord Beswick: My Lords, would the noble Lord give way? May I make one point? I did not make a reference to wealth creation. It should have been made. I tried hard to prune my speech. I was shorter than some of those who followed me.
Lord Orr-Ewing: My Lords, I am glad to have that corrected. It did not appear in the original text.
Wherever we may sit in this House there is one matter which gives us deep concern, and that is unemployment. It is nonsense to pretend that the Government are not trying. After all, every
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Government try to use their assets to the maximum extent. We would not be spending £2·3 billion—a large sum compared with the annual expenditure on Trident, or any other object—on the cost of unemployment if we did not have to do it. Half that is on the creative side. On the attracting and training of young people, all of it is good investment for the future; although I concede that the present situation is hard on the young people.
I want to make some constructive suggestions, for despite all the efforts of the Government there are still areas where they could be more helpful, and more helpful in the coming Budget. I quote from a number of proposals in the admirable booklet published by Sir Philip Goodhart from the House of Commons. I want to bring out four areas which are worthy and deserving of attention. First, help to the assisted areas where there is high unemployment—that is why they are called assisted areas—by Her Majesty's Government. Surely they should now cut by half the national insurance contribution so that whenever an employer employs somebody he should pay only half the going rate.
Secondly, I should like the Government seriously to consider the policy of giving help—again in assisted areas—to the young. Surely we could waive any national insurance contributions by the young for the present. The Government should waive this and thus encourage employers to take on extra young people. Thirdly, I should like to see the Government waive national insurance for 12 months when an employer hires an applicant who has been on the register for more than a year. These are the hard core, the people who have been suffering most, and they should get every possible encouragement; and employers should be encouraged to take them on. Lastly, I should like the Government to look again at encouraging part-time work. Despite what has been said in this very good debate, it is better to work in the mornings or in the afternoons than not to work at all. We need to reduce the financial penalties and increase the incentives for the part-time worker.
Since the Opposition have not yet put forward any viable policy to solve our problems, and tend to paint this scene of our nation in doom and gloom—and this Motion in some of its wording does the same—I should like to say that there is one area in which overseas countries have decided, notwithstanding all the bad propaganda we get from our strikes and the like, that Britain is the best place in which to invest in new factories and manufacturing.
The United States of America has invested widely in Western Europe as a whole, mainly in modern manufacturing technology. But of the investment they have made in Western Europe easily the largest slice has been in Britain. These are hard-headed business people. They would not invest in Britain if they did not think that ours was a viable economy which had a considerable future. The next place for their investment is West Germany, but whereas 36 per cent. of their investment in Western Europe goes to the United Kingdom, 21 per cent.—considerably down—goes to West Germany; and third in this investment table is France with 11 per cent.

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It is no good the Opposition condemning everything that the Government have done: people stand back and make judgments on those who wish to invest here. The admirable report from the Investment in Britain Bureau, which is part of the DTI, shows that this inward investment created 15,000 jobs in 1983 and, incidentally, it has also safeguarded a further 18,000 jobs. This inward investment by the USA, above everyone else, mainly in sunrise and high technology industries, is of tremendous importance. Two-thirds of these jobs have been created as a result of United States investment in Britain. I would ask the responsible elements of the Labour Party who sit in this House to use their influence on the hard Left Wing to say "Stop being anti-American. Stop trying to kick America, lock stock and barrel, out of this country", because we are deeply dependent on their inward investment and on some of the high technology, research and development and the products which that investment produces in this country.
To summarise, despite the efforts of the Government, I urge them again to look at ways of encouraging employment of the young and also encouraging employment of the long-term unemployed—those who have been unemployed for more than a year. I ask them to look at the question of part-timers to see whether we could not somehow arrange our taxation affairs so that people are encouraged to work part time rather than not at all. I believe with confidence that all that has been said today shows that we in Britain have geared ourselves to finding employment in the high technology and sunrise industries and that, if we press on with imagination and determination, we shall succeed.
8.32 p.m.
Lord Ardwick: My Lords, my heart went out to our two maiden speakers. It is always an ordeal to make a maiden speech, but in a Chamber illuminated with these bright lights, with the crowded galleries and a crowded Chamber containing a number of stars of debate, it must have been a very severe ordeal indeed. I thought that they acquitted themselves like veterans, and I hope we shall hear a great deal from them in the future.
The speech which impressed me very much was that of the noble Lord, Lord Roll of Ipsden. I thought that he gave a very good answer to the statement which is frequently made that there is no alternative to the Government's policy. He showed that there is a variety of alternatives and that within that variety it is possible to probe and experiment to produce the best results. He also suggested that it was time that Britain went into the EMS. I entirely agree with him about that, and I do not understand the Government's attitude.
The noble Earl, Lord Gowrie, said, "Yes, but not now". The reason it is "not now" is because we are an oil currency. But we shall be an oil currency for the next 10, 15 or perhaps even 20 years, so "not now" can mean never. A week is a long time in politics; ten years is never. I do not know whether the noble Viscount who is to wind up can deal with this problem. The noble Earl, Lord Gowrie, has said this before, and I have been rather puzzled by it.
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When I was listening to the noble Baroness, Lady Seear, I was a bit embarrassed because her speech might almost have been written from the same brief as mine, until she came to the end. She made the point very strongly that this Government, far from expressing a consensus, represent only about 42 per cent. of the electorate. Then she began to attack my party. I thought that the viewers would realise why we have a Government which represents only 42 per cent. of the electorate while we have an Opposition which represents all the rest. It is because that Opposition is divided among three parties, and, as we have heard from the speeches from this side, is rather bitterly divided.
When I was a boy I was taken to many socialist meetings. The speakers were evangelists brimming over with fervour and faith. Yet their pattern was simple. They would describe the ills of our neighbourhood, of the city, of the country, of the world, and then they would reach a magnificent climax. "Comrades", they would say, "we shall never get rid of these ills unless we have socialism". It was a magic remedy which did not have to be thought out.
I have often thought of this during the past few years. This Conservative Government, this strident band of conviction politicians, have a naive faith in the magic of the market economy, of free enterprise capitalism. They have the same simple faith in that as we had in socialism. "Cut down public expenditure", they say, "reduce taxation, stop subsidising industry and restore competition and all the problems of high unemployment, all the problems of expanding production and all the problems of the external account will fade away, or at least will be very much simplified".
There was an excuse for the socialists of my childhood. The world was complex, mysterious and full of threat, injustice and deprivation. These pioneer socialists had no experience of office. All they had to live on was faith and hope that one day the entire cruel system would be changed. But the Conservatives of today have no such excuse. They have more experience of office than any other party. They were in charge during the tragic years of mass unemployment in the 1930s. The mass unemployment was reduced, but it was never abolished throughout the 1930s, despite low wages, tame unions, a National Government which was dominated by the Conservatives though led by a poor, weak, worn out Ramsay MacDonald, followed by a very powerful Neville Chamberlain. Despite low interest rates, stable money and tame trade unions, a few months before war began unemployment was still almost two millions—1·8 million—until May 1939.
If these conditions which the Government postulate are the cure for these evils, why did they have so little effect, despite a housing boom on the basis of a 2 per cent. interest rate and despite rearmament? Why do the Government believe that the formula which had so little effect then is the formula which can have an effect now? That unemployment weighed very heavily on the conscience of the nation. Even the playboy Prince of Wales, cried out when he went to South Wales, "Something must be done!"

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One of those who tried to do something about this was the first Lord Woolton. He went to both my schools. His first education was in Ardwick, and he was a friend of mine. He was exposed to the suffering in Liverpool and Manchester. He did all he could to succour the unemployed and also to bring industry to the north-west. I believe Speke Airport was partly due to him. He became a commissioner for the distressed areas in the north.
Towards the end of the war, when he was a pillar of Churchill's National Government, he was made Minister for Reconstruction. Winston gave him his brief—food, homes, work. Woolton used to tell how he reversed it, putting "work" first of all in the priorities. Under the influence of Keynes, and even more, of Beveridge, he produced the famous White Paper which began:
"The Government accept as one of their primary aims and responsibilities the maintenance of a high and stable level of employment after the war".
Woolton did not join the Tory party until 1945 but within a year he was chairman and he encouraged Churchill to take up this pledge of high and stable employment as a priority in the general election of 1950. Then the years of consensus began. A new Conservative Party was created on the intellect of Rab Butler and on the geniality of "Uncle Fred" as he was known.
The Tories were able to build on the firm base provided often in the face of great opposition by the Attlee Government. The terms of trade changed in our favour and the lives of the British workers, including all those of my extended family in Lancashire and South Wales, were transformed. But even 26 years ago Woolton was warning of the new perils of prosperity, of inflation and overfull employment.
I must say that the Conservative repentance was never quite complete. All political parties are kinds of Jekylls and Hydes. We all have our Hyde side—and it is in the Conservative Party as much as in any. There were always, even at this time, Tories murmuring, very much to the embarrassment of the Front Bench, that a whiff of unemployment would put the workers back in their place. There were always Conservatives enjoying inherited affluence who thought that social security was undermining the initiative and the independence of the poor. And there were large numbers of middle-class Tories who bemoaned the diminished differential between themselves and the workers. They also were very concerned that the shop assistants had ceased to be as deferential as they had been before the war. They used to cry out about the wickedness of the unions and the burdens of taxation.
I am not going to suggest for one moment that the Government of today is composed of people like that. It is not. But it seems to me that some of this kind of Tory find the current Government much more to their taste than some other past Conservative Governments. The Conservative Party has turned its back on the party of Churchill and Butler, of Woolton and Macmillan, and years of consensus—alas!—are over. Today, the priority of the Conservative Party is not as it was in those days: work for all. It is not to get back to a high and stable level of employment. Neither is it to improve welfare and educational opportunity.
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No, the priority is to cut taxation and reduce public expenditure and to give respectability to this materialistic philosophy, there is a high-falutin' theory that this is the key to the solution of all other problems; that this is the magic formula. The Government, I admit, have had some success in combating inflation. There have been some years of modest recovery and, thank goodness, the Government have not been wholly consistent with their philosophy. The job creation schemes, the youth training scheme, and so forth, are an aberration from the dogma.
This House has many virtues but it has one grave defect. Unlike the other place, it does not have large numbers of Members who, like my noble friend who has just spoken, live in the industrial areas of the Midlands and the North where there are pockets of 40 per cent. unemployment, where there are abandoned factories, empty shops and, throughout the community, a loss of hope in the future. There is today a conflict in the party opposite, in the party of Government, about the degree of priority that ought to be given to public works, particularly those which refurbish the infrastructure. And each side in this argument can produce figures showing that either the tax cuts will produce more jobs than capital investment in the infrastructure or the opposite.
One cannot enter into that kind of statistical argument. The problem, the clinching point of the argument, is that the jobs that tax cuts create will have no visible link with the creation of those jobs. They will seem to be the result of chance. What people need is a clear proof that the Government's concern is for the workless, and this can be given only by the direct provision of jobs in areas where the need is greatest. After those resources have been used, if there is something left, then there is a case after this for taking poor taxpayers out of the tax bracket; but there is no case at all for cutting taxes in a way which makes the better-off people richer.
8.47 p.m.
The Lord Bishop of Derby: My Lords, the noble Lord, Lord Beswick, has called attention to the need for Her Majesty's Government to develop policies to give new life and national pride—not, in this instance, the opposite of humility—and to encourage motives. This is to ask not only for changes in action but also for a fundamental change of mind, a change of attitude, repentance—a word that has been used already and not from these Benches. Policies applied with authority inevitably affect people's thinking. They can give a right lead guiding people to repentance, and it is the nation as a whole that needs some change of mind and attitude. This Motion has implications for us all. Unless there is a general will to achieve the noble Lord's objectives, Her Majesty's Government's objectives, if they are in the right direction, will be undermined.
To debate these issues in this House brings out, significantly on this particular day, the great value of the life of this House that, in it, ideas can be exchanged without the kind of polarising of opinions which so often occurs elsewhere. I hope that when we come to read the record of this debate the polarising that has appeared will not seem quite as so astringent as at the

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moment it has sounded. A great thing about the debate has been the number of constructive suggestions which have come from all parts of the House.
Violence sometimes arises in our community because we project on to others our own failures to solve problems. Perhaps this accounts for the increasing personalisation of politics, which is a most unfortunate development. In every area of life it is the man or woman at the top who is continually held to account, discussed, abused, blamed. In politics, this can destroy the sense of joint responsibility. It adds strength to the false idea that conviction and consensus are opposites. It is always possible for people with conviction to work towards such a consensus as will unite the nation. There is responsibility on us all, not only in this House but everwhere, to do more constructive things than attack the Government. The Government, however, give a lead by the way in which they respond to the general mood in the nation and the principal issue is the kind of lead they are giving.
In preparation for this debate, I have taken soundings of clergymen and others in my own diocese, which is almost precisely in Derbyshire. All of those working in mining areas have been conspicuous in the impartial and reconciling care that they have given to all their parishioners, whatever their direct or indirect involvement in the mining dispute. Those areas cry out for unifying policies.
It is not only there, however, but much more generally among people of all ages, including the young unemployed, that there is a mood of helplessness, an awareness of inability to change what appears to be a deteriorating situation, in almost every area of our national life. Ordinary folk feel that their views do not count and their votes do not count. The wife of a miner, once on strike but now working, said to me among a small group of people, that they do not know what the powers are which now control their lives. They are just weak and find themselves incapable of doing anything to bring about change.
There is also a feeling of despondency among those in employment. No one can be quite sure where the axe is likely to fall next, and a whole factory may be closed down. Currently in my own See city, many in the British Rail works and in Rolls-Royce have great fears for the future, whether those institutions are or are not to be privatised. The general mood cries out to the Government both to speak a word of hope and to take action to give people some faith in the future. I wish that we could see more clearly some groups of people thinking, either officially or unofficially, about the way in which the nation in the future is going to deal with all issues of work, employment and leisure—because the situation is changing and, far from the ding-dong of political argument, we need constructive thinking to be brought to bear on future policies and actions.
Along with this general despairing mood goes a widespread feeling that the high hopes of Beveridge have been reduced to such an extent that the welfare state is near to breaking down. Government spokesmen make clear, no doubt with complete exactness, how large and increased is the financial contributions being made to the National Health
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Service. More money still is needed. An inquiry in a number of major hospitals revealed widely that only two or three hours a week are being given to outpatient departments for radiotherapy for cancer patients. More beds need to be made available for that work if it is to be done properly; but more beds mean more hours and larger costs. All the way through there is a danger for those who are particularly vulnerable: the young, the elderly and casualties.
However, the issues here have to do not only with hospitals but with many other aspects of welfare. In a television documentary a few weeks ago, a man was shown in his family setting. His wife was urging him to go and get his new spectacles which the optician had prepared, but he could not go because he lacked the £34 to pay for them. There was another, smaller instance—small, yes, but still indicative—concerning a dentist's bill for £13·50 for one examination and one filling. Charges of this sort destroy the whole principle of national insurance.
I will give your Lordships some illustrations from what has been reported to me. First, faced as we are in this small area with such a high incidence of alcohol abuse, child neglect and battering, we recognise that what are needed are structures that will enable long-term help to be given, whereas the social services can really afford to cover only emergency situations. There is a point of great need there.
Another example: on our one small estate of 515 dwellings, 41 per cent. of tenants are single-parent families. Notices seeking possession are served on 9 per cent. of the tenants annually. One family in every 18 is referred to the social services each month and, my correspondent said, these are figures: the reality, in terms of pain, hurt and depression, are not expressible. I know that particular area.
Another example is that modernisation was recently carried out, and even though many of the houses concerned took 18 months to complete, tenants were not moved out because funds were not available. People spent months without heating, without plaster on the walls, with unfinished plumbing and so on. Then I received the bitter comment: "In more affluent areas such a thing would not have been allowed to happen but because these are poor people, then anything goes".
Situations of these kinds are not the direct and immediate responsibility of the Government only. I applaud their success in reducing inflation, because so many people benefit from that. Having no economic theories, like most people, I cannot see why reducing inflation and also reducing unemployment are impossible of attainment together. I appreciate the palliatives the Government have brought to bear on the situation and the way in which policies are intended to make improvements, but the question which rises up from so many is: how long? How much longer is it going to take for policies to work?
There seem to me to be two main failings—not expressed here, but very widely expressed elsewhere. The first is an apparent ignoring of the widespread existence of poverty in the nation and the problems of the underprivileged. So much talk in response to questioning on radio and television seems to assume that there is really no problem of poverty at all. The

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second failing is the assumption that if only people put out a little individual effort all would be well: people are their own worst enemies and they are the ones who can put things right. But the poor are gravely disadvantaged and the whole nation needs to take this fact fully into account.
It will not be sufficient, as the noble Baroness, Lady Seear, has pointed out, to free large numbers of people from paying income tax, immensely valuable though that step would be. Reducing taxes, we are told, would benefit all. So it would, but in what a disproportionate way! It would increase the affluence of many but would do nothing to abolish poverty and the accompanying needs; and when threats are made or leaks take place about value added tax on food, they can surely only come from people who earn infinitely more than the average wage. It is an extraordinary thing, but it is only the poor who are told to be content with their lot and to avoid the sin of envy.
I do not believe that a completely egalitarian society is possible or even desirable, but I cannot believe that it is right, to take a very recent example, to pay anyone in the public service £95,000 a year, however able he may be and however crucial a responsibility he may carry, while at the same time millions of others are being ordered, persuaded and cajoled into accepting wage increases which will give them infinitely less than £9,000 per annum. If payments in the private sector set the pattern, so much the worse for the private sector. Surely the Government should encourage public service without undue regard for financial rewards.
There is, of course, a moral problem over holding together the necessity to produce money and the desirability to be detached from it. But the crucial thing is our care for people—for all people—and that moral problem should press on us all. An industrial adviser in the diocese of Derby, having been round areas of dereliction and depression, was invited to take part in what he called a post-mortem on the subject of the Church and the unemployed. He said: "I didn't say much. I can cope with the statistic of 3.5 million out of work: it's the people that bother me". Individuals who are the kindest and gentlest people can be found to take part in the harshest and most violent of actions, and we have seen something of this in recent days. Similarly, individuals with the greatest personal compassion can be corporately indifferent to the needs of others. It is not primarily a unity of ideas that is needed but a unity and compassion; not sentimentality but compassion.
The purpose of the noble Lord's Motion would be the more speedily realised if Her Majesty's Government were to be more apparently bothered by the people who are in distress. I do not question the attitudes of individuals but the impression we are so often given in what is said is that there is great indifference and, when a lead in this respect is apparently lacking, then the response is bound to be small.
9.1 p.m.
Lord McAlpine of Moffat: My Lords, in addressing you tonight, I must declare an interest because I will be
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mentioning civil engineering. One of the things that I have learnt during the many happy hours I have been among you in this Chamber has been that it is extremely unwise to stand up and talk about a subject of which you do not have a considerable amount of experience and a certain amount of knowledge. As far as the former is concerned, I can claim to have more than half a century's experience, but as to the knowledge, I am afraid it is up to your Lordships to judge.
I want to make three points because I feel very deeply about them. The first point is whether it is wise to spend money on heavy civil engineering to make employment; the second point is about how we can get more houses; and the third point is a conundrum. It is a great conundrum to me because I just cannot understand why our Central Electricity Generating Board appears to be absolutely determined to build an American reactor here when the British one is proving to be so very much better.
I shall deal with my first point: the question of spending perhaps £1 billion in getting heavy civil engineering. I am afraid that my noble friend Lord Gowrie more or less stole my thunder because he expressed the situation so much better than I could. It is absolutely tragic that that industry should spend so much time and energy in trying to kid you all that they will find a lot of jobs. A man leading a very big business said—and it was published the other day—that if you spend £1 billion you will give jobs to 120,000 people. You might do it for four months, but the industry is so mechanised that it is absolute nonsense and I would love to see that stopped. What my noble friend Lord Gowrie said was so very right.
I think it was the noble Lord, Lord Carmichael, who raised the question of housing. I agree with a great deal of what he said, but once again one must realise that it is not money that gets things done. I was so interested in getting houses built—it is not my job, because I do not build houses, but I wanted to see houses being built—that I arranged for the Minister of Housing on two occasions to meet 30 or 40 builders to have a general discussion. On both occasions the same thing came out: central Government were doing their best but they were plagued by the selfishness and smallmindedness of local government. Everybody wants houses built, but nobody wants one built at the bottom of his garden. That is why we are not getting houses. It is not money; it is the low class mentality of planners. If I were going to recommend the Government to do something—far be it from me to instruct them, but I should like to persuade them—I would suggest that they get a vast pair of scissors and cut through all this tiny, bureaucratic red tape and then we shall get the houses. It is not money.
I should like now to go on to my baby—the question of why we cannot have a British nuclear power station. We have got through this horrible political strike as far as I can see without a single light blinking. I think it is terrific praise to the people who operate the generators, the power stations, the Central Electricity Generating Board, the South of Scotland Electricity Board, who have all done a fantastic job. It is not possible to pay a sufficiently strong tribute to them. They will get halos, wonderful big halos, and they will deserve them. But what have they done to deserve those halos?

