Sitting of 24 July 1985

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

    OXFORDSHIRE BILL [Lords]
    Order for consideration, as amended, read.
    Amendments agreed to.
    Ordered,
    That Standing Order 205 (Notice of third reading) be suspended and that the Bill be now read the third time.—[The Chairman of Ways and Means.]
    Bill accordingly read the Third time, and passed, with amendments.

Oral Answers to Questions
  FOREIGN AND COMMONWEALTH AFFAIRS

    Middle East
    Ms. Clare Shortasked the Secretary of State for Foreign and Commonwealth Affairs whether he will agree to meet the joint Jordanian-Palestinian delegation to discuss King Hussein's middle east peace initiative.
    The Secretary of State for Foreign and Commonwealth Affairs (Sir Geoffrey Howe): We support King Hussein's courageous initiative. My right hon. Friend the Prime Minister and I had a useful discussion with the King on 19 July. We are examining with him how best we can encourage the current movement towards peace negotiations. We have also welcomed the Israeli Prime Minister's proposals of 10 June as a useful contribution to narrowing the gap between the parties.
    Ms. Short: The Secretary of State must be aware that there is now a real danger that that initiative will run out of steam, and the Palastinian people will conclude that there is no way in which diplomacy will bring them a just solution. That is a grave danger for the situation in the middle east. Could not the British Government have a little more courage and, instead of whispering in the ear of the American Government, stand up publicly and agree to meet the delegation in order to move the whole initiative forward?
    Sir Geoffrey Howe: The hon. Lady is right to emphasise the importance of keeping the movement towards peace moving in that direction. It is wrong to cast any judgment on our lack of courage or insight. We are looking continually at all the possible moves that we can make to help the process forward. The key point is that what is necessarily a step-by-step approach is kept moving in the right direction and that each step that we take will help and not hinder that process.
    Mr. Walters: In order to assist King Hussein in his peace efforts, would it not be helpful for Her Majesty's Government to announce their willingness to receive the joint Jordanian-Palestinian delegation in advance of the United States doing so? Should we not appear to be one step ahead of the Americans in this matter, and not one step behind?
    Sir Geoffrey Howe: My hon. Friend is right to draw attention to the need to judge these matters carefully. 'We shall certainly be making a judgment in response to such suggestions in the way that we judge, after consultation with the King, to be most likely to take the process forward.
    Mr. Janner: The right hon. and learned Gentleman has welcomed the statement by Prime Minister Peres, who I am sure he will agree is a man of peace. Does the right hon. and learned Gentleman know that it is the expressed view of Prime Minister Peres that, far from the Hussein initiative hastening the way to peace, it will stand in the way of direct negotiations between the parties, which provide the best hope for a true solution to a very difficult problem?
    Sir Geoffrey Howe: Despite my overwhelming respect for the hon. and learned Gentleman's accuracy and my awareness of his concern in the matter, I am not sure that he accurately summarises what Prime Minister Peres said. The important thing is to take into account how easy it is for misunderstandings to arise in the matter and to make sure that progress is being maintained in the direction and with the objective of direct and effective negotiations in the cause of peace.
    Mr. Temple-Morris: Will my right hon. and learned Friend congratulate King Hussein on his sincere efforts to achieve peace in the middle east? Will he do his utmost to swing the moderate Arab states behind King Hussein and secure appropriate representation on the delegation? In all the circumstances, will he take it on board that it is the wish of many right hon. and hon. Members that he meets the delegation?
    Sir Geoffrey Howe: I understand the point in the last part of my hon. Friend's question and the extent to which it is supported. As he says, it is right to encourage Palestinians who are committed to working for peace, all of those moderate leaders in the Arab world who are committed to the same cause, and all those in Israel as well.
    Mr. Latham: Will my right hon. and learned Friend ensure that he does nothing to jeopardise Mr. Richard Murphy's American diplomatic initiative and that any deputation that is received here contains names that are also acceptable to the Americans?
    Sir Geoffrey Howe: Each question that is asked on this matter shows the many factors that one must keep in mind and the many components that could be constructive that one must take care not to jeopardise. I have well in mind the points that my hon. Friend made.
    Mr. Anderson: This is a courageous initiative which is clearly at a delicate stage. Will the Foreign Secretary confirm that the Government have no objection in principle to meeting the joint delegation? Will he also confirm that the Government believe that these moves towards a partial settlement on the lines of Camp David

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    are more likely to be productive than is a generalised peace conference, and that there are real signs of progress, especially as the Soviets seem more willing to recognise the existence of the state of Israel?
    Sir Geoffrey Howe: One cannot be sure about the validity of the hon. Gentleman's last point. He is right to call attention to the hazards, as he put it, of a generalised peace conference, certainly at this stage. The important thing is to take steps that are necessary and right at each stage to encourage moderate leadership on both sides to come closer together and, eventually, to negotiations.

    Mozambique
    Mr. David Atkinsonasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on relations with Mozambique.
    The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Tim Renton): We maintain friendly relations with the Government of Mozambique. This is happily demonstrated by the current visit to this country by the Mozambican Foreign Minister, Dr. Chissano, as our guest.
    Mr. Atkinson: Will my hon. Friend confirm newspaper reports that Britain is to train and equip Mozambican army officers and NCOs? Does not the Machel regime remain Marxist, denying human rights and fundamental freedoms, and is it not coming under increasing pressure from anti-Marxist rebels? Are we convinced that we are supporting the right side?
    Mr. Renton: Yes, Sir. President Machel has made clear his wish to develop relations with Western countries. We believe that we should respond positively. It is against that background that, with the full agreement of the Zimbabwe Government, we have offered to expand the British military advisory and training team in Zimbabwe to train officers and NCOs of the Mozambican army.
    Mr. Meadowcroft: I am glad to hear that we have friendly relations with the Mozambique Government. Does the Minister agree that they are extremely exposed because of their relationship with South Africa? Will the hon. Gentleman assure us that there is support for the Mozambique Government and their relationship with South Africa, bearing in mind the emergency in South Africa? Does he agree that it is important that we show that we have the interests of the Mozambique Government and their independence at heart, despite the problems that must arise from the emergency in South Africa?
    Mr. Renton: We have the interests of Mozambique's development at heart. Until now, South Africa has stuck by the Nkomati accord and has recently not given official support to Renamo. That has been acknowledged in Mozambique. We have an interest in the external implications of the current insecurity in Mozambique. That is one reason why we have taken the steps that I have just announced.
    Sir Peter Blaker: What are the Mozambique Government's views on the proposal to impose economic sanctions on South Africa?
    Mr. Renton: I am not aware that the Mozambique Government have yet expressed any view on that subject.

    United States of America
    Mr. Canavanasked the Secretary of State for Foreign and Commonwealth Affairs when he last met representatives of the Government of the United States of America; and what subjects were discussed.
    Sir Geoffrey Howe: I last did so when my right hon. Friend the Prime Minister and I met Vice-President George Bush during his visit to London from 2 to 3 July. The principal topics discussed were international terrorism, East-West trade, East-West relations and international trade issues.
    Mr. Canavan: What discussions or recent communications have there been between the British and American Governments about possible concerted action by both Governments to reject the legitimate calls for economic sanctions against South Africa? Is it not absolutely deplorable that once more the British Government are deserting our true friends in the Commonwealth in order to kowtow to Ronald Reagan in support of the continuance of economic relations which in effect will bolster the evil apartheid regime which is directly responsible for the recent bloodshed and other atrocities during the current emergency in South Africa?
    Sir Geoffrey Howe: I join the hon. Gentleman in condemning apartheid wholeheartedly and without qualification, but at that point I must part company from his insight into international affairs. I cannot believe that he seriously imagines that our view about the wisdom of economic sanctions is dictated by a determination to kowtow to President Reagan or to anybody else. We wish progress to be made in order to secure the removal of apartheid, but we believe that the imposition of economic sanctions would not help in that direction but would have the contrary effect.
    Mr. Hickmet: Is my right hon. and learned Friend aware that the United States Government propose to impose curbs on steel imports from 1 August 1985? Is he also aware that imports from the European Community into the United States are the result of rigidities and inefficiencies in the steel manufacturing sector in the United States? Is it not unfair that because high American interest rates fund their massive budget deficit, which provides an opening for the import of European steel into their market, they should propose to block such imports? What action will my right hon. and learned Friend take about this and what representations will he make to his opposite number in the United States Government?
    Sir Geoffrey Howe: My hon. Friend is right to draw attention to steel imports as one of the areas where the United States is threatening to take restrictive action if agreement cannot be reached with the European Community. We believe that the United States should refrain from taking unilateral action in such areas. It is important for such disagreements to be handled bilaterally between the European Community and the United States. The exchange rate of the dollar, to which the size of the United States federal deficit makes a significant contribution, is an important factor.
    Mr. Deakins: Did the Foreign Secretary discuss with Vice-President Bush how to cope with the growing volume of popular pressure in both the United States and Britain for the imposition of some form of economic sanctions on

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    South Africa? If so, what conclusions did they reach as representatives of two Governments who, in this sense, are beleaguered minorities in their own countries?
    Sir Geoffrey Howe: The hon. Gentleman must speak for himself in judging the scale of pressure for action of that kind in this country. However, on this issue the view of the United States is the same as our own: that although we profoundly detest and deplore apartheid and all its manifestations, we do not believe that the imposition of economic sanctions would be helpful either in helping to remove apartheid or in promoting the interests of the people who are most adversely affected by it.
    Sir John Farr: Since most hon. Members agree with my right hon. and learned Friend that economic sanctions against South Africa would be unhelpful and unrewarding, will he assure the House that he took the opportunity when he met Vice-President Bush to express very clearly Her Majesty's Government's views?
    Sir Geoffrey Howe: The two Governments are in constant touch with each other on this topic. In the context of the United Nations and of bilateral contacts we have no doubt about each other's views.
    Mr. George Robertson: On the subject of contacts with the American Government, what precisely is the function of the current visit to America by the Secretary of State for Defence? Why is he going round the United States trying to lick up the gravy of the star wars programme when the Foreign Secretary and all his European counterparts seemed openly to express widespread doubts about the strategic defence initiative?
    Will the Secretary of State comment on the reports that the United States Congress has already been notified that a phased array radar system is to be installed at Fylingdales in Yorkshire, along similar lines to the much criticised phased array radar at Krasnoyarsk in the Soviet Union?
    Sir Geoffrey Howe: The hon. Gentleman is extending his range of curiosity widely this afternoon——
    Mr. Robertson: Why not?
    Sir Geoffrey Howe: I am always here to satisfy, as far as I can. Let me take the hon. Gentleman's second point first. Any decisions to modernise existing radar establishments, including the one at Fylingdales, are a matter for my right hon. Friend the Secretary of State for Defence, and would be undertaken in any event in compliance with existing treaty obligations.
    On the hon. Gentleman's first point, all the countries of the Western European Union have commissioned the Council to co-ordinate their reactions to the American invitation to participate in SDI research — a research programme which most members of the WEU support. The visit by my right hon. Friend the Secretary of State for Defence to Washington, which is now over—he returned last night — was designed to give practical impetus to the exploration of ways in which British companies can participate in the research programme.

    USSR (Postal Services)
    Rev. Martin Smythasked the Secretary of State for Foreign and Commonwealth Affairs whether the non-delivery of mail to individuals in the Union of Soviet Socialist Republics in breach of the Universal Postal Convention was raised by the United Kingdom delegation
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    during the discussions on human rights at the Conference on Security and Co-operation in Europe in Ottawa in May; and if he will make a statement.
    The Minister of State, Foreign and Commonwealth Office (Mr. Richard Luce): The United Kingdom delegation to the Ottawa meeting made clear our very real concern about the Soviet practice of interfering with private mail sent from abroad.
    Rev. Martin Smyth: Is the Minister aware that the host of communications sent recently from the United Kingdom to the USSR which were seized by the Soviet postal authorities included inoffensive items such as wedding invitations and birthday cards? Will the Minister undertake to communicate with his opposite number in the USSR to discover which items are prohibited by the Soviet postal authorities, so that those who send communications to their friends in that country can be informed?
    Mr. Luce: I know of the hon. Gentleman's longstanding interest in this problem. As I said, the general subject was raised forcefully at the Ottawa meeting on human rights. As the hon. Gentleman will know, my hon. Friend the Minister of State — the hon. Member for Edinburgh, Pentlands (Mr. Rifkind)—arrives in Moscow today. He told me before his departure that he intends to raise this general issue during his visit.

    Soviet Foreign Minister
    Mr. Michael Brownasked the Secretary of State for Foreign and Commonwealth Affairs what plans he has to meet the new Soviet Foreign Minister.
    Sir Geoffrey Howe: I expect to meet the new Soviet Foreign Minister in Helsinki on 1 August during the meeting commemorating the 10th anniversary of the signature of the Helsinki final act.
    Mr. Brown: Does my right hon. and learned Friend agree that the main prerequisite for agreement on arms control is that there should be confidence between East and West? Will he use that meeting as an opportunity to stress the British Government's commitment to increasing confidence?
    Sir Geoffrey Howe: I agree with my hon. Friend that the achievement of success in arms control negotiations could depend substantially on the creation of confidence on both sides. I shall certainly do my best to stress that. It is one reason why we welcome the prospect of contact at the highest level in the forthcoming summit meeting between the President of the United States and Mr. Gorbachev.
    Dr. Owen: Before that meeting with the new Soviet Foreign Minister, does the Foreign Secretary think it appropriate to restart the Anglo-Soviet health agreement, which was signed in 1975 but suspended in 1979? The suspension has caused much friction between the two countries. Would not such a gesture be appropriate to commemorate the signing of the Helsinki final act?
    Sir Geoffrey Howe: I shall reconsider the matter in the light of the cogent arguments advanced by the right hon. Gentleman. I cannot promise him that my consideration will be concluded in time for the meeting next week.
    Mr. Lawrence: When my right hon. and learned Friend meets the new Soviet Foreign Minister, will he say

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    that, although the overseas English language broadcasts of the BBC are not usually jammed, its Russian service broadcasts are always jammed, and that that is in breach of the international telecommunications convention—another international undertaking which the Soviets have signed but do not honour?
    Sir Geoffrey Howe: Freedom of broadcasting is a matter that frequently arises at meetings of this kind, and it will be relevant to the proceedings at Helsinki next week. My hon. and learned Friend will find that there is a question directed specifically to this subject to be answered later today.
    Mr. Boyes: When the Foreign Secretary meets the Soviet Foreign Minister, will he tell him that the British Government are against the deployment of chemical weapons in Europe by any NATO state, and that it would be helpful if the Soviet Union would reduce dramatically its stocks of chemical weapons and produce no further stocks? Will he also say that the British Government would guarantee, on the removal of all Soviet stocks, that they would be opposed to the deployment of any chemical weapons in Europe?
    Sir Geoffrey Howe: The hon. Gentleman is right to draw attention to the massive stocks of chemical weapons held by the Soviet Union and the importance of their removal if we are to secure progress towards a worldwide ban on chemical weapons. The United Kingdom has neither manufactured nor stocked chemical weapons for many years. We shall continue to press the Soviet Union, at Helsinki and elsewhere, for a worldwide ban on chemical weapons.
    Mr. Key: Will my right hon. and learned Friend take every opportunity to press upon the Soviet Union leadership how welcome it would be if, in a co-operative and uncompetitive spirit, it would increase its contribution to solving the problems of famine and development in the Third world?
    Sir Geoffrey Howe: I shall take that opportunity. I drew attention to that point in a speech yesterday, noting the significant fact that, in the past six months, India has contributed 10 times as much to food aid as the Soviet Union.
    Mr. Healey: Will the proposed visit of Mr. Gromyko to Britain still take place? If not, will it be replaced by a visit from Mr. Shevardnadze, his successor as Foreign Secretary? When the right hon. and learned Gentleman meets the Soviet Foreign Minister in Helsinki, will he suggest that the Soviet Union should impose a ban on all tests of components or subcomponents of systems that could be used in space, including the Soviet anti-satellite system?
    Sir Geoffrey Howe: I shall consider the second point raised by the right hon. Gentleman. On his point about a visit from Mr. Shevardnadze in place of Mr. Gromyko — whom we must congratulate on his appointment to President — the invitation previously extended to Mr. Gromyko has been re-extended to Mr. Shevardnadze and I hope that it will be accepted.

    Argentina
    Sir John Biggs-Davisonasked the Secretary of State for Foreign and Commonwealth Affairs if he will
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    make a statement about the prospects for Anglo-Argentine relations in the light of Her Majesty's Government's decision to re-open trade with Argentina.
    Sir Geoffrey Howe: We have repeatedly made it plain that we seek more normal relations with Argentina, while continuing to fulfil our commitments to the Falkland Islanders. By lifting restrictions on imports from Argentina we have taken a practical step of benefit to both sides, as we have done on a number of occasions since 1982. But the restoration of more normal relations requires as well a constructive approach from Argentina, which it has so far declined to adopt.
    Sir John Biggs-Davison: While upholding British sovereignty over the Falklands, does my right hon. Friend's reply mean that Her Majesty's Government are always ready to welcome Argentine co-operation in the defence and development of the region? Meanwhile, will the Foreign and Commonwealth Office stop pussyfooting and procrastinating about fisheries protection through a mistaken fear of certain powers?
    Sir Geoffrey Howe: There is no question of the Foreign and Commonwealth Office pussyfooting or procrastinating about the prospect of effective control over fisheries in the Falkland Islands region. My hon. Friend must understand that we want to achieve an effective fisheries regime, which is much more likely to be effective if we can achieve it on a multilateral basis. That is why we are working actively, under my supervision, to make progress in that direction.
    Mr. Dalyell: What advice did the right hon. and learned Gentleman get in Brasilia?
    Sir Geoffrey Howe: We had a useful and constructive exchange of views on a large number of matters. —[Laughter.]
    Mr. Speaker: Order. If all questions were as brief as that, we should get on very rapidly.
    Sir Anthony Meyer: Will my right hon. and learned Friend assure the House that in future dealings with Argentina he will in no way be dismayed by its very disappointing reply to his imaginative gesture in lifting trade restrictions? Will he explain that the renewal of diplomatic relations is more in Argentina's interests than it is in ours?
    Sir Geoffrey Howe: From as long ago as September 1982, when I first proposed and negotiated the withdrawal of financial restrictions between the two countries—an agreement which has yet to be fully implemented by Argentina—I have been exercising a patient pursuit of good reason and sense from the Government of that country.
    Mr. Tom Clarke: Does the Foreign Secretary accept that the President of Argentina had a very distinguished record in opposing the previous regime? Will he also accept that initiatives and good will on both sides could lead to a lasting agreement on all outstanding issues that would be the envy of diplomats throughout the world?
    Sir Geoffrey Howe: I certainly recognise the position adopted by the President of Argentina and the part that he has played in restoring democratic government to that country. That is why I am disappointed by the reluctance of his Government to respond even to the gesture we made

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    a couple of weeks ago. We would welcome any signs of willingness to move step by step in the direction of more constructive relations.
    Mr. Robert Banks: In relation to what my right hon. and learned Friend has said, can he say whether he has any objection to the landing of civilian aircraft from Argentina at the new airport at Port Stanley?
    Sir Geoffrey Howe: The management of that airport is a matter upon which one would need to consider each proposal as it was put.
    Mr. Hardy: May I return to the question of fisheries? Is the Foreign Secretary aware that there is not a great deal of time before irreparable harm will be inflicted upon the fishery resources of the Falkland waters? What evidence can he give the House that the Foreign Office has taken any helpful action, and when shall we see the urgent initiatives that are necessary?
    Sir Geoffrey Howe: I appreciate the seriousness with which hon. Members on all sides of the House are looking for a solution to the matter of fisheries raised by the hon. Member for Wentworth (Mr. Hardy) and by my hon. Friend the Member for Epping Forest (Sir J. Biggs-Davison). We need to reach a conclusion that will be effective, durable and respected. We are much more likely to achieve that on a multilateral basis, and that is why we are working towards that end. If we wish to preserve the fish about which the hon. Member is concerned, we must secure ageement on as wide an international basis as possible.
    Mr. Foulkes: I hope that it is in order for me to congratulate the Foreign Secretary on this small step forward, even with the unfortunate caveat on sovereignty. Is the Foreign Secretary aware of the oil exploration already under way by Firstland? He is aware of the chaos over fishing. Will he now consider some agreement with Argentina on the development of oil resources for our mutual benefit? Will he confirm that Argentina is involved in the multilateral discussions on fisheries, and that we can expect an agreement soon, before all the fish have gone from the South Atlantic?
    Sir Geoffrey Howe: I hope that the action upon which the hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) was kind enough to congratulate me indicates our disposition to find any way we can to improve our co-operative relationship with the Government of Argentina. That is what we are seeking to do in relation to fish, and we will look at any proposals in relation to anything else. Many people in Argentina understand that action of a multilateral kind to manage and conserve fish in the South Atlantic would be in everybody's interests.
    Mr. Meadowcroft: I welcome the reopening of trade with Argentina. How far does the Secretary of State believe it is significant to the stability of the democratic, civilian regime in Argentina to have a discussion of sovereignty on the agenda? If he does believe that it is important, what is he doing about it?
    Sir Geoffrey Howe: A discussion about sovereignty cannot be on the agenda. For that reason, we have been seeking to open up prospects of discussion on the wide range of topics that I have identified.