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One of the greatest contributing facts has been the tremendous success of the British designed and built nuclear reactors. Even the black sheep at Dungeness is producing electricity and it will produce a little more later in the year. This is a very crucial matter. Why should we go to America? It will take two years before we start an American station, because of this Sizewell nonsense going on. If we ordered two twin nuclear power stations tomorrow they would be finished and working in seven years. This would give work to 70,000 men in the places that we need them.
Everyone is talking about spending capital to make work for the people on the North-East coast, in Renfrew and in Glasgow. Factories have been built which have been mothballed, simply because of the determination of the Central Electricity Generating Board not to order any more British reactors but to go for American ones. To me that is absolutely crazy.
I should like to read to your Lordships a few of the remarks given in evidence at the Sizewell inquiry by the South of Scotland Electricity Board:
"If Sizewell B is to be the first PWR in the UK, then it would cost more than a comparable AGR only because of launching costs.
"If thereafter there is to be a programme of Nuclear Power Stations, the difference in cost between the AGR programme and the PWR programme"—
the American one—
"would be insignificant.
"A comparison"—
this is very important—
"of the latest design and performances of AGRs in the UK and PWRs in USA shows that during the last three years the load factor achieved by the AGRs"—
the British one—
"is 80 per cent. against 70 per cent. by the PWR".
Why do we go on? The two stations that have been built in Britain to date, one at Torness and one at Heysham, are both within programme and within scheduled price. I cannot help feeling that my noble friend Lord Stockton had a point when he remarked that we would sink if we did not use our own abilities. We have produced great and wonderful technical abilities. The hour is late, but I hope that your Lordships will think seriously about an answer to my conundrum.
9.7 p.m.
Lord Prys-Davies: My Lords, in this debate we have returned to a theme which we on these Benches are constantly advancing. That theme is the responsible society and the just society that we want to see for ourselves—and, above all, for our children—and the policies to be pursued in order to achieve those ends.
We can start by identifying the basic priorities. People want a job; they want a home; they want good schools for their children; and they want hospitals and health centres. People also want a level of income, whether they are employed or out of work, which will enable them to live a full life and, if they so wish, to participate in the life of their community. One would have thought that those were the basic needs, and that we ought to be able to create a framework that will enable people to live a full life. What is clear, however, is that the policies which have been relentlessly
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pursued by the Government are not achieving those ends for many people, and many parts of the country.
We are ready to make concessions to the Government. My noble friend Lord Cledwyn was very fair when he acknowledged that the country is suffering from the effects of a world recession, that we cannot be isolated from world markets, and that our country is being affected by the impact of new technology. But what the Government will not acknowledge, at least publicly, is that only a part (according to some authorities, only one half) of the worsening of our conditions stems from world conditions—world conditions which they are unable to do much about.
The Government will not acknowledge that a substantial part of the hardship is a direct result of Government policy. If one listens to the Government—and this is what is disturbing—nothing is blamed on the fault of their policies. Blame is placed on the faults of the world, on the faults of the unions, or possibly on an act of God. But nothing is the Government's fault. Is this self-deception or is this an arrogant attitude of mind?
I will give three examples. It is true that they are small examples, but they are indicative of the effects of Government policy. They are very much in line with the examples which the right reverend Prelate the Bishop of Derby gave to the House. First, I was struck by the evidence given to a Select Committee of this House by the Family Welfare Association. In 1982–83, this charity gave £80,000 to the poor: but its director told the Select Committee that it could have donated more than 10 times that amount to meet what he described as "desperate needs". So there is undoubted evidence from the grass roots that more and more people are being driven by the Government's policies to the edge of poverty, and made to rely on charity.
Again, I was struck by something which the school inspectors had to say in their annual report published last June. They drew attention to the fact that parental contribution is now (and I quote):
"a moderate or a substantial addition to school's purchasing power in three out of four schools".
In the poorer areas, a cutback in education cannot be substantially alleviated by parental contributions and by deeds of covenant; and an inadequate supply of books, paper, art material and, indeed, computers (and we heard about computers during Question Time this afternoon) may not be made available.
Children can be attracted by the well-stocked library, and they can be attracted by the computer. But in the poorer areas the children whose parents cannot afford to buy books for the home are also the children in schools where the cutback is a cutback that cannot be alleviated by the parents. So, unless the local education authorities can somehow work miracles with their funds—and that becomes increasingly difficult—the cycle of disadvantage in education in the poor areas is almost complete. I should have thought that all this made nonsense of our belief in equal opportunity for all our children.
My third example comes from the county of Mid-Glamorgan in the heartland of South Wales, where I

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live and work. Your Lordships will know that the core of this county was coal in its numerous valleys, but it is a county which is subject to great pressures and contains within its boundaries many difficulties, as it has been overcome by change at an unprecedented speed. I give a few examples. Male unemployment is at a rate of 22·6 percent. Of its 16 to 17 year-olds, 38 per cent. are seeking jobs. About 5 per cent. of its population is on a waiting list for in-patient or out-patient hospital admission. Ten per cent. of its houses are in desperate need of modernisation, and about 10,000 people are languishing on the housing waiting list; and 44 per cent. of the householders of Mid-Glamorgan are without a motor car.
There are, therefore, enormous problems within the county which cannot be solved by this county relying and drawing on its own potential and its own resources. The councillors and the people of Mid-Glamorgan will say that the Government, in co-operation and collaboration with the councils of the county and with the area health authority, should be assessing the overall needs of the county and then should be pursuing policies which will involve public expenditure and capital investment in order to narrow the gap between the facilities which exist and the facilitities which ought to be available. So this region, like other depressed regions of the country, requires guidance, planning, and investment in order to achieve a balanced development. That is the prime function and role of Government.
The Government are basing their programme for future prosperity on the continuing policy of a reduction in income tax. That being so, we ask the Minister to explain how a penny off income tax will reduce the waiting list for housing; how it will reduce the waiting list for hospital admission; how it will enhance education opportunity for all our children; and how it will make more funds available for housing improvement grants. In short, will the Minister explain how a penny off income tax will improve the quality of life in the regions which I have described? It is not enough to say that there is no alternative. We have heard this afternoon that there are numerous alternatives and one of those alternatives is spelt out in general terms in the words of this Motion.
9.18 p.m.
Lord Wilson of Langside: My Lords, I have listened with great interest to the speech of the noble Lord, Lord Prys-Davies. I am sorry that I am not able to follow him in his theme, but I hope that the Minister, in replying, will have something convincing to say in response to the many matters which the noble Lord raised.
I was glad to see that a few moments ago the noble Lord, Lord Boyd-Carpenter, came back into the Chamber and I prepared myself to raise one or two minor matters arising out of his speech. I am very disappointed that he has since gone, but as I decided to touch on those matters and since my cerebration is not as quick as it used to be when I was young, I shall nevertheless do so. He met the accusation of the Government being doctrinaire—as one would expect of the noble Lord, Lord Boyd-Carpenter, because his
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advocacy is probably the most brilliant in this House—by laughing it off; which is always an effective trick, if I may say so.
The noble Lord said that the doctrinaire was a person who held certain doctrines with which one disagreed. The point would no doubt be taken by some of your Lordships. It is of course that a doctrinaire, as I understand it, is an impractical theorist or one disposed to carry principles to logical but unworkable extents. This is the accusation which the Government have to meet in this context from many parts of the House: Are they or are they not doctrinaire—not in the sense of the noble Lord, Lord Boyd-Carpenter, but in the true sense?
The other thing which the noble Lord tended to dismiss was the allegation—and we have heard much of it in the course of this debate—that the Government's policies have been divisive. He said—and there is truth in this—that of course there are many issues on which all of us are divided. That we know, but the tactics of the Government in almost every sphere in the industrial context that they have touched on, from the miners' strike to anything else one likes to think of, have been so inept that they have driven the moderates into the hands of the extremists. That is what has upset so many of us—utter incompetence and ineptness of the Government's handling of these situations; and I shall touch shortly on the miners' strike in a moment.
We are all in debt to the noble Lord, Lord Beswick, for putting down this Motion. He is one of the wise men of the Labour Party—there are still some—who remain there for all sorts of reasons. As I understand the Motion, it is a recipe for 1985. Speaking for myself, I am very glad that 1984 is over, because it has not happened! It occurs to me that it may be that, like many Cassandras, Orwell was right and he just happened to get his timing wrong. We shall know in due course. Anyway, with 1984 out of the way, it gives us an oportunity to come to grips with the reality of the British political scene. I would only offer your Lordships one or two random political reflections from a mere tyro in the field.
The British political scene is really all rather like Joxer Daly's world; it's in a state of terrible chassis. Having got 1984 out of the way, I think that it gives us an opportunity to reflect on the British political scene in the context of Orwell's other considerable political satirical work—Animal Farm. Your Lordships will remember Animal Farm. I tried to find my copy last night, but I am speaking purely from recollection. There were the two counter slogans: one turned them round. One said: "Four legs good; two legs bad". The other said: "Two legs good; four legs bad". I think that it was the sheep and the humans. Do your Lordships remember that? It is really rather like the Conservative and Labour Parties echoing: "Privatisation good; nationalisation bad", and vice versa. It is really awfully like that.
It occurred to me too that in the Palace of Westminster every now and then there are significant moments of truth. I think it is a great pity that, when these occur, someone—perhaps whoever is in the Chair or the Chief Whip or the Leader of the House—cannot order a period of silence in order that we may reflect and absorb these moments of truth.

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The one which has most appealed to me over these last months was during the quite memorable maiden speech of the noble Earl, Lord Stockton. Of course we shall all have our own ideas of what was the most significant thing that he said, but for my money it was when he said that what we needed in the state of Britain today and in the context of British politics was a kind of intellectual revolution. I must say that many of us on these Benches must have agreed with him. I saw him as pointing in the same direction as we do, to the need for a change in the mood and the pattern of British politics.
Of course many of the commentators and many on the Labour Benches have made mock of us about this, saying that we are the remoulders who want to remould everything nearer to the heart's desire and so on. That is fair fun. I thought this was the direction in which the noble Lord was pointing. I may be wrong. I see the noble Leader of the House looking a bit puzzled, so perhaps my point is not as clear as I ought to have made it. However, I will just have to leave it there.
In any case, I have great hopes that we shall achieve this intellectual revolution, this remoulding, this changing of the pattern of British politics because the alternative to that hope is surely despair. I think that probably the greatest contribution which the BBC has made to British political life in recent years has been to put on the television screen The Pickwick Papers. I see the Leader of the House again looking very puzzled. This will remind many people who have forgotten and it will inform the many millions who have never heard of it about that famous election all those years ago at Eatanswill and about the Blues and the Buffs and about Mr. Slumkey and Mr. Fizkin I hope no one will say, as I think the noble Earl, Lord Stockton, said of Lord Beswick's Motion, that it might be a bit Pecksniffian.
I have the feeling that, after many years moving away from the atmosphere of Eatanswill, of late, over these last two or three years, we have been moving back in that direction. That is really what it is all about. If we do not turn away the tide in another direction, Britain's decline will continue.
May I just say in conclusion—and I do not always agree with him—that Dr. David Owen was absolutely right when he said in the Observer on Sunday that he very much feared that if the political gavotte of the Tory and Labour parties did not come to an end, Britain's decline would continue in so far as politics has influence on its industrial and economic front—and might be permanent. That is what the desire to change the mould and the pattern of British politics which we on these Benches all share is all about.
9.29 p.m.
Lord Stallard: My Lords, like the noble Lord, Lord Orr-Ewing, I hope that I shall be forgiven if I do not spend too much time on the usual courtesies of the House except to say that I agree with the tributes already paid to the maiden speakers. I should like to add my gratitude and congratulations to my noble friend Lord Beswick for giving us the opportunity to
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have this debate and for setting the trend and the framework, together with my noble friend the Leader of the Opposition to enable us to have the discussion.
Many of today's speeches have demonstrated clearly that our greatest problem is mass unemployment and the fear and the insecurity that it brings. The link between increased crime and drug addiction and unemployment has been made clear. It has been mentioned by a number of speakers. No amount of rhetoric or excuses can disguise the misery, the worry and the ill-health that many thousands of people are suffering as a result of the present Government's policies. In my opinion, one of the Government's greatest crimes is the calculated destruction of our manufacturing industry. This matter has been touched upon by a number of noble Lords. I shall therefore try to be brief.
I wish particularly to deal with the lost job opportunities and the lost training opportunities that have gone with the destruction of manufacturing industry. There are over 1·25 million young people under 25 without jobs. Those are horrific statistics in anyone's language. A total of 355,000 youngsters have been on the dole for over a year. A whole generation will have grown up without ever having had a job. In fact, they are in danger of becoming what is called natural wastage without ever having had a job. That is a terrible indictment of any government.
I wish to spend a few minutes discussing the plight of these young people and to refer particularly to training. Here, I want to express an interest. Before coming to Parliament, I spent all my working life in engineering, first as an apprentice, then as a craftsman, and finally as an instructor teaching future craftsmen. I believe therefore that I have some understanding from that standpoint. I recognise that it is vastly different to the standpoint of many noble Lords in this House. However, from that standpoint, I have some understanding of what the decimation of our manufacturing industry means to those craftsmen and women and their families.
I listened with extreme interest to the noble Earl, Lord Halsbury, who is not in his place at the moment, when he related to us how, very early in life, he wrote an essay on unemployment and how his father had given him some advice upon writing it. I can tell the noble Earl that the essay was probably written about people like my father and many others in the neighbourhood. They were probably the subject of his essay. It was not an essay that I was writing; it was the life we were living—the unemployment and all that went with it.
I can recall, too, the pre-war punitive approach to training when young lads were sent on training courses under threat of suspended benefit if they did not go. Most of the available courses—in fact, almost all that I can recall—were on boot and shoe mending. There was no job at the end of the course. In fact, many of the youngsters that I knew had very few boots and shoes on which they could practise at home, even if they could have afforded the materials to do the job. We did not write essays but we knew quite a lot about unemployment.
I can remember, too, the discovery of training during the war years. I recall the capacity to learn quite

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intricate engineering skills shown by men and women of all ages from all walks of life. In the years immediately following the war, training took on a new interest and a new impetus. We saw a great many developments. One major development in my view was the recognition that no longer could the voluntary efforts of employers be relied upon to fulfil training needs. With the agreement of all the political parties in Parliament, as well as experts and trade unionists outside, the 1964 training Act was introduced. A network of industrial training boards was established and funded to stimulate training and to avoid skill shortages in key sectors of industry.
In 1973, the MSC was set up to promote national training objectives and to co-ordinate their implementation with industry and the education service. As recently as 1981, a new training initiative was being pressed by the MSC which was designed to improve and develop apprenticeships and to give all young people under 18 the chance either of continuing in full-time education or undertaking a period of work related training. This initiative was welcomed by industry, by the trade unions, by the TUC, by the Labour Party and all those people who were involved and interested in training; but the Government refused to provide sufficient resources to back up that national training initiative and instead began to dismantle the whole post-war approach to training.
The situation now of course is extremely critical. Your Lordships may know that in 1979 there were 106,100 apprentices employed in the engineering industry. Last year there were 59,000. That is a massive reduction, and the number is falling rapidly. Indeed, apprenticeships in manufacturing industry have been disappearing even faster than jobs, and that is fast enough. The apprentice percentage of all employees in manufacturing industries had fallen from 2.2 per cent. in 1979 to 1.5 per cent. in 1984; and in 1984 the apprentice intake reached an all-time low of 7,800 because of the Government's approach and their determination to destroy the manufacturing sector.
We know, too, from reports and surveys that discrimination against young women and black youngsters is on the increase in industry; that employers are failing to cater for the disabled and the disadvantaged; and that trainees are being forced to work in unsafe conditions. The quality of training on the YTS is variable, and those who complete their courses have no guarantee of a job at the end. I do not know how many noble Lords watched a programme on Sunday evening on the BBC; I think it was called "16 Up"—a report on the YTS. I am sure that those who saw it were as horrified and disturbed as I was at some of the revelations in that programme: bogus certificates, false training, the effects on some of the youngsters who had been involved, the impressions they had gained from their experience of that kind of phoney course. This is something about which we ought not to be proud. It is all right being complacent and shaking our heads, but we ought to take very seriously the kind of things which came up in that programme; I certainly do. I hope that we shall learn something from that kind of research which is being done.
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The present chairman of the Tory Party has said:
"we need to move forward so as to secure a well-trained workforce, which is an essential condition of our economic survival".
I do not think anybody would disagree with those sentiments. But how have the Government reacted? How are the Government implementing those sentiments, those fine words? I do not believe that the Government are moving forward at all. I believe they are moving backwards—back to the days of ignorance and fear, back to the days when people's lives were ruled by employers and an authoritarian state. The Government are treating training not as part of a strategy to create jobs in long-term growth but rather as a substitute for such a strategy. Resources are released only to disguise the increasing number of youngsters without jobs, to depress real wage levels and to restrict public spending in other areas. They have funded the YTS by plundering resources from other programmes, mainly adult training programmes, and made them up with resources from the European social funds.
The Government have blocked any increase in the allowance for trainees and have re-introduced the punitive approach that I mentioned not so long ago by reducing benefit, or threatening to reduce benefit. I see in his place the noble Lord who is quite familiar with this threat to reduce benefit entitlement for young people who leave early or refuse to take part in these schemes. The Government have also cut back on training and re-training resources for adults under the training opportunities programme, and they are considering loan systems for adult training.
The Government are going back to the discredited approach of leaving training to the employers—an approach which everyone agreed failed prior to 1964 and the setting up of the industrial training boards. Indeed, 16 out of the 23 industrial training boards that were set up have been scrapped by the Government, and the mechanisms that went along with them for the sharing of the training costs have gone as well. The Government are also seeking further cuts in the network of skill centres, which in my view have provided an invaluable training resource.
So we are entitled to question the Government's commitment to the Tory Party chairman's stated objectives, and I think that I can certainly demand from the Government the same financial commitment to training that they have shown, irrespective of cost to the taxpayers, in other spheres. For example, I am thinking of the defence of the interests of the Falkland Islanders, the determination to defeat the miners and to crush trade unionism, and the resolve to destroy local democracy. All of those things are being pursued irrespective of cost. I think that I am entitled to ask for the same type of commitment in respect of training in order to get our youngsters into paid employment.
In the last minute that is available to me tonight I suggest that the restoration of training boards must be paramount, and that there must be expansion of apprenticeships in trades and occupations where skill bottlenecks have already reappeared. Major changes must be made in the youth training scheme along the lines of its original aims—and if I had time I would quote the original aims to the noble Lords opposite

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who look puzzled. For example, the allowances must be increased and linked to increases in the cost of living, because so long as the YTS is viewed as cheap labour it will have little credibility for the youngsters who are being asked to participate. The YTS must remain voluntary and it must offer a range of choice on a sufficient scale to meet the needs of young people. Moreover, the quality of training must be improved.
Resources must be made available to the careers service to advise on the various schemes and how they can best be adapted and used, and action must be taken to secure equal opportunities for young women, for ethnic minorities, and for the handicapped and the disabled. All schemes must ensure a safe and healthy working environment.
I could continue to speak on this subject for much longer if time were available. However, I am sure that the steps which I have mentioned, and many others, are urgently necessary if we are to begin the process of preparing our manufacturing base for the growth that we are told is on the way. If the Motion tonight is carried, it will be a welcome step in the right direction, and I support it.
9.43 p.m.
Lady Saltoun: My Lords, on 9th May last year the noble Lord, Lord Spens, who is so sadly missed in this House since his death in October, spoke in the debate of the noble Lord, Lord Wilson of Rievaulx, on unemployment. He said that, thanks to the new technologies, we should never again have full employment as we have known it and that, indeed, the situation would become worse. At column 949 of Hansard on 9th May last year he said:
"What should be done? Long term, I believe we must get the working week reduced to not more than 32 hours per employee. If we could so this, it would allow one additional employee to be taken on for every four now being employed, but it would be useless to try to reach this target gradually by reducing hours by one a year or something like that. It has got to be done immediately, across the board. That will require new sets of taxes and social security payments and benefits, which will have to be produced and adopted. I believe that we ought to have some form of committee or commission to look straight away at that long-term problem".
The noble Lord also said that employment protection legislation should be repealed, wages councils abolished and overtime reduced. He also suggested that prosperous firms should combine to provide advice and assistance to new businesses, as has been done by Enterprise Ashford in Kent. Finally, he suggested that measures should be taken to persuade married women to give up jobs subject to PAYE and to encourage them to become self-employed. The noble Earl, Lord Gowrie, was winding-up for the Government on that occasion and probably remembers that speech well, although I do not think that he agreed with it all.
However, I wish that the Government would think seriously about the points that Lord Spens raised, and either consider implementing some of his suggestions or think of some other way in which to deal with the situation, because the new technologies will not go away; they are here to stay and to flourish.
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I have a few more brief points to make. If the working week were reduced, leisure would increase. If you are well educated, you can occupy almost unlimited leisure hours cheaply, profitably and enjoyably. But if you are not, you need constant entertainment, and that is usually expensive. So a good education would be of paramount importance.
Secondly, in a more leisured society you would have a vast number of potential voluntary workers. I wonder whether thought could be given to tapping this potential source of help for such things as caring for the elderly, the infirm and the disabled in their own homes? Thirdly, we have heard a great deal today about the need for expenditure on the infrastructure. In this context may I make a plea—not for the first time in this House—for toll motorways? I do not know why people are so opposed to them. They have them in other countries and they seem to work perfectly well. So why not have them here? The Forth and Tay Bridges work perfectly well. When they were opened they transformed life for people in North-East Scotland who had had to queue for hours for a ferry, and they were perfectly happy to pay a toll, just as they had had to pay to use the ferry.
Finally, we have heard from various noble Lords about uniting the nation. Extreme adversity, such as another world war, would certainly unite the nation, but it would be a terrible price to pay for unity. The price of unity can be too high.
9.47 p.m.
Lord McIntosh of Haringey: My Lords, my noble friend Lord Beswick has drafted his Motion admirably to enable us to consider the economic policies of this Government, not only in terms of their efficiency but in terms of their equity. A number of noble Lords have spoken much more eloquently than I could about the equity of Government policies. I want to concentrate on the efficiency of Government policies, and I want to look at Government policies as they were expressed in yesterday's White Paper on Public Expenditure in terms of how well they conform with modern business principles and modern business practices.
In the days before rising interest rates and the plummeting pound, the Prime Minister was known to compare the national economy with the economy of the household. I think it would be as well if occasionally we thought about the economy, and the controls and obligations on those who have responsibility for the economy, in the light of the principles on which one might conduct an enlightened business enterprise.
The first thing that is noticeable in the public expenditure White Paper is how much it lacks a business plan for the nation as a whole: in many ways, as an economist would see it, it concentrates only on one part—an almost random part—of public expenditure. The second thing one notices is that there is a complete failure, not only to have capital and revenue budgets for the economy as a whole but even to recognise the distinction between capital and revenue, of which we were reminded most eloquently earlier this afternoon by the noble Earl, Lord Stockton.