    European Community (Intergovernmental Conference)
    Mr. Deakinsasked the Secretary of State for Foreign and Commonwealth Affairs if he will be submitting any proposals to the forthcoming European Economic Community intergovernmental conference; and if he will make a statement.
    Sir Geoffrey Howe: We have already put forward a number of practical proposals. They remain valid. I expect specific proposals from other member states to be put forward as a basis for discussion at the conference. In the light of that discussion we shall consider whether to put forward any further ideas ourselves.
    Mr. Deakins: Does the Foreign Secretary support the Prime Minister's view, expressed recently in the House, that amendments to the treaty of Rome are not required?
    Sir Geoffrey Howe: The view that we took when we went to the meeting in Milan was that it was possible to achieve the necessary progress on the basis of our proposals, without treaty amendment. As the Prime Minister said in her statement to the House after the Milan summit,
    "We must go to that…conference and consider what is put before us."
    Mr. Dykes: Now that we appear to be more enthusiastic about the conference, will my right hon. and learned Friend reassure the House that we shall attend with positive and enthusiastic proposals? If a good number of the founding member states want to make some changes to the treaty—without there being too many—would it be possible for us to accept that with good grace and common sense?
    Mr. Beaumont-Dark: Good God, no.
    Sir Geoffrey Howe: The important thing, which is well known to my hon. Friend, is that we must achieve a conclusion of the agenda before us as quickly as possible in order to promote effective common action and further progress within the Community. We shall be approaching the whole agenda at the intergovernmental conference with a view to concluding those matters and achieving as much progress as we can.
    Mrs. Clwyd: Will the Foreign Secretary impress on his colleagues that Community aid to Turkey should depend on that country's return to democracy? Will he bring to their attention the new report by Amnesty International showing that torture of political prisoners in Turkey is systematic and widespread and that nothing has changed in that country since the beginning of this year?
    Sir Geoffrey Howe: I am able to challenge the last part of the hon. Lady's question forthwith, because the parts of Turkey subject to martial law have been substantially reduced since the beginning of this year. That is indicative of the progress that we wish to see towards the restoration of full democracy in Turkey, which is important.
    Mr. Budgen: I remind my right hon. and learned Friend of the robust and patriotic words of the Prime Minister who said on her return from Milan, "I do not think there is any need for any amendment to the treaty." Will my right hon. and learned Friend make it clear that the Government rule out any proposals for amendment to the treaty that might come forward at the intergovernmental conference in the autumn?
    Sir Geoffrey Howe: I remind my hon. Friend of the equally robust and patriotic words of my right hon. Friend the Prime Minister who said:
    "We must go to that…conference and consider what is put before us."—[Official Report, 2 July 1985; Vol. 82, c. 191.]
    It would be foolish to go to such a conference with preconceived ideas. Our objective, in the interests of the economic policy and politics of this country, must be to secure effective agreement so that the Community can make the sort of progress that we all want to see achieved.
    Mr. George Robertson: Now that the Foreign Secretary has taken to fudging up everything that the Prime Minister has said in her robust comments, will he tell the House what he will do at the intergovernmental conference to protect this country from changes in the voting procedures which, even without a change in the treaty, could easily lead to the elimination of the Luxembourg compromise? Will he resist any procedural change that will make costly tax harmonisation possible, and will he recognise and admit to the House that any intergovernmental conference that has no agenda, so little time for preparation and nobody agreeing on what the eventual outcome will be, is a recipe for misunderstanding, disillusionment and disenchantment?
    Sir Geoffrey Howe: The hon. Gentleman has a capacity which astonishes even me for casting gloom and doubt on every sensible proposal before the House. He must recognise the importance of going to the conference with a view to achieving effective progress in a direction that is important for this country. That is how we approach all proposals in the Community. The hon. Gentleman will recall that it was agreed at the Milan conference that proposals for tax harmonisation should be remitted to Finance Ministers for further consideration, because they cause equal doubt and difficulty to a number of member states. As for the Luxembourg compromise, the hon. Gentleman will also accept that many states recognise and emphasise what the Community recognises, that it is not possible in the Community to disregard or overrule the vital national interests of any country. That having been said, it is of vital national interest for the Community to achieve co-ordination and unity on the progress that is necessary.

    European Community (Foreign Policy)
    Mr. Knoxasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on progress towards a common European Community foreign policy.
    Sir Geoffrey Howe: The United Kingdom put forward at the Milan European Council ideas for a binding agreement on European political co-operation. This would include the formalisation of the commitment to consult, establishment of a small secretariat and closer cooperation on security. These ideas, together with others, will now be on the agenda of the forthcoming intergovernmental conference.
    Mr. Knox: Will my right hon. and learned Friend confirm that greater co-operation in foreign affairs among Community countries is a major objective of British Government policy, and that such co-operation is very much in the interests of this country and the other countries of western Europe?
    Sir Geoffrey Howe: I agree with what my hon. Friend has said. It was for that reason we put forward the proposals that we did at the Milan conference for an agreement on political co-operation.
    Mr. Boyes: If Foreign Ministers ever work closer together on a common policy, and whether they do or not, will the Foreign Secretary make it absolutely clear that he is against torture? Will he make it absolutely clear that he is against torture in Turkey—[Interruption.]
    Mr. Speaker: Order. The question concerns European foreign policy.
    Mr. Boyes: With respect, Mr. Speaker, I am saying to the Foreign Secretary, as one of the people making that common policy, that the common policy must be to oppose torture wherever it is, particularly systematic and widespread torture in Turkey.
    Sir Geoffrey Howe: The question ranges, as you pointed out, Mr. Speaker, a long way beyond that on the Order Paper, but I have no difficulty in assuring the hon. Gentleman that of course the policies of Her Majesty's Government are opposed to torture.
    Mr. Teddy Taylor: Will the Foreign Secretary do all in his power to make sure that a European foreign policy does not become an anti-American foreign policy? Is he aware of the huge resentment in the United States about the indiscriminate dumping of steel from state-subsidised companies in Europe and about the disruption of world food markets, again by indiscriminate, subsidised dumping of food surpluses?
    Sir Geoffrey Howe: My hon. Friend refers to the other side of the coin that we discussed a moment ago. The fact is that on both sides of the Atlantic there is a problem to be tackled over the disposal of steel exports in today's world economic conditions. It is equally the case that American agricultural policy involves, in his words, dumping agricultural exports on the world market at subsidised prices. It is precisely because we need to resolve conflicts of that kind sensibly that we need to tackle them, and can benefit so much from tackling them, within the European Community rather than on our own.

    South Africa
    Mr. Cartwrightasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the current state of British relations with South Africa.
    Sir Geoffrey Howe: We are seriously concerned at the deterioration of the internal situation in South Africa and especially the imposition of a state of emergency. This underlines the urgent need for the rapid opening of a dialogue between the present South African Government and the genuine representatives of the non-white community. These grave developments inevitably have an effect on our bilateral relations.
    Mr. Cartwright: Since the South African authorities clearly take little or no notice of representations from Her Majesty's Government, will the Foreign Secretary now open negotiations with our European partners with a view to establishing an EEC-wide ban on new investment in South Africa? Does the Foreign Secretary accept that such

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    a policy would be neither disinvestment nor disengagement, but a worthwhile and effective way of securing the sort of changes that we all want to see in South Africa?
    Sir Geoffrey Howe: The hon. Gentleman is right to draw attention to the value of approaching these questions in consultation with our partners in the European Community, which is why we issued the statement that we did on behalf of all the Foreign Ministers on Monday. He has not succeeded in persuading me that the proposal that he has in mind would be of value.
    Mr. John Carlisle: Will my right hon. and learned Friend accept that, faced with the increasing tide of black violence in South Africa, which includes murder, torture and alleged cannibalism, the South African Government had no choice but to bring in these emergency powers to protect innocent black lives? Will he also accept that the intervention of EC Foreign Ministers and of well-meaning Anglican bishops does nothing to encourage South Africa towards peaceful change?
    Sir Geoffrey Howe: I can understand that Governments of all sorts must consider what action is necessary to check violence and disorder. However, I do not find it easy to conclude that the measures taken by the South African Government at the weekend represent the best way of achieving the sort of progress that we want in South Africa. Nor is it right to conclude that we should refrain from commenting and pronouncing upon the aspects of the South African regime which we believe are unhelpful to the future of all people of that country.
    Mr. Winnick: Leaving aside the disgraceful remarks of apologists for South Africa that we have just heard, are not the present events in South Africa the inevitable result of the policies that have been pursued in that country since 1948? When will its rulers recognise that while the majority of people in that country are denied political and human rights there will never be peace? Is it the Foreign Secretary's intention to recall the British ambassador? Would that not be the most appropriate step to take at this time?
    Sir Geoffrey Howe: We have long made clear our view that the policy of apartheid on which the South African Government rest their case is misconceived, unjust, inappropriate and indefensible. Having said that, we think that the least helpful thing that we could do would be to withdraw our ambassador. One reason why we have an ambassador in post is precisely so that we can make clear to the South African Government the views of this Government.
    Several Hon. Members rose——
    Mr. Speaker: Order. I remind the House that there is a statement on this matter later. I shall allow a short run of questions, but those who are fortunate enough to catch my eye now may not find it so easy later.
    Mr. Simon Hughes: On a point of order, Mr. Speaker. I do not think that there is to be a statement.
    Mr. Speaker: I have it wrong, and I apologise.
    Sir Peter Blaker: While the actions of the South African Government are very much to be deplored, will my right hon. and learned Friend confirm that all the so-called front-line states of central and southern Africa are
    1034
    trading vigorously with South Africa? Does he know of any proposal from any of those countries to impose economic sanctions?
    Sir Geoffrey Howe: My right hon. Friend is right to draw attention to the fact that a number of the front-line states have said that their relationship with South Africa would prevent them from complying with any recommendation for economic sanctions.
    Mr. Steel: Will the Foreign Secretary make it quite clear to the South African Government that our Government believe that an imaginative and humanitarian gesture, such as the release of Nelson Mandela, would do far more to calm the position in South Africa than the introduction of all the instruments of oppression that have occurred during the last few days?
    If that is the right hon. and learned Gentleman's view, what concrete steps is he prepared to take other than spilling out the adjectives of condemnation on South Africa? Will he take a lead from the American Congress and at least consider selective sanctions?
    Sir Geoffrey Howe: I and the Government have made it plain on many occasions that the South African Government need to take bold action to restore the possibility of dialogue, including the step mentioned by the right hon. Gentleman. That does not lead me to conclude that they are likely to be encouraged in that direction by the imposition of sanctions. I well understand why those who deplore the policies of the South African Government as much as I do would like to see something being done. It is only after the most careful judgment that we have reached the plain conclusion that sanctions are likely to have the opposite effect to that desired.
    Mr. Nelson: Will my right hon. and learned Friend confirm that it should be no part of British Government policy, nor would it be in British interests, to add fuel to any fire in South Africa? Will he continue to resist the siren voices of those who suggest that disinvestment would be in the interests of faster progress? That would surely be ineffective, unworkable and least in the interests of those whom it was designed to assist.
    Sir Geoffrey Howe: I have a great deal of sympathy with my hon. Friend's point. It was very well put by Mrs. Helen Suzman in Europe the other day, when she said:
    "Such action in fact blunts the only weapon that Blacks have, or are in the process of acquiring—the economic muscle that accompanies upward mobility on the economic ladder by virtue of greater skills and increased consumer power."
    Mr. Robert Hughes: While major differences remain between some of us and the Secretary of State, will he accept that many of us warmly endorse his call for bold steps to be taken by South Africa, such as the ending of detention, the release of people detained without trial and the unconditional release of Nelson Mandela? Having said that, may I ask the right hon. and learned Gentleman why his speech yesterday was bereft of even the most timid proposal to try to make South Africa implement steps to carry out the policies that he has apparently vigorously demanded?
    Sir Geoffrey Howe: Because after careful consideration, despite the unanimity of views about objectives, we share the view expressed, for example, by Mr. Alan Paton, that those who would pay most grievously for disinvestment would be the black workers in South Africa.
    Mr. Ian Lloyd: I urge my right hon. and learned Friend to continue to pay attention to the wisdom of people such as Alan Paton and Helen Suzman, both of whom are friends of mine, the chairman of the Anglo-American Corporation, Mr. Harry Oppenheimer, and Chief Buthelezi, among many others, who have given a thorough, far-reaching and impressive analysis of the reasons why disinvestment would be a disastrous course of action. If Her Majesty's Government and the Foreign Ministers of the Ten are now to feel both obliged and entitled to interfere in the domestic affairs of another state, may I ask on what grounds we do not feel both entitled and obliged to proscribe to the Indian Government what they should do about civil violence in Ahmedabad, to the Singhalese Government what they should do about the civil and racial violence in Ceylon, and to many others? Are we not creating the most dangerous precedent?
    Sir Geoffrey Howe: My hon. Friend overlooks a crucial central fact, which is the extent to which the apartheid regime in South Africa is uniquely built on foundations of racial discrimination.
    Mr. Healey: Will the Foreign Secretary also agree that the South African Government, since they were given an uncovenanted diplomatic triumph by the British Prime Minister a year ago, have invaded two neighbouring countries and have sabotaged their solemn commitment to facilitate independence in Namibia? If the right hon. and learned Gentleman believes that sanctions are always counter-productive, why did he support sanctions against Poland, why is he now supporting American sanctions against Nicaragua, secret details of which were revealed by a recent document leaked by a civil servant in a Government Department? Does he not agree that financial sanctions against Iran were instrumental in securing the release of the America hostages?
    Sir Geoffrey Howe: The right hon. Gentleman has posed a long catalogue of questions. We have always taken a profoundly sceptical view of the value of sanctions anywhere——
    Mr. Healey: What about Poland and Nicaragua?
    Sir Geoffrey Howe: —and many of the points implied in his question are not justified by the facts. As a result of the meeting between President Botha, Mr. Botha the Prime Minister, and myself, there have been a number of significant steps, although not large enough, in the direction of reform in South Africa. The tragedy is that they have been blunted and frustrated by the other actions taken at the same time by the South African Government.
    Mr. Nicholas Winterton: Will my right hon. and learned Friend accept that perhaps the most constructive attitude that could be adopted by Her Majesty's Government would be to encourage South Africa to return to the radical reforms that it was undertaking before the latest violence occurred? Will the British Government do that and, in doing it, support the approach of Bishop Tutu in deploring the violence in the black townships? Will my right hon. and learned Friend outline some of the initiatives which he and the Government will encourage President Botha and his Government to introduce in the Republic of South Africa?
    Sir Geoffrey Howe: My hon. Friend is right to say that we should encourage the South African Government to take further the process of reform that had been under way
    1036
    in recent months. None of those steps go far enough, but they are a start. It is right also to endorse the message from Bishop Tutu that violence of any kind from either side can play only a destructive role in southern Africa.

    Nicaragua
    Mr. Simon Hughesasked the Secretary of State for Foreign and Commonwealth Affairs what information he has as to the number of British citizens currently in Nicaragua.
    Mr. Renton: There are currently estimated to be about 70 British citizens resident in Nicaragua.
    Mr. Hughes: Will the Minister condemn the actions of one British citizen recently in Nicaragua, an office bearer of the Federation of Conservative Students, Mr. Hoyle, who flaunted his participation with the Contras? Will he assure the House that, no matter where in the world it occurs, the Government will condemn participation with terrorists in actions against any democratically elected Government by any citizen of the United Kingdom, especially those with political responsibilities?
    Mr. Renton: As my right hon. Friend the Leader of the House remarked last week, I think that I am very much more frightened of the Federation of Conservative Students than the Sandinistas are likely to be. The gentleman who was in Nicaragua was not there as a supporter or delegate of Government policy.
    Mr. Bill Walker: Will my hon. Friend confirm that, unlike the citizens of many other countries, British citizens are permitted to go to any part of the world where a country will allow them to enter, and that when they are there they are entitled, by the freedoms that we are allowed, to make statements of their beliefs, whatever those statements are?
    Mr. Renton: Yes, that is right. To refer to the original question, I do not think that British citizens who are in Nicaragua will take any great comfort from the decision of the Greater London council, supported by various Labour Members, to twin London with the Nicaraguan capital of Managua. I do not believe that they will find that a fruitful step.
    Mr. Foulkes: Why does the Prime Minister condemn some forms of terrorism by some people and not condemn the terrorist action of Mr. Hoyle in taking part in this Contra attack? Why will the Minister not confirm that the Government are equally against that sort of action by an office bearer of the Federation of Conservative Students, which was quite outwith the bounds of any reasonable action? Why is the Minister facing both ways on this issue? Will he now condemn the action of this office bearer, Mr. Hoyle?
    Mr. Renton: I suppose that I should congratulate the hon. Gentleman, on his return from Nicaragua, on having joined what The Observer described as the
    "Sandanista bib-and-beret brigade".
    It is quite clear that the problems of Central America, including Nicaragua, will not be solved by force, from whichever side it comes. That is why we support the Contradora process and are pleased with the progress that was made at the meeting that ended yesterday.

    Immigration
    Mr. Meadowcroftasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the implications of recent changes in immigration policy for matters within his responsibility.
    Mr. Renton: Recent changes in immigration policy have concerned the imposition of a visa regime on Sri Lanka and the introduction of changes in the immigration rules. Both these subjects were debated in the House last night. These changes have caused or will cause an increase in entry clearance work overseas.
    Mr. Meadowcroft: Has the Minister had the opportunity to read the report in the Official Report of the speech of the hon. Member for Bedfordshire, North (Mr. Skeet), who argued with some emotion that we are dealing with individuals and not statistics? Is he aware that queues in the different capitals and entry clearance posts in the subcontinent are likely to lengthen? Surely this is an inhumane way of dealing with the problem of immigration. Applicants are having to wait for 12 months and more for interviews. Will he accept that it is desperately important to consider humanely the possibility of applicants being interviewed far more quickly?
    Mr. Renton: We must accept that if there is a change in the immigration rules which allows another new category to apply for entrance to the United Kingdom—for example, the husbands of women who are now settled in this country but not British citizens—there will be an increase in entry clearance work. We shall do our best within the resources available to us to ensure that the delays in the queues are kept to a minimum. We shall consider the possibility of equalising queue lengths between different countries in the Indian subcontinent.
    Mr. Stokes: Is my hon. Friend aware that, contrary to the views of all the Opposition parties, including the Liberal party, the vast majority of people, including many immigrants, respect the Government's immigration policies as being firm and fair?
    Mr. Renton: I very much appreciate my hon. Friend's point. When I was on the Indian subcontinent earlier this year and had the chance to see the entry clearance officers at work in Pakistan and Bangladesh, I came strongly to the conclusion that they try to apply the immigration rules as fairly and decently as possible.

    Cyprus
    Mr. Haynesasked the Secretary of State for Foreign and Commonwealth Affairs when he last discussed the problems of Cyprus with the Secretary General of the United Nations; and if he will make a statement on the outcome of that discussion.
    Mr. Renton: My right hon. Friend the Prime Minister and my right hon. and learned Friend had discussions with the Secretary General on 23 January and remain in close and frequent contact with him through official channels about the Cyprus problem. The Secretary General has made clear his determination to continue his efforts to bring about a settlement in Cyprus and we have expressed our strong support for his initiative.
    Mr. Haynes: Is the hon. Gentleman aware that that is not good enough? Has he read early-day motion 915,
    1038
    which refers to the 11 years during which there has been an invasion of Cyprus? Is the hon. Gentleman aware that, under a complacent Conservative Administration, Hitler invaded many European nations? What will the hon. Gentleman do about these problems? I am not satisfied with his answer. Action must be taken. Inaction has gone on for long enough. The problems should be sorted out.
    Mr. Renton: I appreciate the hon. Gentleman's concern. We take a serious view of anything that worsens the situation in Cyprus. For that reason we opposed, and called for the reversal of, the so-called declaration of independence in 1983. We drafted and secured the adoption of United Nations Security Council resolution 541, which deplored the Turkish-Cypriot action and declared that it was legally invalid. We believe that all sides should do their utmost to support the Secretary General's efforts.
    Mr. Crouch: I do not want to waste the time of the House——
    Mr. Beaumont-Dark: Everyone else has done so.
    Mr. Crouch: Does my hon. Friend realise that he has just answered the question that I wanted to put to him about the fact that the Government confirm that they strongly support United Nations resolutions 541 and 550 and recognise the Government of the Republic of Cyprus as the only Government in Cyprus?
    Mr. Renton: I thank my hon. Friend for endowing me with the quality of perceptiveness, which I did not know I possessed. My hon. Friend has put the Government's position accurately and well.
    Later——
    Mr. Deakins: On a point of order, Mr. Speaker. I should like to draw your attention and that of the House to the fact that today's Foreign Office questions mark the end of the experimental period that began earlier this year. during which European Community questions temporarily lost their separate slot. This experiment was agreed between the usual channels, although there was inadequate consultation on either side. To take today's questions as an example, only two European Community questions were asked compared with the seven or eight that would previously have been asked. Whatever one may think of the European Community, it is not being viewed in the same light as the United States of America, the middle east, South Africa or any other part of the world, although it has the power to tax the British people and legislate for them, a power which other parts of the world do not have. May I therefore express the hope through you, Mr. Speaker, that the Leader of the House will take on board these comments, which have been conveyed to ham separately? I understand that some of the minority parties also feel strongly about this issue.
    Sir John Farr: Further to that point of order, Mr. Speaker. There were 81 oral questions on the Order Paper today to the Secretary of State for Foreign and Commonwealth Affairs, only nine of which were devoted to European Community matters. Most of us believe that the experiment has been a great success and we hope that it will continue in a permanent form. There seems to be no reason to devote 20 minutes of Question Time to the European Community when so many other pressing matters in the rest of the world await attention.
    Sir Russell Johnston: Further to that point of order, Mr. Speaker. The Liberal party does not agree with the view of the hon. Member for Harborough (Sir J. Farr). It feels that you, Mr. Speaker, ought to exercise some benign influence over the Government to ensure that these matters are properly ventilated.
    Mr. Donald Stewart: Further to that point of order, Mr. Speaker. May I add my support to the point made by the hon. Member for Walthamstow (Mr. Deakins). The experiment has been a failure in the sense that the European Community impinges on so much of the business of this House. Whatever views hon. Members
    1040
    may have about the European Community, I believe they would prefer that slot to be reinstated, because this experiment has been a failure.
    The Lord Privy Seal and Leader of the House of Commons (Mr. John Biffen): It might be for the convenience of the House if I drew its attention to the written answer that was given on 22 March, which initiated the present experiment. It said:
    "The experiment will last until the summer recess to allow an opportunity for its success to be evaluated. Further discussions will then take place through the usual channels to determine whether the new arrrangement should become permanent." —[Official Report, 22 March 1985; Vol. 75 c. 625.]
    May I suggest that we should have those discussions rather than that they should be continued at this momemt.