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It is noticeable how, in their statements to the nation on economic policy, the Government fail to make use of that invaluable accountants tool, the analysis of the source and application of funds. If we were to look at the various sources of public revenue, and to look at them in terms of their longevity and their capability of being maintained over a period of time, we might look rather differently at the sort of conclusions which Government spokesmen draw as they talk to us about the Government's economic policies. It is true that the domestic and business taxpayer is a continuing source of funds. But we must look at Government revenues in terms of the other sources, notably the revenue from oil, which, as has been said on a number of occasions this afternoon and this evening, has a finite life and particularly the revenue from the disposal of public assets, which, again, has been referred to. As the Lex column in the Financial Times pointed out this morning, when that runs out we shall be back to dull old debts again. It is incumbent upon the Government, if they are going to be honest and consistent in their economic reporting to the nation, to point out that some sources of revenue for the Government are not as stable, not as long term, as others.
The main defect that we ought to examine in the economic reporting of the Government to the nation, and indeed the economic planning by the Government for the nation, is in their attitude to assets. A number of noble Lords, notably the noble Lord, Lord Ezra, have made effective reference to the need to maintain our fixed assets and the infrastructure of this country, and the damage which will be done if we allow ourselves to get in the position of spending immensely more for repairing assets which have already decayed rather than dealing with them on a planned maintenance basis as any efficient business would do.
There is also the obligation on the Government to take consistent care of their existing earning assets. That seems to me to exclude a lot of disposal of assets which has in fact taken place, and particularly when we come to examples like British Telecom where the disposal of assets not only takes place in such a way as to remove the possibility of future earnings from those shares from the public sector, but also actually hands away billions of pounds to speculators who are going to play no part in the economy of this country.
Another obligation on an effective business ought to be the creation of new earning assets. It is here that the Government's policies and the Government's presentation of their policies most conspicuously fall down. Let us take the example of microelectronics, high technology. The Minister for Information Technology, Mr. Geoffrey Pattie, said that he does not believe that market forces alone will provide long-term high-risk research investment. In other words, he is saying that there is an obligation for the public sector to take a part. What do the Government in fact do, having successfully invested in Inmos and created the largest manufacturer of integrated circuits in this country with the aid of public investment? They sell Inmos off, and then in November last year cancel the existing microtechnology support programmes on the
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grounds, if you please, that the budget has already been spent up until January 1986.
Can you imagine a business organisation finding successful sources of investment, and finding that it is pursuing the right path and that people with good projects are there to take up the money, saying, "I am sorry, the public expenditure White Paper insists that this money has now run out and is not available any further, and we are no longer going to be giving any grants under these programmes"? It is economic nonsense, and it is only those who are completely blinkered by the way in which they approach the formulation of public economic policy who could possibly think otherwise.
Finally, I want to refer to the management of human resources. I am sorry for the jargon phrase which has crept into this country from American industry, but it expresses something real. Other noble Lords have spoken with far more skill about training than I could. We have had an eloquent speech just now from my noble friend Lord Stallard on this point. It is possible to make serious judgments about the efficacy or otherwise in economic terms of youth training and adult training.
Did the noble Earl, Lord Gowrie, make such an assessment? Did he attempt to? No such thing. His only reference to training in his opening speech was to claim the fact that training takes people off the job queue and reduces the unemployment figures. There was no reference whatsoever to the fact that the management of human resources through training is an investment in the assets of this country for the future. Here again we have the example of the Government blinkered by their own way of looking at economic policy, unable to see the wood for the trees.
Finally—I have said that word before and I apologise; one gets caught in this. There is the question of reporting standards which the Stock Exchange or the Securities and Exchange Commission might impose on business organisations. I suggest that some of the examples of economic success used by the noble Earl, Lord Gowrie, in his opening speech fail to come up to the reporting standards which we ought to expect of a responsible private or public authority. He jumps from annual figures suddenly to giving quarterly figures for exports, in order to take advantage, without explaining why, of the changes in the exchange rates for the pound. He claims that the falling off in the increase in gross national product has been caused by the miners' strike, without explaining the differences, in several degrees of decimal points, between the effect of the one and the result of the other. I could give many more examples, but there were so many examples where he simply took the easiest way out rather than pursue a consistent argument.
I suggest that the Government ought to have at least the standards which would be required of an honourable business enterprise in presenting their figures. Enlightened businesses nowadays produce a social audit account; they produce accounts in which the money paid in taxation is considered to be a benefit to society and a contribution by the enterprise to society as a whole. That breadth of vision, which is now available and being used by business enterprises,

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could be adopted by the Government. We could get away from the narrow view which has been presented by the Government and by their spokesmen today.
The noble Earl, Lord Stockton, paid a dubious compliment to the noble Earl, Lord Gowrie, of saying that his was the best defence of Government policy
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that he had seen for a long time. It is rather like saying that the defence counsel for the Mafia is doing an excellent job in court. I think the responsibilities are greater. My noble friend has very properly drawn attention to the necessity for, and the consideration of, social justice as well as economic efficiency.
9.57 p.m.
Lord Beloff: My Lords, at Question Time this afternoon—which seems a very, very long time ago—reference was made to the overseas services of the BBC. In the World Service tomorrow two Members of this noble House are to be asked to explain today's debate to the world: one of them is me. I have therefore been giving close attention to our proceedings. I must say that from the beginning I have found them falsified to some extent by a Motion which, in a less tolerant House—for instance, a school debating society—might have been ruled out. I say that for this reason. There are three elements in the Motion of the noble Lord, Lord Beswick, which, give or take a word or two, any civilised government ought to accept. Any government would want to unite the nation; any government would want to stimulate pride in the welfare provisions of the nation; and any government would wish, even in a sinful world, to make something of social responsibility. But in the middle we have the joker in the pack where the noble Lord, Lord Beswick, inserts the words:
"policies … which aim at directly creating employment rather than reducing taxation".
It is perfectly arguable that there are ways of reducing unemployment other than by the reduction of taxation. But the noble Lord, Lord Beswick, is perfectly well aware that there are many people in this House and outside who believe that there is no contradiction between a reduction in taxation and a reduction in unemployment; on the contrary, that it is precisely the reduction in taxation which is likely to lead to a reduction in unemployment. I do not propose to pursue that particular contradiction in the Motion because I am not able to argue the case either way. I do not know, and I do not believe that anyone knows, the exact relation between reduction in taxation and other methods of tackling unemployment.
Lord Beswick: My Lords, the noble Lord, I believe, has overlooked the word "directly" in "directly creating employment".
Lord Beloff: My Lords, I agree that I left out that word. I cannot see that it makes very much difference because, directly or indirectly, a person either becomes employed who was not previously employed or does not. Whether this is the result of someone buying something which he is going to make, or whether he is directly employed by a nationalised industry or by an agency of government, to him, I should have thought, makes very little difference.
As I say, I do not wish to argue this because I do not believe that economic science now or perhaps ever will be able to give the kind of precision to which some people attach importance. Someone actually said that the Institute of Fiscal Studies (which we were told was a reputable institution, and I have no reason to doubt it) can calculate in so many numbers the actual numbers of people who would be employed if this or that policy were adopted. This seems to me to be running in the face of all the predictions about economics and the economic future of this and other
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countries that we have had from professionals in that subject for generations.
Rather, I should like to ask your Lordships to consider another aspect of this question which I fear is much more serious. That is that we must be, in many ways, deeply depressed by today's debate, first of all—and not exclusively—by having to face the disagreeable facts about the present which the right reverend Prelate the Bishop of Derby and others have repeatedly called to our attention. This is a country with a great deal of unhappiness, most of it resulting from unemployment. That is common ground. What worries me more is that the divisions that are caused and the observations that are made appear to be in many aspects so familiar.
If one looks back over British history—not as many noble Lords have done, since the Second World War; not as the noble Earl, Lord Stockton, did, looking back on his own active lifetime; but looking even further back—many of the things that were said about unemployment and its result, poverty and deprivation, were common from among the observers of the social scene in the first great period of social surveys, which is almost exactly 100 years ago. It was one of the great contributions of the 1880s.
We were told by many noble Lords, particularly on this side of the House but from all sides of the House, that Britain can only remedy some of this at least by a more active and enterprising concern with newer industries, including of course training, which was referred to by the noble Lord, Lord Stallard, and possibly direct financial intervention, as was suggested by the noble Lord, Lord McIntosh, and so on. The trouble is that people 100 years ago in this country were saying exactly the same thing about what were then the new industries. They were already pointing to the fact that the industries which had created Victorian Britain and its industrial empire were already becoming obsolete and that it was the Germans who were discovering the new industries which in that period were—not as now, electronic—very largely chemical.
What is it about this country which, after a century, still inhibits us from doing something which it was pointed out was essential to our economic salvation a hundred years ago? Speakers have referred (I think the noble Lord, Lord Monkswell, did in his moving maiden speech) to divisions; for instance, the divisions between north and south and between the less and the more comfortable parts of the country. This is not new. If one looks at Beatrice Webb's diaries, written before the first world war, she had already observed a growing difference between those areas of industrialisation in the north, which were already having a totally and increasingly different outlook which could be measured electorally and in other ways, and the rest of the country.
So when we think we are dealing with things which are so deep-rooted that they go back even beyond the lifetime of the noble Earl, Lord Stockton, it is not, I think, very useful or very helpful to spend very much time condemning a Government and accusing them of lack of concern about these matters or, still less, of trying to perpetuate or increase the misery.

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I was reproved during the last debate we had on unemployment by the noble Lord, Lord McCarthy, who is not in his Front Bench place today, for saying that in our current economic problems there was a relevance and a connection between the miners' strike and unemployment, because a strike of that duration was not only causing unemployment in that industry itself but was increasingly affecting other industries, too. I am glad to say that today, at any rate, it has been admitted by noble Lords opposite that there is a connection and that you cannot discuss unemployment without taking account of the miners' strike and of certain other things connected with it, of which the current negotiations between British Rail and its unions are perhaps the most obvious, if not necessarily the most deep-rooted.
I think, therefore, that one has to look at some very fundamental questions which are themselves so large that, like the clues in G. K. Chesterton's detective stories, one may overlook because they are so large. The one which most concerns me and which I think should most concern those who regard unemployment, rightly, as the first thing on our agenda is this. Although, as I said, in the 1880s and 1890s a great many of these phenomena were observed, what has happened since then is that there has been a massive rise in the standard of living of a very large proportion of the people, still leaving at the bottom of the heap a proportion which varies according to the trade cycle, according to recessions and according to world trade conditions, but which is certainly much larger than a civilised society ought to tolerate.
I cannot help feeling, without being an economist, that there must be some connection between the ability of society constantly to add to its material possessions so that the fully-employed family is infinitely better off now than a fully-employed family was in the 1880s and the 1890s, whereas the unemployed now, as then, are the subject of deprivation which, as has been rightly pointed out, goes beyond mere physical deprivation to moral suffering. If we could agree to examine together as a grand inquest of the nation, as Parliament was once termed, our progress or lack of progress over this century in those terms, perhaps we could bridge some of those divisions which the noble Lord, Lord Beswick, deplores.
10.10 p.m.
Lord Hatch of Lusby: My Lords, as is unfortunately habitual, I am going to take an approach to the Motion moved by my noble friend Lord Beswick which I imagine is unique among those who have spoken or who are about to speak. I want to concentrate simply on that phrase in my noble friend's Motion which calls for the direct creation of employment. We are talking here about what has commonly become known as TINA—there is no alternative, the creed of the Prime Minister. We are talking about unemployment, surely accepted on all sides as the greatest scourge of this country today, over the past decade, and fearfully over the next decade.
At Question Time only on Monday I asked the Government if they would not themselves institute
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research into the effects of unemployment on the family, on the health of the unemployed, on the incidence of suicide among unemployed men and their wives. There have been a variety of approaches to the issue of how unemployment can be reduced and new employment can be created. As the noble Earl, Lord Stockton, pointed out to us this afternoon, we are in the midst of the third industrial revolution. Some have talked about the necessity for working shorter hours, for sharing work, for early retirement and for longer holidays, but the Government have adopted increasing unemployment as part of their policy, as an essential part of their policy.
They say that their main objective is to bring down inflation, although I would point out that even though they have had some success there, they increased inflation before they brought it down. Even now they have not brought it down anything like as much as, for example, the West Germans.
There are 4 million unemployed in this country. Do none of us equate those 4 million unemployed with the 17 million children who die every year for lack of resources that could be supplied by the workers of this country? Her Majesty in her Christmas address of December 1983 pointed to the gap between the rich and the poor as the greatest problem on earth. The response of the British people to the tragedy of Ethiopia shows that those words have been echoed far and wide across this country.
I hope that the noble Viscount who is to wind up the debate—I sympathise with him in the multitude of points with which he will have to deal—will spend one moment in unravelling a mystery which the Government appear to have thrown at me in previous debates of his kind. I have previously quoted—I warned the noble Viscount that I would be doing so again—the words of the noble Lord, Lord Belstead, when he replied to a debate which I initiated last May on the necessity for this country to increase its trade with the third world. In his reply he gave these very significant figures. He said that in 1983 75 per cent. of the bilateral overseas aid allocated by this country was tied to the procurement of British goods and services; in other words, created jobs. He said further that the export business again was equal to our contribution to multilateral aid, creating jobs in Britain. Thirdly, he said that from 1977 the aid and trade provision which gives grants to British businesses for overseas tenders spent £264 million, but that it had resulted in additional exports for firms in this country amounting to £1,298 million—creating jobs for British workers.
I quoted those figures in the debate we had last December which was wound up by the noble Earl, Lord Gowrie. What was his answer? He almost slid away from the issue. He replied that my question could be answered through the Government's policy of abolishing exchange controls. Does that answer stand up to any examination?
Since the noble Earl has several times stated—as he has done again this afternoon—his approval of the abolition of exchange controls, may I point out to the noble Viscount who is to answer for the noble Earl that in 1982 (the latest year for which figures are available)

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the outward direct investment from this country was £2,528.3 million. Of that amount, only £331.8 million went to developing countries—a mere 13.12 per cent. The rest went to the developed countries and industrialised countries which are our competitors. In other words, the opportunity which we have for breaking into the closed market of third world countries is not satisfied by the abolition of exchange controls; capital goes to industrialised countries, capital goes to the established industries in those countries, and capital goes to those countries which are our major competitors.
I do not accept TINA, and we on this side of the House do not accept it. There is an alternative in the provision of jobs. We may need more industries, and we may need new channels for our current industries to trade in new markets. Let me quote in support the ICFTU affiliates in the Nordic area and in the Federal Republic of Germany. They have issued a statement which shows that if there is a stimulus of 1 per cent. of the gross national product plus (and I would underline this) the implementation of the United Nations target of 0.7 per cent. of GNP in development assistance, then over a period of from two to three years this would create 10 million jobs in the OECD area plus further millions of jobs in the rest of the world.
Despite this proof—and this is a point I fail to understand and it is one on which I have never secured an answer from the Government—that aid assists exports, assists our trade, and is an investment in our economy, this Government have cut overseas aid by nearly 20 per cent. during their five years of office. How can they equate that action in their own terms and according to their own standards? How can they defend that action? How can they justify it?
From yesterday's White Paper on public expenditure we learnt that they plan to go on doing the same thing. Over the next five years the cash increase in overseas aid is to be 16·4 per cent. That is well below the Government's own forecast of inflation. In other words, they are saying quite deliberately that they will be continuing to cut overseas' aid, despite the fact—as I quoted from the noble Lord, Lord Belstead—that some of them, at least, recognise that overseas aid is an investment in the economy of this country and a way of creating jobs in this country.
Is it any surprise to find that—as well as the fact that we are in manufacturing deficit for the first time since the beginning of the Industrial Revolution—when manufactures take such a big part of our exports to the third world countries, to the closed markets of today, in 1982, 28 per cent. of our exports went to the lesser-developed countries; in 1983 that figure came down to 20 per cent.; and in 1984, although the figures have not yet been published, they were substantially under 20 per cent.? In other words, our exports to the third world are declining and our aid to them is being cut. Why? Because the Government cannot see the logic of their own case. They are, therefore, cutting the purchasing power of our potential customers.
It is only a week or two ago—and I can quote this in public because the examination was in public before the Select Committee on overseas trade set up by the
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noble Viscount—that the leading officials of the Foreign and Commonwealth Office and of the Overseas Development Administration admitted to us (as I say, this has been published, so it is open) that logically a cut in aid meant a cut in exports.
I ask the noble Viscount to meet this charge of inconsistency. I suggest that the Government's attitude to unemployment can be summed up in the words of the philosopher John Dewey:
"To profess to have an aim and then to neglect the means of its execution is self-delusion of the most dangerous sort".
10.22 p.m.
Lord Banks: My Lords, the Motion moved by the noble Lord, Lord Beswick, calls for economic and social policies which will give new life to national pride in the welfare state. I should like to echo that plea.
The impact of the world recession has meant that the welfare state has been under attack in the developed world, and throughout Western Europe there has been a nibbling at the edges of the welfare state. In this country, of course, we have had cuts in it and I think particularly of the two Social Security Acts of 1980. It is not surprising that there has arisen from that the question whether we can afford the welfare state. In trying to answer that question, we should bear certain facts in mind.
The first is that the United Kingdom Government spend a smaller percentage of the gross domestic product than does the rest of the European Community; more than the United States as the noble Lord, Lord Boyd-Carpenter, reminded us earlier—
Lord Boyd-Carpenter: Much more, my Lords.
Lord Banks: —although that country runs a large deficit which does not appear to create inflation, but less than West Germany.
The United Kingdom Government also spend rather less on welfare provision—or social protection as it is called in the EC tables—than most other EC countries. Half the Government's expenditure goes on welfare—that is, housing, education, health, personal social services and social security—and 60 per cent. of that goes on social security. So the social security budget is the major factor in the welfare budget. It is true that the cost of social security has risen from 9½ per cent. of the gross domestic product to 11½ per cent. of the gross domestic product between 1979 and 1983, but of course during most of that period there was no growth.
There are two factors which led to that increase. One was the very considerable increase in unemployment. The second was the fact that there were more pensioners at the end of that time than at the beginning and that they had had a real increase in their pensions, particularly before the link with earnings was broken by the Government. Now we have a measure of growth, and, with the present level of benefits and modest growth, the cost is expected to stabilise at around 12 per cent. of gross domestic product, if I have understood correctly the expenditure figures which were issued yesterday.

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I think that we also ought to bear in mind that social security benefits transfer a claim on resources. They do not consume them in the same way as they are consumed if a hospital is constructed or a school built. I think that that is important when we are considering whether we can afford the welfare state. In view of all these factors, I come to the conclusion that we can afford our welfare state as it is now, and even extend it a bit, provided that there is no real decline in GDP and no further dramatic increase in unemployment. I do not think that it would be the end of everything if we were to stabilise social security spending at, say, 14 per cent. of GDP instead of 12 per cent. and that would allow some quite considerable improvement.
I said just now that social security benefits do not consume resources; they merely transfer a claim on them. Of course that has implications for the economy. The money transferred from one lot of people to another will be spent differently. If one transfers it from the better-off to the less well-off, some that might have been saved will be spent. Then again there obviously must be limits to redistribution if one is not to damage the economy. We on these Benches feel that we are a long way from reaching the limits of redistribution and that there will have to be further redistribution if the very real poverty which exists amidst comparative affluence is to be eradicated.
If we are to put into the public new pride in our social security system, we must reform it. We are well aware that some benefits are inadequate, that there is immense complexity and that there is the impact of taxation on the social security system leading to the poverty trap. Those things, no doubt, have led the Government to set up the reviews which are now looking into these matters. We await with interest, though with apprehension, the Government's findings in this sphere.
I have made it clear to your Lordships on many occasions that in my view the best way to deal with these particular problems is to establish a tax credit system which will unify and simplify the tax and social security systems. But I said earlier that we could maintain our social security system and our welfare spending generally so long as there was no real decline in our GDP.
I know that our present unemployment is partly due to world recession and partly due to policies initially pursued by the Government—high interest rates, an overvalued pound and a deflationary squeeze. I certainly agree with the proposals put forward by my noble friend Lord Ezra for investment in the infrastructure both for the reasons which he gave and because of the impact which it would have on unemployment. But there is another underlying cause of unemployment, and that is our steady industrial decline, to which reference has been made throughout this debate. It is highlighted, as the noble Lord, Lord Hatch, has just said, by the fact that we no longer have a favourable balance in manufactured goods. Exports of manufactured goods, plus invisible earnings, have paid for our imports and for our standard of living. They no longer do so. Exports of North Sea oil are bailing us out.
When North Sea oil runs out, if we cannot pay our way, we shall then have balance of payments
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difficulties, a falling pound as a consequence, inflation as a consequence of that, and declining standards generally. There will then not be relative but actual decline and it would certainly be difficult to maintain our welfare state in those circumstances. It seems to me that this is perhaps the most urgent problem that we have before us, not because the effects of it would be felt immediately but because, if we do not take steps now, we shall not be well placed to deal with the full effects of the problem when they come upon us.
Our need is to discover and promote industries which will serve a large world market. I think we have to build up our manufacturing base, as my noble friend Lord Ezra said, and to be part of the third industrial revolution to which the noble Earl, Lord Stockton, referred. We seem to have spent our research and development funds mainly on defence and on industries where there is little opportunity to secure a large and growing overseas market. The noble Lord, Lord Roll of Ipsden, referred to Japanese economic policies. I believe it is true to say that in Japan there has been a remarkable union of government leadership and direction on the one hand and private enterprise on the other. The Ministry of International Trade and Industry, to which my noble friend Lord Ezra referred, has co-ordinated, stimulated, promoted and controlled development. It has inevitably been selective. How it has operated has been set out very clearly in Keith Smith's Pelican book, The British Economic Crisis, which I should certainly recommend to any Members of your Lordships' House who have not come across it. No doubt we should rightly consider some Japanese policies quite unsuitable for us. But I feel sure of this: while the markets have an important role to play, left to themselves they will not solve our problem.
For a start, we need greatly increased expenditure on research and development and stronger strategic direction. We must stop thinking of state intervention and private enterprise as irreconcilable. We need to face this basic problem with a blend of the two. Winston Churchill, in 1906—incidentally, in his Liberal days—said this:
"It is not possible to draw a hard and fast line between individualism and collectivism … No man can be a collectivist alone or an individualist alone. He must be both an individualist and a collectivist. The nature of man is a dual nature. The character of the organisation of human society is dual".
I believe those words are as true today and as relevant today as they were when they were first spoken.
10.33 p.m.
Lord Irving of Dartford: My Lords, in 1979 we embarked on an experiment in monetarism, with inflation as the main enemy. The essence of this approach was a tight control on public expenditure, a complete faith in the market economy and the conviction that tax cuts would stimulate the economy to a new and enduring prosperity.
Five years later, we have inflation at 5 per cent. or less but unemployment at an all-time record. Nearly 25 per cent. of our manufacturing capacity has disappeared, we have a trade deficit in manufactured goods of £5 billion for the first time in our history and our annual tax bill has risen by £22·5 billion. A recent OECD report of the 20 industrial nations shows that

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our standard of living has dropped to fifteenth in the table. Forty-five per cent. of our construction workers are on the dole and much of our infrastructure desperately needs replacing.
For some time the pound has looked to be in a state of collapse and £20 billion have left these shores to fuel the boom in America, or have gone to help recovery in Japan. The savings and other funds of British people are not being used to regenerate British industry but, because of high interest rates, have gone to America to be invested there. This is a very sad state of affairs. It exacerbates, I believe, Government policies. I wonder, in fact, whether the Government were wise to abandon exchange controls when they came into office immediately after 1979.
The Earl of Gowrie: Yes, my Lords.
Lord Irving of Dartford: My Lords, the Government have claimed repeatedly that we are in an international recession from which all are suffering. While not wishing to minimise the importance of a low inflation rate or denying the fact of an international recession, it is nevertheless true that, although we concentrated exclusively on inflation, both America and Japan have done better with lower inflation rates and also with lower unemployment figures. Both have maintained a much larger public service borrowing requirement than we have. The truth is that they have not been impeded by a doctrinaire attachment to monetarism.
However, it must also be remembered that we started with an enormous advantage over every western nation except Norway with the windfall of North Sea oil. From 1979 to the end of last year the Government received over £40 billion in North Sea oil revenue. None of our principal competitors has enjoyed this advantage. The bill for unemployment benefits since 1979 has been, coincidentally, also £40 billion. Therefore, the total of our oil revenues has, in effect, been spent on unemployment benefit.
The Government have failed in other ways. Despite our vast nationalised coal, oil and gas resources, energy prices to the high energy-using industries like paper, with which I have an association, steel, chemicals, cement and glass, and to the clay-using industries, have been higher than those paid by their foreign competitors in France, Germany and America, putting them at a disadvantage. Although numerous appeals have been made to the Government by the leaders of these industries and by Sir Terence Beckett of the CBI, it has all been of no avail. Despite all these horrific facts, the Government have announced once again today that there will be no change in their policy.
Nothing that the Government have said in this House or in the other place seems to many people to be remotely adequate to deal with the future. Economic survival is at stake, and we have no strategy for dealing with the situation. If we do not secure an improvement in our balance of payments when the oil revenues peak and begin to decline, as they will soon do, we shall be unable to pay for our food and for other goods that we need from abroad.
The Earl of Gowrie: Nonsense!
Lord Irving of Dartford: My Lords, we have backed ourselves into a monetarist cul-de-sac with a Government committed to leaving it all to the market but also with a belief that it is not possible for Government to influence the situation in any really significant way. The Government's posture has been one of resolute indecision—as someone said, "Of waiting not to intervene"—but, as in the case of sterling, being inexorably driven to intervene but always too late and often wrongly. This can be seen in the mining dispute, in the sterling crisis, in the battle over oil prices and in other areas. The Government had no policy when the 2.40-dollar pound was damaging our exporters. They had no policy 10 days ago, when they intervened once again to encourage the increase of rates. They had only the fear that the pound might go through the floor.
None of our competitors takes this view. The reliance on the market economy is all very well as long as every other country acts in this way. But we know that in many ways the governments of many of our competitors do believe in intervention and give considerably more assistance to their industries than we do.
The obsession with the public sector borrowing requirement has caused difficulties which not only inhibit the future but could weaken us for a generation or more. I should like to deal with one such situation. Those of us who serve as members of university councils know of the damaging cutbacks that have taken place there. The Science Policy Foundation published a series of critical essays on United Kingdom science policy last year by a group of distinguished people with an introduction by Sir Herman Bondi, for many years one of the Government's chief scientific advisers. They said:
"What is already abundantly clear is that without determined and consistent publicly-funded research and development, the imaginative creativity leading to essential innovation will vanish."
The report goes on to say:
"The message of this first review, put in simplest terms, is that publicly funded research and development continue to be essential to the wellbeing of the United Kingdom. The acceptance of this by Government seems to be in question".
There is no future for the United Kingdom without a highly-qualified scientific and technological manpower, and that is not possible without support for basic science. The Government's lack of concern for research was clearly shown when the Tory Back-Benchers revolted recently over parental contributions, when the money was found overnight by cutting research. Universities suffered a 10 per cent. cut in funding between 1980–81 and 1984–85, with the loss of £460 million of resources. Real resources going into research councils have also been seriously reduced. Sir David Phillips, chairman of the Advisory Board for Research Councils, estimates the research councils face a cut of 25 per cent. over the next 10 years. If we want to be in with a chance in the future we must make more of an effort now. This is a state of affairs which is due to the policy of monetarism and its preoccupation with the public sector borrowing requirement and its unwillingness to borrow to invest in the future.
One other way we are failing to meet the challenge of our time is in the rejection by the Government of consensus. At a moment in our history when we need

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the co-operation of everyone in our society if we are to survive, we live in a society where conflict is the order of the day. The adjustments we need to make if we are to compete in the world are so considerable that we cannot afford the cost of a divided nation. Difficult though it may seem, the Government must secure the confidence of organised labour. Our best companies know this well and have excellent relations with their workers and their unions. It is made even more difficult with a Government who proclaim, as a virtue, their rejection of consensus.
However, the immediate change to be made must be to give unemployment at least equal priority with inflation. I am not asking, nor is the CBI or others, for a massive lurch back to stop-go economics. Nor do we want to risk high inflation. What we want is a moderate reflation of demand to prime the pump, but above all to create jobs in the most direct way and to give hope to many who live without hope—some even living with the fear that they will never have a job again. Where there is no hope there can be no respect for society, and therein lie the seeds of social discord.
In terms of unemployment, it has been said by the Institute of Fiscal Studies, supported by the London Business School, that £1 billion of public investment would provide 185,000 jobs and these, by their purchases, would add further to demand. However, £ 1 billion of tax cuts would produce only 30,000 jobs and this money would be more likely to be spent on imports. The people of this country are prepared to forgo tax reliefs to enable jobs to be created. We ought not to betray this spirit of compassion or the unemployed.
The Earl of Gowrie: Unbelievable, my Lords.
10.44 p.m.
Lord Harmar-Nicholls: My Lords, at this late hour, and after such a list of speakers, it would not be unreasonable to think that all that should be said has already been said. However, there are still one or two points which ought to be covered. The first one I should like to mention, without wanting to over-egg the pudding, is purely a domestic one to this House. What is this Motion doing on the Order Paper? This Motion has been treated by most noble Lords as though it were a serious exercise that there might be in some high-class debating society where they put forward points of view. It is not. I do not complain about the Motion, because it gave my noble friend Lord Gowrie an opportunity to make an excellent speech. I congratulate the noble Lord, Lord Beswick, for his tactical success in getting it on the Order Paper—a clear, blatant, party political exercise.
What makes this a domestic point is that we had such a party political exercise in the form of a Motion on 12th December. The reason that I am particularly drawing attention to it is that I am rather interested in seeing that we maintain the proper standards of our parliamentary system in the two Houses. On Page 379 of Erskine May—which is the "Bible" which sets down the general standard that we should follow—it says:
"Matters already decided during the same Session, a motion or an amendment which is the same in substance as a question which has been decided in the affirmative or negative during the current Session, may not be brought forward again during that Session."
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What we debated on 12th December was identical to what we are debating today, and this is the same Session. I have the feeling that this Motion is only on the Order Paper because, in the knowledge that the cameras were going to be here, it was thought a good opportunity to place on the record what were thought to be some good, hard, political points that would be against the Government. I congratulate the noble Lord, Lord Beswick, on getting it through—
Lord Beswick: My Lords, I hope that the noble Lord will withdraw those congratulations. This was not something that I thought up on the spur of the moment; I had been thinking along these lines for a long time, cameras or no cameras.
Lord Harmar-Nicholls: My Lords, I shall willingly withdraw the congratulations; but in order to show that I have not said what I have said without some thought, let me give the chronology. Of course the conclusion could be wrong; the long arm of coincidence is often present. However, the reason that I say it on the chronology is this. We had a debate on 12th December and the speeches made then were identical. Almost the same speeches have been made today by the people who spoke on that occasion. They did not have to do much preparation for today. Three days later on 14th or 15th December it was known that today would be the first television day, and two days after that, on 17th December the noble Lord, Lord Beswick, got his Motion on the Order Paper. It may well be a coincidence; but I submit that that, added to the advice that I read from Erskine May itself, would excuse anybody for thinking that they are entitled to treat it as a jolly good tactical success—and I always congratulate a winner—in being able to get through the rules and to achieve something that they wanted to achieve. There is nothing wrong with that.
Lord Camoys: My Lords, I find it very difficult to agree with the noble Lord, Lord Harmar-Nicholls, on this point. First as I understand it, the date on which we were going to be televised was agreed remarkably later than when the Starred Questions were put down. Secondly, I think that the subject which has been proposed in the Motion is so important that it deserves further consideration. I am sorry, but I totally disagree with the noble Lord's point.
Lord Harmar-Nicholls: My Lords, my noble friend is of course entitled to his view and I very much enjoyed his contribution. However, he has been here a very short time; I have been competing in this kind of thing for 35 years and with the same people as I am competing with now. Therefore, I can perhaps recognise things that my noble friend may not be able to recognise, and that is quite understandable. But in answer to my noble friend, let me say that the chronology is quite true. The debate was on 12th December; the announcement that we would be having the cameras was on 14th or 15th December; and the Motion of the noble Lord, Lord Beswick—identical almost to the other one—went down on 17th December, two days later. Erskine May said that it was not something that ought to be allowed. However, we have allowed it and so let us get on and discuss the Motion.

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The other matter which has not been mentioned and which I think is important to have on the record in view of the way in which the debate has gone is this. To form a proper assessment of any Government success or failure, you do have to take into account in my submission the starting point and its inheritance. You must do that before you can form any conclusions as to whether a Government has been a success or a failure in meeting problems which are besetting not only this country, but almost every other country in the world. In talking about the inheritance, I should like to remind your Lordships that in the five years of the last Labour Government the national debt increased more than it had increased in the past 300 years. The national debt went up from £45 billion to £95 billion.
Lord McIntosh of Haringey: My Lords, will the noble Lord give way?
Lord Harmar-Nicholls: My Lords, I would rather not because of the clock; I have already taken longer than many people wanted me to—I am very well aware of that! The national debt went up from £45 billion to £95 billion. The interest alone on that has averaged out at something like between £9 billion to £10 billion a year, and the total income over that same period from North Sea oil has been about £9,000 billion to £10,000 billion. The last Government put North Sea oil in pawn before we came to office. I want to know how many times they will spend the North Sea oil revenue. They put it in pawn 10 years ago; now they want to use it again for investment in this and investment in the other, just as though that indebtedness to which we had been committed before we came to Government did not exist. We should remember that when this Government came to power, in addition to the national debt, the overseas borrowing had risen to £22 billion. During the five years we have been in office we have repaid half of that; we have repaid £ 11 billion. Is that something that ought to be remembered or denied when we hand out the credits and the criticisms of what happened in those five years?
The manufacturing argument has been put many times. In those five years the output per person in manufacturing has gone up 18 per cent. In France it has only gone up 13 per cent. in the same period; in Japan it has only gone up 11 per cent. in the same period; and in Germany it has only gone up 8 per cent. in the same period. Again, we should remember that, per 1,000 of the population, we have more people in employment in this country than any other European country except Denmark. These are matters that ought to be taken into account when we think of the criticisms that will be put forward.
As I want to deal with this as a debate and not as a prepared lecture, I am impressed by the contradictions that come from people who genuinely want to find an answer to many of the problems. The noble Lord, Lord Ezra, who is not in his seat, made a most effective speech; he recommended most strongly that industries ought to invest in capital equipment to make them feature among the leaders of the world, and that is right. The noble Lord quoted an example of a shoe firm which, because it had spent money on investing in
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new machines and equipment, had been able to preserve jobs that would not have been preserved. But as a consequence of having the new equipment, it had to dispense with a number of employees, who had to go on the unemployment list. It had to do that in order to remain efficient; in order to remain in business at all.
I should like to think that the noble Lord, Lord Ezra, and those noble Lords who agreed with him, were prepared to admit that some people had to go on the unemployment list in order to keep certain companies modern and competitive, instead of charging the Government for the extra unemployment which had arisen from the very investment that they had recommended as the answer to some of our problems. Those are the sort of contradictions to keep in mind.
I am sorry that the noble Lord, Lord Glenamara, has left his place but he made a most emotional and very impressive speech, and I know that he was very genuine about it. In the process of making his speech, because he was concerned for the North-East, he said that it was a pity we did not carry on with the industrial development certificates, which meant that past governments sent industry to the North-East where it was needed. The noble Lord may be weeping for the North-East, but I am a Staffordshire man and I weep for the West Midlands. The main reason that the West Midlands, which was the most successful part of this nation for something like 60 years, is now in the doldrums and at the bottom of the league, is because it was not granted industrial aid certificates at a time when it wanted to vary its industries. That was a crime committed by Governments of both sides, my own as well as the Opposition. I make the point only to show that, if the noble Lord, Lord Glenamara, thinks that it is right in the interests of the North-East that these things should be done, then of course, the Government have to take into account my views too, when that supposed remedy brought such disaster to the West Midlands, which is my part of the world.
Then we heard all the talk about our supposed position as a result of the report of the OECD that we had not been spending on infrastructure. The facts are clear. The spending on infrastructure in 1984 was equivalent to what it was in 1979. The Government are spending just as much in real terms in 1984 as they did in 1979. But if you add to that the contribution to the replacement of infrastructure that has been made by free enterprise as well, the total of the free enterprise contribution and the Government contribution is no less than £55 billion—the highest it has ever been. These are the considerations which have to be taken into account if we are to look upon this for what it is—a Government-bashing exercise done under the auspices of this particular Motion.
The one thing which I hope will come out of it, whether it is in accordance with Erskine May or not, is that we can on things which matter so much for the future success of this country find some sort of unity. You are not going to get unity of parties, but you can get the unity of the people in some aspects, and particularly on the question of unemployment.
I should like to feel that this House would take the lead in removing this charade of charge and countercharge on unemployment, and take it out of the party