Local Authorities (Financial Assets)
3.32 pm
Mr. Jack Straw(by private notice) asked the Secretary of State for the Environment if he will make a statement about his proposal to introduce retrospective legislation to take further control over the financial assets of local authorities.
The Secretary of State for the Environment (Mr. Patrick Jenkin): Although the Government welcome the news when a council replaces its mortgage lending with private finance, it is obviously wrong when mortgages are transferred to a bank or other institution en bloc without the consent of the individual borrowers. In many cases, the risk is not transferred to the new lender. Such transactions are artificial and have been entered into only to circumvent the capital controls approved by the House.
I therefore announced yesterday, in answer to a question from my hon. Friend the Member for Lancashire, West (Mr. Hind), that we propose to legislate at the earliest opportunity to give home owners with a local authority mortgage the right to decide whether the local authority may dispose of its interest to a specified purchaser, and a transfer without consent would be invalid. So far, relatively few councils have entered into such en bloc transactions, but a good many more are in the pipeline.
Because deals can be struck swiftly, we shall ask the House, in order to give immediate protection to borrowers, to give retrospective effect to the change as from midnight last night. I wrote yesterday to the chairmen of the local authority associations offering to consult them on the details of the proposal.
Mr. Straw: Is the Secretary of State aware that his announcement, which slipped out in a written answer last night, is outrageous and ill-considered, and has nothing to do with the merits of such deals or with protecting individual mortgagors, and everything to do with the Government's crazy economic policy, under which dictatorial controls have been imposed to prevent local authorities from spending their money on capital programmes to build houses, help industry and create jobs'? If these en bloc deals are a bad idea now, why were they a good idea in February when his Department told the Financial Times that
"it was happy to encourage this kind of deal."
Is the Secretary of State further aware of the immediate impact that his statement will have, that Calderdale will lose £3 million of planned housing starts, and that Wigan will lose £12 million? How many local authorities and housing associations will be affected? How much is involved? How many jobs will be lost? Will the policy apply to the United Kingdom or to England and Wales only?
Does the Secretary of State not understand that, to the best of my knowledge, every authority has written into these deals protection for the mortgagors? If there were technical problems in that respect, they could have been dealt with through consultation with the local authority associations.
Is not this measure a further example of the Secretary of State's vindictiveness? No such restrictions have been imposed on building societies, which normally expressly
1042
provide for the transfer of mortgages without the consent of the mortgagor. Is the Secretary of State proposing retrospective legislation to deal with that?
Is the Secretary of State further aware that to legislate retrospectively on such a matter is a gross abuse of the democratic procedure? It is the fourth time that he has done that. Does he agree that
"Retrospective legislation is a damned slippery slope. Let the House dig its heels in and say that it will have no more of it." —[Official Report, 2 March 1965; Vol. 707, c. 1264.]?
Has he forgotten that those were his exact words in the House when he was a Back Bencher on the way up, rather than a Secretary of State on the way out?
Mr. Jenkin: It is astonishing that the hon. Gentleman should consider it perfectly proper that a local authority should sell the mortgages of all its house purchasers over their heads, without even consulting them, and transfer the obligation in forms which do not even transfer the risk When, during the debates on the Local Government Act, there was a question of transferring the Greater London council mortgages, the hon. Gentleman was one of the first to insist that that should be done only with the consent of the borrowers. His indignation is synthetic.
The hon. Gentleman has asked whether the measure applies only in England and Wales. The question that I answered yesterday applies only to England and Wales. I am not responsible for these matters in Scotland. He asked for other facts and figures. In December 1984, when we gave the House an estimate of the receipts in the year 1985–86 from the sale of local authority assets, we did not take any account of block sales of mortgages, such as we are discussing today. Therefore——
Dr. John Cunningham: It is their money.
Mr. Jenkin: The hon. Gentleman shouts from a sedentary position that it is their money.
Dr. Cunningham: It is.
Mr. Jenkin: The truth is it is also the mortgagor's mortgage, and he is entitled to be consulted.
Mr. John Heddle (Mid-Staffordshire): Does my right hon. Friend agree that the way in which the Liverpool city council went cap in hand to the Banque Parisbas to sell its mortgage book for £30 million was a shabby deal to get round my right hon. Friend's prudent cash limits? Will he confirm that locked up in local authority mortgage books are £5,000 million, which are ratepayers' assets? Does he agree that it would be much better if those assets were unlocked for the benefit of the ratepayers, and if the borrowers transferred their liability to building societies and banks, which have much more sympathy and understanding for the relationship between the home owner and the borrower, and for cases of hardship and arrears? Would my right hon. Friend encourage every borrower to transfer his or her mortgage to building societies and banks accordingly?
Mr. Jenkin: I entirely agree with my hon. Friend that it is a perfectly proper and welcome transaction when a local authority, as it were, accelerates the receipt of capital assets by refinancing its mortgages to the private sector, provided it does so with the consent of the borrowers. The Government have repeatedly made it clear that we consider it an entirely appropriate way of generating capital receipts.
Many people, both inside and outside the House, were taken aback by Liverpool city council's transaction with

1043
the Banque Parisbas. There were conflicting views about the legality of the procedure, which is why we shall take an early opportunity to legislate to make the position absolutely clear.
Mr. John Cartwright: Does the Secretary of State accept that the homes of many private tenants in my constituency are constantly sold over their heads from one landlord to another? If that is legal and acceptable, why should it be wrong for mortgage loans to be transferred without the individual approval of the borrower?
Mr. Jenkin: I think that most hon. Members would have been astonished if it had been said a few months ago that it would be perfectly acceptable for a local authority simply to sell a mortgage to a building society without even consulting the tenants. The hon. Gentleman took part in the debates on the Local Government Bill, when the provision was pressed hard on the Government—not that it needed to be, because we recognise the need to obtain the tenants' consent—that when GLC mortgages are transferred, that should be done with the mortgagors' consent. The disposal of freeholds on property where the tenant has a lease is an entirely different branch of the law, and does not come within this question.
Mr. Jerry Hayes: Does my right hon. Friend agree that the statements by the Opposition spokesman, the hon. Member for Blackburn, (Mr. Straw), show how much of an armlock the hard Left has on the Labour party? Does he further agree that not only is the hon. Member for Blackburn supporting the madcap Marxists on the Liverpool council, but he is what we all believed him to be, Mr. Hatton's poodle?
Mr. Jenkin: My hon. Friend lays bare the inherent contradictions in the attitude of those on the Opposition Front Bench, who purport to show their respectable face in the House, where they are parliamentarians believing in the rule of law, but who never fail to give aid and comfort to the wreckers who do not believe in the rule of law.
Mr. Roger Stott: Is the Secretary of State aware that the appalling decision that he has taken, in what can be described only as an underhand and dubious manner, will in effect deprive my local authority in Wigan of £12 million that could be spent on housing and education projects that are badly needed in that town? Can he tell me and those people how he can justify that unwarranted intrusion into legitimate local government business?
Mr. Jenkin: The hon. Gentleman might suggest to his local authority that it could secure the receipts that it hopes to get if it persuaded the borrowers that it would be right to transfer their mortgages to the institutions that the council may have in mind. If that was done, there could be no possible objection. I wish the hon. Gentleman luck.
Mr. Terry Davis: Why is it wrong for a council to sell a mortgage without the consent of the borrower if it is all right for a building society to sell a mortgage without the consent of the borrower?
Mr. Jenkin: I am advised that it is almost impossible for one building society to sell a mortgage to another without the consent of the borrower—
Mr. Straw: Not true.
Mr. Jenkin: If the hon. Gentleman consults the legal textbooks on the matter—
Mr. Straw: I have.
Mr. Jenkin: —he will find that building societies are always advised to do that. Recently, one or two banks have entered into such block transactions, but the fact is that they have not succeeded in transferring the risk, and they remain in a contractual relationship with the borrowers. We are concerned with the propriety of public authorities—local authorities—and I am astonished that the hon. Gentleman should take that view.
Mr. Dave Nellist: May I thank the Secretary of State for his vindictive announcement this afternoon? Does he realise that it gives Back Benchers such as myself who are of relatively recent origin hope for the next Labour Government? If it is all right for the Tories retrospectively to take away powers from councils such as Liverpool, Lambeth and the others that have been mentioned today, it will be all right for the next Labour Government to reverse the decisions, rebate that money and give it back to the local authorities. In addition, they will be able to have retrospective legislation for others such as the miners who have been attacked by the Government and those who have lost their jobs. If retrospective legislation is all right for the Tories, it will be all right for Labour next time.
Mr. Jenkin: I thank the hon. Gentleman for giving me the opportunity to say that he has clearly totally misunderstood what was said in yesterday's answer and what I have said today. Nothing in the answer in any way affects the transactions entered into by Liverpool or any other transaction entered into by a council before midnight last night. We want the legislation to run from the date of the announcement, to protect the borrowers and to ensure that their consent is obtained. I hope that the hon. Gentleman will support that.
Mr. Jim Craigen: When will Ministers stop this game of cat and mouse with local authorities? Does not the right hon. Gentleman's statement demonstrate more of the sour grapes at the Treasury that local authorities are doing what Ministers keep exhorting them to do—deal with public assets?
Mr. Jenkin: I detect behind the hon. Gentleman's question the dissatisfaction with the present capital control system that I share. He will know that I have been in discussion with local authority associations for some months now in an endeavour to find a better system which will achieve the Treasury's objective of more certain control over the total of local authority capital spending while leaving local authorities with greater certainty and flexibility, so that they can plan their capital programmes further ahead.
Mr. Anthony Steen: Before my right hon. Friend pours more money into the bottomless pit of Liverpool city council, will he ensure that all grants have stringent conditions attached to them so that Liverpool cannot spend money as it wishes and so that the

1045
Government have some control of public money? Will he ensure that he does not make the same mistake that Liverpool city council is making and announce in a written answer on Friday that the Government propose to go through the national park of Dartmoor on the southern route south of Okehampton?
Mr. Jenkin: I admire my hon. Friend's geographical ingenuity. I have to tell him that I have to make payments to Liverpool and any other council in accordance with the laws passed by the House.
Mr. Simon Hughes: How many people made representations to the Secretary of State alleging that their interests were not being looked after in these transactions? How many others will lose the chance of housing this year? The right hon. Gentleman knows that the move has been supported by the Labour party and by councils such as Calderdale, which are balanced. He saw this coming but has decided to act only now. The Audit Commission told him that his Department should maximise assets for house building rather than reduce, let alone retrospectively, at the tail end of the Session, the chance of people having housing. The right hon. Gentleman has presided over a massive deficit in housing and he appears to want it to continue for the rest of the financial year.
Mr. Jenkin: The hon. Gentleman seems to be under the misapprehension that something I have said today discourages local authorities from refinancing their mortgages in the normal way. On the contrary, I have gone out of my way to stress that the Government welcome that being done when it is done in the normal way by securing the consent of the mortgagor. If Calderdale or any other county council wants to enter into such a transaction, it needs only to secure the consent of its tenants—which, if the hon. Gentleman is right, will benefit the local community and be readily forthcoming.

Hon. Member for Linlithgow
3.47 pm
Sir Anthony Kershaw: On a point of order, Mr. Speaker. I wonder whether this would be a convenient moment to raise a matter concerning the third report of the Foreign Affairs Committee which deals with the events of 1 and 2 May 1982. Paragraph 1.6 of that report states that there is sufficient indirect evidence to support the view that the hon. Member for Linlithgow (Mr. Dalyell) had supplied Committee documents to the press —The Guardian and the New Statesman.
I have received a letter from the hon. Member in which he says that he did not leak those documents to the papers concerned and nor did anyone acting for him. The Committee accepts what the hon. Member has written and I will therefore propose that the Committee makes that clear in a separate report to the House. I know that the Committee will wish me to express regrets for any embarrassment caused to the hon. Member for Linlithgow.
Hon. Members: Hear, hear.

Homelessness
3.48 pm
Mr. Roland Boyes: On a point of order, Mr. Speaker. During a visit to the northeast last week, the Minister for Housing and Construction said that, in the next fortnight, he hoped to announce further measures to alleviate the real problem of homelessness. In view of substantial public and parliamentary concern about the problem of homelessness and as two weeks takes us into the recess, will you, Mr. Speaker, in the presence of the Secretary of State for the Environment, join me in expressing the hope that a statement will be made while the House is still sitting?
Mr. Speaker: There is very little time.

Sports Grounds (Safety and Control)
3.53 pm
Mr. Max Madden: On a point of order, Mr. Speaker. You have expressed your concern in the past—most recently yesterday—about reports to this House being made available in advance to the media. I understand that the report of Mr. Justice Popplewell's committee of inquiry into safety and control at sports grounds, about which there is to be a statement, was made available yesterday to the media under an embargo. I checked at the Vote Office at 11 am and was told that the report was not available. I was also told that there was no indication of when it would be made available to hon. Members. I was subsequently informed that it was made available at or about midday.
As the report relates to very important matters, not least to the death and injury of our constituents, many hon. Members can see no good reason why reports to this House should be made available to the media under an embargo but should be denied to Members of the House until hours before a statement is to be made, thus putting us in a very poor position to put questions to the responsible Minister on a report which was made available to the media long before it was made available to hon. Members. Can you please, Mr. Speaker, do something to ensure that Government Departments stop this practice, which causes considerable annoyance to all hon. Members?
Mr. Speaker: I am not certain that I can do much more than continue to express my sympathy with what the hon. Gentleman said, and with what was said yesterday and previously. It is a matter for the Government, not for me. However, the Leader of the House is here and will have noted what has been said.
The Secretary of State for the Home Department (Mr. Leon Brittan): Further to that point of order, Mr. Speaker. Perhaps I should say that I regret what has occurred. The plan was that the report would be published at 10.30 this morning, which I hope the House will feel would have given hon. Members enough time to consider it carefully.
With permission, Mr. Speaker, I should like to make a statement. The Government have today published the interim report of the inquiry into safety and control at sports grounds under the chairmanship of Mr. Justice Popplewell, established following the tragic fire at Bradford city football ground, and the events at Birmingham city on 11 May. My right hon. Friend the Secretary of State for Scotland and I are both deeply grateful for the speedy, clear and thorough way in which the chairman and his two assessors have tackled this difficult and important task.
The inquiry concludes that the Bradford fire was probably caused by the accidental dropping of a lighted match or cigarette or tobacco on to accumulated rubbish below the stand; that had the guide to safety at sports grounds—the "green guide"—been complied with, the tragedy would not have occurred; and that the riot at Birmingham — which the police could not reasonably have foreseen—was caused by spectators bent from the outset on violence. No one reading the report, or who followed the public hearings in Bradford, can doubt that the inquiry has investigated these matters as thoroughly as possible.
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The inquiry makes 32 recommendations, eight of which are provisional. They fall into two groups: those concerned with safety and those concerned with control. I am making available separately a written statement dealing with each of the recommendations.
The safety recommendations include several designed to improve arrangements at sports grounds by, for example, improving evacuation procedures, the training of stewards, the provision of fire-fighting equipment and increasing the scope of safety certificates. In all those cases the Government will be inviting the local authorities, the police and the sports authorities to respond immediately to the spirit of the recommendations. The Government will issue a fresh edition of the guide to safety at sports grounds, the green guide, in the light of the inquiry's final report. But they will also ask certificating authorities and the police, in exercising their powers to take full account of the recommendations for amending the green guide, before the issue of the new edition. There is no need for them to wait.
On crowd control, the inquiry has made a number of important recommendations concerning membership cards and closed circuit television, the creation of new criminal offences relating to smoke bombs and the throwing of missiles and the need for a more suitable police radio.
On membership cards, the inquiry recommends that urgent consideration be given by football clubs in England and Wales to introducing a membership system so as to exclude visiting fans. Also recommended is that closed circuit television be introduced at league football grounds. The Government strongly support the television recommendation, and have already made clear their support for a scheme of membership cards to help exclude troublemakers. A Football League working party is considering the options and I would urge the league and the Football Association to take heed of the recommendations of the inquiry by seeking jointly to reach positive conclusions at the earliest practicable date.
It is also proposed that new offences should be created making criminal the possession of smoke bombs in football grounds and the throwing of missiles. This proposal will be carefully considered for possible inclusion in the public order legislation that the Government hope to introduce next Session. The Directorate of Telecommunications at the Home Office will also consider, as a matter of urgency, how best to meet the concern expressed about the personal police radios used at Bradford.
In its provisional conclusions, the inquiry states that it is minded to recommend changes to the provisions of the Fire Precautions Act 1971 and Safety of Sports Grounds Act 1975; that the police be given additional powers of search and arrest; and that consideration be given to the creation of a specific offence of chanting obscene or racialist abuse at a sports ground. We shall, of course, consider with care any recommendations that the inquiry makes on these and other points in the final report.
I hope that it will also be convenient for me to bring the House up to date on matters relating to safety and control since my statement on 13 May. First, under the Safety at Sports Grounds Act I have designated all the qualifying grounds of clubs in divisions 3 and 4 in the Football League in England and Wales, as well as in divisions 1 and 2 of the Rugby League. The necessary orders were laid on 19 July and come into force on 9 August. From the latter date, clubs will be required to apply for safety certificates

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before admitting any spectators. I have made it clear to the certifying authorities that the expectation is that they will work swiftly, normally by means of issuing interim certificates. In some cases, the best way of providing immediate protection— while also reducing the costs of implementation — may well be to restrict attendance ceilings in grounds or parts of grounds.
My right hon. Friend the Secretary of State for Scotland has decided for his part not to proceed at present by extending designation in Scotland beyond its existing limits. However, he has arranged for all non-designated clubs and all governing bodies in sport in Scotland to conduct an urgent review of ground safety in co-operation with their local fire authorities.
Secondly, all uncertificated grounds of the third and fourth divisions of the Football League, of the first and second divisions of the Scottish Football League, and of the first and second divisions of the Rugby League have been inspected as a result of the request that I and my right hon. Friend made to chief fire officers and firemasters. In addition, accommodation for spectators at the larger cricket grounds, Rugby Union grounds, race courses, motor racing tracks, greyhound tracks, tennis clubs and athletics grounds has been inspected.
Chief fire officers and firemasters have sent copies of their findings to the management of the sports grounds showing what remedial measures have to be taken. In some cases, this will involve the complete closure of a stand until rebuilding or remedial work has been completed. In other cases, strict limits are being placed on the number of spectators allowed into the stand. My hon. Friend the Minister responsible for sport will be looking further at the financial implications with the interests concerned in his working group on the financing of safety improvements. Managements have responded in a cooperative way and have either set necessary work in hand or are considering how to comply with the requirements. Local authorities and local fire authorities have sufficient statutory powers to ensure that essential fire safety requirements are complied with. These will in no way be affected by the separate proposals directed towards streamlining the present law on fire precautions published yesterday in a consultative document and which I am inviting the inquiry also to consider in the context of its work.
My right hon. Friend the Secretary of State for Scotland and I are grateful to chief fire officers and firemasters for the prompt, efficient and careful manner in which this survey has been carried out. A digest of the reports will be submitted to the inquiry.
Thirdly, the House will, of course, be aware of the rapid passage through both Houses of the Sporting Events (Control of Alcohol Etc.) Bill. It will be in force by the beginning of the football season.
Fourthly, steps have also been taken to enhance police effectiveness next season. In England and Wales the Association of Chief Police Officers has introduced a new system for exchanging information about the conduct of fans, which should assist in anticipating and preventing trouble. Three of the Home Office photographic vehicles will be available to be deployed at football matches, together with two experimental high-definition tripod-mounted cameras. This is in addition to the £500,000 worth of closed circuit television equipment purchased through funds provided by the Football Trust.
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Fifthly, my hon. Friend the Minister responsible for sport has helped to promote and draw up a Council of Europe convention on spectator violence which was adopted by the Council of Europe Committee of Ministers yesterday.
There is no single, simple method of making sports grounds safe and free from violence, but I believe that the steps taken in the past few months, coupled with the implementation of the important recommendations of Mr. Justice Popplewell's inquiry, have already made, and wall make, a significant contribution towards preserving football as a major spectator sport.
Mr. Gerald Kaufman: This report makes profoundly depressing reading. We must pay tribute to Mr. Justice Popplewell for the care with which, in the limited time available to him, he has looked into these matters. The account of the events leading up to the Bradford fire is particularly heart-rending in the aftermath of Sunday's moving memorial service. The description of what took place in Birmingham is a sickening catalogue of mindless violence and brutality.
We need to know what can be done urgently to present such outrages and tragedies from happening again. In that context, the press handout accompanying the report is simply impractical in declaring:
"The Committee has produced an interim report so that safety levels can be improved quickly before the start of the new football season in August".
The new football season begins in just over three weeks and, although the report contains a number of useful and sometimes important recommendations, hardly any of them could be implemented and have a noticeable effect in time for 17 August.
For example, recommendations about improving the efficiency and increasing the responsibilities of stewards assume that stewards can be trained to be some kind of super-efficient elite corps. Anyone who knows the real world of football stewarding knows that this is more easily said than done. The report points out that in Bradford, for example, the ages of the stewards ranged from 73 to 12.
Again, the report's recommendations on installation of perimeter fencing does not resolve the two conflicting roles of such fencing as, on the one hand, a protection of the pitch against hooligans and on the other a prison penning in potential fire victims in circumstances of panic.
Certain recommendations do not seem to have been thought through. For example. the proposed ban on all cars being parked within a quarter of a mile of football grounds means that law-abiding householders will be prevented from parking their cars outside their homes. This will affect my constituents, for example, and no doubt many thousands of other people.
Again, immediate designation of all sports grounds with a capacity of 500 or more as recommended, could affect 50,000 small grounds. Is this remotely practicable? Again, there are serious doubts among the football authorities and the police about the principle and practicality of two Popplewell recommendations— that of admission by membership tickets only and that only registered supporters of home teams should be permitted to attend games. This is an unprecedented proposal with serious implications, which Mr. Justice Popplewell does not seem to have considered.
Even if we set aside these issues, has anything been done about such recommendations? We are now nearly two months beyond the time limit set by the Government

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for practical schemes for membership cards to be introduced by the football authorities. Nothing has been decided and all that we now get from the Government on this are further pious hopes, expressed by the Home Secretary.
Again, only limited progress has been made for plans to install a universal system of closed circuit television and the funds available from the Football Trust do not begin to match the need here.
Most of Mr. Justice Popplewell's other recommendations have been met by the Home Secretary only with vague expressions of good will. People will be "invited" to do this, "consultations" will take place on that, "consideration" will be given to the other. Some points have been noted, others are to be studied. Hopes are voiced. The Government express their readiness to stand by.
The problem of fascist involvement, with which the report deals in disturbing detail, is not confronted by the Home Secretary. While the report has an excellent and well thought-out description of the nature of violence that we encounter in our society, and makes it clear that the violence in football grounds is only a manifestation in one group of places of the violence that is inherent throughout our society, Mr. Justice Popplewell's terms of reference preclude him from making any recommendations on this matter. We have heard nothing from the Home Secretary today about this profoundly important issue. But, above all, the press handout on the report admits that the inquiry did not deal with financial questions. Of the 24 immediate recommendations of this report, 13 require immediate and substantial outlay or entail serious financial consequences. There are no proposals from the Government to deal with that problem, only an examination to take place on some unspecified date. Even the most prosperous clubs, and they are few enough in number, do not have adequate resources to carry out the recommendations contained in the report and which the Government appear to endorse in principle. The Football Trust simply does not have the money left to fund these proposals.
The only solution is the equivalent of the Horserace Betting Levy Board, a football levy board, which will return to the game some of the massive revenues that the Treasury extracts from it. That is the approach of the Labour party and that is what it advocates, because pious hopes will not provide remedies for the serious problems vividly described in this report. What we need is action and that is not what we are getting from the Government.
Mr. Brittan: Many people outside the ranks of Government supporters will be disappointed at the carping response of the official Opposition spokesman to these proposals. The response was not only carping but inconsistent. On the one hand, the right hon. Gentleman calls for the expenditure of substantial sums of public money and urgent action, and on the other hand he objects to some of the recommendations in the report because they are unprecedented. He must make up his mind about whether what occurred this year illustrates a situation that is unprecedented and that requires action, or one to which conventional solutions can be applied.
Of course the financial questions are important and, as I indicated in my statement, my hon. Friend the Minister responsible for sport and his working party are engaged in
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discussions about those. It is a misrepresentation both of Mr. Justice Popplewell's report and of the Government's response to it, to imply that nothing can be done or that nothing is being done in the short term. Opposition Members were as anxious as anyone and more anxious than some that Mr. Justice Popplewell should make an interim report. I indicated that he was most welcome to do so and that it was up to him to decide whether he thought that would be useful. He did so decide and he was right. It is in the nature of things that when an interim report is produced within weeks, its recommendations cannot be instantly implemented. But it does not follow from that that it is not worth doing, because the implementation process can be started that much earlier.
The report contained specific recommendations about fire precautions related to the green guide and its contents. I have said from the Dispatch Box that, although we are producing a new edition, those recommendations should be regarded as the guidance of Government from this moment on. The right hon. Gentleman thinks it is clever to talk in a carping way about some things being recommended and others being subject to guidance. Some of these matters, such as safety, are not determined by Government issuing detailed edicts affecting the whole country: they are determined by local authorities considering applications in accordance with Government guidance. I have had no complaints that that guidance has not been followed, because invariably it has been.
In announcing today that that guidance will be varied in accordance with the recommendations in Mr. Justice Popplewell's report, we are operating in the proper way to ensure that safety requirements are properly complied with in the light of the new recommendations. For the right hon. Gentleman to suggest anything else may score a few cheap political points, but it will lead people who are attending grounds to have unnecessary anxieties, and it does less than justice to the inquiry and to the local authorities who will implement this report.
Similar considerations apply to the other matters raised by the right hon. Gentleman. Everybody realises that the recommendations about the training of stewards and perimeter fencing cannot be implemented instantly. In matters such as training, it is obvious that the earlier the recommendation is made about what should be done the better and the sooner an improvement will come. I ask the House to take the view that this report is necessary. It is by definition a partial view of the position, but it makes important and valuable recommendations, which are being pursued vigorously and urgently.
Several Hon. Members rose——
Mr. Speaker: I draw the attention of the House to the fact that there are two other statements after this and a ten-minute Bill. This is an important Back-Bench day and I ask for brief questions, please.
Sir Hector Monro: Will my right hon. and learned Friend accept that I welcome the report and his statement? Both are condemnations of the state of many football grounds and many spectators, and fully justify the tough line taken by my right hon. Friend the Prime Minister and by the Minister responsible for sport. Will the Home Secretary press ahead and ask the football authorities to implement as many of the excellent