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political arena. It does no good. It is not helping, and there is no need for it. We know that unemployment is not a British problem. We know that unemployment is a problem affecting the whole of the Western world, and we know that it is a nonsense to suggest that that is not being dealt with because our Prime Minister is more assertive in her style than some people would like her to be.
We have really to get down to this. As the noble Lord, Lord Ezra, has said, we ought to make use of our inventions, but when we get inventions which will do in ten minutes what it previously took a hundred men a week to do, of course we have to go through a phase where we have the problem of unemployment, and we get nowhere by turning it into a party political shuttlecock as has happened today.
This House ought not to do that. That is why I did not want the Motion, although I recognised it for what it was—a party political ploy. If this House is going to remain a part of our parliamentary system, the strength of this House will lie in its objectivity, and the fact that, when legislation comes here, we look at it without the normal party spleen which I suppose is absolutely essential in the House of Commons. When we have debates such as this which highlight differences which, deep down, do not truly exist, I think we are injuring the contribution we can make to the future government of this country.
I should like this House to give a lead in getting down to seeing what the best answer—not the perfect answer, or not one that will bring a solution overnight—is likely to be for dealing with the scourge of unemployment, which is affecting not Britain alone but our fellow men all over Europe.
10.59 p.m.
Lord Kaldor: My Lords, in view of the lateness of the hour I shall restrict myself to one point; that is the causes and consequences of the recent spectacular fall in the exchange value of the pound. I apologise to your Lordships if you detect that I say something that has already been said by one of the previous 34 speakers. I shall try to avoid that.
I believe I am right in thinking that the fall in the pound in recent weeks caught both the British public and the Government unawares. The Government are firmly ensconced in their beliefs in monetarist dogma which states that provided the money supply is correct inflation will be kept at bay and we do not need to worry about the exchange rate. It has been said many times both by the Chancellor and by the Prime Minister that the exchange rate must be left to market forces. That was changed last Sunday and I will not go into that now.
I merely wish to say that when the market forces do something quite so big and unexpected as the fall in the pound from 2.40 dollars to 1.10 dollars in little more than 18 months, this may have far-reaching consequences, especially when after the event in looking back we can find pretty good reasons why international speculation should have turned against the pound. It reflects a lack of confidence in our continued ability to pay our way and to pay for essential imports by exports, despite the godsend of all
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this extra revenue from oil, which we could not have reckoned on before it occurred.
For several centuries Britain lived and prospered—I am stating absolute platitudes—by exporting manufactures in exchange for essential food and raw materials. As recently as 1954 this country had a perfectly well-balanced trade structure. Our exports of manufactures, which exceeded manufactured imports by more than three to one, were enough to pay for our essential imports of food and raw materials. But from the late 1950s onwards our position continuously deteriorated. Our net trade in manufactures became smaller and smaller because the imports of manufactures, despite devaluations and this and that, consistently rose in volume twice as fast percentagewise as our exports. In the course of this our share of imported goods in the total domestic demand for manufactures rose from 5 per cent. in 1954 to 33 per cent. today, whereas the world demand for British goods as a percentage of total world demand has not risen; on the contrary, it has tended to fall. Of the 11 major industrial exporters we are the only one to have halved our share between the early 1950s and 1970.
After 1972 the position appears to have stabilised itself. Our share hovered around 10 per cent., but this may simply have been due to the fact that as a result of the oil shock there was a general stagnation in the world—world trade had not risen. On past experience we have always done much better, relatively speaking, in years in which world trade has not risen much than in years when it has. It was when world trade was rising fast that our share was falling fastest.
In 1979 our share of world trade started slipping again and now it is only three-quarters as high as it was in 1980. If your Lordships do not believe me, a CBI circular was circulated to all members today which contains these figures. The net balance in manufacturing trade showed a steady and alarming fall. In 1963 our exports were still more than twice as high as our imports. In 1967 our exports still exceeded our imports by more than two-thirds. But a few years later, by 1979, the surplus had disappeared. Since then, the balance has turned increasingly negative.
If you take the last three years alone, the rise in imports of manufactures exceeded the rise in exports by £3 billion a year. This year the balance is £9 billion less favourable than three years ago. This means running into a catastrophic balance-of-payments crisis; and anybody who studies these figures will become a natural speculator against the pound. Indeed, the deterioration over the last six years has swallowed up all the benefits balance-of-payments wise which we had from North Sea oil, which enabled us to reduce our imports and to have net exports of oil.
This deterioration is still going on. It may be kept in check or temporarily reversed by spectacular falls in the exchange rate, such as last week's fall, which was greeted by our industrialists, according to the Financial Times, with the utmost joy. They will be able to export at a terrific profit because the pound is so undervalued. All I wish to say is that from the Government's point of view, as regards the avoidance of inflation, it is a mixed blessing. It is a very dangerous development because what happens is that,

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with each of these shocks, the pound's external value becomes more undervalued in relation to its internal purchasing power.
That is a sure sign of running sooner or later into the kind of sweeping inflation that Germany went through in 1923. That summer, I remember, for a dollar you could live in Germany for a week—about the same price as a single meal in London or New York—because the mark was so undervalued in relation to its internal purchasing power. That kind of undervaluation sooner or later unhinges the domestic cost and price levels and leads to a cumulative process of inflation.
The second thing that I want to say is that, contrary to what various people have said on both sides of the House—and I did not agree by any means with everything that was said on this side—mass unemployment such as we now have is always a sign of some kind of malfunction of the market economy. A healthy market economy eliminates by itself any involuntary unemployment on a large scale. But if something does not function properly—if I may use a human analogy, if some organ, either your liver or your heart, or some other organ, has something wrong with it—then you get as a manifestation, in this case, heavy unemployment.
Keynes was the first to analyse this. He showed that heavy unemployment was a consequence of disproportionality between the people's propensity to save and business's desire to invest. That causes incomes and employment to fall until the two coincide. To take the simplest example, if you are able to export 20 per cent. of your maximum potential output of manufactures but you import 25 per cent. of all your consumption of manufactures, or personal consumption and investment, the result is that businesses will make losses at any level of output which is higher than 80 per cent. of the full employment level, because at 80 per cent. the two ratios become equal to each other—the export ratio and the import ratio. And that is the necessary condition for producers as a group getting back in the form of receipts as much as they laid out.
So what I am trying to say is that, if you want to get rid of unemployment, there is only one way of doing it—but when you hear what it is you may be uncertain whether the remedy is worse or better than the disease. To get rid of unemployment, all you have to do is to restrict imports to the percentage which would be compatible with an equality of imports and exports at the full employment level.
There are hundreds of ways of restricting imports: by duties, as we did in 1932, by licences, as we did during and after the war, by embargoes, by this or by that—there are hundreds of ways of doing it. But any way in which you restrict imports will automatically provide an expansionary force to increase domestic production and employment until this involuntary unemployment is eliminated. That is why I say the remedy may be worse than the disease, because this is the sort of remedy which is incompatible with our membership of the Common Market.
My Lords, if I may speak just very briefly, I think the Common Market has been an absolute disaster. One cannot say that the Tories or Labour were responsible
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for it: the whole nation is responsible. There was a referendum, which came out two to one in favour of joining. But whereas before we joined the Market we had an annual surplus in manufactured trade with the six countries of Europe, including Germany, of £400 million at 1970 prices, which is equal to nearly £ 1,800 million at present prices, last year we had a deficit in our manufactured trade with the countries of the European Community of £7,900 million. This year that deficit is going to be anything between £8·5 and £9 billion. It is twice as much as our total deficit in manufactured trade. So the employment that we lost, we lost to our partners in the Common Market, who, though they bought more from us, bought much less than what we bought from them as a result of being in the Common Market. It is only in this way that a surplus of £2,000 million can be converted into a deficit of £8,000 million, and that fully explains all the unemployment that you have here.
I know that there are Euro-fanatics who think that the future of Europe is far more important than prosperity, full employment or even the fate of this country—and after all they have the right to emigrate to Europe and set up business there. Whether all of us feel like that, I do not know; but I would merely wish to end my speech by saying that there is a simple remedy for unemployment—a remedy which was taken by a Conservative Government—the so-called National Government—in 1932, which in five years practically cured the situation by increasing manufacturing output by 50 per cent., increasing manufacturing employment by 33 per cent. and reducing unemployment by one and three-quarter million. So we could do it again. We did it once and we could easily do it again. But when we did it then we were not members of the Common Market. Whether we can do it now without leaving the Market, I do not know.
11.15 p.m.
Lord Rea: My Lords, at this late hour you will be relieved to hear that I am not going to give a discourse on macro-economics but will diverge to a rather more domestic subject.
I think it is appropriate to spend a few minutes in this debate considering the National Health Service because it forms a major part of our national life both economically and socially. We nearly all use it, and about 1 million people work in it. I have worked in it for about 25 years now. It is a very popular organisation and very cost effective compared with the health care systems of other countries. According to recent figures given by Mr. Kenneth Clarke in Hansard of another place—or should I say the House of Commons?—on 5th December, we spent 5·9 per cent. of our gross domestic product on health in 1982, compared with 9·3 per cent. in France and 10·6 per cent. in the United States. In cash terms, we spent £290 per head per annum, only just over half as much as the French who spent £540 per head, and I think received no better service for their money, although their doctors did a great deal better than ours.
It is good value for three main reasons. First, there is the referral system in which patients have to pass through a primary care "sieve" before reaching the more expensive secondary care or hospital level. Secondly, it is funded centrally from general taxation,

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a fact which in one sense might worry monetarists but in another sense might gladden their hearts since they can of course control it more easily. To this Government's credit, they have been more generous to the National Health Service than to other departments. Perhaps this has been politically expedient because the service is so popular. Thirdly, it is free at the point of service, thus eliminating a whole area of expensive bureaucracy as well as in my view greatly improving doctor-patient relationships. All of us know who said,
"The National Health Service is safe in our hands".
Those of us working at ground level in the Health Service, however, sometimes feel that these hands are gripping us so tightly that it is becoming hard to breathe. Certainly morale in the Health Service has not been good for some years but pessimism is now rapidly giving way to anger. Much of this is due to the directives from on high to regions and districts about how to manage their affairs, instead of trusting them to get on with it. We are very uneasy about some of the recent appointments to the health authorities which, due to the Conservative administered reorganisations of 1974 and 1982, were undemocratic in the first place and depended very heavily on carefully chosen personnel. We trusted the Minister to be fair in his choice. We are particularly worried now about the new Griffiths managers.
Expertise in commercial business is not necessarily a good qualification for managing the more difficult ethical and social problems involved in running a health service. Enforced "putting out to tender" of services has been greatly resented resulting as it has in many cases in reduced standards, loss of jobs and diminished security for the lowest paid, as my noble friend has pointed out. Cleaners in a hospital are part of a team.
Professor Davies of Addenbrookes Hospital, Cambridge, the paediatrician who resigned from his district health authority in protest, said:
"In my ward we value very highly the responsible and loyal work of our cleaners and the personal help that they often give to our patients and their parents."
I think that many of us who have spent time in a hospital ward would echo this. Casual contract labour cannot fill the gap, but the profit from their labour can fill somebody's pockets.
I will briefly suggest three ways in which the National Health Service could be developed, and which may help to restore morale. First, community care should be strengthened—and I hope in a moment to develop that theme a little. Secondly, research and new advances in treatment should be generously funded. Very expensive equipment and procedures must of course be subject to close scrutiny. Technology for its own sake, despite its excitement, is to be avoided. But we have in Britain some of the best medical scientists in the world: they will go elsewhere if we do not use them. Here I echo the noble Lord, Lord Ezra, in regretting recent cuts in the Medical Research Council and University Grants Committee budgets for equipment and research. This was an appallingly bad decision. It is equivalent to a farmer who is in financial difficulties selling off his seed corn to pay his debts.
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As well as improved treatment, research also uncovers the causes of illness and ways of preventing it. This leads me to the third way in which the National Health Service could develop. Real efforts should go into preventive health. The main brunt of the diseases of affluence with which we are now afflicted falls on those aged from 40 to 70—an age group that covers most of the people in this House. I wonder sometimes whether the reason why the lip service paid by successive Governments to prevention is not followed by action is because they fear that they could not handle the increased numbers surviving to enjoy their retirement and eventually having to be looked after in their old age. This is a difficult problem, but one that should be faced honestly in any look into the future.
An ageing population is already a factor that the Government acknowledge. In financing the National Health Service we have to run in order to keep still. To give credit where it is due, the Government recognise this. Sometimes, however, this "built-in" cost increment has been claimed as a real increase, whereas it is in fact paying to keep the service where it is.
This brings me back to look again at community care. For a long time it has been accepted that more care should take place in the community, in patients' own homes or in small domestic-sized institutions wherever possible. This applies to old people, to mentally ill people and to some of the work now done in acute hospitals. But initially this is not cheap. Buildings need to be adapted and new staff taken on. When all the large Victorian institutions are finally closed or modernised and their staff retrained and redeployed in the community, we may possibly break even or even save money. But for some years many mentally ill patients, for example, will need the protective environment of a self-contained institution.
Some of those institutions are being emptied too fast. Many of your Lordships may have seen the "Horizon" programme last week on the closure of Friern Hospital. Insufficient resources are being made available in the communities which are receiving people discharged from the large hospitals. The budgets of some local authority social service departments are being augmented by joint funding schemes—an excellent idea, but eventually they will have to shoulder the burden themselves. With the threat of rate-capping it is not surprising that local authorities are reluctant to commit themselves to sufficiently wide-ranging community care schemes. In the circumstances, they may resent having vulnerable people literally dumped on them.
The Government's policies to control local authority expenditure are thus directly hindering the development of the community care that is needed as a result of their own policy of hospital closures. It is the least articulate, with the least ability to look after themselves, who are suffering.
Care in the community also includes primary care—general practice and its related services, including the district nurses, for example. I include the home helps and meals-on-wheels service as an essential part of that team. General practitioners and district nurses cannot look after old frail people in their own homes without the assistance of these absolutely essential people. They are funded by the social service departments, which are in great difficulty at the

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moment. Primary care controls the gateway to the expensive hospital and specialist services.
In general practice today standards are higher than ever, with universal vocational training, but excellent young vocationally trained GPs are now having difficulty in finding jobs. It is not because there is no need for them but because the practice vacancies are controlled rigidly by medical practice committees under DHSS direction. Many older doctors are not retiring, as the Acheson report suggested they might, and making way for well-trained and enthusiastic newcomers, often with a broader outlook than some of the older family doctors—of whom I suppose I am now one.
I think that wise investment here will pay off by helping to contain the ever-rising costs of hospital care. But GPs are not getting much encouragement from the DHSS right now. Instead, they are being told how to manage their business without consultation. Last year they were told to cut down on deputising services without any constructive alternatives. After a very angry response the Department of Health and Social Security backed down. Now, again, we have an edict from on high limiting the drugs prescribable on the National Health Service. There was no prior consultation, and the Government have succeeded in making enemies of the British Medical Association, the pharmaceutical industry, the Labour Party and the Alliance—strange bedfellows your Lordships might say.
I hope that by the time we debate this issue on 6th February—answering the Unstarred Question of the noble Lord, Lord Kilmarnock—the Government may have had second thoughts on the matter. One has always believed in some limitation on what we should prescribe. I was at first inclined to stand back and watch the contestants slug it out, but there is a principle involved apart from the lack of consultation. Some people of limited means will not be able to get the prescriptions which most suit them and to which they have become accustomed. Those who can pay for them will do so. Double standards based on ability to pay are being introduced. What is strange about this decision is that the Government have in their hands an excellent report—the Greenfield report—which came out with a much fairer way of saving money on drugs and which was much more acceptable to the professions concerned.
Looming ahead for general practice is the Green Paper on primary care. There were days when we could have looked forward to a constructive and forward-looking proposal from the DHSS in such a paper, and I hope we still can, but we fear that its main purpose will be to put financial restrictions on general practitioners and the services which they can provide.
I think I have said enough to suggest that the National Health Service needs an injection of hope and a new sense of direction. We have got a service which is popular and an integral part of our national life. There is a real need for wise investment in key areas of what is already a remarkably cost-effective but very underfunded service.
11.29 p.m.
The Earl of Longford: My Lords, I will not follow my noble friend Lord Rea in his very interesting
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observations. The time is late—it is just on half-past eleven—and I am assured by high authorities on this side that I shall be tolerated if I speak for not more than 10 minutes, popular if I speak for seven or eight minutes and still more popular if I speak for five minutes. I may not achieve the last named figure, particularly if I am interrupted.
I rise with one purpose only—to support the general theme of my old and dear colleague, my noble friend Lord Beswick. In the absence of the noble Earl, Lord Gowrie, whose great talents we recognise, I shall not criticise him except to say that I am afraid that he missed what seemed to me the main point of my noble friend's speech. It seems to me that he was stressing the disaster that will overtake any country that relies on unadulterated self-interest as its driving motivation.
To focus our thoughts, I shall just quote an extract from St. Francis of Assisi. No noble Lord on the Benches opposite, and I am certain not the right reverend Prelate, who spoke so well, is likely to object to it. In a prayer attributed to St. Francis one reads these words:
"Lord, make me an instrument of your peace.
Where there is hatred, let me sow love;
Where there is injury, pardon",
and this in particular:
"Where there is discord, union".
When the present Prime Minister, whose great qualities are recognised by all in varying measure, took office originally, she proclaimed from Downing Street those words and some more attributed to St. Francis. Obviously those words are very hard to live up to. Perhaps no Administration has ever lived up to them totally, but I venture to say that no other Government in recent times have failed so totally to approach the problems of government in that spirit.
I come to the unemployment problem, which was effectively expressed by a number of speakers, but I have in mind particularly what was said by the noble Lord, Lord Glenamara, who is not with us now. He was speaking about the whole area. I cannot speak for any large area like the noble Lord, Lord Glenamara, and other noble Lords, but let me say a few sentences about unemployment among the young homeless in central London. I was talking yesterday to one such young man in a club which I visit almost daily and have done for 15 years. He had been unemployed for four years. When I asked him whether he was looking for work, he admitted that for two years he had not thought it worth while to try to get a job.
I am sorry to lose the attention of the noble Earl, Lord Stockton, as I was coming to him, but I shall have to speak about him in his absence. I very much enjoyed his speech.
The young man made it plain that he had lost any desire to find a job. In fact, through the extraordinary working of our system he gets something more than £5,000 a year on social security. That is quite legal and that is what he gets at the present time owing to the extraordinary rents that people have to pay; and that in itself is an outcome of the housing policy. If one considers young men in central London, and indeed all over the country, not only in the areas affected by the mining dispute but in the North, Liverpool and all such other areas, I venture to suggest that many of

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them are being damaged for life, and a heavy responsibility falls on the Government who are leaving them in this state of almost permanent unemployment.
What I was going to say about the noble Earl, Lord Stockton, was this. It arises out of something that he said about the noble Earl, Lord Gowrie. He said that he had quoted with great satisfaction some words of Mr. Gladstone—words that must have been spoken a good hundred years ago. The noble Earl, Lord Stockton, said that he had for a long time begun to realise that Conservatives were no longer Tories; they were just Victorian Liberals. I think that there is a lot of force in that; self-interest is to be regarded as the sole effective motivation.
Some years ago I remember Mrs. Thatcher discovering a pamphlet for the first time—the works of Adam Smith, whose The Wealth of Nations came out in 1776. It will be remembered—the noble Lord, Lord Rea, will certainly remember it—that in The Wealth of Nations Adam Smith argues that any man in pursuing his own interests will serve the interests of the country. That was the optimistic doctrine of Adam Smith because he believed there was an invisible hand which assisted that result to come about. Well, I am afraid that no invisible hand seems to be assisting the present Government. I do not know whether they expect an invisible hand to produce this result. Adam Smith's optimism led on, as I think economists who are present, my noble friend Lord Kaldor and so on, will agree, to the gloomy doctrines of Ricardo and then on to the class war of Karl Marx. What we find when we pursue self-interest is that selfishness in the employer is selfishness in the workman or in the group of workmen. In other words, economic man is a greedy man.
This greediness, which is the philosophy of the Government, is what is producing a state of national dissension. I know that we shall never get total union in peacetime in a democracy, but in the days of the noble Earl, Lord Stockton, and some other governments—certainly we tried to do it in Labour governments and it has been tried in previous Conservative governments—there was a desire to try to find some common purpose. That desire seems to have evaporated in the case of the present Government. Therefore, the only advice I can offer the Prime Minister—she might not take it but nevertheless I must offer it—is to forget Adam Smith, try to avoid the consequences in the teachings of Karl Marx, and return to St. Francis of Assisi. That was her first and her best guide.
11.38 p.m.
Lord Molloy: My Lords, it has been a long debate. The pitch has become a little bumpy, but the lights are still blinding. Some have found it too "hot in the kitchen" and have gone off home. It is now 20-odd minutes to midnight. Just a few moments ago the noble Earl, Lord Stockton, left the Chamber. He had sat it right the way through and I would not be surprised if he came back. I think he deserves some credit for that.
Lord Boyd-Carpenter: My Lords, would the noble Lord allow me? My noble friend left the Chamber and said he was returning. No doubt once he sees the noble Lord's name on the annunciator he will hasten back.
Lord Molloy: My Lords, that only goes to reveal that the noble Earl is not only a man of courage and ability but of great intelligence. The last part of the recitation goes like this: "There is a match to win"—and there certainly is. The match that we have to win is to try to get this Government to listen to others than their own specific rich friends. If we can have done that in this House tonight, I believe we shall have made a good contribution to overcoming some of the ills that afflict us.
The noble Earl, Lord Gowrie, made I believe a very brave speech. It is very difficult to have to defend this Government in any rational society. I believe he spoilt it with a redolence of sycophantic behaviour and unfortunately he seemed to borrow a certain amount of arrogance—I think he borrowed it from 10 Downing Street.
The noble Baroness, Lady Seear, thought all of us were out of step except, of course, the Social Democratic Party and the Liberals, and that Britain would do much better if it stood on the club feet of those two so-called political parties. There is a desperate unpleasantness and an awful attitude abroad in our country, which has been developing over the past three years. Tolerance seems to be withering on the vine in Great Britain. There is, all over the country, an amount of abrasiveness which I believe we are not used to. Basically the cause of all this is not merely one person being unemployed in a particular family; it is the overall result of unemployment on all the family.
On this particular aspect, I know what I am talking about; I know what unemployment means. Before the Government gave me a free suit in 1939—we all know what for—my parents, with their family of seven, had gone through the agonies of unemployment. It is not merely a question of doing without things; it is not merely a matter of damaging one's health: it damages people's minds. This is what this Government have to try to understand. Because of this awful threat of unemployment, because of the state into which the nation is getting, we have seen the appalling increase of the drug racketeers and, I regret to say, of violence, too, both on our streets and on the picket lines.
I come from mining stock. I am 100 per cent. with them. But I firmly believe, as Mr. Kinnock does, that they are doing their just cause no good by resorting here and there to violence. I have to say this loud and clear. I, for one, will never accept that from John o'Groats to Land's End there is no Briton capable of running Britain's mining industry. To say otherwise is a disgrace. It is unfortunate for Mr. MacGregor, but it is a great disgrace to our country when I hear Frenchmen, Germans, Americans, Belgians and Dutchmen make the point, "Whatever has happened to you? You have to turn to someone from another country to come and run your great industry." That is something we shall have to deal with.
When I say that I deplore violence, I can also understand the agonies in the mining communities

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which are being destroyed. I say, however, to those who have indulged in violence that when you have convinced thinking men that it is right and humane men that it is just, you will gain your cause. Men lose half of what is gained by violence. What is gained by argument is gained for ever.
There has been an increase in many evils in addition to unemployment. Over the past four years we have seen a dramatic increase in drug-taking. There is an enemy within our nation: it is the enemy of callousness. Sometimes, when I look at the callousness of the Government, I ask myself, "How can one blame other people being callous in their attitude to each other?" Good manners seem to be going. Good things are under threat. The NHS has been under threat; housing has been under threat; our civilised welfare state has been under threat. There is the curse of unemployment, and, if I may say so, the curse of bankruptcies. Under this businessmen's Government, we have had a record number of small businessess going bankrupt since records were kept. The small family business does not seem to count to this Government. When will someone as well as those on this side stand up for them? This, linked with unemployment, is a cancer affecting many families.
I believe, too, that the dreaded curse of unemployment among our youth has not really been taken seriously by the Government. I have listened to a number of examples given by various Ministers from time to time as to what has to be done. But nothing really has been done, not only to try to reduce unemployment but also to prevent unemployment. It goes on and on. Where it hits our youth, it is very serious. The millions of young people in the dole queues of Britain are the trustees of our posterity. There is a grave danger of Britain's national pride being a victim of the callousness of this Government.
It seems to me that the Government are bent on destroying or crushing aspects of trade unionism, forms of demonstration and the spirit of youth. Local government is under attack, as are all the things really beloved of the people of this country. This Conservative Government seem obsessed with the discipline of fear rather than with encouraging the sustained energy of confidence which could help our nation so much.
The Government are hanging on to discredited and dangerous economic policies. They are blind and deaf to the lessons of the 1920s and the 1930s. Twice we have heard in this Chamber the remarkable experiences of the noble Earl, Lord Stockton. In the days when he wrote his book, The Middle Way, some of us thought that it was our only salvation. Written by a Conservative Member of Parliament, it was totally ignored by the National Government of the day. But it was not ignored in other places.
As I have said, from time to time we have had assurances from the Benches opposite that unemployment is going to be reduced; it is going to be dramatically reduced; we have only got to wait until next year, or perhaps for 18 months. That has been going on for nearly five years. What the Government have really been doing is whitewashing their own pie in the sky. That is the truth, is it not? The humour of Shaw, the humour of Shakespeare and the humour of
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Oscar Wilde told so many great truths. May I modestly join their company?
There is a real and tried alternative, and it is this; I have mentioned it before. I am referring to the policies of Keynes and Galbraith, which they in turn outlined to the greatest American of our time, Franklin Delano Roosevelt. He implemented the economic policies of Kenneth Galbraith, a Scots-Canadian who was to become an American ambassador. I think that is a remarkable achievement for a person whose roots are in this island, and of whom I am most proud. Galbraith, with Keynes, convinced FDR about their policies. What happened? There was in the United States of America in the mid-1930s a remarkable recovery, which drifted over to this island and assisted not merely in getting rid of unemployment in the United States and starting to bring it down in Great Britain but in providing us with valuable breathing space to resist the onslaught of Fascism. I am very pleased to read that Mr. Edward Heath has joined my four-year-old plea to adopt the policies of Keynes, Galbraith and Roosevelt and return to the sanity of spend and prosper.
We need to give a lead to involve ordinary people in the principles of fair play: trade unions and management. I believe that social justice for all our people will encourage them to give of their best. In conclusion, I should like to quote our great poet, Milton, as I have done once before in this Parliament. I ask the Government to take note of this; it is well worth noting. It is about the greatest, most wonderful thing we have in Great Britain—our own British people. As Milton has said, we are,
"A nation not slow and dull,
But of a quick, ingenious and piercing spirit,
Acute to invent,
Subtle and sinewy in discourse,
Not beneath the reach of any point,
The highest that human capacity can soar to".
If we can really accept that as a description of the backbone and the guts of the British people I say that we have nothing to lose but our national sadness and the despair which afflicts this island. I hope the Government will read this great debate today, that they will take the advice proffered on all sides of the House, and that we can move forward, but not to become a great nation just simply for the sake of greatness. I happen to believe that, with that sort of leadership, the endeavours of the people of this country can be an example to all mankind.
11.50 p.m.
Lord Graham of Edmonton: My Lords, it is clear to me that a consequence of the economic policies being pursued by the Government is to diminish the declining store of fellowship and national spirit that we so desperately need in 1985. The question others have already asked and which must be repeated is: what is the economic imperative of this Government? Shorn of all the jargon, it is to make the rich richer, even if in so doing they make the poor poorer. We have seen crocodile tears for the victims of Tory economic policy—the 4 million unemployed—fail to mask the true recipients of the Government's concern. That is spelt out in the priority to be given to reduce taxes in preference to reducing unemployment. The Government are responsible for recreating the class

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system in our society—not the old classes, but the new ones: those who are in work and those who are not in work. By appearing to care more about the lot of those in work than those without jobs, there is created a dreadful resentment in our society between the two classes.
Government policies that perpetuate divisions and rivalry create dreadful choices. I say to the Government: you cannot strengthen the strong by weakening the weak. The poor, the needy, and the disadvantaged in our society are the real martyrs. The appeal to greed, to selfishness and to the devil take the hindmost is naked and unashamed. Many illustrations of that have been given in this debate. I intend to pursue only one: that touched upon by my noble friend Lady Fisher when she referred to the issue of the low paid, and wages councils.
It seems to me that the Government are determined to get out of the business of government by withdrawing from the government of business. Yet while they are ostensibly concerned with justice in the workplace, they are pledged to remove some of the protections enjoyed by workers in general—but in particular in the distributive trades. The shop workers and catering workers are among the lowest paid sectors and rely upon statutory protection to ensure fairness and equity. For instance, it is an open secret that the Government are hostile to the continuation of wages councils. The 1983 Conservative election manifesto was pledged to ensure that wages councils do not reduce job opportunities by forcing workers to charge unrealistic pay rates.
The Chancellor is on record as asserting that institutional mechanisms for fixing pay, such as wages councils, distort—and I emphasise that word—the operation of the labour market by maintaining high rates of pay, and prevent employers from taking on more workers. Let us look at both of those claims. What are the unrealistic pay rates? The adult male rate covered by the Retail Food Wages Council is £71 a week; the 60 per cent. rate for 16 year-olds is £42 a week. The supplementary benefit level for a couple with two children and paying rent and rates of £21 weekly now stands at £103· 15p (that is the long term rate). That puts the wages council rate at £32·15p below the supplementary benefit level.
If we take earnings as a yardstick, the Retail Food Wages Council figure for earnings, as a percentage of national average earnings, is 71 per cent. In 1979 it was 84 per cent. The relative position of workers covered by wages councils and the position of other low-paid workers has declined dramatically under this Government. For non-food retailing, the decline has been from 87 per cent. to 75 per cent.
In the light of the figure of £71 being the rate that we seek to protect—and to that the Opposition say "Hear, hear"—and in the light of the likelihood of that wage rate being abolished, I ask the Minister how on earth it can be regarded as an unrealistic wage rate? I recall the words of the right reverend Prelate the Bishop of Derby who earlier reminded us of a Government official, an appointee, who was paid the enormous sum of £95,000 a year. How can we expect to get national unity and support for the Government and do away with resentment if, on the one hand, £71 a week is
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looked upon as an unrealistic wage rate and, on the other hand, the Government pay £95,000 to an official? For instance, do the Government ever listen to their friends in the CBI? The CBI has stated that wages councils will provide a valuable safety net for low-paid workers; that wages councils play an important role in preventing under-cutting of wages. Smaller companies benefit from the multi-employer bargaining in wages councils. Yet what have the Government done to strengthen and enforce statutory protection for these low-paid workers in shops and in small factories, and also for the home workers? Since 1979 the number of inspectors has been cut from 166 to 120; the number of visits to employers has declined from 34,000 to 26,000. Inspectors discovered that over one-third of the employers were breaking the law; more than £2½ million in wage shortages were assessed.
It is a sad fact that many employers would pay less even than the current low level if they could get away with it. It is a further fact of life that wages councils are found in industries where there is little effective trade union organisation, where workers have inadequate job security and where they are vulnerable to exploitation. If the wages councils are abolished, that will make their position far worse.
However, this policy of abandoning the weak to the perils of market forces contrasts remarkably with the Government's policy on pay towards its own employees, the civil servants. The Chancellor of the Exchequer has said:
"The overwhelming majority who remain in work have seen their living standards rise steadily, no matter which measure one cares to use".
Earlier, the noble Earl, Lord Gowrie, in speaking as the second speaker in this debate, said that lower pay rises mean more jobs. Yet since 1980 Civil Service pay has increased by 24·8 per cent. while over the same period, from March 1980 to March 1984, prices have gone up by 36·8 per cent. White-collar workers' pay has gone up by 50 per cent. Civil servants have had to take the lower pay rises. But as for jobs, 108,000 civil servant jobs have gone, with a further 37,000 planned to go by 1988. Here is a case of workers having to settle for low wages to save jobs only to find that their jobs have gone as well.
The Government have succeeded in creating an atmosphere in our society which is not only divisive but frightening; they have created a state of affairs where the conditions for conflict dominate. They have presided over the emergence of a climate of confrontation. They glory in the language of conquest; they delight in turmoil. They seek to reward the strong by punishing the weak. They will pursue these ends at our national peril. Within the timescale of a Parliament, with its massive majority, there is much that the Government can do; but to do it requires the confidence of the people and a Government who care. The Government do not care, and in my view they have lost the confidence of the people. Until they manage to reverse their priorities, and support the weak rather than the strong, they will find no support from these Benches or from me.
11.58 p.m.
Earl De La Warr: My Lords, I listened with great interest to the tripartite discussion between the noble

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Lords, Lord Harmar-Nicholls, Lord Beswick and Lord Camoys. I do not propose to pass any judgment on this. I shall only tell the House that I intend to make a largely apolitical speech because this is the way in which I believe matters of this type should be dealt with in your Lordships' House.
I want to talk to your Lordships about the special problems, if special they be, of long-term unemployment; that is, unemployment that lasts for over a year. As noble Lords know, the figure now stands at 1¼ million and over half of those people have been permanently unemployed for over two years and many of them for three and four years.
A significant statistic follows from that. During the last three to 3½ years long-term unemployment in the terms that I have defined it has gone up by two times. It has gone up from 600,000 to the figure it stands at today. At the same time short-term unemployment has gradually reduced over that period by about 10 per cent. I fear that there is an ugly lesson in that trend.
The vast majority of long-term unemployed, although they are people of all sorts, are made up—as the noble Baroness, Lady Seear, pointed out—of people who are manual workers with limited, or very limited, skills. Therefore it is perhaps not suprising for that reason alone, although there are many others, that there is a very sharp decline in the probability of getting a job as the months go on.
Indeed, about two years ago the Manpower Services Commission published a pamphlet on the subject of long-term unemployment and they produced this figure of probabilities: if a chap had been unemployed for only three months then his chances of getting a job within the following six months stood at just about 50 per cent. His chances of getting a job after 12 months had decreased to below 15 per cent., and that, I think, is a good measure of the problem that we have before us.
Of course the flow on to the unemployment register and off the register is as big as it ever was. Something like 350,000 people a month leave jobs and join the register, and about the same number leave the register and go into new jobs. Therefore the turnover is still, at least at the short-term end, extremely fluid. But still there is this inexorable slippage into the long-term group.
To me it is rather like—if I may try an analogy—an overflow from a fast flowing stream trickling away into a still and nearly stagnant pool alongside. We can all agree—can we not?—that we cannot let this increase in long-term unemployed continue and it must be checked somehow; but mark my words, my Lord—and my noble friend Lord Camoys put this much better than I can—this is not primarily a job for Governments. Governments do not run this economy it is run by business. It is run by managers, by their employees, and the unions of those employees, and it is run by commerce and the representatives of finance. It is management and unions and the Government together who are responsible.
If I may say so, I think that frequently politicians have dug their own graves over this, because year in year out since the war every party has claimed that it was going to do something about unemployment, and
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is it therefore surprising that everybody believes that it is up to the Government to put everything to rights? Of course it is not, and the sooner we learn that the better.
I should like briefly to tell a story that is apposite here. It concerns a company in the food business; a company that many of your Lordships will have heard of, called Kentucky Fried Chicken. It has 300 outlets around the country, and if any noble Lord has a taste for it he might like to know that the nearest outlet is a 25p bus ride away, just at this end of the Old Kent Road.
In an expansion programme the company plans to employ another 10,000 people within the next four or five years. It has for some time been company policy, and will continue to be so, that it does its level best to take its employees from the ranks of the unemployed, and, if possible, from those who have been unemployed for six months or longer. I wish there were more firms who thought and behaved like that. It does not ask for handouts from the Government to do these things, but does them as a matter of policy. I believe there is an important moral there.
I want to make two suggestions: neither is in any sense macro-economic. I believe for reasons that I have given that long-term unemployment will be with us for a very long time, so these suggestions are specific to the long-term unemployed and are intended to be of help to them both from the point of view of morale and, to some extent, from the point of view of finding jobs.
The first suggestion is one which, in nearly the same form, has been made already by the right reverend Prelate the Bishop of Norwich, who has said that there should be a substantial disregard in the matter of part-time earnings. But I say it should be for the long-term unemployed only, because we do not want to go too far in encouraging a nation of part-timers. The improbability of the long-term unemployed getting a job surely provides a justification. It seems quite ridiculous that a man should be able to earn only £4 a week before the extra is docked pound for pound from his weekly benefit money. I should certainly treble that figure. In doing that, I think I am £2 ahead of the bishop, am I not?
The Lord Bishop of Norwich: My Lords, that is correct.
Earl De La Warr: My Lords, when I heard that I thought of putting it up higher, but I decided that I would stick to the existing figure. I contend that if this succeeds, in that it encourages many more people to take part-time jobs, in so far as the taxpayer is concerned it would be at exactly neutral cost. I know that one can argue the other way, but I argue strongly that it would be of nil cost to the taxpayer. I hope that the Government will be able to accept that.
The second suggestion I want to make concerns the enlarging of the existing community programme, for which the Government deserve a great deal of credit. It now takes in 130,000 people every year at a net cost of £190 million. I say "net" because it should be clear that I have deducted the cost of the supplementary benefit which would have to be paid. These schemes are sponsored and run by local authorities and by various voluntary bodies, and they do such work as

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clearing derelict sites, visiting old people and painting their houses, and generally doing other community work. For this they get paid £63 a week.
Three things have emerged from a study of this programme, which, under various names, has been going on for some time. First of all, there is no shortage of volunteers and no shortage of would-be sponsors. Secondly, there is an enormous fillip in hope and morale among those who are on the courses, and clear signs of an improvement in physical and mental morale. But, above all—and this is the most important—the chances of getting a job after you have been on a course are reckoned (although it starts at a low base) to double. So by any standards this is a cost-effective scheme, and I should like to see funds provided to enable the number to double from 130,000 to 250,000 every year.
I would only add that there is an immediate necessity, whether or not that is accepted, for the appropriate department to give the sponsors a longer-term assurance than the one year that they get now; because they cannot possibly organise these schemes if they have to work on the Treasury basis of year by year. This is something which I should like to ask the Government to attend to at once.
These suggestions in no way conflict with the general thrust of the Government's economic policies, and here I should like to join my noble friend Lord Thorneycroft, in two ways. First, like him, from time to time I show manifestations of "rising damp"; but, secondly, I agree with him entirely in that I, too, congratulate the Government on the sterling way in which they have stuck to their guns in making the control of inflation the most important and the most central point of their economic policy. I hope the Government will take on board the suggestions I have made and will consider them carefully, for, quite apart from the terrible wastage, the plight of the long-term unemployed is, indeed, one of the worst of the social evils of our time.
12.14 a.m.
Viscount Chandos: My Lords, as the first speaker tonight (or should I say "this morning"?) with the formidable task of winding up this remarkable debate, I feel like the man commissioned to summarise Paradise Lost in one sentence. The noble Lord, Lord Beswick, has prompted a debate which has fully lived up to the importance of its subject, and I should like to join other noble Lords in thanking him for it.
There is one very clear impression that I have been left with, and one very clear conclusion. The noble Lord, Lord Beswick, has not only proposed a Motion on the need for uniting the nation, but has succeeded in creating that very unity tonight here in your Lordships' House. On every side of the House—on the Conservative Benches, on the Labour Benches, on the Alliance Benches, on the Cross-Benches, on the Benches of the right reverend Prelates opposite—a sweeping majority of speakers has supported the Motion of the noble Lord, Lord Beswick, and has condemned the Government's policies. The Government Front Bench are isolated, with a handful of supporters scattered behind them, as they have seen
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their case destroyed by rational argument, by example and by eloquence.
The noble Earl, Lord Stockton, at the same time as talking about a government of national unity, said that the speech of the noble Earl, Lord Gowrie, was the best defence of the Government's policies he had ever heard. I join in agreeing with other noble Lords that the noble Earl, Lord Gowrie, put up a stalwart performance, even though I sometimes wonder whether, with the noble Earl, Lord Stockton, as a noble friend, the Government Front Bench needs a noble Opposition.
The very facility with which the noble Earl, Lord Gowrie, put the Government's case makes the undoubted success of the Government's critics tonight all the more impressive and significant. The illusion that the Government have fostered these last two or three years that there is, and can be, no alternative has been shattered in your Lordships' House, in the House of Commons, in the City, in the country and abroad. The shattering of that illusion today was also achieved, of course, in a most uncontroversial way by the two maiden speakers, whose mixture of restraint and passion I greatly admired. After the noble Earl, Lord Gowrie, introduced the right reverend Prelate the Lord Bishop of Birmingham as "the embodiment of the Church Militant", I thought that permission might have been given for ecclesiastical fireworks; but the right reverend Prelate's contribution remained restrained, and was no less striking for it.
Perhaps the most notable dissection of all was by the noble Lord, Lord Roll, who used the great authority and impartiality of the Cross-Benches, combined with his reputation as a most distinguished economist and banker, to demonstrate the fallacies of the Government's position. While doing so, the noble Lord, Lord Roll, supported the noble Earl, Lord Stockton, in reminding your Lordships' House of the limitations of academic economists, the noble Lord's own first profession. Modesty, however, may have prevented him from saying that, whatever those limitations may ultimately be, the intelligent critical pursuit of economic analysis is a vital and central aid to good government.
The Chancellor of the Exchequer described the views of Mr. Edward Heath as "voodoo witchcraft" in the House of Commons last week. I would suggest to your Lordships that the conduct of government and economic management in the belief that professional economists have little to contribute is a real example of the ancient form of witchcraft. In this context, I should like to pay tribute to the noble Lord, Lord Balogh, whose recent death has reduced the ranks of great economists as well as the Membership of your Lordships' House. His writings influenced my inadequate study of economics, and his speeches in your Lordships' House were vigorously honest critiques of the Government's misguided policies.
The noble Lord, Lord Roll, has had a second career, as I have said, as a most successful and widely-admired banker. For that reason also, his speech was significant, because it reflected the extent to which his views are now gradually being absorbed in parts of the country, the City, industry and the rest of the business community, which had previously supported the Government with hopeful, but misplaced, loyalty. As