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recommendations as possible? Will he have further consultations about the controversial issue of membership cards and the designation of all sports grounds?
Mr. Brittan: I am grateful to my hon. Friend. There will be consultations. I hope that the House will feel that membership cards have a useful part to play in crowd control. Plainly, that is not a view held only by the Government, because it was authoritatively supported by Mr. Justice Popplewell and his inquiry. It is therefore incumbent upon the football authorities to consider the different options and to press ahead urgently. I welcome the fact that the Football League investigation into these matters will produce a report in September. I hope the Football Association will also feel able to enter into discussions on this important matter.
Mr. Clement Freud: We on the Liberal Benches welcome the recommendations of the Popplewell report. Before the Home Secretary introduces new and largely unworkable legislation, which could jeopardise the traditional appeal of our unique national game, will he not think again about encouraging local authorities to operate more closely with football clubs and try to find a solution in that way? The right hon. Member for Manchester, Gorton (Mr. Kaufman) suggested a levy board. Would the Home Secretary accept that if only 10 per cent. of the money spent on transferring, buying and selling footballers had been spent on improving grounds we would now have the best stadiums in the world?
Mr. Brittan: I entirely accept the last point made by the hon. Gentleman. It is a fair point. I also agree that cooperation between football authorities and local authorities is important. He referred to the traditional appeal of football, but one cannot help thinking rather wrily and sadly of the events on 11 May. They were indications that not all that infrequently the traditional appeal has turned into something rather more horrific. In the light of that we have to contemplate action which is regrettable but wholly necessary.
Sir Paul Bryan (Boothferry): Does my right hon. and learned Friend agree that in trials following the violence in the coal strike it proved difficult to get convictions, despite acts of obvious violence? Will he bear those difficulties in mind when shaping the legislation and the steps he proposes to take to deal with violence at sports events?
Mr. Brittan: I am grateful to my hon. Friend. That is an important point to take into account. Sometimes it is a question of the law, but more often it is a question of law enforcement and the availability of evidence. The introduction of closed circuit television in some 30 grounds, coupled with the availability of the Home Office equipment I have referred to, will be an important step in that direction.
Mr. Tom Pendry: Is the Home Secretary aware that while much of the Popplewell report will be welcomed by the football world, much of it bears all the hallmarks of an interim report, in that the judge and his assessors did not have time to look at the many and diverse problems facing football?
Is the Home Secretary aware that the football world will be particularly critical of the blanket membership card scheme and the banning of away supporters? Are the
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Home Secretary and Mr. Justice Popplewell convinced that if my team, Derby County, came to London, I should not go along and give them a cheer? God knows they need it. That is not practical and it is not on.
Is the Home Secretary aware that on behalf of the all-party football committee I presented to Mr. Justice Popplewell a membership card scheme for away supporters that is much more practical than the scheme that he is offering?
As my right hon. Friend the Member for Manchester, Gorton (Mr. Kaufman) said, if any or all of the proposals are to be implemented by the football clubs, the Government cannot stand from giving them the necessary financial assistance, whether through a levy board or other means. Otherwise, the Home Secretary will go down in history as having helped to kill off our national game.
Mr. Brittan: I do not think that the House will find it surprising that an interim report bears all the hallmarks of an interim report. That is inevitable and right and proper. Mr. Justice Popplewell carefully takes heed of that inevitable fact by distinguishing between firm recommendations and provisional recommendations. That seems to be a sensible approach. He and the rest of the committee will reflect on the provisional recommendations and consider them further as they proceed with their work. No doubt others will comment on them.
The hon. Gentleman mentioned membership card schemes. Mr. Justice Popplewell does not suggest that the proposal referred to by the hon. Gentleman is the only one or that it is free from difficulties.
Mr. Denis Howell: It is the one that Popplewell recommends.
Mr. Brittan: It is indeed, but Mr. Justice Popplewell points out the difficulties and suggests that there are other approaches. The right course is for the football authorities to look at the desirability of schemes in the light of the report and I hope that they will come forward urgently with practical, sensible positive and enforceable proposals.
Mr. Gary Waller: Will my right hon. and learned Friend accept that most reasonable people will feel that his response to the report is a reasonable balance between practicality and urgency? Is not there an essential contradiction in the view of the right hon. Member for Manchester, Gorton (Mr. Kaufman) that the Government should take immediate action and his statement that the Government are proposing action that cannot be implemented within three weeks?
Mr. Brittan: My hon. Friend is right. The right hon. Gentleman's response was riddled with inconsistencies.
Mr. Madden: What practical steps is the Home Secretary taking to implement the recommendation:
"There should be urgent consultation between the Health & Safety Executive and the fire authorities and the local authorities as to how best to coordinate and communicate their inspections and reports"?
Is the Home Secretary aware that many of the recommendations call for all these bodies to spend money that they do not have and for work to be done by officials whom they do not have, because local authorities have had their incomes reduced by the Government and many have been reorganised, usually ending up with less manpower than previously?
The Home Secretary accuses the Opposition of carping criticism, but does he not understand that he and his

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Government stand accused of complacency, with a maximum of talk about these matters and a minimum of positive action?
Mr. Brittan: I do not accept that for a single moment. The fact that action is being taken is made clear by, for example, the fact that among third and fourth division football grounds, five stands have been the subject of local authority recommendations for closure pending further work and seven grounds have been recommended for reduced spectator capacity. The suggestion that none of this has any practical impact does not stand scrutiny. As for the form of co-operation and consultation recommended in the report, there is nothing in any of the financial measures introduced by the Government that prevents that from occurring.
Mr. Geoff Lawler: I pay tribute to Mr. Justice Popplewell not only for the prompt way in which he produced his report but for the sensitive way in which he conducted his inquiry. I know that that view is felt strongly in Bradford. I am sure that the chairman and directors of Bradford city would not seek to deny that points made in the report, which says that much of the action required would have been taken if the necessary resources had been available. Therefore, as the burden of ensuring that a similar tragedy never happens again must now fall jointly on the Government and football representatives, will the Government speed up negotiations with the football representatives to ensure that clubs can take the necessary measures and have the necessary financial resources to do so?
Mr. Brittan: I am sure that my hon. Friend's remarks about Mr. Justice Popplewell and his inquiry will be all the more appreciated because of my hon. Friend's distinguished involvement in the aftermath of the tragic events. My hon. Friend the Minister responsible for sport is sitting on the Government Front Bench and he will certainly take my hon. Friend's comments into account in his deliberations.
Mr. Tam Dalyell: May I press the Home Secretary on what my right hon. Friend the Member for Manchester, Gorton (Mr. Kaufman) said about money? My right hon. Friend the Member for Birmingham, Small Heath (Mr. Howell) and I have both been told by the chairman of Chelsea that his club cannot even afford the computer that will be necessary to bring in the desirable modifications. Where is the money to come from? Chelsea is one of the richest clubs.
Mr. Brittan: The idea that there is no money available is belied by the fact that about £7 million has been disbursed by the Football Trust in recent years, and the point made by the hon. Member for Cambridgeshire, North-East (Mr. Freud) is not without force. However, it is not for me to judge the financial capacity of the football world to deal with these matters. I have said clearly that the financial aspects of the matter are being considered by my hon. Friend the Minister responsible for sport and his working party, and all these matters can be looked at.
Mr. Colin Moynihan: I strongly support the excellent interim report, but will my right hon. and learned Friend confirm that it is not the Government's intention to give one-off capital grants to football clubs for
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safety improvements, as that would unfairly discriminate against many other businesses — professional football clubs are businesses — which pay from their own resources for putting the safety of their employees and the public at the top of their priorities?
Mr. Brittan: My hon. Friend's comments will assist the Minister responsible for sport in appreciating that there is more than one view of these matters.
Mr. Merlyn Rees: The Home Secretary is, of course, aware that the report deals with Elland road football ground, the home of Leeds United, which was in my constituency for 20 years and is now in the constituency of my hon. Friend the Member for Leeds, Central (Mr. Fatchett), who is in Leeds today and on whose behalf I am speaking. I live within a quarter of a mile of the ground and I hope that I will not he stopped from parking my car within a quarter of a mile of the ground.
I welcome the report. Whatever is said by Popplewell, the report will need time for implementation. I only hope that the clubs, the local authorities and the police in every area are sitting down now planning what they will do from 17 August. I do not believe that, even when Popplewell produces his further report, his proposals, desirable as they may be, will deal with the problem
There are three things about Leeds United, the club which I support. In Birmingham, so-called Leeds supporters had pickaxes and wore swastika armbands. They came to the ground drunk. It needs more than Popplewell. I have stood outside Elland road in the past when we had real crowds. What is wrong with society? The report talks about containment; there is something radically wrong with some of the spectators that go to these grounds. We ought to be looking at the causes of it and not just how to stop it.
Mr. Brittan: I appreciate what the right hon. Gentleman says and I welcome the fact that he recognises the value and importance of an interim report which proposes practical measures but was not designed to address the wider issue of the cause of football violence. I am sure that any attempt to do that would not have led to the practical proposals that have come forward.
I can reassure the right hon. Gentleman that the sort of discussions and planning that he commends are taking place throughout the country and specifically in west Yorkshire at the moment.
Mr. John Carlisle: While partially accepting some of the recommendations made by Mr. Justice Popplewell, such as those relating to identity cards, television help and so on, I must express to my right hon. and learned Friend my concern that the report seems to put the whole responsibility for what is basically a social disease on football. May I draw to his attention paragraphs 6.55 and 6.58 on punishment? In paragraph 6.55, Mr. Justice Popplewell says:
"I believe there is a good deal of justification for this view"—
that is, that many people think that the sentences are not stiff enough. He goes on to quote Lord Justice Lawton in January 1984, and says:
"We infer that those who have a propensity to use violence are not deterred by fines or by orders imposing only a limited restriction on liberty."

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Can we have an assurance from my right hon. and learned Friend that the Government will consider the recommendations and come before the House in the autumn with some much stronger measures that deter hooligans so that we do not face such problems in the future?
Mr. Brittan: I am sure that my hon. Friend would not wish to misrepresent, however inadvertently, what Mr. Justice Popplewell said on these matters. In fact, he said:
"While the independence of the judiciary of the executive is an important feature of our constitution and courts must feel free to impose in a particular case a sentence which they consider appropriate, it is worth repeating the trenchant words of Lord Justice Lawton".
He then quotes the words of Lord Justice Lawton. In other words, the learned judge is drawing to the attention of the community, and commending, the fact that Lord Justice Lawton pointed out the circumstances in which it was proper and possible to impose severe sentences in cases of the kind which my hon. Friend has in mind. The ability of the courts to respond to that guidance is shown most notably and helpfully perhaps in the Cambridge case, when very severe sentences were imposed.
Rev. Martin Smyth: Although I realise that the report does not deal with Northern Ireland, I welcome the general tendency of it, and observe that we are learning from it. May I press the Home Secretary to comment a little further, following his answer to the hon. Member for Stalybridge and Hyde (Mr. Pendry), on a membership system to exclude visiting fans? I am positive that there are those who come from Scotland, there are certainly those who come from Northern Ireland, and there are others who come from other parts of the world, who would like to be able to see decent football. Rather than hindering genuine, visiting spectators, should not more attention be given to dealing with the social problem of those who, even as home fans, disrupt society, rather than penalising visiting fans?
Mr. Brittan: I appreciate what the hon. Gentleman says, but what Mr. Justice Popplewell is saying in that recommendation is that things have reached such a pass in football with regard to football violence that it is necessary to consider taking a measure which otherwise in principle would be intensely undesirable and which would certainly, if implemented, prevent people from doing something which hitherto they have rightly and properly wanted to do. That is a recommendation which cannot be ignored or set aside. The judge explores and explains fully the difficulties, and discusses some of the alternatives. I think it behoves us not to carp at the particular recommendation, but to address the problem and the way of solving it which the judge identifies.
Mr. Jonathan Sayeed: I join in the general congratulations to Mr. Justice Popplewell on the depth and speed of the report, but I take issue with recommendation 20 on membership cards. As gate money is important, particularly to the smaller clubs, and as that gate money comes from regular supporters of the home team, regular supporters of the away team and casual supporters, it is surely damaging to smaller clubs to take away two parts of that gate money. Does my right hon. and learned Friend agree that it would be better to have a national membership scheme, and does he join me in regretting that the governing bodies of the sport have consistently prevaricated and procrastinated? One factor
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that has necessitated the report is that those bodies have not put their house in order. They are now asking the Government to do it for them.
Mr. Brittan: I do not wish to use the opportunity to criticise anybody, but it is an objective fact that the recommendation in the report relating to membership cards has to be seen in the context of a rejection by the football authorities of a national membership scheme of the kind that my hon. Friend commends. What Mr. Justice Popplewell would have said if they had vigorously pursued such a scheme and implemented it, or what he might now say in his final report if they consider the proposal and say, "This is not any good, let us revert to a national scheme", is a matter for speculation today but, I hope, for serious consideration tomorrow.
Mr. Roy Hughes: Will the Government specifically consider giving financial assistance to struggling third and fourth division clubs? For example, Newport county, as a result of an inspection of its ground by the authorities, has been told that to bring the ground up to safety standards will cost no less than £260,000. If it receives a 75 per cent. grant from the Football Trust, this will leave a sum of between £60,000 and £70,000 to be found, which is money that it just does not have.
Mr. Brittan: I recognise the difficulties identified by the hon. Gentleman, but in many situations it is possible that the clubs concerned have capacity that they do not use in full and that partial closure is, at least in the interim, an option that should be considered.
Mr. Richard Holt: Will my right hon. and learned Friend take an early opportunity to refute the suggestion that the Government would make any public money available to this so-called sport? As for the correlation made by the right hon. Member for Manchester, Gorton (Mr. Kaufman) between horse racing and the betting levy board, he just does not understand a word of what he is saying. I agree with my hon. Friend the Member for Luton, North (Mr. Carlisle) that, until the football authorities have the same sort of control that there is in racing, then really there is absolutely nothing that the Labour party has to say on the issue.
Mr. Brittan: I agree with my hon. Friend to the extent that I think the first responsibility is on the football authorities and those who run clubs to make them safe. The Government can introduce legislation relating to the criminal law and to public order, and the learned judge can make a report, with recommendations on safety and other matters, but none of that should divert attention from the fact that the primary responsibility belongs to those who run the game and invite people to attend matches.
Mr. Robert Maclennan: While I recognise that many of the recommendations of the Popplewell inquiry cannot be implemented immediately, can the Home Secretary at least give an assurance that on 17 August clubs will not be opening which do not satisfy the necessary safety requirements?
Mr. Brittan: Clubs which open by then will. if designated, have had to apply for a certificate before that day.
Mr. Peter Bruinvels: All Football League and Football Association clubs must surely

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welcome the recommendations of the report. However, does my right hon. and learned Friend agree with me that many of these clubs are unlikely to carry out those recommendations either before 17 August or later in the year? Can we get them to put their own house in order so that they unlock the turnstiles and kick out those people who just do not behave? Will he join other hon. Members and support the suggestion of a national identity card, which is the only way to kick out offenders, by keeping a central register?
Mr. Brittan: I have not spoken unsympathetically about that proposal, but more generally it will not be an option open to clubs involved in these matters simply to ignore the recommendations, because legal obligations will be imposed upon them by designation, to name but one example.
Mr. Peter Pike: Will not the Home Secretary recognise the serious concern that will be felt in many clubs in the country if the proposal on membership cards has to go ahead? Not only will there be severe financial and administrative costs, but this will be a deterrent to the casual supporter who may well become a regular supporter. Will he not recognise that it is an infringement of civil rights to stop the genuine supporter travelling to the away match just because of the hooligan element in society? Is it not a serious indictment of society if the Government have to move along those lines? My hon. Friend the Member for Stalybridge and Hyde (Mr. Pendry) and I met the London branch of Burnley football club supporters this morning. There are 37 such clubs that support provincial clubs in London. How will they be affected, because they are made up of loyal supporters who travel all over the country, as far as Aberdeen and Plymouth, to see the teams they support?
Mr. Brittan: The hon. Gentleman talks about civil liberties. I do not think that that is involved here. It is open to a club to decide whom it wishes to admit. It can decide to admit members only. On the financial advantages and disadvantages, many clubs may feel that if they can convince communities that they can attend football matches safely, the financial advantage from more people coming to watch the games will far outweigh any disadvantage resulting from implementing measures necessary to bring that about.
Mr. Richard Hickmet: When considering the recommendations of the report may I ask my right hon. and learned Friend to bear in mind that there are clubs such as Scunthorpe United in my constituency which are the backbone of the football league? Is he aware that they have an average gate of between 2,500 and 3,000 people throughout the season, so that the recommendations on visiting fans and the work necessary to meet the fire officers' requirements would cause a great loss of income? Is he further aware that they would be unable to bear the capital costs without assistance? Can my right hon. and learned Friend offer any hope to such clubs?
Mr. Brittan: I cannot offer them any assistance today. I have already indicated the context in which that matter is being considered by the working group of my hon. Friend the Minister with responsibility for sport.
Dr. Norman A. Godman: As a supporter of that very famous Scottish club Morton, may I ask the right hon. and learned Gentleman what is going on in Scotland? If I heard him right, he spoke of an urgent review in Scotland. When will it take place and when will its findings be published? Will it include Berwick Rangers? Will he remind his Scottish ministerial colleagues that recommendation 20 of the report refers to membership cards being confined to England and Wales? We do not need them in Scotland.
Mr. Brittan: What I said in the statement was that my right hon. Friend the Secretary of State for Scotland is not to extend designation in Scotland beyond its present limits. He has arranged for all non-designated clubs and all governing bodies in sport in Scotland to conduct an urgent review of ground safety, in co-operation with the local fire authorities.
Mr. Tony Favell: May I follow my hon. Friend the Member for Leicester, East (Mr. Bruinvels) in asking my right hon. and learned Friend whether he will consider the possibility of introducing a national identity card system, such as prevails in many Continental countries?
Mr. Brittan: I hope that the whole question of identity cards and admission cards will be considered. Mr. Justice Popplewell has made his recommendation. A number of my hon. Friends have suggested an alternative. Of one thing I am quite sure—that either of the alternatives is better than the present position of having no system.