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a demonstration of that trend, your Lordships may like to read today's Financial Times on the subject of the Government's White Paper on Public Expenditure. "Planning on the never-never" reads the headline of the Lex column. The column reported:
" 'Shoddy' was one of the kinder adjectives in City circulation last night."
The financial markets in London and world wide have lost confidence in the Government and its management, non-management or mis-management of the exchange rate. The markets would welcome knowing which of the first two functions the Government were attempting to achieve.
The noble Lord, Lord Roll, demonstrated the crippling damage that an over-valued exchange rate does to exporting industry, and emphasised the point that lost markets cannot easily or quickly be regained. It is for that reason that the noble Lord, Lord Camoys, was being unfair in suggesting that the current lower exchange rate's failure to transform the prospects for increased employment proved that a lower exchange rate three or four years ago would have made no difference.
My noble friends and allies in your Lordships' House and in the House of Commons have called repeatedly for our full entry into the European Monetary System. The noble Earl, Lord Gowrie, despite his voluminous Treasury brief, chose only to tell your Lordships that we could not link sterling to the European Currency Unit within the EMS because sterling is a petro-currency and the other EMS currencies are not. The noble Lord, Lord Roll, has asked what a petro-currency is, and if he does not know, I do not know who does.
Perhaps your Lordships would consider that Norway is in a position rather similar to the United Kingdom; indeed oil and gas production now accounts for a greater proportion of Norway's economic output than it does of the United Kingdom's. The Norwegian Krone might therefore fairly be considered a currency whose sensitivity to the price of oil is at least as great as that of sterling. Yet since the end of 1983 sterling has weakened against the European Currency Unit by twice as much as the Norwegian Krone—12 per cent. against 6 per cent. The EMS has all the flexibility and strength that is needed to absorb the strains that oil price movements impose on the sterling exchange rate, and the Government are being wilfully obstinate in finding one excuse after another for remaining outside the EMS.
The Alliance welcomes the belated change to sterling's parity, but is disturbed by the Government's indecisive ineptitude shown in their exchange rate policy—or non-policy. I hope that the noble Viscount, Lord Whitelaw, can expand on the comments of the noble Earl, Lord Gowrie, and explain why the Government are so reluctant to introduce the exchange rate stability for the future which would substantially ease the burden of uncertainty on British industry.
The central theme of today's debate has perhaps been the choice between personal tax cuts and increased public expenditure which the Government might wish to consider. Events have possibly already overtaken your Lordships' debate with the publication of the White Paper on Public Expenditure to which I
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have already referred. The newspapers this morning have without exception summarised the paper as proposing a major squeeze on public expenditure. I should like to quote briefly once more from the Financial Times, this time from the leading article:
"The other plan which is undesirable in itself is the continuing planned squeeze on public sector capital formation, which will be reduced by nearly a quarter in real terms over the next three years if defence 'capital' is excluded …
"A company which ran down its assets in this way would soon earn a very poor rating in the financial markets. The Government publishes no balance sheet, so the neglect of public assets can be estimated only by inference".
The White Paper lays down plans for the nationalised industries to be net repayers of debt to the central Government, which can be achieved only by under-investment, overcharging of consumers, or a mixture of both. The noble Earl, Lord Stockton, joined my noble ally Lady Seear in asking how long the Government, by making no attempt to distinguish between capital and current spending, will try to mislead the country over the true balance sheet of the public sector.
The noble Earl, Lord Gowrie, himself suggested that your Lordships' House examined the balance sheet of the Government. A little later, his noble friend Lord Camoys repeated the argument used by the Chancellor of the Exchequer last week, that the country is now suffering from the low rate of new business formation in previous years. My first reaction to that claim is to suggest to your Lordships that any problem deriving from such a shortage of maturing small companies pales into insignificance compared with the damage done now to the future economic prosperity by the Government's current attitude towards investment in capital goods and educational facilities.
It also set my mind on another train of thought. The early 1970s—the years of the previous Conservative Government—saw the flowering of a new style of businessman and company; the liberator of under-utilised assets, or, more popularly, the asset stripper. Many noble Lords, might agree that the consequences of that development may have accounted for the paucity of soundly-based new businesses at that time, as much as any other single factor.
The current Government could perhaps have been successful in encouraging some measure of entrepreneurial activity on a sounder footing, but instead have themselves adopted the behaviour of an asset stripper on a vastly magnified scale. The fast-growing fringe bank of Thatcher, Lawson and Company, with its West End branch under the management of the noble Lords on the Front Bench opposite, has been pursuing policies of an irresponsible short-term nature.
In the run-up to each public offering that is made to the electorate, Thatcher, Lawson and Company seldom strip assets, and indulge in creative accounting in order to put the most superficially attractive gloss on the Government's prospectus—quite regardless of the irreparable damage being done to the long-term prospects for economic growth. The Government and their supporters claim to be concerned with long-term solutions rather than short-term remedies, and yet all the while action is being taken on the most shortsighted basis. The Government have, as your Lordships know, raised billions of pounds through the

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sale of shares in previously Government-owned companies. This policy might receive slightly wider support if the Government showed any willingness to reinvest those proceeds in new industrial projects.
British Leyland has achieved a really remarkable transformation since Sir Michael Edwardes was appointed chairman by the last Government. The company, thanks to the realistic and necessary, but still painful, sacrifices of much of its workforce, as well as to improvements in management, now has a model range and a level of productivity and quality control which enables it to face the toughest competition in the world. Some three and a half years ago, the vice-chairman of its technical partner, Honda, told me that the quality of the Triumph Acclaim produced by BL was in some respects higher than the equivalent car produced by Honda in Japan. The turnround of BL is as great an achievement as the rescue of Chrysler, also with government support, in the United States—although Chrysler has benefited from the huge expansion in the American economy during that time. Therefore, it has already reached a high level of current profitability.
Despite this, the Government seem to be prepared to cripple and stunt the next stage of BL's return to profitability by refusing further government financial investment. Instead, they insist on continuing the sale of BL's profitable operations. What chance does BL have of securing private funding when the financial community sees this lack of commitment by the Government? In the private sector, banks and investors will look very closely at the reasons why a 98 per cent. shareholder will not put up new investment in a venture that has made progress as remarkable as BL's.
The noble Lord, Lord Boyd-Carpenter, suggested that it was a commonly-held view that the public sector was incapable of investing funds wisely, in contrast with the unerring aim of the private sector. That view may be commonly held but it may not necessarily be right. In 1978 two high-tech companies were founded; one with £60 million of investment, and one with £30 million, invested over the first two or three years. At the end of last year the first was sold for more than £ 100 million and the other was worth a few million pounds only.
Noble Lords may be surprised to know that the first was Inmos, already mentioned by the noble Lord, Lord McIntosh, backed by the Government and now a vital part of the country's microchip and computer industry. The other was Nimslo, backed by private investors and now a prominent loss-making company in the dead-end industry of 3-D cameras. Not all public investment need be bad or badly applied and it is not necessary to advocate nationalisation or re-nationalisation in order to justify a willingness of government to invest in good industries they already own.
The Government continue to pursue short-sighted and short-term policies which short-change the country as a whole. The unmistakable mood of your Lordships' House tonight is that such policies are wrong and should be changed. My noble friends and allies have tonight advocated policies which we are confident will produce greater employment, prosperity, fairness and unity. Many noble Lords on
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other Benches have suggested measures with which we agree. I should like to add my strong support, therefore, to the Motion proposed by the noble Lord, Lord Beswick, and call on the noble Viscount, Lord Whitelaw, to indicate to your Lordships that the Government will not stand rigidly and blindly to attention on the bridge of the sinking ship so vividly described by the noble Earl, Lord Stockton, but instead adopt policies to achieve the aim of the Motion of the noble Lord, Lord Beswick.
12.32 a.m.
Lord Underhill: My Lords, it is a privilege to follow the speech of the noble Viscount, Lord Chandos. I think he has made a forceful, well-informed, direct speech, and one which, frankly, despite what the noble Lord, Lord Harmar-Nicholls, may feel, basically was free of party politics, dealing with the issues of state. It is because I appreciate the generosity of the noble Viscount, and also because usually I find myself in agreement with his noble friends, the noble Baroness, Lady Seear, and the noble Lord, Lord Taylor of Gryfe, that I deeply regret that in their speeches they took the opportunity to deliver a party political broadcast in attacking my own party. At the right time my colleagues and I will justify why we remain loyal to the principles with which we came into this party and for which we have worked for well over 50 years.
I also appreciate the generous statement of the noble Viscount on the introduction of this debate by my noble friend Lord Beswick. His speech and that of my noble friend Lord Cledwyn set the keynote for this debate. That is the answer to the noble Lord, Lord Harmar-Nicholls—that so many noble Lords wished to take part in the debate and, by and large, have dealt with the issues of the Motion, which is concerned not just with unemployment but also with social welfare and the important question of emphasis on the motives of social responsibility.
It has not been a competition as to who has the most compassion. I believe that noble Lords opposite have as much compassion as I have. The trouble is that we have different policies. There is a difference in philosophy, and that difference in philosophy makes them adopt attitudes which I believe are opposite to that of social responsibility.
The noble Earl, Lord Gowrie, said that there is no indication of a lack of unity. The noble Earl must move in a different world from that of most of us, and not in the real world. Many speakers this afternoon and this evening—we have now had over nine hours of debate—have shown quite clearly that he is in a different world. There is not a mood of national unity in the country. The Government give no inspiration towards a common purpose. A tendency to there being more authoritarian government and a feeling of confrontation is abroad in the country, which is promoted by the Government, particularly by the Prime Minister.
There is the encouragement of individual well-being—and this is a basic point in the Motion—which the Prime Minister calls "self-reliance", irrespective of the general good. The noble Earl, Lord Gowrie, said that there was a suspicion of paternalism. He went on the say that there was a rejection of the idea that the state knows best, or words to that effect. Frankly, I

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thought that he must have been joking. I know what the Government have done to local government, and of the directions given by them. We have more control of local councils than we have ever before had in modern Great Britain, yet the noble Earl says that this is a Government who do not follow a policy of parternalism! It is worse than paternalism: it is domination.
The atmosphere between local councils and local authority associations on the one hand, and central Government, on the other, is worse than ever before. That is not good for the general progress of our economic well-being, apart from not being good for local government. As noble Lords know, I am president of the Association of Metropolitan Authorities. I hear the reports of the central council. The associations no longer go to the central council to discuss the details of what should be done. They go there and are told by the Government what is to be done and how best to cut their own throats; and, naturally, local government is not going to do that.
The cuts in the rate support grant throw a greater burden onto the rates. As everybody recognises, the policy of GREA is hopeless and does not help the situation at all. Now local councils are being stopped from using their own capital assets, even for schemes of great social importance.
There is a difference between north and south, but even in the south there are pockets of heavy unemployment and deprivation. I have not forgotten the visit that my noble friend Lord Graham of Edmonton and I made to Hackney, to which we referred in one of our debates on rating. We found areas of deprivation in Hackney, which is facing rate-capping and cuts, with all the problems that it has to deal with. My noble friend and I, together with a few other Members of your Lordships' House, spent four hours this morning visiting parts of Greater London and Inner London looking at the problems, such as the modernisation of houses and social problems. Even greater problems will face the borough councils in meeting the cost of this important work if abolition goes through. All these factors should before us.
The right reverend Prelate the Bishop of Derby (I think it was) referred to the need to redistribute income. I hope that noble Lords have not forgotten that under this Government VAT was deliberately increased from 8 per cent. to 15 per cent., and that ever since 1979 that has affected the poorest of our people. VAT is the sort of tax that hits the poorest hardest, and it was this Government which introduced it.
When we look at the question of redistributing income, we find that the most wealthy have held on to or increased their share of the nation's wealth. This is made clear in the Inland Revenue statistics for 1984. Let us keep in mind that the top 1 per cent. of the population own one-fifth of the nation's marketable wealth. That equals what the bottom 75 per cent. own in total. The poorest 50 per cent. of our population own just 4 per cent. of the nation's wealth. No one can justify that. Nobody can deny that unless we strive to change that we cannot expect complete national unity.
The Financial Times of 17th January stated that the income of the poorest section of our community fell by
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60 per cent. between 1975 and 1983. The income of the better off 20 per cent. of the population rose from 44 to 48 per cent. of the national income over the same period. Surely we have to do something about this, and that is what the Motion says. Since 1979, tax concessions to the better off have totalled £3 billion a year and, with other mid-term financial strategies over these five years, frankly have not worked.
Many noble Lords have referred to the level of unemployment in their own areas. The noble Earl, Lord Stockton, referred to 28 per cent. in his own area. I think we ought to say how we—certainly I, many of my colleagues and other noble Lords—appreciate the fact that he has remained throughout the whole of this debate and shown his interest in this subject. When one reads debates in another place, Members of Parliament regularly give an account of the position in their own constituencies, but the figures for the different areas can be seen in the Department of Employment Gazette by any noble Lord. Some are just appalling. I will not go over areas. But let us remind ourselves of what the situation is. Unemployment has doubled, from 1.3 million, when this Government came into office in 1979, to 3¼ million today. Everyone recognises that that is not the real figure and that the real figure is nearly 4 million unemployed.
A noble Lord: They massage the figures.
Lord Underhill: As the noble Earl, Lord De La Warr, made quite clear, the worst problem is the problem of the 1¼ million who have been out of work for more than a year and many who have been out of work for longer than that. One and a quarter million is the highest figure ever for those who have been unemployed for more than one year.
I said that was the worst problem, but possibly the worst is the position of our young people. There are areas where one in three of the young people have been out of work and have never had a job. There is the feeling of hopelessness. What are we offering? I think we all welcome the training schemes, but most of us recognise that some employers use these training schemes for cheap labour and, as soon as one has finished, they get another one. I said "some employers". Also at the end of the day, special employment measures and training for young people do not provide jobs. There have to be economic and financial policies which eventually find them jobs.
Let us not overlook the fact that the numbers on supplementary benefit have risen from 2.9 million to 4.3 million. That is a 50 per cent. increase, under this Government, in the number of claimants on supplementary benefit. My right honourable friend Mr. Roy Hattersley, in a recent public speech said:
"Men and women in work, some of them enjoying an increased standard of living, no longer regard their neighbours who are out of work as somebody else's problem. Unemployment is now a moral as well as an economic and social issue".
We ask that the Government accept that. If the Government do not accept that, then, frankly, we have to build up a consensus of opinion outside which will make the Government appreciate that point of view.
Noble Lords, as the noble Viscount, Lord Chandos, has said, have concentrated a great deal of attention on the policy of direct job creation through public

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investment, or tax cuts. The Government would appear to be determined to stand by a policy of tax cuts. In reply to Questions in the Commons on 13th December, the Prime Minister refused to accept the conclusions of three surveys published on that very day, including one based on the Treasury's own model. In the course of our debate, reference has been made to one or other of those surveys. All those surveys concluded that increased public investment is by far the most effective way of reducing unemployment. The noble Earl laughs. I will come back to that point in a moment.
The Prime Minister has also said that she wants to see extra demand for goods. I quote:
"Reduction of tax can lead to extra jobs, as it leads to extra demand".
All that I have said appears at Col. 1202 of the Commons Hansard of 13th December, so I am not making this up. Of course, tax cuts create demand—a consumer boom—with no control as to whether all that demand is met by imported goods. It seems generally agreed that the Chancellor is likely tq have at least £1.5 billion to spend. We argue, as many noble Lords in all parts of the House have argued, that more jobs will be secured by using direct investment through public investment than will be secured by tax cuts. I have other quotations to justify what I say. The Guardian, referring to the OECD report—not a Labour Party report—stated:
"Research carried out … reinforces the view of the Conservative Party's backbench dissidents that any budget money should be spent on investment rather than income tax cuts".
The noble Lord, Lord Boyd-Carpenter, said that we should not follow a policy for unity unless it was the right policy. The OECD says what should be the right policy-—
Lord Boyd-Carpenter: My Lords, the noble Lord must not misrepresent me. I did not say that we should not follow a policy for unity. I said that we should follow the right policy and then try and unify the country behind that.
Lord Underhill: My Lords, that is what I intended to say. You can put that down to the fact that I left school at 14. I repeat it. The noble Lord said that if we want a policy of unity, it is no good having the wrong policy. That is what he said. That is what I intended to say. The OECD says what is the right policy to follow. If the Government's reply is that they do not accept the OECD analysis, then I should like them to tell me on what grounds they reject the analysis.
The noble Earl, Lord Gowrie, also said that capital expenditure was taking place on a massive scale. Yet various noble Lords have referred to the OECD report showing that Britain is at the bottom of the industrial nations' table of spending on investment, construction and infrastructure. The latest available figures for 1983, says the OECD, show that the share of investment—gross fixed capital formation—in Britain's real national income was only 13.6 per cent., the lowest figure of all countries for which results were calculated for that year.
When the noble Lord, Lord Thorneycroft, compared Britain's performance with that of our competitors, he overlooked telling your Lordships that
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those countries did not have the benefit of vast sums in North Sea oil receipts, as this country has. Nor did he tell your Lordships that those countries do not possess—in some ways, they are fortunate—the capital receipts from the sale of our national assets. The criticism made by many noble Lords is that these things have been frittered away. My noble friend Lord Cledwyn reminded us of a figure of, I think, £17,000 million being spent on unemployment as a result of lost tax revenue, the cost of unemployment benefit and lack of national insurance contributions.
We are not saying that investment in our infrastructure is the only requirement. Of course, there are others—training, research, improved productivity, better industrial relations and so on. But a vast number of influential bodies support the policy of greater public spending on our infrastructure. Your Lordships' own Select Committee on unemployment made this recommendation. It was debated in your Lordships' House. In the last few days we have had further reports from the British Aggregate Construction Materials Industries. They say that this is an absolutely essential policy to follow. In a covering note, they say:
"An objective and searching reappraisal of public spending would reveal the justice of the case for more investment and the means to pay for it. Further, it would enhance the present economic recovery and mop up idle human and construction resources".
This very morning we had a brief sent by the Building Employers' Confederation, also urging that this policy should be followed.
One of these documents draws attention to the fact that public capital has declined by three-fifths in a decade while current spending on goods and services—that is, excluding pensions, unemployment and social security benefits—has risen by one-fifth during that same period. The document asks the same question as did the noble Baroness, Lady Seear, and a number of noble Lords. They put the case that the reason investment carried out within the private sector is praised, whereas public investment is condemned, confounds all analysis. I should like the noble Viscount, when he replies, to give the answer to that, because that is the key to a basic, fundmental argument. Surely there is no argument at all about the types of projects which are needed. They have been listed so often that one need not go into this again. Apart from the need for—I am afraid I cannot give way; I have been speaking for 20 minutes and I do not want to speak for too long.
Before I close, I am going to mention the question of the National Health Service. I am pleased that the noble Lord, Lord Rea, brought this into the debate. Ministers often quote figures to disprove that there are cuts in the National Health Service. I never like referring to things unless I have got some facts. I hope noble Lords will forgive me if I talk about my own locality. I have here an official document of the Waltham Forest Health Authority. I attended one of two meetings where there was a large-scale protest about the closure of a small hospital which is loved by the people in the area. The medical staff are the local doctors; they are on call. That will be the fourth local hospital to be closed in that area in 18 months. The authority says:
"The Authority is faced with substantial cuts in the amount of money received to provide these services … In the face of a cut of £2

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million per annum in the budget over three years, the authority had to re-examine its priorities".
Having been instructed to cut out over 100 acute local beds, a hospital which deals with 83,000 X-rays a year will no longer deal with them.
Over and above that, I saw in the Guardian of 28th December that the Royal National Ear, Nose and Throat Hospital, which is England's—the noble Lord laughs. If he can disprove this, let him disprove it. The paper says that England's only post-graduate centre for the three specialities—that is, ear, nose and throat; I know what delay means there, because my wife was a patient there just a few years ago—is to lose half its facilities from the end of January because of spending cuts. The paper says that the proposal will mean 17,000 out-patients using the one remaining site and that 2,300 patients awaiting operations will face further delay.
There is in the country a widespread feeling, which the Government have got to recognise, that the Government are moving towards creating a second-standard National Health Service. The National Health Service is very dear to people of all parties. It may be that money is being shifted from one region to another region, but it is causing cuts which are diminishing the standards.
In conclusion, I should like to say that I fervently hope there will be no suggestion, as has been reported in the papers, of a further increase in prescription charges to £2. There has been a 700 per cent. increase in prescription charges since the Government came to office. It ftits the poorest hardest. The noble Viscount will not be able to give us a definite answer on that point, because it may be a Budget matter; but I hope that the Government, if they have any thoughts of raising prescription charges to £2, will cancel them immediately.
All these matters relate to the Motion. We are dealing not just with unemployment but with the whole question of social welfare and the general standing and life of our people. The figures show that we must do a great deal more if we are to equalise the disparities between the sectors in our community.
Viscount Whitelaw: My Lords, this has been an historic debate in your Lordships' House. For the first time a very large number of people have had the opportunity to listen to and watch the proceedings from their own homes. No doubt we shall be told how many actually decided to do so. Equally, there will be much argument about the value of televising your Lordships' House. But surely few will dispute that the views and opposing arguments of noble Lords who have taken part in the debate were worthy of a wide audience.
So I am sure that I speak for the whole House at this moment in thanking the noble Lord, Lord Beswick, for his Motion; for the scope of his Motion; for his opening speech, and for the tone and character of it. I am sure that the House is very grateful to him. I should also like to congratulate the two maiden speakers, the right reverend Prelate the Bishop of Birmingham and the noble Lord, Lord Monkswell. If I may say so, the right reverend Prelate was a model. I made comments about the most reverend Primate previously which gained some amusement and credibility in the press,
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and I must therefore be rather careful not to follow that by saying that the Bishop of Birmingham has shown a very high standard of ethics, or something like that. But I think he did show a very considerable understanding of your Lordships' House in making a maiden speech which was not controversial but which went into the background of many of the problems that we are facing today in a very fair way indeed. I should like to thank him for his speech this afternoon.
The noble Lord, Lord Monkswell, spoke with considerable feeling from his own experience. That is always something that it is very important to do. It would be impertinent for me—someone who has been in this House such a short time—to say that that was something that your Lordships' House liked. But I have learned, even in this short time, that that is something that your Lordships do like, and so I hope that we shall hear from the noble Lord again in a similar vein. Indeed, I am quite certain that we shall hear the right reverend Prelate again, if not necessarily in a similar vein. But we shall look forward to that as well.
It is my particular task in winding up the debate for the Government to try to refer to as many of the contributions that have been made in this debate as possible. Since I have heard nearly all the speeches and have been sitting in this House, with two very short intervals, for nearly 10 hours on end, I hope that the House will understand if sometimes my notes are not as adequate as they ought to be or maybe as readable as they ought to be. However, I shall do my very best to reply to as many of the points as I possibly can, and, indeed, as fairly as I can.
Before I do that, I should like to make one comment about the noble Lord's Motion. The Motion covers a great deal of ground. It is clear that what lies behind it is the desire for a united nation. Here I think that one is entitled to say that that is a desire that is shared in all parts of the House, and, I believe, by anyone who is genuinely in politics.
I would never have spent the last 30 or so years of my life in politics if I had not had the desire for one nation in this country. I certainly would not have spent all the time that I did fighting for this country in the war if I had not thought it was right to have one nation; and I certainly would not remain in the Government now unless they had the desire to have one nation. I want to make that perfectly clear. Therefore, I find some of the charges against the Government, and against me personally on one or two occasions, fairly offensive in all the circumstances, because I do not think they are charges which are in any way right, and I utterly refute them. I think it is also fair to say that someone like myself, who represented a North of England constituency in another place for some 28 years, will certainly not acquiesce in a Government approach which appeared complacent or unaware about the dangers of a north-south divide in our country.
In fact, I believe that the Government can be shown to have acted with determination and success to tackle some of those very problems which have divided society in the past. In particular, our economic policy has focused on tackling inflation, which at the highest levels of the 1970s destroyed the savings of many who had worked to build them up over the years, and