Foreign Affairs Council
4.44 pm
The Secretary of State for Foreign and Commonwealth Affairs (Sir Geoffrey Howe): With permission, Mr. Speaker, I will make a statement on the Foreign Affairs Council held in Brussels on 22 and 23 July, at which my right hon. Friend the Minister for Trade and I represented the United Kingdom.
The Council discussed the arrangements for the intergovernmental conference called by the Milan European Council. A copy of its conclusions on that subject has been placed in the Library of the House. The conference will take place at the level of Foreign Ministers. The first meeting will be in Luxembourg on 9 September. The Political Committee has been asked to draw up, by 15 October, a draft treaty on political cooperation on the basis of our own and the Franco-German proposals. Proposals for treaty amendment will be looked at in a group which will meet at official level to prepare work for Foreign Ministers to consider.
Agreement was reached on two directives providing for freedom of establishment for pharmacists and mutual recognition of their qualifications.
The Council agreed a Community position on the future of the multi-fibre arrangement for the GATT textiles committee meeting on 23 July.
The Commission reported to the Council on the negotiations between the Community and the United States on steel products not covered by the 1982 carbon steel arrangement and on the current trade dispute between the Community and the United States on citrus and pasta. The Council held a first discussion on the Commission's proposals to increase the Community's tariff on video tape recorders and reduce the tariff on semiconductors, and approved the eighth annual report on co-operation with the EFTA countries.
The Council agreed a negotiating mandate for an EC-Central America co-operation agreement. It also reviewed progress in EC-Gulf Co-operation Council relations.
The Council agreed arrangements for approving proposals brought forward under the Mediterranean financial protocols. It also agreed the terms to be applied to Spain's use of pre-accession aid to reduce excess fishing capacity.
The Council formally adopted the reference framework for 1986 in accordance with the Council's conclusions of December 1984 on controlling Community expenditure. That fixes the maximum level of permitted expenditure to finance Community policies in 1986. Following a meeting with the European Parliament, the Council also adopted the agreed regulation implementing integrated Mediterranean programmes.
Meeting in political co-operation, the Foreign Ministers discussed the recent resurgence of terrorism and hijacking. They agreed to put urgent work in hand for joint action by the Ten to combat that problem. They also issued statements on Afghanistan and to make clear their concern at recent developments in South Africa. Texts of those statements have been placed in the Library of the House.
Mr. Denis Healey: First, I thank the Foreign Secretary for his statement. I must say that it is rather oddly balanced. In a statement that covers three
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pages, there are three lines on the proposals for the establishment of pharmacists and only three words on the historic tragedy of South Africa.
On the detail of the statement, I congratulate the right hon. and learned Gentleman on the dogged pragmatism with which he once again swept up the debris caused by the eruption of Krakatoa Kate in Milan. I hope that the prospects for the forthcoming intergovernmental conference—on which the Prime Minister has made, as he pointed out, totally contradictory statements within a space of a few hours—will be more successful than the lamentable proceedings in Milan.
On the mandate for negotiating a central American cooperation agreement, do the Government propose to join the French and other European Governments in providing troops to monitor a possible agreement on Nicaragua that is now being sought by the Contadora group?
On co-operation on terrorism, have the Government finally agreed to return to Italy persons convicted of terrorism in Italy who are now living freely in Pimlico?
Will the right hon. and learned Gentleman answer two or three questions on South Africa? Why did he oppose the proposal by his colleagues to make the Community code of conduct for companies in South Africa mandatory, especially as the British company BTR grossly violated that agreement in recent months? Why did he oppose an immediate end to the declaration of the emergency that has turned South Africa into a stone trooper state? How can he reconcile the absolute and unconditional opposition to economic sanctions against South Africa that he expressed in the House this afternoon and in his speech last night with his formal undertaking on Monday to consider sanctions if South Africa did not make progress in a reasonable period of time?
Sir Geoffrey Howe: I always accept congratulations from the right hon. Gentleman with a very high degree of reservation. I am glad that he welcomed the work now being put in hand for the intergovernmental conference that will commence at the beginning of September.
On central America, the Contadora group meeting has only recently come to an end and there was no consideration of the particular proposal that he mentioned at the meeting between Foreign Ministers.
The right hon. Gentleman referred to the extradition of possible terrorist suspects to other countries——
Mr. Healey: They have been convicted of terrorist crimes.
Sir Geoffrey Howe: This matter would have to be considered by my right hon. and learned Friend the Home Secretary in the light of applications in accordance with whatever extradition treaties might exist.
On South Africa, the suggestion that there was a proposal to make the European Community code on industrial companies mandatory was not discussed. between us on Monday. That code is under review in the Community to see in what way and to what extent it may or may not need to be reviewed.
My colleagues all agreed with the conclusion set out in the communiqué, that the state of emergency should be brought to an end, but all agreed that it would not be suitable or sensible to include any particular epithet about the immediacy with which that should be done.
Our position on sanctions is as I have stated it several times in the House this afternoon.
Mr. David Howell: Will my right hon. and learned Friend clarify the Government's broad approach to new treaty-making in relation to the intergovernmental conference to take place in September? Is it the Government's broad aim to go for a new treaty on political co-operation of the kind, for instance, that the Dutch Government are now proposing, or merely to propose the reorganisation of procedures to improve political cooperation? Is it the Government's broad belief that the treaty of Rome requires amendment, in particular the common agricultural policy clauses in the treaty, or is it still the view of the Government that that area does not need amendment at this time?
Sir Geoffrey Howe: The answer to the first point raised by my right hon. Friend is that it has been our view—the view that we put forward at Milan—that political co-operation has been an area of considerable success for the Community. For that reason we put forward at Milan proposals for a binding agreement on political cooperation between the member states of the Community. Those proposals, alongside the Franco-German proposal, are now being considered with a view to securing agreement on that point, which is distinct from the treaty of Rome.
The answer to my right hon. Friend's question about the treaty of Rome is that we put forward proposals at Milan for achieving the reforms necessary in the working of the Community which would not have needed any treaty amendment. We remain to be convinced that treaty amendment is necessary. As my right hon. Friend the Prime Minister said, we shall be going to the conference ready to consider what is put before us so as to reach conclusions best likely to help the effective working of the Community.
Sir Russell Johnston: I, too, congratulate the Foreign Secretary on the positive approach that he has adopted towards the intergovernmental conference in Luxembourg, which compares favourably with the obstructive attitude that the Government first adopted towards the conference being held at all. Like the right hon. Member for Guildford (Mr. Howell), may I ask the right hon. and learned Gentleman for an assurance that he will give priority to ensuring that the decision-making process of the Community is improved, even if that requires treaty amendment, and that he will not stand on any sort of nationalistic dignity as, sadly, he is urged to do by occupants of the Opposition Front Bench?
Sir Geoffrey Howe: While I welcome the general encouragement offered by the hon. Gentleman, I cannot accept his contrast between our attitude at Milan and our attitude at the meeting earlier this week. Our objective throughout is to achieve effective changes in the decision-making procedures of the Community because we believe that it is an essential British interest for the Community to be able to function more effectively and for the United Kingdom to be in the mainstream of developments to that end. When we come to consider whether treaty changes are necessary, we shall approach that with those objectives in mind. We have taken the view that the case for such changes has not been made out. We believe that the proposals that we put forward would have enabled us to
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make progress quickly and effectively at Milan. That remains our objective and that is the way in which we shall consider the matter.
Mr. Teddy Taylor: As there was a widespread welcome from hon. Members on this side of the House for the Prime Minister's vote against the conference, will my right hon. and learned Friend say whether it really is the position now that the Government have an open mind on treaty amendments and on the question of a draft European union proposal, and whether they might be willing to surrender unanimity on the vital article 100, which deals with directives affecting every industry and every job in Britain?
Sir Geoffrey Howe: My hon. Friend is right to say that article 100 covers a wide range of matters, and I believe that every member state in the Community would have substantial reservations about applying changes in that respect on anything like a universal basis. Similarly, every member state in the Community recognises the reality of the provisions which enable account to be taken of vital national interests.
A decision has been taken to hold the intergovernmental conference. It therefore makes sense, if we are to promote the interests of this country, for us to take a positive and constructive part in that conference. It remains our view that the changes we wanted could have been achieved without treaty amendment, but we must consider now exactly what is put forward, recognising the need to achieve agreed conclusions at the end of it——
Mr. Teddy Taylor: Why is my right hon. and learned Friend being obstinate about this?
Sir Geoffrey Howe: I beg my hon. Friend to contain his anxious interest in the subject for a moment longer. We must not shrink from the objective set out in the treaty of Rome to achieve ever closer union between the peoples of Europe——
Mr. Nicholas Budgen: Ah.
Sir Geoffrey Howe: —a goal that was laid down as long ago as 1946 by Winston Churchill.
Mr. Eric Deakins: If political cooperation works so well in the EC, why is a binding agreement necessary? However, if there is to be a binding agreement, why should it take the form of a draft treaty, with the whole panoply of subsequent legislation in member countries, rather than of an intergovernmental arrangement which could then become a Community treaty by virtue of section 2 of the European Communities Act 1972?
Sir Geoffrey Howe: We put forward a proposal for an agreement between the member states on the subject of political co-operation because we thought it sensible to set out more clearly and effectively the arrangements for consultation with a view to more effective political cooperation. The practice thus far has worked well and we considered it important to make the commitment more effective along the lines that we suggested. That would take the form of an agreement between the member states of the Community — an international agreement, a treaty, as it were—but a separate agreement distinct from that contained in the treaty of Rome.
Sir Anthony Meyer: Is my right hon. and learned Friend aware that through his skill and imperturbability he has won the compliments of the House, in particular of the overwhelming majority of my right hon. and hon. Friends, and that he therefore has complete freedom of manoeuvre —[Interruption.]—to negotiate such agreements as in his judgment will be to the long-term advantage of this country in the European Community?
Sir Geoffrey Howe: I am grateful to my hon. Friend for his tribute, endorsed by the enthusiastic applause of the right hon. Member for Leeds, East (Mr. Healey), and I understand his view of the way in which we should approach the matter. We shall seek to reach conclusions which will promote the interests of this country which are entirely compatible with advancing the interest of the European Community as a whole.
Mr. John Home Robertson: Is the Foreign Secretary at all perturbed by the situation which has arisen following the German veto of proposals to deal with the European grain surpluses? Have there been any further discussions in the Council about the situation, and what is the British Government's position on the issue?
Sir Geoffrey Howe: The future of grain prices was considered not by the Foreign Affairs Council but by the Agricultural Council——
Mr. Home Robertson: What about the veto?
Sir Geoffrey Howe: —and the way in which the German Government conducted their case in relation to cereals prices served as a clear demonstration of the reality in the Community that account must be taken of each country's vital national interests. We need to find a way of doing that which will enable us to advance and not retard the general process of effective co-operation in the Community.
Mr. David Heathcoat-Amory: The House must be glad that the 1986 framework for Community expenditure has now been settled, even though we know that it can subsequently be increased by majority vote of the Council of Ministers. What will the total be for 1986? Can my right hon. and learned Friend confirm that it represents no greater increase than is allowed in domestic public expenditure? Does he agree that the strictures of the Chancellor of the Exchequer on public expenditure are as valid in Europe as they are at home?
Sir Geoffrey Howe: I have no doubt that the case for ensuring that finance determines expenditure and not vice versa, which I uttered in my first Budget speech and which President Delors uttered in one of his early contributions to the proceedings of the Community, is equaly important in both places. I am glad to say that the Commission's 1986 budget proposals for agriculture show an increase of only 2·5 per cent., excluding enlargements, within the guidelines required by budget discipline.
Mr. Tom Clarke: I assume that there was no discussion on international famine, but the statement on South Africa was less than robust. Is it not a fact that it contained no reference to that country's recent outrageous invasion of Botswana?
Sir Geoffrey Howe: I think that I am right in saying that every Community country had already made announcements about the Botswana incident. Certainly the
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United Kingdom had done so. We condemned the invasion of a Commonwealth country as being without justification, and we did so plainly. I think that every other Community member state took the same view. The international famine was not discussed as it was discussed by aid Ministers a week or so ago.
Mr. Jonathan Aitken: Is my right hon. and learned Friend aware that some of us are rather puzzled by the growing gap that seems to be opening up between the Foreign Office and No. 10 Downing street? Does he recall that my right hon. Friend the Prime Minister denounced the intergovernmental conference as unnecessary? However, we seem now to be approaching it with an open mind on every subject with almost unseemly enthusiasm. Secondly, does my right hon. and learned Friend recall that on 2 July my right hon. Friend the Prime Minister asked her colleagues in the House not to use the phrase "European union" as it was so confusing, yet we are hearing an endorsement of it this afternoon? Surely we should get our own act together before we go to the European conference.
Sir Geoffrey Howe: My hon. Friend must retain a sense of perspective about these matters. Both the Prime Minister and I went to Milan with the clear view that we could make the necessary changes without proceeding to the further step of an intergovernmental conference. We thought that the changes necessary to promote progress in the Community, which is of great importance, could there have been made. The majority of our partners took the opposite view and an intergovernmental conference is now to take place. The progress that needs to be achieved is still just as necessary and that is why we want to attend the conference to achieve that progress. For that reason, my right hon. Friend the Prime Minister said on 2 July that we must go to the conference and consider what is put before us.
I did not use the phrase "European union" in an earlier reply. I reminded the House that the treaty of Rome itself commits us to ever closer union between the peoples of Europe. If Europe is to achieve effective exploitation of its technological resources and success in reducing unemployment within the Community, we need to achieve closer co-operation on a range of matters throughout the Community. Those who do not recognise that deceive themselves about Britain's future.
Mr. Jeremy Corbyn: When the Foreign Affairs Council discussed central America, did it take the opportunity to condemn the American trade embargo on Nicaragua and to review the existing aid and trade agreements between Europe and central America especially Nicaragua, to ensure that the effect of the United States trade embargo can be minimised by increasing trade with Europe, especially medical products and important technical components that are needed for many of Nicaragua's industries?
Finally, did the Ministers take time to condemn President Reagan's statement that Nicaragua is a haven for terrorists? That assertion has been proved to be completely wrong by every journalist and every informed observer who has been in Managua recently.
Sir Geoffrey Howe: The Foreign Affairs Council did not consider every aspect which appeals to the hon. Gentleman's prejudices.
Mr. Corbyn: Just answer the question.
Sir Geoffrey Howe: We concluded a negotiating mandate for agreement with the nine countries of central America, covering economic, commercial and development co-operation. The Council has taken account frequently of the views of countries engaged in the Contadora process, to the effect that a number of countries in central America, including Nicaragua, need to cease the process of contributing to the destabilisation of their neighbours.
Mr. Nicholas Soames: Did my right hon. and learned Friend discuss with our Community partners in the broader context Britain's possible entry of the European monetary system? Does he share with me the grave disappointment of many Members of this place that such little progress has been made to build on the Venice declaration? Does he accept that the historical tragedy, so-called, in South Africa pales into insignificance when we consider what could happen in the middle east?
Sir Geoffrey Howe: It is important for the countries of the Community to continue to contribute as closely together as they can to the advancement of the peace process in the middle east. One of the important features of the Venice declaration is that it has helped to condition a largely common approach to what is necessarily a step-by-step process.
We already belong to the European monetary system. Our attitude towards participation in the exchange rate mechanism remains that we shall do so when the time is right.
Mr. Tam Dalyell: What was the net effect of the Council's proposals on the supply of pharmacists in the United Kingdom? Perhaps the Minister's Parliamentary Private Secretary will tell him that Lothian Members have been greatly upset by the closure of the distinguished department of pharmacy at the Heriot-Watt university. We have been lectured by Sir Peter Swynnerton-Dyer to the effect that it had to be done because, among other things, there was a surplus of pharmacists.
Secondly, the Secretary of State for Scotland is well aware of the interests of Hewlett Packard and Nippon Electric in semiconductors. What has been said to the French and Germans about the way in which they cut corners on the COCOM arrangements while we remain pristine pure, greatly to the disadvantage of British industry? Were the COCOM arrangements discussed? If not, will the right hon. and learned Gentleman read the report of the debate on exports to China which took place last week, in which some Conservative Members, my hon. Friend the Member for Rotherham (Mr. Crowther) and I had a good deal to say about the matter?
Sir Geoffrey Howe: For the second time this afternoon, the hon. Gentleman has made a lengthy intervention. I shall try to benefit from studying the various topics to which he has drawn my attention.
The effect of the directive is to extend employment opportunities both ways by including the right of establishment of pharmacists throughout the Community, which I think is a sensible response to the hon. Gentleman's first question.
It is proposed that the tariff level on semiconductors should be reduced. These items constitute a product and
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an industrial component and a reduced tariff is likely to contribute to increased industrial competitiveness in the United Kingdom.
Several Hon. Members rose——
Mr. Speaker: I shall call the hon. Members who have been rising in their places, provided that they are brief.
Mr. Tony Marlow: I wonder whether my right hon. and learned Friend can respond to a scenario——
Mr. Speaker: Order. Not a scenario; that worries me.
Mr. Marlow: I ask my right hon. and learned Friend to consider a brief scenario, Mr. Speaker. If there were to be a treaty amendment which would allow directives to be put through without unanimity, and if my right hon. and learned Friend were against a certain directive which he had to bring before the House to enact in British law, what would he do in those circumstances?
Sir Geoffrey Howe: My answer to that scenario is that I am not obliged to answer hypothetical questions.
Mr. Nicholas Budgen: My right hon. and learned Friend has said that the EEC institutions might cure unemployment in the United Kingdom. If it is possible for Governments to do that, why cannot the Government reduce unemployment?
Sir Geoffrey Howe: We in Europe spend as much on civil research in high technology industries per head as that which is spent in Japan and the United States. We are able to exploit that investment a great deal less effectively than those countries. That is because there is insufficient openness and unity in the European market for the products of high technology industries.
Mr. Teddy Taylor: More public expenditure? Are we all Socialists now?
Sir Geoffrey Howe: I am talking in neither case about public expenditure, which is another obsession of my hon. Friend the Member for Southend, East (Mr. Taylor). Our net civil expenditure per head on civil research—public and private—is as high as it is in Japan and the United States, but we get less for it. We shall not be able to exploit our investment effectively until we achieve greater unity in the European Community.
Mr. Eric Forth >(Mid-Worcestershire): Will my right hon. and learned Friend confirm that the agenda for the intergovernmental conference has been finalised and that there will be no late additions to it? What voting procedures will be used at the conference? How will the conference's recommendations be determined? What criteria will my right hon. and learned Friend use to judge the extent to which the House will support the Government's attitude at that conference? Will he give an undertaking that he will make a statement in the House before giving any irrevocable commitment at that conference?
Sir Geoffrey Howe: A number of proposals for the conference have already been put forward. We are awaiting concrete proposals from partners as a basis for discussion, and we shall then consider how we should respond. The conference, which is constituted under article 236, has to reach conclusions by common accord. In order to put those conclusions into effect, endorsement

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by the Parliament of every member state of the European Community must be given. The House will have ample opportunities to consider these matters. We shall be bound by the same entirely proper constraints as other members. I shall bear in mind, when considering how we will react to a particular proposal, the enthusiastic support that my hon. Friend always gives me for any sensible proposal.
Mr. John Carlisle: Does my right hon. and learned Friend accept that many of his colleagues would agree with this morning's Daily Telegraph leader which says that the EEC Foreign Ministers have given the "wrong response" to the situation in South Africa? Will my right hon. and learned Friend confirm that the article was accurate in quoting him as having had "misgivings" about the statement? Does my right hon. and learned Friend agree that he did not go along with all the recommendations of the Foreign Ministers?
Sir Geoffrey Howe: I think that my hon. Friend will not be surprised to hear that the statement, which resulted from consideration by the representatives of the 10 member states seeking to achieve agreement, represents something to which each of the Ministers present at the meeting had contributed. The statement was agreed by all the Ministers present. The statement is important, in that it represents a common view on the position in South Africa. It is important for the statement to be part of the foundation of Britain's approach to the problem.
Mr. Robert Adley rose——
Mr. Speaker: Order. Did the hon. Member rise when I said that I would call the four hon. Members who were standing?
Mr. Adley: I was provoked into rising. I was sitting here quietly.
Mr. Speaker: Go on, then.
Mr. Adley: Following the question by the hon. Member for Linlithgow (Mr. Dalyell), will my right hon. and learned Friend take the time during the recess to read the Adjournment debate in 1975 about COCOM and sales of Harrier aircraft to China? I support what the hon.
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Member for Linlithgow said about this. It is about time that Britain and Europe put their interests first rather than continually following the lines set by the United States Government who do precisely what they think is in the interests of their manufacturers.
Sir Geoffrey Howe: I hope, Mr. Speaker, that the proceedings will soon draw to a close, as I am anxious that my holiday reading should not be completely overloaded.
Mr. George Robertson: Will the Foreign Secretary confirm that his Government's policy remains the policy that was unanimously adopted by the House on 28 June 1985 and that it will remain our policy throughout the intergovernmental conference in October? Does the right hon. and learned Gentleman have an open mind on the Dooge committee's recommendations on co-decision making between the Council of Ministers and the European Parliament? What will be the outcome of that openness? What proposals will the right hon. and learned Gentleman take to Luxembourg to reduce effectively the preponderance of Community expenditure on agriculture and do something about distributing the Community's assets to bring about the economic regeneration of Europe?
Sir Geoffrey Howe: I am most grateful to the hon. Gentleman for his constructive insight into the fact that the Community's assets can be used for the constructive regeneration of Europe. I welcome his acknowledgment of the importance of curtailing the percentage spent on agriculture. As I said in an earlier answer, that is one of the measures achieved by the framework and guidelines that have been laid down so far.
On many occasions we have put forward the argument —it has been supported by many of our partners—that co-decision making could easily be a prescription for no decision making. Any increase in the powers of the European Parliament would require a change in the treaty and would have to be endorsed by each national Parliament. For that reason, we have been arguing that Parliament could play a more positive role within its existing powers. We think that that is the approach best able to command the support of all member states.

Suicide Precautions (Glenochil)
5.15 pm
The Secretary of State for Scotland (Mr. George Younger): With permission, I should like to make a statement on the report of the working group on suicide precautions at Glenochil young offenders institution and detention centre which has been published today. Copies have been placed in the Vote Office and in the Libraries of both Houses. I have also laid copies of the determinations of the Sheriff Principal in the cases of Angus Boyd and Derek Harris.
In November 1984, following a recommendation by the Sheriff Principal, after a fatal accident inquiry, I set up an independent working group under the chairmanship of Dr. Derek Chiswick, consultant psychiatrist at the Royal Edinburgh hospital, with the following remit:
"To review the precautionary procedures adopted at Glenochil Young Offenders Institution and Glenochil Detention Centre to identify and supervise inmates who might be regarded as suicide risks; and to make recommendations."
I asked Dr. Chiswick and his colleagues to expedite the report, and I am most grateful to them for completing their work by the end of June.
This is an important report on a subject which has generated a good deal of understandable public concern. It makes a considerable number of recommendations, the majority of which I am ready to accept, although some will require more detailed examination. There are, however, a number of recommendations that I cannot accept. As I cannot in the time available today give a detailed response to all the recommendations, I have laid with the report a paper which sets out my initial response to it.
I should remind the House that procedures to identify and care for vulnerable and inadequate offenders, who may have genuinely suicidal tendencies, must be a vitally important feature of any penal institution. Nevertheless, these are a tiny minority of the inmates. We must not lose sight of the fact that the primary purpose of custody is the deprivation of liberty as a punishment. The inmates at Glenochil are there because they have offended against society and require custodial sentences and rehabilitation. They include many hard and brutal offenders. About half of those in the young offenders institution are serving sentences of between three years and life for particularly serious offences. The authorities at Glenochil have to manage their custody as well as that of a comparatively small number of vulnerable youths.
I wish to refer to some of the detailed points made in the report. The report's broad conclusions are, I am pleased to note, in accord with the recent finding by the Sheriff Principal, who conducted the fatal accident inquiry into the death in April of Derek Harris, that there is no evidence that the regimes operated at Glenochil or the actions of staff were responsible for any of the seven deaths that have taken place since 1981—only three of the seven deaths were determined as deliberate suicides. In submitting the report Dr. Chiswick states that the working group had been impressed by the dedication of the governor and his staff and that the recommendations made in the report imply no criticism of the staff at Glenochil.
The working group acknowledges that, no matter what steps may be taken to prevent suicides, there is no guarantee that these measures will be successful. It considers that the aim should be to achieve a proper
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balance between procedures that reduce risk to a minimum and yet are compatible with an acceptable way of life in a penal establishment.
The report says that, in relation to the young offenders institution, where all but two of the deaths have occurred, the majority of inmates serve their sentences in a purposeful manner and that the problems are attributable largely to a few inmates who behave aggressively towards their fellows. Such aggression is impossible to prevent, without stopping all association amongst young offenders who mostly serve their sentences without difficulty and cooperate with staff.
The working group criticises the procedures whereby inmates thought to be suicide risks are kept in what is known as strict suicide observation for lengthy periods. I remind the House that those procedures have been in use in penal establishments in Scotland for many years. The procedures involve observation being maintained on an inmate in a cell at 15 minute intervals, day and night. All clothing, bedding and furniture which could be used to cause self-injury may be replaced with clothing and bedding of canvas and with cardboard furniture. No one likes using those measures, but in Glenochil they have been effective to the extent that no inmate has committed suicide while under strict observation. Indeed, the two most recent deaths at Glenochil occurred after the inmates concerned were removed from strict suicide observation, and, in the case of Angus Boyd, the Sheriff Principal commented that death might have been avoided if he had not been removed from strict suicide observation. That illustrates how delicate and complex is the question of caring for these unfortunate individuals. None the less, I accept that the use of those precautions for other than extremely short periods is undesirable in relation to young offenders.
The working group offers advice on identifying possible suicide risks, and makes a number of recommendations on how inmates who are mentally disturbed or vulnerable in some other way may be managed. I wholeheartedly accept the important recommendation of using a team approach involving all the professionals and prison staff to counsel inmates and to minimise the risks of suicide. That is the general direction in which we intend to go in the follow up to the report. Indeed, some of the reports's recommendations have already been met in whole or in part by measures taken since the death of Derek Harris in April. Work has now been completed on a secure hospital facility at Glenochil, consisting of a ward and a single cell, so that strict medical observation can be provided in appropriate cases. In addition, immature and vulnerable inmates requiring a more closely supervised supportive regime are now housed in "D" hall of the young offenders institution, or transferred to Carrick house at Polmont young offenders institution.
Some recommendations have staffing and resource implications, and will require careful consideration. There will also have to be consultation with the staff associations and other interested bodies. Others create problems of adapting existing structures. Recommendations of this longer-term type will need to be examined carefully so that the custody and care of inmates is not put at risk in the short term.
In a number of respects the working group has gone beyond its remit and discussed issues affecting the overall management of establishments and the prison service as a

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whole which, as a small, specifically qualified group, it was not constituted to comment on. A minority of the working group felt that, such was the aura of suicide permeating Glenochil, the only solution lay in its temporary closure. I concur with the view of the majority, who rejected that idea.
I trust that the working group's findings, taken together with the determinations of Sheriff Principal Taylor, will be accepted by hon. Members and by the general public as refuting any suggestion that the unfortunate deaths which have taken place at Glenochil are attributable to the regimes, particularly that of the detention centre, or the behaviour of staff. There is not a shred of evidence to support those allegations.
My hope now is that the governor and staff of Glenochil will be left to get on with their difficult and demanding task, and that the institution will be afforded an opportunity to settle down after recent events, and to make the useful changes which I have accepted from the recommendations in this report.
Mr. Donald Dewar: I add my thanks to Dr. Chiswick and his colleagues for their work. The important report takes a careful and detailed look at the background to a tragic series of deaths, which cost seven young lives at the Glenochil complex. The Opposition's doubts centre on the nature of the regime and the way in which the system operates, and should not be taken to impugn the commitment or integrity of the staff there.
The Secretary of State's approach, as instanced in the statement, has been rather negative and, at times, sadly, a little unfeeling. There is an important distinction between saying that an offender may go to prison as a punishment and saying that he goes to be punished. The Secretary of State has ignored the widespread feeling that the regime for young offenders in Scotland is inflexible and rigid, and does little to rehabilitate and support young men who, in every sense, are at risk. It smacks of complacency to say that
"There is not a shred of evidence"
to suggest that the system contributed to any of the deaths, as the Secretary of State said.
Is it accurate to talk of a "tiny minority" as being a genuine suicide risk when, during the past 18 months, 123 inmates at the detention centre and 132 at the young offenders institution have been on strict suicide observation? In 1984, 7 and 10 per cent. respectively of the total number of inmates in the two centres of the complex were under that sort of observation. By no stretch of the imagination could that be called a "tiny minority".
I welcome the specific recommendations on suicide prevention that have been accepted, especially those for more psychiatric support and medical help. Will the Secretary of State look carefully at the recommendations made on contact between inmates and their families, which, with ingenuity and imagination, could be put into practice, but which are heavily qualified in the report that the Secretary of State has laid? Most important, will the Secretary of State give some thought to the implied criticisms of the system that can be found in the report? I am thinking of the reference to a lack of a distinct philosophy at the young offenders institution and the suggestion that the regime there has drifted too close to that in the detention centre, the recommendation that there is a need for a policy development unit, and, above all,
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the revelation, to which the Secretary of State referred but which does not appear in the report. that a body of opinion in the working party thought that the position was so serious that the only possible short-term solution was a temporary closure of the Glenochil complex.
Will the Secretary of State note that the Opposition resent the implication that Dr. Chiswick and his colleagues acted improperly by going beyond their remit? They had a clear duty to state their wider anxieties. Every hon. Member who studies the matter impartially will feel that they did so in a dignified and restrained fashion.
Will the Secretary of State give urgent consideration to recommendation 63 for a review of the criminal justice system for under 21-year-olds in Scotland? It is time that we had a long hard look at the system, which, for example. offers only one option in terms of a custodial sentence between 28 days and 4 months. There must surely be a case for a system in which a court sentences a young offender to a specific custodial period, but in which his placement is a matter for a balanced assessment based on his individual circumstances.
Finally, will the Secretary of State confirm that the wider inquiry, to which I have referred and which is the subject of recommendation 63, has not been ruled out? Will he go further and make it clear that he will be prepared to set up such an inquiry because there is so much support in Dr. Chiswick's report for the view that our approach in Scotland to young offenders often lacks sympathy and imagination, and, in some cases, can be counterproductive in practice?
Mr. Younger: I am grateful to the hon. Gentleman for his tribute to the staff at Glenochil, which I warmly endorse. They have a difficult task and have done it well. I absolutely reject the hon. Gentleman's suggestion that my response is in any way negative or unfeeling. It is extremely positive. More than half of the recommendations are already being implemented, which is a quick response.
I take issue with the hon. Gentleman in his denial of the fact that there is no shred of evidence that the regimes are responsible for any of these tragic deaths. That has been investigated by the Sheriff Principal on several occasions in fatal accident inquiries. It has been carefully looked for by Her Majesty's Inspector of Prisons in his annual reports, and now it has been examined particularly carefully by Dr. Chiswick and his group. In each case they have come to one conclusion without doubt, which is that, however sad the events, and however serious their causes, the regime has not been responsible for them. We must accept the facts put to us by that series of inquiries.
I am grateful for the hon. Gentleman's welcome of greater psychiatric help, and I take his point about trying to improve contact with families to the greatest extent possible. We shall certainly do what we can to improve that.
With respect to the hon. Gentleman, there is a reference in paragraph 6.4 to a minority who took the view that major reconstruction was the only solution to the problems in the regime. However, that was rejected by the majority. We should look hard at that suggestion because to break the regime into small units would be counterproductive to the objective of trying to get young offenders rehabilitated and to undertake more activities generally with their fellows in the institution.

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Referring to two other recommendations, the hon. Gentleman mentioned the establishment of a policy development unit. I confirm that we shall look at that carefully. It was considered in the internal management review in 1978 and rejected, but that does not mean that it should not be reconsidered now. I shall certainly do that.
The hon. Gentleman also referred to changes in the criminal justice system. We keep it under constant review. Much change is taking place at the moment following the Criminal Justice (Scotland) Act 1980 in which major changes were made. Partly as a result of that, the population of young offenders in our young offenders institutions has dropped by about 20 per cent. A halt in that progress while another review takes place would not be helpful. It is much better to proceed on the basis of the suggestions of the Stewart committee and so on, which we intend to do.
Lord James Douglas-Hamilton: Is my right hon. Friend aware that the publication of the report will be warmly welcomed, particularly the implementation of the majority recommendations to ensure that there is effective teamwork among those professionally qualified to see that suicides do not happen? What is my right hon. Friend's policy towards the minority recommendations, which were not accepted? Do many of them remain under consideration?
Mr. Younger: I am grateful to my hon. Friend. He is right to put his finger on the main theme recommendation in the report, which is that those difficult cases should be dealt with very much by a team of people of different disciplines who can give individual special treatment to those cases. I am sure that that is the right way to go. Some of the recommendations that were not fully accepted are still being assessed for further consideration and possibly consultation with other interests involved. I have not been able to accept a small number of recommendations, and I have made that clear.
Mr. Malcolm Bruce: Does the Secretary of State accept that the Chiswick inquiry acknowledged that the brief that he gave the committee was too narrow for the situation that it was asked to investigate, and that it has rightly put forward a much broader set of proposals? However, does not the right hon. Gentleman admit that his response has been rather selective in picking on things that seemed to support his approach, which appears to have been complacent throughout? Does not the right hon. Gentleman agree that, for example, he has resisted anything that implies spending significant amounts of money on the buildings or the staff?
When I visited Glenochil, I was impressed by the work of the staff and the governor, and by their dedication. However, the fact is that they have to deal with young people who are referred to them. They acknowledge that frequently young people who are referred to them are unsuitable for the young offenders institution. At the back of the report there is a list of 32 cases of youngsters who suffered from broken ankles or some physical or mental disability, making it impossible for them to cope with the regime. Therefore, does the Secretary of State not recognise that a wider inquiry into the whole policy needs to be taken into account, as well as the screening process for young people being referred to such institutions?
Mr. Younger: I take the hon. Gentleman's point about the remit given to the committee being too narrow. However, it was a direct response to the suggestion of the Sheriff Principal, who had conducted the fatal accident inquiries and suggested that such an inquiry would be suitable.
When I replied to the hon. Member for Glasgow, Garscadden (Mr. Dewar) I did not say that I implied no criticism of the Chiswick committee for, in some respects, recommending beyond what it was directly asked to do. It is not a question of criticising the committee, nor is it a question of the committee expecting me not to mention that if I consider that the committee has done so.
The hon. Member for Gordon (Mr. Bruce) referred to injuries. I understand that those people were transferred from the detention centre. With any group of young people who are active and have problems, there are bound to be some accidents at times. However, the atmosphere of the regime has been applauded by Dr. Chiswick and his committee as humane and reasonable. That is important for everyone concerned, not least the staff.
Mr. Gordon Wilson: I congratulate the committee on the speedy and thorough way in which it underook its review of the procedures at Glenochil and the unfortunate circumstances that led to the suicides. Will the Secretary of State tell the House the size of the minority that recommended temporary closure of Glenochil? How does he intend to approach the assertion by some members of the committee that, because of the aura of suicide hanging over that establishment, it will be difficult for it to return to normality, and it may be left open to the copycat suicide which, unfortunately, is a significant part of that mode of behaviour? As the suicides have occurred and as the report does not completely answer questions about the methods by which they could be reduced, what constructive proposals do the Government have in mind to deal with that aura?
Mr. Younger: On the hon. Gentleman's first question, I cannot tell him the size of the minority, but I refer him to paragraph 6.4.2, in which there is mention of a minority, but we are not told its size.
With regard to atmosphere, I agree with the hon. Gentleman that it is one of the most baffling, difficult and distressing features of the case. I take it as a serious point to which all the staff concerned must address themselves with great care. It is not easy because the special cases who might be suicide risks require specialised care and treatment. It is important that the team approach to dealing sensitively with those people not only, as I hope, prevents any further suicides or accidents but tries to tackle the aura of suicide, which must be eliminated if the institution is to be successful.
Mr. Bruce Millan: The Secretary of State has made a long statement, and this is a complicated and detailed report that we shall want to study closely. It is already clear that the impression that the Secretary of State gave in his statement, that, according to Chiswick, there are no problems at Glenochil, does not accurately represent the views of the committee. For example, the right hon. Gentleman quoted perfectly rightly the tribute that Dr. Chiswick paid the staff at Glenochil, but he did not quote Dr. Chiswick's statement in the same paragraph that

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"we think that the procedures we suggest can only be operated in the context of more fundamental developments at Glenochil. We consider that these are necessary to ameliorate some key institutional problems which we believe to exist."
There was nothing in the Secretary of State's statement to acknowledge those key problems.
The recommendations on the broader issues were meant to tackle or at least study the problems. For example, there is criticism of lack of managerial and medical guidance to the staff at Glenochil from the headquarters of the Scottish prison service.
Unless the Secretary of State takes those criticisms seriously, he will find that there will be continuing anxiety about Glenochil and how we deal with young offenders generally in Scotland. The right hon. Gentleman's statement, with its extremely complacent tone, unfortunately will in no way allay those anxieties.
Mr. Younger: The right hon. Gentleman is right to say that it is a long and complex report. Inevitably, I have not been able to respond on every point. My approach is entirely one of wishing to meet, if possible, as many of the recommendations as possible. We are dealing with a highly serious matter which the committee was set up to examine. I hope that it will at least reassure the right hon. Gentleman to know that I do not take it lightly. I should not like anything that I have said to suggest that I am in any way satisfied that everything should be left as it is. The recommendations in the report were constructive. While saying that there was no cause to blame the staff or the regime for the tragic events, it made many constructive responses. I have done my best and will continue to do so to see that the recommendations are implemented.
The right hon. Gentleman mentioned the lack of guidance to management. He can make a judgment on that, too. I refer him to appendix D, which sets out the guidance that the prison management department has given. If the right hon. Gentleman studies that in due course, he can see whether he thinks that the guidance is deficient. If so, of course, we shall be prepared to consider that.
Mr. Robert Hughes: The Secretary of State said that many people at the institution were on the suicide watch. Is he satisfied that there is adequate psychiatric care for people before they are sent to the institution? In view of the serious events that have taken place, would it not be wiser not to send to Glenochil those who have been identified as having suicidal tendencies?
Mr. Younger: One of the recommendations is that psychiatric facilities should be stepped up. I have accepted that recommendation and we shall do the best we can. Assessments of people before they go to the institution are already made carefully and will be made as thoroughly as possible in the future. Severely disturbed people who go to the institution are treated quite differently from each other. I hope that the team approach will foster individual, sensitive and careful treatment in the interests of patients as well as of everyone else.
Mr. Gavin Strang: Does the right hon. Gentleman agree that seven deaths out of 7,000 inmates during four and a half years are not acceptable and cannot be regarded as a coincidence? Are we to conclude that the reason is still a mystery? If so, would it not be more prudent to accept the views of the minority and, at least temporarily, close down Glenochil?
Mr. Younger: I do not agree. We all realise that this is a most serious problem, and we have looked in all of the reports and inquiries for a shred of a suggestion that a major change in the regime could have prevented the deaths. I assure the hon. Gentleman that I would have acted immediately on any such shred of a suggestion, but there is none, so we must take the determinations of the sheriff in the fatal accident inquiries at face value. They give as complete an explanation of the deaths as is ever likely to be possible — each is different, but none appears to have resulted from the regime. We have to accept the facts as presented to us and to act upon them. To do otherwise would be wrong.
Mr. Robert Maclennan: Is the Secretary of State aware that the most worrying aspect of his response to this important and careful report is his continued misrepresentation of its central message, which is not, as he said, that the regime is in no way responsible, but that there is something seriously wrong? Perhaps the right hon. Gentleman will address himself to paragraph 10.4 of the report which says:
"The young offenders institution was built as a high security establishment…Less emphasis appears to have been given to planning for the needs of a range of offenders…We consider that Glenochil may have been disadvantaged by an apparent lack of foresight in planning and development."
In those circumstances, it is patently misleading to the House and the country to suggest that the Chiswick inquiry has not found matters which seriously require further investigation.
Is the right hon. Gentleman aware that the alliance parties fully endorse the recommendation of the Chiswick committee, and of the hon. Member for Glasgow, Garscadden (Mr. Dewar), that there should be a review of the criminal justice system for under 21-year-olds in Scotland? Will he undertake to ensure that that is put in hand?
Mr. Younger: The hon. Gentleman's first question dealt with two issues. I, Dr. Chiswick, Her Majesty's Chief Inspector of Constabulary and the sheriffs in their fatal accident inquiries have not said that the regime or the detention centre is perfect and incapable of change, but that we have found no evidence to suggest that the regime caused or contributed to the deaths. That is an important determination. If it were otherwise, we should all be quite justified to take it extremely seriously.
The second point, to which I believe the hon. Gentleman was referring, is that many recommendations require follow-up action. Some are quite sweeping and far reaching. I shall address them in a constructive spirit and accept as many as possible. I do not think that the hon. Gentleman could have expected a better result than that.
Dr. Norman A. Godman: I am sure that the right hon. Gentleman agrees that the identification of vulnerable people is essential. I am also sure that he agrees that parental visits and parents can play an important part in detecting those who are at risk. May we look forward to the rapid implementation of recommendations 54 to 60? Psychiatric training— recommendation 17 — is an essential ingredient in the detection of those at risk. The same is true for the Kardex system— recommendation 21— which is used in all acute psychiatric units, especially for those prone to suicide. May we have an early implementation of those recommendations?
Mr. Younger: I have accepted recommendation 21. I hope that it will be properly followed up. As for visits, it is desirable to have as open a regime for relatives as possible. However, there are some resource problems such as overcrowding at visiting time. We shall have to see whether we can improve that. We cannot envisage a 100 per cent. open visiting system at all times. I have to decline to implement that part of the recommendation.
Mr. Tom Clarke: Is it significant that the Scottish Prison Officers Association does not appear to have given evidence? Is it not possible that it would have reminded the right hon. Gentleman of the importance of taking away an offender's freedom and of the possibility of personal fulfilment, self correction and realisation of potential? The fact that a minority of the committee felt that it was necessary to produce their own report and that some went beyond the committee's remit must influence the right hon. Gentleman into considering at least the possibility of a much wider inquiry.
Mr. Younger: I do not agree with the hon. Gentleman's latter point, although I am willing, when implementing as many of the recommendations as possible, to make further studies or determinations as they appear necessary. The Scottish Prison Officers Association did not submit any evidence officially because it felt that, as it was not represented on the inquiry, it should not do so. There are several recommendations on which I would want to have consultations with it before implementation. I clearly and openly acknowledged in a statement last year that the role of Scottish prison officers involves personal development, personal relationships and rehabilitation, not just custody.
Mr. Tam Dalyell: Arising out of my constituency experience, will the individual treatment about which the Secretary of State rightly talked extend to the problem of visiting, which my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) raised, especially when there are problems of step parents or no parents? Could it be extended in some cases to brothers or even friends? On paragraph 6.5.1 regarding fragile personalities, is the recommendation for existing screening proposals to be improved acceptable, and what will the Secretary of State do about it? In regard to paragraph 9.8, should there be further medical examinations after the first week?
Mr. Younger: I am grateful to the hon. Gentleman for his first question. We would like to extend visits as far as we can, but there must be a progression of visiting during a patient's stay in the regime. We hope that it can be done in a structured way so that there is not too much disturbance. I must be brutally realistic, however. There must be considerable control of visiting because it is a sad fact that almost all of the contraband that is brought into such institutions comes during visiting. That presents a bit of an inhibition to too wide a visiting regime. I accept that screening has to be looked at more carefully, particularly screening before people come to these institutions to make sure that they are suitable for them. We are looking very hard at the relevant recommendations.
Mr. Dewar: I return to recommendation 63 and the possibility of a wider inquiry. The Secretary of State gives the impression in his statement that he practically rules it out of court. He made it clear that he wishes merely to proceed on the present basis. If he will turn to his summary of recommendations and initial responses which have been laid today he will see that in response to recommendation 63 he refers to the Stewart committee on alternatives to prosecution and to certain proposals for intermittent custody that have been made by the Home Secretary. Finally, he says:
"When these are complete the Government will give consideration to the need for a review."
That is considerably more optimistic than what he appeared to say today. In case he should have given the wrong impression, will he confirm that he will consider the possibility of a review? Will he also say when that consideration will take place? We shall want to return to this issue.
Mr. Younger: I apologise if I gave too gloomy a view of that recommendation. I accept the hon. Gentleman's point. However, the point I was trying to make was not that I would rule out further consideration of these matters but that we should not stop in its tracks the very good progress that is being made on sentencing. The inquiry arose from this series of seven tragic events, to which we must respond positively in every way that we can. However, we should not ignore the very real progress that has been made in the treatment of young offenders. The changes to the Criminal Justice (Scotland) Act 1980 were widely welcomed. There has been a population reduction of about 20 per cent. In young offenders institutions. This is partly the result of the changes in sentencing policy and the abolition of the borstal course.
I accept, however, the hon. Gentleman's suggestion. I am not saying that a further inquiry may not be necessary but that we should allow the present progress to proceed. When we know the Government's recommendations on the Stewart committee's report on alternatives to prosecution, we shall examine whether a further inquiry is needed.

BILL PRESENTED
  PROVISION FOR YOUNG PEOPLE IN RURAL AREAS (No. 2)
  Mr. David Penhaligon presented a Bill to establish a Rural Youth Affairs Advisory Committee and to define its responsibilities; to amend the Road Traffic Act 1972 to allow 16-year-olds to drive a motor car on a road provided that it is solely in the course of receiving instruction from an approved driving instructor to amend section 22 of the Town and Country Planning Act 1971 in relation to change of use of dwelling houses in rural areas; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 25 October and to be printed. [Bill 205.]