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which particularly hurt the low paid and those on fixed incomes. Wherever we sit in the House, whatever Government we have been in, we were all responsible for various parts of those days of high inflation—all of us. We all know it and we all know that it was divisive to our society. This afternoon many noble Lords have said that they regard the Government's success with inflation as good and they have given us credit for it. They may have criticised much else; but for that they have given us credit, and for that I believe we are entitled to take some credit.
I now turn to the major argument about the action which should be taken in order to deal with the very distressing levels of unemployment in this country. It is fair to say, though it is no excuse, that unemployment levels are known in many other countries of the world at the present time. Nevertheless, they are most unsatisfactory to our country and we have to do everything we can to deal with them. The questions that have been posed to your Lordships' House today—and many solutions have been offered—have, in the main, fallen into two categories. There are those who believe that action must be taken through more public spending, and there are those who believe that tax cuts raising the threshold will create more incentives and therefore in turn lead to more jobs. Both arguments have right on their side. I thought that my noble friend Lord Thorneycroft put the matter in very proper perspective, as he so often does—and it is not surprising that I say that because, after all, I was his Parliamentary Private Secretary 29 years ago—when he said that we cannot advance too far down either of those particular roads.
Surely history has proved that to be correct. As my noble friend Lord Boyd-Carpenter said, successive governments have tried the course—sometimes it would appear the easy course—of getting out of unemployment by high public spending. Alas! it has not led to more employment; it has led to rising costs, to loss of competitiveness in industry and so to loss of jobs. Surely we would be deceiving ourselves—and far worse the people of our country—if we pretended that, if we tried again this solution on its own, of simply increasing public expenditure as fast as we could that would in some way provide unity and prosperity for our nation, when it so manifestly failed to do so in the recent past, and where it has so manifestly failed to do so in socialist France—the socialist government in France has had to give up that very policy itself.
However, that is not to say that there is not a place for public spending—of course there is. My goodness me! if we look at what this Government are spending, there can be no doubt that there is a considerable amount of public expenditure already. The noble Viscount, Lord Chandos, waxed eloquent about the criticisms in some newspapers this morning of the public expenditure review, but he did not mention, because it did not suit his case—and I do not blame him because people do not mention things that do not suit their cases—that many other newspapers said that the Government were spending far too much, that there was far too much public spending, and that it was very dangerous in our present situation to spend so much.
So there are two arguments there as well. I would claim that we must do both. I would never suggest for
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one moment that it was right simply to go down the road of tax cuts alone; nor would I wish to see it done—and here I come to the remarks made by the noble Baroness, Lady Seear—on the basis that we did not help those at the bottom end of the scale by increasing the thresholds, and that we simply made the rich richer. I believe it is important to get people out of the poverty trap. It is important, as the noble Baroness said, to seek to get people out of taxation at the bottom levels altogether. It is difficult to do so, as I understand it, without giving some reliefs at the higher levels at the same time. But certainly I take the point she made because she was very fair indeed on many other factors.
I noticed—and I shall come back to this when I mention the noble Viscount, Lord Chandos, at the end—a certain divergence of view among the Alliance. After all, the noble Baroness the Leader of the Liberal Party said that it was quite wrong to spend your way out of unemployment, and they were false prophets who suggested that. It seemed to me that the noble Viscount, Lord Chandos, took a different view. The noble Baroness also believed in increasing the thresholds and helping taxpayers at the bottom levels. It did not seem that the noble Viscount, Lord Chandos, looked at it in quite the same light. But there it is: if you are going to form an alliance you have to get your act together, and no doubt the Alliance will be able to get their act together in the fullness of time.
If I may come to a very serious point, my noble friend Lord Stockton mentioned the question of how we were going to get into the third industrial revolution. I thought that with his remarkable perspective of history, if I may so with all humility to him, he led us on the road to realising the challenge that faces us. The first industrial revolution, the second, and now the third. We have to take advantage of it. I believe that we would all accept that that is something we have to do.
Certainly that is something that I know the noble Lord, Lord Cledwyn, in his speech—and I thank him for some of the support he gave on different matters, although he had many criticisms to make, quite reasonably, at the same time—realised we have to do. The question is: how are we going to do it? My noble friend Lord Orr-Ewing mentioned that we were attracting considerable American investment in the technology industries at the present time. I think that my noble friend Lord Stockton would say that that is an extremely valuable thing for us to be doing.
I believe that the Government, by their help for small businesses, by many of the other employment measures they are putting forward and by the help they are giving in the technology industries, are seeking to go down that road and to give every encouragement to industry to do so. I appreciate what my noble friend Lord Stockton says, but I believe that we need to do everything in our power to encourage that investment and to give every help to that particular development. I am sure he is right, and I am sure that is something which the Government must seek to do.
The noble Lord, Lord Taylor of Gryfe, made a speech about the nature of our society. I have a great admiration for his sincerity of purpose, but I do not altogether accept the road down which he wished to go as a result of that sincerity. But I understand what he I feels and what he means. I understand very well,

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having lived near Glasgow for some part of my life, exactly what he says, and I share many of his feelings.
The noble Lord, Lord Roll, was anxious about the divisions in our society, and came to this point of concern about doctrinal rigidity. I have the greatest respect for the noble Lord, who I have known in many capacities. Perhaps he would understand me when I say that I have after all been in Cabinets and Shadow Cabinets of the Conservative Party now continuously for nearly 15 years. I do not find the Cabinet that I am now in any more doctrinaire than the one that I was in between 1970 and 74. I do not expect my right honourable friend Mr Heath would necessarily accept that argument; but I have to tell the noble Lord that I have been in both the Cabinets, and quite frankly, I do not think that the present one is more doctrinaire. I believe that, on the whole, Cabinets are faced with so many difficult problems that come before them that they simply are not in the position half the time to take a doctrinaire attitude. They have to make up their minds on the facts put before them at any time; and I have found that both the Cabinets I have been in have been doing exactly the same thing. So I do not really accept this argument about being doctrinaire. Everybody has found everything in the world wrong with me during my political life, except one thing: no one has ever suggested that I was doctrinaire. If I do not think the Cabinet is doctrinaire I am entitled to say so.
The noble Lord, Lord Roll of Ipsden, raised the question of America and our success compared with the American success. I am sure that he, from his banking standpoint, would agree that the American currency, in regard to attracting investment and the number of people who deal in that currency, is in a very different position from our currency. We have to overcome some difficulties which they do not have. That does not mean that we do not have to do it, but I think the noble Lord would agree that they are different.
My noble friend Lord Boyd-Carpenter I have already mentioned in relation to being doctrinaire and his points about public expenditure. He was generous in what he believed, that the policy of the Government, if we stuck to it, was the right policy to lead us into the third industrial revolution. That encouraged me because I am most anxious to meet the requirements put forward by my noble friend Lord Stockton. If the policies are right to that end, as my noble friend Lord Boyd-Carpenter said, that would be a great encouragement to me.
The right reverend Prelate the Bishop of Norwich said that he was an optimist in national life. I found that encouraging. I hope that I can reciprocate that I was an optimist in my minor efforts in his field of religion: I trust that I am. From his optimism he said that we had tackled inflation; he admired the youth training scheme—which has come under fire from some other people, so I am grateful to him for that—and the employment schemes.
The noble Baroness, Lady Ewart-Biggs, talked about employment for women and the problems about employment for women. I note the difficulties which she sets out. I thought she somewhat exaggerated them, if I may humbly say so, but I can see some of the arguments she put forward.
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My noble friend Lord Camoys, who I was delighted was able to take part in the debate, made a very striking speech. He started with the point that the question who cares most was sterile. I do so agree with him; it certainly is a sterile question. We all care. The question is: how are we to give effect to that care? He pointed out that wage restraint in the past had been ineffective. He pointed out that the prospects today were moderately good, and that the prospects for exports were good. Indeed, he praised the ideas of the small businesses and the advance in technology. He hoped that we would do better with standards in our schools. That is something which is extremely important for us in going into the technological revolution of the future.
The noble Lord, Lord Carmichael, referred to many problems in the Scottish environment and the human values concerned. I thought he was slightly a prophet of doom. Nevertheless I understood some of the points that he put forward.
The noble Lord, Lord Ezra, asked me specifically about the recent NEDO report on the infrastructure. Some of the figures in the report, it is fair to say, are clearly exaggerated. I do not think I can deal with them all in detail now, but in answer to him, and indeed in answer to the noble Lord, Lord Underhill, at the end, I would ask them both to remember that total investment in the economy, public and private, is expected to run at some £55 billion in 1984 and it will rise further. I should have thought that that was a considerable investment in both sectors and gave some of the answers to what was said about the NEDO report.
My noble friend Lord Campbell of Alloway was generally supportive of the Government's policies. I am afraid that his was one of the speeches which I regret I did not hear, but I am grateful to him for the support he gave and for the points that he put forward.
The noble Earl, Lord Halsbury, said that there was a great difference between the inflation and unemployment situation in the 1930s and now. Today we are facing unemployment in an inflationary environment whereas before we had been facing unemployment in the 1930s in a deflationary position, and that was very different. And, he said—I believe very fairly and gave support to the argument which I put forward—that because we have unemployment today in an inflationary environment one cannot spend one's way out of it simply by increasing public spending on its own.
The noble Baroness, Lady Fisher of Rednal, spoke about social service spending, and I noted the points that she made. Again, as with the noble Lord, Lord Carmichael, I thought she was incredibly gloomy and I regretted that, because I do not think that that is necessarily her nature and I do not know that she felt quite so gloomy as she thought it right to appear on this particular occasion.
My noble friend Lord Orr-Ewing, apart from making the point which I have already mentioned about attracting American investment, made some very helpful points about training and employment measures. I am grateful to him for what he said about the value of these measures and for his proposals for particular help in the assisted areas. The noble Lord, Lord Ardwick, said that the Tory Party had turned

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back on the Tory Party of the past. Well, I seem to have been a member of the Tory Party now which has turned back on the Tory Party before. I do not notice that it has happened, and I have been there. Therefore, I do not accept it.
The right reverend Prelate the Bishop of Derby said he hoped that there would be constructive proposals from all sides. He said that he hoped that there would be unifying policies for the mining dispute. I say to him that I think it is very difficult for the Government because, after all, it is not the Government who have caused the splits in the mining dispute. The Government have made sure that those miners who wish to continue to work have been able to do so and increasing numbers have decided to do so. In doing so, those miners have split from some of their other colleagues. That, I agree, from the point of view of the mining community and the miners' union is very regrettable, but I do not think it would be reasonable for me to go further at this hour of the morning in explaining who I believe to be responsible for that. However, I think it is perfectly clear that the responsibility must lie with those who have split the union. The right reverend Prelate said that the welfare state was near to breakdown. I must say I could not accept that argument, although I have to pay attention to the very important points that he made about his own area.
My noble friend Lord McAlpine of Moffat made three very important points about the civil engineering industry, about which he knows—and as so often in this House someone knows more than everybody else about a particular subject—probably more than most of the rest of us. He says that, in fact, increasing activity there gives only a limited opportunity for employment. I think we have to pay attention to that. He talks about more houses being obstructed by local authority bureaucracy and planning controls. I think we have to pay attention to that. Lastly, he makes his point about backing our own British nuclear reactor instead of the American one. I must simply pass that on to my right honourable friend the Secretary of State for Energy. I have known that view of my noble friend and I think I had better not say any more about it at this stage.
The noble Lord, Lord Prys-Davies, gave examples, of which I have taken a very careful note, of some of the problems in schools and some of the problems in Wales. The noble and learned Lord, Lord Wilson of Langside, said that we were very doctrinaire. I do not think that he is now here. Oh! yes he is. I had thought that I was going to be absolved from saying anything about him if he was not here, but I must apologise to the noble and learned Lord. He talked about the remould of the position and he talked about the miners' strike. I have to say to him much the same as I said to the right reverend Prelate the Bishop of Derby; that is, that it is certainly not the Government who can be responsible for any of the divisive positions in the miners' strike.
The noble Lord, Lord Stallard, talked a lot about training. I am bound to say to him that I was involved in the 1964 Training Act as a very junior Minister in that Government and I have known something of industrial training ever since. I did not recognise many of the things that he said about industrial training at
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the present time. I do not think they are accurate and I believe that we have done a great deal to improve the training position and that my noble friend Lord Young is doing a great deal on this particular front.
The noble Lady, Lady Saltoun, mentioned the various proposals put forward by the late Lord Spens, whose death we all so much regret. She also mentioned the idea of a commission of long-term, unemployment trends, and the employment protection legislation and wages councils being a bar to more employment. She also referred to the new technologies. Further, she mentioned a hobby-horse of my own. I am not allowed to have hobby-horses when I am in the Government, but if I were not in the Government I would have the same one as her, about tolls on motorways. As I am in the Government, I am not allowed to have it.
The noble Lord, Lord McIntosh of Haringey, talked about management techniques so far as the White Paper on Public Expenditure was concerned, about the infrastructure and about training. I certainly noted the point that he made. The noble Lord, Lord Banks, came back to the position of discussing the welfare state, on which he is an acknowledged expert, and the whole question of American investment and the position of America. I think I must just say the same to him as I said to the noble Lord, Lord Roll, that I think we have a different problem simply because their currency, for a wide variety of reasons, is very attractive to investment, and ours of course is not in the same category.
The noble Lord, Lord Irving of Dartford, began by not comparing like with like when he started discussing our position with that in America. I am an old friend of his and I hope that I may be allowed to say this to him. I thought that because he started from false premises he drew some wrong conclusions (which if you start from false premises, you are almost bound to do) and as a result I could not agree with what he had said. My noble friend Lord Harmar-Nicholls made some strong points in support of the Government, and I am very grateful to him.
The noble Lord, Lord Kaldor, eventually came out—I was waiting for it—with policies which he has had for a long time and which have not found favour; that is, import control and withdrawing from the European Community. He will long proceed to put forward those policies. I do not think they will be accepted by any government; but I do not think he will be deterred in any way by that.
The noble Lord, Lord Rea, raised the question of the management of the National Health Service, and indeed at the end of our debate the noble Lord, Lord Underhill, also mentioned the National Health Service. I think I ought to remind them both that in England alone this year we shall be spending some £13.5 billion in cash—more than double the £6.5 billion spent in 1978–79 and, in real terms, an increase of 18 per cent. Capital spending has also been increased, following a cut of one-third under the last Labour Government. The result is that 142 major new schemes are being designed or are under construction and further developments costing over £1,100 million are also being planned. That does not sound like what the noble Lord, Lord Underhill, or indeed the noble Lord, Lord Rea, were telling us about.

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My noble friend Lord Beloff raised some very interesting points and gave some considerable support to the Government's point of view, for which I was extremely grateful. The noble Lord, Lord Molloy, had some delightfully amusing similes, which cheered us all up at a late hour; but he did say one thing which was totally incorrect. He kept on talking about Mr. MacGregor as "a foreigner". As a fellow Scotsman originally, born in Scotland as I was, and as Mr. MacGregor was born in Scotland too, I think I am entitled to somewhat resent the fact that an Englishman like the noble Lord, Lord Molloy, should describe a fellow countryman of mine as a foreigner, because I do not think that he is. I hope that the noble Lord will realise that in fact Mr. MacGregor is a Scot and not a foreigner—and I do not think I should give way, because Mr. MacGregor is a Scotsman: I do not think it can be denied.
The noble Lord, Lord Graham of Edmonton, talked about wages councils. I think that in considering the activities of wages councils and indeed the poverty trap of the low-paid one needs to consider the raising of the thresholds to a point which I hope he will have in mind. My noble friend Lord De La Warr spoke about long-term unemployment and this being with us for a long time. He put forward various points on disregard for benefit and concerning the community programme. I am extremely grateful to him for his advice to us to stick to our guns.
I have already spoken about the noble Viscount, Lord Chandos. I had an enormous respect for his grandfather and I hope that in time I shall gain a sufficient respect for him.
The noble Lord, Lord Underhill, spoke about local government money. I think that one must remind him that in the relationship between national and local government the problem of local government money, so much of which is provided by the taxpayer—by the central government and so by the taxpayer—has not just arrived. The noble Lord will remember the late Tony Crosland, as Secretary of State for the Environment in the Labour Government, saying: "The party's over".
Indeed, the party was over then, and should have been over, and we are seeking to ensure that the party is over now because some of that expenditure is very damaging. I have dealt with the noble Lord's points about the National Health Service.
I am afraid that I have delayed your Lordships for a considerable time. I felt it was my duty to try to answer a very long debate with the fullness that it deserved. I hope I have been able to do so and I hope I have convinced your Lordships, although I do not expect so, that this Government are on the right course and are determined to do what is best for a united nation.
Lord Hatch of Lusby: My Lords, may I—
Noble Lords: Order! Lord Beswick!
1.27 a.m.
Lord Beswick: My Lords, we have had quite a long debate and it has been wound up in a most remarkable fashion. The noble Viscount, Lord Whitelaw, said to
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me earlier that, after so long a time, he did not think he would be capable of living up to the standard required. If he can do this after 10 hours it would be very interesting to hear him after a 20-hour debate.
It is not for me to open arguments again. I would simply like to offer my thanks to all those who saw fit to take part in the debate. We have had 40 interesting speeches and of course I cannot hope to refer to many of them. I should, however, just like to add my congratulations to the two maiden speakers and I hope that we shall hear them again before so very long, and maybe in more normal circumstances.
I should like to say that I was sorry that the noble Baroness the Leader of the Liberal Party felt constrained to get so cross about the Labour Party. I think it would have been much better if she had concentrated on what I actually said, especially as he took 20 per cent. more time to say it than I did in moving the Motion.
I am sorry, too, that the noble Lord, Lord Thorneycroft, could not give way because there were some points that I thought ought to be clarified.
I was particularly grateful for what the right reverend Prelate the Bishop of Derby said because he seemed to me to show the understanding of our human problems for which I had asked. I hope that the House has not lost any of its recently acquired admirers as the result of this debate and the televising of it. I offer no judgment upon it. We shall await reactions. I can say only that so far I have no reason to regret my vote against the televising of our proceedings. I feel, however, that the discussion we have had might, as I pleaded in my original Motion, well be taken a little further on some other occasion to see if we cannot get nearer to agreement on some of the matters that need sorting out and some of the policies that are required.
I repeat my thanks. I congratulate all those noble Lords who stuck it to the end and I admire the obvious stamina of them all. I have no requirement for the Papers mentioned in my Motion, and therefore beg leave to withdraw it.
Motion for Papers, by leave, withdrawn.

Reserve Forces (Safeguard of Employment) Bill [H.L.]
Reported from the Joint Committee with an amendment; recommitted to a Committee of the Whole House; and ordered to be printed as amended.
House adjourned at half-past one o'clock.

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