  Discrimination
  5.53 pm
  Mr. Greville Janner: I beg to move,
  That leave be given to bring in a Bill to ban discrimination against people because they are single or elderly, or in other specified categories, and for connected purposes.
  The purpose of the Bill is to fill some enormous and surprising gaps in our law which permit discrimination against vast categories and huge numbers of people, discrimination which is intolerable in any decent society. There is discrimination against single people, including single-parent families and the single homeless. There is discrimination against older people, which forces women to retire at 60, whether or not they wish to do so and whether or not the result will be that they are forced into poverty or loneliness, while men are required to soldier on until they are 65, if they wish to receive a pension, irrespective of whether they are fit and without regard to of the number of unemployed people who are desperate for their jobs. There is discrimination particularly in the home and in employment. Finally, there is discrimination that does not permit men to have paternity leave when their wives are having children. This discriminates against the wives just as much as it discriminates against the husbands.
  It is a massive array of unacceptable discrimination that is completely unaffected by the law. Although I accept that the law cannot change the ways that people think, it can and must provide a decent and proper framework for any society, including especially our own, which in so many ways is discriminatory and in which people are suffering so greatly.
  I have the support of a massive series of organisations, to each of which I pay tribute. They include the Campaign for the Homeless and Rootless. CHAR, of which I am proud to be a founder and trustee, Gingerbread, which cares for single-parent families, the National Council for One-Parent Families, the Single Homeless Project, the National Council for Carers, CRUSE which looks after the bereaved, Help the Aged, the National Council for the Divorced and Separated. the National Council for the Single Women and Her Dependants, and Shelter. The community should be grateful to all of these organisations which look after people who, in the main, are discriminated against because of the nature of our society.
  Curiously enough, the Sex Discrimination Act 1975 bans discrimination against people because they are male or female or because they are married but it contains no similar provision to outlaw discrimination against those who are single: whether or not they have ever been married, or whether or not they are widows or widowers. They may be discriminated against while those who are married may not. It is a distinction with neither sense nor compassion.
  According to figures that have been supplied to me in written answers, there are today over 11 million single people in this country who are over the age of 16. There are 6,170,000 men and 5,090,000 women. This huge number of people is completely unprotected against discrimination.
  There is an immense number of one-parent families. In 1982, there were 930,000 single-parent families who were unprotected by the law. In many cases they were suffering very considerable hardship because of discrimination
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  against them in housing and in work. If one speaks to their organisations, as I do, and Listens to them, one finds that the difficulties that single parents face in finding private sector housing are often equalled by those which they suffer in the public sector, whose ability to provide accommodation for anybody is shrinking and within which it is always harder for single people to obtain accommodation than it is for those who are married.
  An official of CHAR told me this morning that it has no way of knowing how many people are both single and without homes, or how many are living rough or in hostels, or both, but it says that several hundred thousand people are in this position. The provision of housing is bad for all but it is worse for the single. In Leicester, the provision of public sector housing is worsening almost daily. Housing starts have withered away because housing provision has been hacked back by the Government There is less housing for those who need it, although that need is growing among many sections of the population, particularly among those who are on their own and lonely and who tend to be not merely in need of care but of shelter. I pay tribute to Shelter for the work that it does.
  Even where there is housing, the rights of single people are not protected by our law. This is weird. When a man and a woman who are not married share accommodation, the law is ludicrous. In the House of Lords decision of Burns v. Burns in 1984, their Lordships considered a man and a woman who had lived together unmarried for 19 years. When their relationship broke up the woman got nothing. The court told her that if she had wanted anything she should have got married. The court did not say that to the man, to the common law husband. It was said to the woman, the so-called common law wife. That area of discrimination was mentioned this week at an American Bar Association meeting, where Dame Margaret Booth made it clear that people who live together could ensure that their property, financial and social security rights were protected only by getting married.
  For those who reach the ages of 60 or 65, the differences are even more acute. Men aged 60 are required to continue working, whereas women aged 60 are generally forced into retirement. Such discrimination should be banned. In this area, the United States provision is an excellent guide. In 1967, the Age Discrimination in Employment Act was introduced as a federal statute to promote the employment of older persons based on their ability rather than age, and to prohibit arbitrary age discrimination in employment. The Act prohibited employment discrimination against people aged between 40 and 65. Since 1967, the Act has been amended twice. In 1974 its provisions were extended to include federal, state and local government employment, and in 1978 it was amended to extend protection beyond the age of 65, without an age limit for employees of the federal Government, and until the age of 70 for most other workers.
  Hon. Members are privileged to serve in the House until any age, depending upon whether they are selected, re-selected or elected. In another place, service can continue into the second century of life. May I pay an affectionate tribute to my father, who served in this House until he was 79 and then for a further 10 years in the other place. Had he been forced into retirement, there is no doubt that he would not have survived. His work would have ceased when he was 65, yet he gave much of his most valuable service after reaching that age.

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  There is no justification, in a society such as ours, which has vast unemployment, for forcing men who wish to retire to stay at work until they are 65. Nor is it fair to require women who are anxious to stay at work to retire when they are 60. We should reach the position in our society where people are treated equally and, as the American statute says, according to their ability rather than according to their age or sex. People should be encouraged to serve society irrespective of anything but their ability.
  Question put and agreed to.
  Bill ordered to be brought in by Mr. Greville Janner, Mr. Gerry Bermingham, Miss Betty Boothroyd, Mr. Gordon Brown, Mr. Jim Craigen, Mr. Michael Foot, Mr. John Home Robertson, Mr. Ian Mikardo, Mr. Merlyn Rees, Ms. Jo Richardson, and Mr. David Marshall.

  DISCRIMINATION BILL
  Mr. Greville Janner accordingly presented a Bill to ban discrimination against people because they are single or elderly, or in other specified categories, and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 25 October and to be printed. [Bill 204.]

  Adjournment (Summer)
  Mr. Deputy Speaker (Mr. Harold Walker): On the next business, I have to tell the House that Mr. Speaker has selected the amendment in the name of the Leader of the Opposition at the top of page 4818 of the Order Paper and the consequent amendment that goes with it.
  Motion made, and Question proposed,
  That this House at its rising on Friday 26th July do adjourn until Monday 21st October, and the House shall not adjourn on Friday 26th July until Mr. Speaker shall have reported the Royal Assent to any Acts which have been agreed upon by both Houses. —[Mr. Lennox-Boyd.]
  6.4 pm
  Mr. Roy Hattersley: I beg to move, in line 1 to leave out 'Friday 26th July' and insert `Tuesday 30th July'.
  The Government have now had 15 or 16 hours in which to consider the vote in the House earlier this morning. It was clear from the vote that most hon. Members do not support the Government's decision to implement the top salaries review. The Government's majority was 17—one tenth of its nominal size—and no one can doubt that dozens of Government supporters went into the Government Lobby last night because of loyalty rather than conviction. The 48 Conservative Members who voted with the Opposition, the 40-odd hon. Members who did not vote and those who voted for the Government with understandable reluctance were the result of the House fulfilling its proper constitutional function.
  Many hon. Members said that they had visited their constituencies during the week between the announcement of the top salaries decision and the vote on the order last night. They had listened to their constituents and had responded to the undoubted mood of the country. However, as I understand it, the Government intend to proceed with the implementation of the report as though there had been no revolt,, no outcry and no general condemnation of all that they have proposed in the operation of that report.
  The Government intend to proceed with the report despite the bitter opposition that they have encountered. The central, crucial reason for that opposition is worth at least a brief repetition. The Government's proposal is opposed simply because it is unfair. It is unfair to ask the low-paid and the average-paid worker to show restraint and at the same time to insist on paying massive increases to the highest-paid public servants, who enjoy advantages that are denied to other sectors of the community. They have complete job security, index-linked pensions, which are almost unknown outside the public service, and a special social status which employment in the private sector does not carry.
  The extraordinary fact about the proposals being made in the first place was recorded in the leader in The London Standard today:
  "To everybody outside the Cabinet the social inequity of these pay awards was immediately apparent."
  What is unforgiveable is that, having been told of the conclusion that the awards lacked social equity, having had a week to consider their folly, and having had a vote to demonstrate the opposition to what they initially proposed, the Government intend to go ahead with it as though there had been universal support for their decision at last Thursday's Cabinet meeting.

  1085
  The opposition from Labour and Conservative Members last night was based, as I have described, on fairness. However, the Government either overlooked——
  Mr. Tim Eggar: Fairness?
  Mr. Hattersley: Yes, and I will explain it to the hon. Gentleman if he does not know what it means.
  The Government overlooked or chose to ignore some practical considerations. First, the top salaries award was almost certain to have a damaging effect on pay negotiations in the public sector. If the Cabinet did not realise that when it made the decision, it must have realised it from reading about the reaction to the decision of pay negotiators in the public sector. There is no doubt that the decision to make those massive awards —in two cases, 46 per cent. Increases —has made a settlement of the teachers' dispute substantially more difficult to achieve. If there is disruption in the classrooms when term begins again in September, those who supported the top salaries pay award must take much of the responsibility for it.
  Secondly, immense resentment is building up among the local authority manual workers and local authority ancillary workers, many of whose total wages are not even 50 per cent. of the pay awards now proposed. Those are all serious considerations, to which the Government should have given careful thought. I have described them in as moderate language as possible.
  They are also serious considerations about which the Prime Minister should have given the House and the country her opinion, for she is the Minister responsible for the Civil Service. This decision was her decision. When it was announced last Thursday, her press officer was telling every newspaper that the Prime Minister supported the report in every line and detail, and had urged her troops to meet criticism head on. However, it was the Prime Minister's duty not simply to say that, but herself to meet that criticism head on, by taking one of the three opportunities provided in the House to defend what is essentially her position.
  Mr. Richard Tracey rose——
  Mr. Hattersley: I shall deal first with the Prime Minister and then with the hon. Gentleman. All that we have heard from the Prime Minister was her answers to questions yesterday, which did not constitute anything like a reasonable response on a serious issue. She has hardly attempted to justify what in anything like rational terms or serious language she has done. She made two points, both of them trivial and neither of them concerned with the merits of the argument that she is supposedly advancing.
  The Prime Minister's first point was that it had all been done before. That is wrong. The precedent on which she leaned so heavily yesterday afternoon, that of 1978, was a pay award staged over three pay rounds, which was paralleled by other comparability exercises for the lowest paid public sector workers, and gave an award to the lower-paid sections of the public service. It was not preceded by the intentional depression of earnings in the private sector by the abolition of wages council protections for young workers.
  The Government should understand, although I fear that they do not, that perhaps the deepest offence has been caused not simply to those on the Opposition Benches but,
  1086
  in the country, to people who are basically non-political and are adherents to no political party. It has been caused by the idea that on a Wednesday afternoon some of the poorest paid and least well protected workers in the community — young workers in wages councils industries—should have their protection removed, and the next day enormous pay increases should be endorsed for the public sector.
  The Prime Minister was wrong to lean on that precedent, but more important than the error in her argument was the fact that she should choose to use that argument at all. After six years in government, she should have the courage to stand on her own record rather than make bogus comparisons with what happened six, seven or eight years ago. To do so is simply demeaning and, as she demonstrated yesterday afternoon, simply to say, "I may be had but they were worse," no longer gets even a cheer from her Back Benchers.
  Mr. Tracey: The right hon. Gentleman obviously considers that he is making a strong case in trying to differentiate between what happened in 1978 when he was a member of the Government who implemented that award, and now. Why, despite the apparent strength of his case, did 38 of his colleagues not come along to support him last night?
  Mr. Hattersley: As speakers say in a music hall joke, I am glad that the hon. Gentleman raised that point, because it enables me to say what should he said. First, the figure of 38 is conjured out of the air.
  Mr. Nicholas Budgen: What is the figure?
  Mr. Hattersley: Secondly, to have reduced the Government's majority still further, which is all that we could have done, as it was never within our power to defeat the Government, would have meant calling back to the House people whom I am not prepared to call back to the House now or ever because that would mean going back to the bad old habits of the 1960s and 1970s when the sick were required to be here. I was not prepared to do that on the vote of censure in 1979, and I am not prepared to do it now
  I am astonished to discover that the best argument that the Government have today is that we should have trounced them more roundly than we did last night. If that is the nature of our crime, it shows how pathetically incapable the Government are of doing what they should be doing in these circumstances. If they had a case on which to build, they should be defending their own proposals rather than making a trivial point about what happened at 2 o'clock this morning.
  The Prime Minister's second defence of the Government's position was, as always—this has become her habit over the past six years—to question the motives of her critics. She said that those who opposed what the Government were doing were guilty of cant and humbug. If her accusation is justified, 49 of her supporters voted for humbug last night and more than 40 of her Back Benchers compromised with cant by abstaining.
  Those who voted against the report, and certainly those who spoke from the Government Benches, were opposed to the report on a principle, and were not opposed to its timing or tactics. The principle was that of social justice. Sooner or later, the Prime Minister will have to learn that

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  even some of her supporters are beginning to think that social justice is an important consideration when Government policy is being decided.
  The House was entitled to a calm explanation from the Prime Minister, the Minister who took the decision that it was right to increase the pay of the Chief of the Defence Staff by 46 per cent., but that it was not right to approve an extra 1 per cent. to bring the damaging teachers' dispute to an end.
  None of these questions has been answered. Instead, we had a typical speech from the Chief Secretary last Friday and an uncharacteristic speech from the Leader of the House yesterday. The Chief Secretary said, in answer to a private notice question, that less fortunate people than the senior civil servants should rejoice at what was being proposed because it offered them, the least fortunate, at least the prospect of winning such glittering prizes.
  In the northern wards of my constituency there is 50 per cent. male unemployment. All over it, services and the housing stock are deteriorating and many men and women are suffering the discrimination of the present immigration regulations. The idea that they should rejoice because the Secretary to the Cabinet is to get an extra £23,750 a year is the most bizarre nonsense imaginable.
  The Leader of the House behaved in a similarly and —I say this as a compliment—surprisingly unconvincing way yesterday evening. What he said, turning not to his hon. Friends but on them, was, "Do you want such decisions about public sector pay to be decided by politicians?", as if the automatic answer to that question was, "Of course not."
  It may be "of course not" for senior civil servants, generals and judges, but it is "of course" for teachers, because the pay of teachers is determined by politicians. The pay of the lowest paid workers in the public service is always determined by politicians, and I do not understand how a distinction can logically be drawn which says that the rich and the privileged must be insulated from the grubby business of politicians deciding how much they should earn, while the poorly paid and those receiving average pay will be subject to Government decisions endorsed by whipped votes in the House of Commons.
  Mr. Eggar.rose——
  Mr. Hattersley: No, I will not give way.
  Regrettably, the double standard typified by the Leader of the House in his answer yesterday evening is exactly what permeates the order. It is exactly what typifies the response to the report, and exactly what has caused so much resentment in the country. It is doing enormous damage in the country, because the Government are dividing the nation by helping one group and penalising and ignoring another. It would be wholly wrong for this House to adjourn until we have made one last attempt to convince the Government of their error, and that requires the Prime Minister to have the courage to come to the House and defend the decision for which she and she alone is responsible.
  It is no good the Prime Minister hiding behind The London Standard bill boards uttering half-veiled threats to resign. It is no good either for the Prime Minister to sit looking menacing on the Front Bench throughout the debate on the Lord Chancellor's Salary Order. The Prime Minister has a duty to defend the decision, which was hers
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  and hers alone. One of the things for which she will be condemned is not just the crass error of making the decision, but lacking the guts to come here and explain why she made it. Let me describe exactly the error made by the Prime Minister.
  Mr. Robert Adley: The right hon. Gentleman knows about guts. Let him tell us about the Common Market vote.
  Mr. Hattersley: In that, I voted against my party. Not only did I vote against my party, but I did not go through the Lobby whining that I might have voted for the other side if circumstances had been rather different. Let me describe the error that the Prime Minister is making.
  Mr. Eggar: Will the right hon. Gentleman give way?
  Mr. Hattersley: No.
  Her error is the belief that social justice does not matter. Of course she is right to say that, in simple terms of arithmetic, a huge pay increase to a selected few costs little, while a small pay rise to thousands of nurses, teachers and manual workers costs a great deal. But in these matters arithmetic is not enough. It is not possible in a decent society for the rich and the favoured to be absolved from restraint while other groups are not.
  Mr. Eggar rose——
  Mr. Deputy Speaker (Mr. Ernest Armstrong): Order. The hon. Gentleman knows that the right hon. Gentleman is not giving way.
  Mr. Hattersley: The Prime Minister does not understand that her policies ought to be characterised by social justice. I should like this House to postpone the Adjournment until we have made one last desperate attempt to teach her that truth, a truth which will destroy this Government.
  6.23 pm
  The Minister of State, Treasury (Mr. Barney Hayhoe): The right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) lost the vote last night and has moved his amendment with customary bluff and bluster, and with precious little regard to the realities of the difficult and complicated problem of fixing pay for senior public servants. It is a problem which this year has generated a great deal of misunderstanding and widespread public concern. He gave no indication at all about what he would do. Would he totally and completely reject the report? Would he, as appeared to be suggested by his right hon. Friend the Member for Bethnal Green and Stepney (Mr. Shore) speaking from the Opposition Front Bench last night, merely stage the increases over a longer period?
  He treats the House with total contempt in that he is not prepared to say what he would do. He attempted to gloss over his own acute embarrassment at having been a member of the Administration who in 1978 agreed to much greater increases. Those increases were of 35 per cent., not the 12·2 per cent. for the Civil Service which he has condemned. He said that the 35 per cent. was staged, as though that were some brilliant feat of political wisdom by the Government of that day. All they did was to implement the proposal in the TSRB report that staging be carried out.
  The cost of the right hon. Gentleman's first stage in the financial year 1978–79 was more than the total cost of the staged award that we are now talking about. Not only did his Government stage the award; they backdated it and as

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  a result a large amount of money was paid. It was not debated, but the Government decision was announced in July of that year and the money was backdated to 1 January.
  The right hon. Gentleman has quite a neck to complain about the increase the Government are proposing for senior civil servants which in this financial year amounts to 5·1 per cent. That will be the total amount on the pay bill for 1985–86 of the award which will be implemented by the Government. He spreads about the figure of 46 per cent., but he knows very well that he is quoting the extreme limit. Why does he not talk a little about the other elements in the report, which involve much lower increases and leave some people in the judiciary and some civil servants in London perhaps rather worse off?
  It is fairer to talk, as I have done, about averages over the whole field. I do not wish to counter his plucking out of the highest figure by plucking out the lowest figure. My criticism of the right hon. Gentleman and his colleagues goes wider than the fact that they gloss over what they have done in the past. Early yesterday morning, the deputy leader of the Liberal party, the hon. Member for Berwick-upon-Tweed (Mr. Beith), who I am glad to see in his place, twice quoted wise words used by my right hon. Friend the Leader of the House in the debate we had two years ago when were discussing hon. Members' pay.
  I should like to contrast what happened two years ago, in July 1983, with what is happening now in July 1985. We had controversial TSRB reports on both occasions. In 1983 the report dealt with hon. Members' salaries and this report of 1985 deals with the pay of senior civil servants, the judiciary and senior military officers. In 1983, Labour, with a few exceptions, argued for full implementation of Plowden, a 31 per cent. increase, when their own and our pay was involved.
  Mr. Budgen: Will my right hon. Friend give way?
  Mr. Hayhoe: Let me complete the point I am making. In 1983 my right hon. Friend the Leader of the House argued the case for restraint and long term staging. The deputy leader of the Liberal party in his speech on that occasion asked:
  "What is the point of setting up review bodies to determine what our level of pay should be, allowing them to spend large sums in the process, and then ignoring what they recommend?" —[Official Report, 19 July 1983; Vol. 46, c. 288.]
  Let the hon. Gentleman remember those words.
  What a contrast we see. Most Conservative Members voted for staged and smaller increases in our own pay and for the full increases, though staged, for senior public servants. Most Opposition Members—Labour Members, with a few notable exceptions, Liberal Members and SDP Members — voted for the full increase in their own salaries in 1983 and oppose a staged increase for public servants in 1985.
  My right hon. and learned Friend the Chief Secretary to the Treasury was right to condemn the synthetic indignation of the Opposition. The House should reject their amendment with vigour and contempt.
  6.30 pm
  Mr. Ron Leighton: I congratulate the Government on the wisdom of their policy. Last night many of us were extremely upset to hear that the Lord Chancellor was hard up.
  Mr. Deputy Speaker: Order. The Minister of State had finished his speech.
  Mr. Leighton: I am making my own speech, Mr. Deputy Speaker. As is my custom, it will he brief.
  Mr. Deputy Speaker: Very well.
  Mr. Leighton: Many of my hon. Friends were extremely——
  Mrs. Elaine Kellett-Bowman: On a point of order, Mr. Deputy Speaker. Is this an intervention or is the hon. Gentleman making a speech?
  Mr. Deputy Speaker: I called the hon. Gentleman to make a speech.
  Mr. Leighton: I am pleased to hear than an hon. Member may make a speech in the House. If the hon. Member for Lancaster (Mrs. Kellett-Bowman) wishes to intervene. I shall give way.
  I reiterate that the Opposition were touched to hear that the Lord Chancellor was hard up. I am sure that most of us were willing to grant him the extra £10,000 or £15,000 that he needs to make ends meet.
  We have taken the wrong attitude. We ought to congratulate the Government on giving these good people 50 per cent. salary increases. My criticism of the Government is that ——
  Mrs. Kellett-Bowman: On a point of order, Mr. Deputy Speaker. Will the hon. Gentleman give way?
  Mr. Deputy Speaker: Order. Does the hon. Lady wish to raise a point of order?
  Mrs. Kellett-Bowman: No. I apologise, Mr. Deputy Speaker. I wanted the hon. Member for Newham, North-East (Mr. Leighton) to give way to me as he promised.
  Mr. Leighton: I am certainly willing to give way.
  Mrs. Kellett-Bowman: The hon. Gentleman is doing the Lord Chancellor less than justice. He knows that the Lord Chancellor will not be taking the increase. The hon. Gentleman is misleading people into believing that the Lord Chancellor is waiting with his hand out for the money.
  Mr. Leighton: If the Lord Chancellor is not really hard up, that takes a great burden off my mind. I thought that these top people were hard up and that we had to vote them an extra £5,000, £10,000 or £15,000 to keep the wolf from the door. If the hon. Lady assures me that the Lord Chancellor is not hard up, perhaps there is no problem.
  However, the field-marshals, the admirals and all the other top people are hard up. At least, I am assured that they are hard up and that, therefore, as a matter of public policy, we must give them lots more money. They have a good shop steward and they must all be given thousands of pounds more.
  Perhaps the Government are right. In congratulating them, I would say only that they are not going far enough. They should extend their wise policy that everyone should have a 50 per cent. pay increase. What about the teachers? Perhaps the teachers and everyone else should have a 50 per cent. increase.
  Wisdom is dawning on the Government at last. Let the message go out to the nation that the Government say that everyone should have a 50 per cent. pay rise. I congratulate the Government on that signal.
  Several Hon. Members rose——
  Mr. Deputy Speaker: Order. Perhaps it would help the House if I reminded hon. Members that we are debating when we should adjourn for the summer recess.
  6.34 pm
  Sir Philip Goodhart: I voted against the Government last night and if the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley), who has been fulminating against the top people's pay increase, had been able to get a proper turnout from his supporters, the policy that he so dislikes would have been defeated.
  However, as we knew would be the case and as has happened throughout this Session, there was not a proper turnout of Opposition Members. Yet even without that proper turnout, the Government received a severe shock from the debate and the vote. What lessons should they learn from that?
  Even those who were most enthusiastic in supporting the Government generally conceded that the political handling of the issue had been inept. However, I suspect that Ministers may have derived some comfort from the words of my hon. Friend the Member for Bury St. Edmunds (Sir E. Griffiths) who said that the Government's action was bad politics, but good government. I hope that Ministers will not take that message. I usually agree with my hon. Friend the Member for Bury St. Edmunds, but in this instance he is wrong. The Government's action was bad politics and bad government.
  Mr. Tony Marlow: My hon. Friend knows that the TSRB reports on top people's pay have been accepted in the past. What was different about the policy put forward last night? What was so wrong last night which has been right in the past?
  Sir Philip Goodhart: I can give my hon. Friend one example. Under the Labour Government we had massive inflation and top people had to have massive salary increases merely to stand still. Because of this Government's wise policies, we do not have massive inflation and, therefore, it is less necessary to give those people substantial pay increases.
  The Government's decision has made it more difficult for Ministers to put forward wise policies. Good government consists trying to remove the excessive divisions that make conflict within the community more likely rather than to exacerbate them.
  The right hon. Member for Bethnal Green and Stepney (Mr. Shore) said in a thoughtful intervention last night that the Government were running three separate pay policies. He pointed out that they argued that young workers should price themselves into jobs and were implementing that policy by changing the structure of the wages councils. I think that that is the correct policy. It is one that I advocated before the Government took it up themselves. I wholly support the Government in their activities in that respect.
  At the same time, the right hon. Member for Bethnal Green and Stepney pointed out that the Government are telling those in the middle ranks of the public sector that they must show restraint, or inflationary monetary pressures will put the overall economic position in considerable jeopardy. Again, I believe that the Government are right in arguing this point.
  When it comes to those at the top of the tree in the private and public sectors, the Government, again I think
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  rightly, are arguing that the differential should be increased. But it requires very great skill to argue all three policies at one and the same time. By accepting the recommendations of the Top Salaries Review Body the Government have made it much more difficult to do so. I think that the Minister will find it much more difficult in future to put forward these sensible policies, and I do not believe that this is good government.
  Mr. John Gorst: As one who went through the same Lobby as my hon. Friend did last night, I wonder whether he has left one factor out of consideration in what he has said. Far from there being no good time for these matters to be dealt with so that one has to deal with them when they crop up, there is a good time for dealing with them, and this answers the last of his points in particular. When the economy is booming, one can do these things. However, when one is running an economy which might be a banana republic or lame economy, that is always the wrong time to give those who are in the best sense of the word parasitic, in that they are not wealth creators, an extra large amount of money.
  Sir Philip Goodhart: Most certainly I do not accept my hon. Friend's point. I do not believe that the Government are presiding over a banana republic economy. We have one of the strongest economies in western Europe with a higher level of non-inflationary growth than any of our partners in the EEC.
  Mr. Budgen: Does my hon. Friend understand whether the Government now believe in comparability? I understood that they regretted having underwritten the Clegg awards, that they were trying to get away from comparability, that, for that reason, they did not support the proposal of the review board two years ago in respect of the pay of Members of Parliament, and were trying to avoid it in other respects. I have not understood the Government's position from any of the speeches that we have heard in the last two days. Can my hon. Friend enlighten me?
  Sir Philip Goodhart: That is a point on which my hon. Friend had better expand for himself. If I sought to deal with it, I would detain the House at excessive length.
  I note that my hon. and learned Friend the Member for Perth and Kinross (Mr. Fairbairn) argued last night, again with some force, that Opposition Members were always hostile to pay increases for those at the top of the salary scale, and that they were against people with large incomes. I think that there is considerable force in my hon. and learned Friend's words. In the past decade, however, I have noticed that there has been a more ready acceptance by the public of the idea that differentials between the top——
  Mr. Deputy Speaker: Order. I hope that the hon. Gentleman will address the Chair rather than turn his back on it.
  Sir Philip Goodhart: I believe that there has been a more ready acceptance that there should be wider differentials. By accepting, as they have done, the whole of the Top Salaries Review Body report, I think that the Government have inadvertently put a road block in the way of the wider acceptance of differentials by the public as a whole. I shall therefore vote against the amendment, and I shall support the Government wholeheartedly.

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  I recall that towards the end of another debate some 45 years ago, when the majority of a Conservative Government fell very dramatically, Leo Amery stood up, pointed to Ministers on the Front Bench and said, "In the name of God, go!". I certainly have no intention of making any such dramatic pronouncement this afternoon.
  My prosaic message to Ministers is this. In the name of common sense, go and have a good holiday, go and paddle on the beach, go and build sandcastles, go and read the excellent thriller by our colleague, the Secretary of State for Northern Ireland. What this whole episode shows is that the Government need a little rest. I am sure that they would not have made the decision that they have made had they not been as tired as Governments get at the end of a long Session. But, when Ministers return at the end of the summer recess, I hope that they will be a little more receptive to the views of Back Benchers, and will recognise that good government does not consist of trampling on the sensibilities of friends and supporters.
  6.48 pm
  Mr. John Silkin: I hope that the hon. Member for Beckenham (Sir P. Goodhart) will forgive me if I do not follow him. He and other hon. Members who have spoken in the debate have quite properly turned it into a debate on matters of national importance and great moment to the country as a whole. But the summer Adjournment by tradition is also a time for constituency problems, and I think that the House, and you, Mr. Deputy Speaker, will forgive me if for a moment I bring it back to that.
  A number of the speeches that have been made so far were so well argued that it was almost impossible to know whether hon. Members were in favour of an Adjournment or against it. I wish to put it to the Leader of the House, who I hope will respond to the debate in due course, that the House should not adjourn without a promise to intervene with the Home Secretary in a constituency matter, the matter of my constituent, Mr. Michael Thynne. I hope that the Leader of the House will ensure—and this has not always happened in the past — that the Home Secretary replies to my request today and that I get a favourable answer from him.
  My constituent Mr. Thynne received a sentence of life imprisonment for a particularly odious crime — rape. The circumstances were appalling. At some time in 1983 he absconded from an open prison—I am putting the worst points first—and was at liberty for three months. He absconded later and was at liberty for three days. His term of imprisonment was then increased.
  However, my constituent has come up for review by the parole board, which says that it will always report within six months. I have been writing to it since September 1984 because the review committee made a recommendation that the case of my constituent should be considered by the parole board as long ago as June 1984. Therefore, the question of the House adjourning for three months while that man has to wait to know what the parole board will decide is something that I, and I hope other hon. Members, find intolerable.
  What the parole board decides is a matter for the board. But that a man should have to wait that length of time after 10 years of imprisonment is an absolute disgrace —[HON. MEMBERS: "What?"] It was 1975 when he was first convicted. He has applied for parole and, in the normal
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  course of events, the decision of the parole board is given within six months. It is 13 months since he applied arid he is going through agony, and that should not happen.
  I hope that the Leader of the House will take my point on board. It is to consider constituency cases as well as matters of national importance that Adjournment motions were instituted. It is important that we vote on the amendment tabled by my right hon. Friend the Member for Birmingham, Sparkbrook (Mr. Hattersley), but I hope that the House will never lose sight of this opportunity to raise questions on behalf of our constituents.
  6.52 pm
  Sir John Farr: We owe it to the Opposition that this afternoon we are. in part, debating the award for top people that was fully debated last night. The right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) mentioned public reaction. I did not attempt to intervene at that time because it was a little difficult. On Saturday I had three meetings in three different towns in my constituency, and on Sunday I had two further meetings in two other towns I met many people, but not one of them expressed opposition to the course taken by the Government. I have received only three letters from constituents objecting to the proposed increases.
  If the country is to be run in a proper manner by top-class people, we must pay them the top-class rate for the job. If we cheat and cut down or ignore the recommendations of the review body, we deserve the fate of the country being run in a second-class way, which would be disadvantageous to everyone.
  Having explained why I was pleased to vote for the Government last night—and would do so again—4 wish to raise another matter. We are discussing whether the House should adjourn on Friday, and I am tempted to support the Opposition amendment suggesting that we sit into next week. The Government have left a vacancy in their public information that should be made good before the House rises. It concerns the Government's attitude towards Northern Ireland and the discussions that have been held with the Republic of Ireland.
  There has been so much rumour and mischievous talk about whether this or that decision has been taken that communities on both sides of the border in Ireland have real cause for concern and anxiety about what the future holds. I have every confidence that the Government will preserve the union of Great Britain and Northern Ireland. but I say that only because I know so well the Ministers who administer Northern Ireland so effectively. Public opinion in both the north and the south of Ireland does not take the same view of Ministers as that taken by hon. Members on both sides of the House.
  It would have been proper and right to have had a debate next week to discuss the progress or otherwise of the talks between Ministers in London and in Dublin. My right hon. Friend the Secretary of State could have given an analysis of the position, outlining the state of play. That would have set at rest any unjustified fears. He could have given the House an assurance chat when it returned there would be a full and early debate before any final decision was taken.
  Many of my hon. Friends have said that the Government are tending to slip on banana skins, are prone to making mistakes and are bad at public relations. The matter I raise is an example of bad public relations. There is a growing need for knowledge in Northern Ireland about

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  what, if anything, has transpired. A Government who are as conscious of good public relations as this Government should be would have recognised that defect and have taken the opportunity—and may yet do so next week—to make a public statement in the House that would have allowed a short exchange on both sides. It would have reassured hon. Members that the United Kingdom is to be preserved, so that we could then go away and enjoy a well-earned and prolonged recess.
  6.57 pm
  Mr. James Molyneaux: I cannot imagine that there will be any shortage of hon. Members able, willing and even eager to carry on the debate on the subject of the opening speeches. Therefore, I hope that the House will forgive me if I join my good friend the hon. Member for Harborough (Sir J. Farr) in seeking to divert its attention to a matter of rather greater concern to us, to the hon. Gentleman and to many of his hon. Friends. I refer to the worsening political position in Northern Ireland—something that could easily have been avoided had not the impression been deliberately given that fundamental decisions would be taken and that significant announcements would be made while the House was in recess.
  I heartily support the hon. Gentleman's call that the House should meet next week. My colleagues and I are willing and eager to come here next week if the Secretary of State, even at this late stage, can be induced to lay before the House a factual and up-to-date report of what is or is not being discussed in the Anglo-Irish discussions. As the hon. Gentleman said, there is nothing more likely to cause confusion or prove a greater incentive to trouble makers than the current uncertainty and suspicion, which can be dispelled only by responsible Ministers.
  In a similar debate on 26 March last I illustrated how an atmosphere of stability and confidence had been created by the Prime Minister's forthright statement after the Chequers summit with Dr. FitzGerald in November. I explained how, in the aftermath of that, there had been something like a sigh of relief from Protestants and Roman Catholics alike, who said to themselves and, more important, to each other, "Now at least we know where we stand."
  In the debate in March I expressed fears that that stability, confidence and relief of tension were being put at risk and eroded by inspired leaks about the Anglo-Irish talks. That was four months ago, and who can say that I was wrong? Northern Ireland Ministers have forfeited confidence not just by refusing until today to clear the air and remove suspicion. They have allowed substance to be given to the leaked proposals.
  The first leaked proposal was that of Dublin judges sharing benches with Her Majesty's judges in Belfast. How does that square with assurances of no weakening of the Union? The second was that Dublin's demand for the abolition of the Ulster Defence Regiment had met with the possible phasing out of the part-time element of that regiment. The third was the inexplicable decision in recent weeks to increase tension by curbing parades which in past years had caused only comparatively trivial incidents. Those three examples are wholly at variance with the Government's earlier rejection of joint control or shared sovereignty.
  1096
  Why has all that occurred? The answer is beginning to emerge through the same channel as was used for the inspired reports and leaks. It is that when British civil servants met their Dublin counterparts about six months ago—in the words of one of them, to repair the hideous damage done by "that woman" to Anglo-Irish relations —they offered the Dublin Government a consultative role in Northern Ireland affairs. Not surprisingly —Dublin politicians being old birds — Dublin said that consultation without real influence was worthless. Therefore, after months of haggling, it was decided to lay on demonstrations of good intent.
  The Ulster judges were approached and suitably bullied. The Ulster Defence Regiment, apparently unacceptable to Dublin because Catholics would be murdered if they were to join, would have to be "trimmed", as The Guardian delicately put it. The Royal Ulster Constabulary was required to show its evidence of good intent and was forced to provide a demonstration of what it could do with a force of 2,000 in a situation where only 200 were required a year earlier.
  We do not know whether Dublin has been impressed by those three examples of the results of consultation and advisory roles. It seems more likely that they will be regarded as a down payment and, like danegeld, more and more will be demanded.
  Ulster people see all of those as the first fruits of the Anglo-Irish secret talks, and costly fruits they are and costly they will prove to be. The cost has been the greatest loss of confidence in Northern Ireland Ministers since the ill-fated Sunningdale experiment. They have succeeded in destroying in eight months all the stability that was established by the Prime Minister and the Government in the aftermath of the Irish Forum and the Chequers summit. And now, as the House prepares to adjourn for almost three months, I beg Ministers to desist from encouraging a monsoon of leaks, rumours, proposals, studies, deals and initiatives.
  The hon. Member for Beckenham (Sir P. Goodhart) suggested that the Government might be tired. I do not know whether he included in that remark his successors at the Northern Ireland Office. Tired or not, they should take a rest. Let us have an intermission in the weekly speculation by Ministers on the prospects of success of the Dublin talks.
  To those Ministers who have plunged the Province into a state of unbelievable political confusion, we on this Bench say, "For God's sake, face up to the consequences of your indiscretions." On behalf of all who wish to preserve the democratic process, I suggest, as did Clem Attlee before me, that a period of silence from them would be welcome.
  7.5 pm
  Mr. Jonathan Aitken: I am grateful for this opportunity before the House adjourns to speak on a subject of great interest to my constituents. I refer to the situation in the Kent coalfield, which has a reputation for being the smallest, most isolated, most militant—and, now, the most vulnerable — mining community in Britain. A large question mark hangs over its future. I wish to comment on its future and on the future of the economic activity and employment that surrounds the east Kent coalfield.
  I should at the outset explain that about a quarter of the Kent miners live in my constituency, although the three

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  pits are located in the constituency of my right hon. and learned Friend the Chief Secretary to the Treasury, who is the most diligent of constituency Members and whose Cabinet responsibilities have not prevented him from being in his place as I raise this issue. I know that he shares many of the concerns and anxieties about his constituents that I now voice about mine.
  The coal strike had a devastating, although predictable, effect on the Kent coalfield. Of the nine coal faces that were in production before the Scargill strike, five have been lost, two at Betteshanger, two at Snowdon and one at Tilmanstone. In addition to those geological losses, the Kent miners worsened their reputation for mindless militancy, for even after all other coalfields had returned to work the Kent men held out for a short period of senseless further strike.
  Even after they went back, some of the most unpleasant acts of intimidation and victimisation of working miners took place in Kent. One sad statistic tells the story. Out of the 2,400 miners in Kent, 331 were working miners, but of those only 12 are today still employed in the Kent coalfield. The other 319 have left the industry and taken voluntary redundancy. The word voluntary in many cases should be in quotation marks because many of those men have been hounded out of the industry by the unpleasant and hostile attitudes of their colleagues.
  That is a sad commentary on the deep and passionate divisions within the work force. But at least that phase of intimidation seems to be over. Just after the strike, one incident of intimidation was being reported to the police or NCB every day. In June there was only one such incident reported in the whole month, and there have been no reports of intimidation in July.
  From my contacts with the NUM, and particularly with the NUM president, my constituent, Mr. Malcolm Pitt, I now detect not only a long overdue willingness to heal the wounds but a new mood of realism about the economic realities. Those realities are that it now costs £100 per tonne to mine coal in Kent. That coal can be sold on the market for only £50 a tonne. That is why the Kent coalfield is losing well over £2 million a month, or nearly £25 million a year. Those losses must be staunched if the Kent coalfield is to have a future.
  Nobody on the Conservative Benches, in the Government or in the NCB wants to see the Kent coalfield close down. The new NCB manager in Kent, Mr. George McAlpine, is adamant in his view that he has arrived not to close a coalfield but to make it economically viable and successful. He and some leaders of the NUM believe that that can be done and that coal can be mined in Kent at half the present cost.
  How is that to be achieved? First, there must be continuing improvement in management. For far too long the Kent coalfield was regarded as an appendage of the south midlands area. The most welcome change is that it has become a unit on its own. It has its own general manager with a short line of communication to the director of operations at Hobart house. That is a welcome management change. Secondly, the old reputation for union militancy has changed as well. That reputation meant clinging to outdated and inefficient styles of work on the surface and underground for far longer than at other coalfields. That must be replaced by new realism and new determination for productivity. Thirdly, a strategy must be
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  arrived at for slimming down the work force. That has already been done eslewhere and 900 voluntary redundancies have already been taken.
  As I have explained, the Tilmanstone pit is located in the constituency of my right hon. and learned Friend the Member for Dover (Mr. Rees), the Chief Secretary to the Treasury. It is scheduled for closure, subject to the colliery review procedure, in about nine months' time. Since the end of the strike it has cost £1 million a month to retain a mining presence at Tilmanstone, where 700 men have jobs. One new face has been in operation since 1 July. The NCB says that Tilmanstone face No. 5 has a life of only about nine months and that after that the exhausted pit must close. The NUM and NACODS are arguing—this is their case in the colliery review procedure—that face No. 5 has a much longer life, especially if mining operations can be extended to reach a nearby seam at a lower level.
  It is not for me to prejudge the outcome of the colliery review procedure. I recognise that there are strong arguments on both sides. The good news is that they are both economic arguments that are based on realism. The Kent coalfield, whether it is at Tilmanstone or anywhere else, must achieve a production cost of £50 a tonne. If that is achieved, the field will have a chance of survival.
  Employment prospects in the Kent coalfield are encouraging. First, there has been vigorous activity by NCB (Enterprise) Ltd., an organisation that has a special remit from the Secretary of State for Energy to create new jobs in areas that are affected by redundancy. It has already made a substantial investment of over £350,000 in an insulating material factory at central stores, which will create 95 new jobs in east Kent. Other investment projects are under active consideration involving up to £1 million in grants and loans from NCB (Enterprise) Ltd. This is good news for the business community and the job-creating world of Kent.
  Secondly, there is a future for hitherto untapped coal-related industrial activity in Kent. One private company has estimated that 3·3 million tonnes of recoverable coal lie on discarded tips on the surface of Kent coalfields and that much of it could be recovered by modern technology at competitive prices, thereby creating 200 new jobs using NUM labour.
  Finally, it should be reiterated that a viable coal industry with the £20 million to £25 million of economic activity that it creates is well worth fighting to preserve in the depressed economy of the area which I represent. If only the management and the work force can co-operate to reach the cost figure of £50 a tonne, which everyone agrees is attainable, I, for one, foresee a successful going concern for the Kent coalmines in future.
  7.14 pm
  Mr. Willie W. Hamilton: It is clear that the Prime Minister herself was responsible for accepting with alacrity all the proposals in the report from the Top Salaries Review Body. The Opposition think that she hid a duty to the House and the country to defend the Government's decision in the form of a speech. The Procedure Committee is investigating the form in which Prime Minister's Question Time is handled, and I took the opportunity to send a memorandum to the Committee in which I observed that it is rather strange that the Prime Minister makes fewer speeches in the House than an active Back Bencher. She gets away with literally murder at

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  Question Time. It is highly unsatisfactory that she is allowed to go from the beginning of a Session to the end of it without making one or two major speeches in the House.
  The Leader of the House is an astute politician and he must recognise, whatever he said last night, and whatever he says this evening, that in accepting the report from the TSRB the Government have made asses of themselves. It is clear that there is a yawning chasm between the Prime Minister and the public. The hon. Member for Harborough (Sir J. Farr) told us that when he returned to his constituency he heard not one complaint about the report. He must be the only Conservative Member to have that experience. The majority of Conservative Back Benchers who voted against the Government's decision to increase the Lord Chancellor's salary did so to save their own skins. Most of them represent marginal constituencies and they know that they are on a hiding to nothing there as a direct consequence of the Government's acceptance of the report.
  Today's edition of The London Standard states:
  "It was the grossest piece of political ineptitude perpetrated by Mrs. Thatcher since she came to office."
  By jove, that is a claim. She and her poodles—I accept that the Leader of the House cannot be so described—seek to defend themselves. The right hon. Gentleman referred to the Government's courage and boldness, but to others their decision reflected stupidity and insensitivity. As my right hon. Friend the Member for Birmingham, Sparkbrook (Mr. Hattersley) said, the Government's action can be said to show ineptitude and callousness. At the same time that the Government were saying that some people deserved or needed an extra £23,000 a year, they were saying to others, "You must price yourself into a job by taking employment at 50 quid a week." So we have a Government whose policy is based on unfairness and ineptitude.
  The Scottish teachers have been on strike for many months for a living wage. The highest salary that can be obtained in any school in Scotland is £21,000, and that is not payable to anyone now. However, the head of the Civil Service is to receive a £23,000 increase to maintain his morale, to prevent him going into private business, or whatever. No one can seriously pretend that the man needs such an increase. As The London Standard today rightly says, the people will never forget the Government's acceptance of the TSRB's report. The decision will haunt the Government from now until the next general election, and they know it.
  The later edition of The London Standard tells us that the Prime Minister last night threatened to resign. When I first read the article I thought that the right hon. Lady had promised to do so. I was hoping that it was a promise. The article describes how the Government Chief Whip was taking into his office half a dozen Tory Back Benchers at a time — rather like the Gestapo —and telling them, "You either support us tonight or instead of going to the beaches of Spain, France or elsewhere, you will be trundling the streets in a general election campaign."
  Mr. Roy Beggs: Does the hon. Gentleman agree that the Government should introduce work-sharing for the top posts that are the subject of the TSRB report? If we had two people for the price of one, we might even have a better service.
  Mr. Hamilton: The Government have suggested that that should be done in other sectors. This is an example of the double standards that we are getting from the Government. They say that low-paid workers must accept even lower wages to maintain or increase the number of jobs that are available. At the same time, they say to the people at the top who do not need the cash, "To maintain your morale and way of living you have to have a salary increase of £20,000 or £30,000"—in some instances an increase of 46 per cent.
  I hope to get a more sympathetic response from the Leader of the House to my next point. Last Thursday, he said that the Government might find time to debate the recent report on Members' outside financial interests. On 4 July, writing in The Times, Mr. Anthony Bevins stated:
  "Some MPs are more than doubling their £16,904 parliamentary salary with outside business consultancies under which they provide political `intelligence' to their paymasters.
  More than 140 MPs are acting as consultants and advisers to firms such as Imperial Tobacco, Grand Metropolitan Hotels, Texaco. British Aerospace, Tate and Lyle, and Rank Hovis McDougall, which are all in the top 50 British companies.
  He went on to say that some companies pay £5,000 a year per consultancy and that a number of Members of Parliament are consequently doubling their salaries.
  Mr. Patrick Nicholls: Will the hon. Gentleman give way?
  Mr. Hamilton: I shall continue because I am going to refer to two Conservative Members. I gave them notice that I would do so. Peter Riddell, writing in the Financial Times, stated:
  "The committee"—
  I have referred to its report—
  "also discussed the increased number of secretaries and research assistants to MPs concurrently pursuing other vocations and using their access to parliament to further them. In evidence, Mr. Peter Luff, a director of Good Relations Corporate Affairs, who holds a pass as a research assistant to Sir Anthony Grant, Conservative MP for Cambridgeshire, South-West, said he held the pass, 'under great protest because it is the only way I can gain access to certain information."'
  A short time ago, the Leader of the House said, when replying to a question from me, that 120 Members had registered their parliamentary consultancies—an increase of 50 per cent. over last year. He did not say that the number of declared consultancies had also increased by 50 per cent. to more than 300.
  The hon. Member for Wellingborough (Mr. Fry) lists in the register three directorships and 22 consultancies or clients, including Thames Water, the Lead Development Association—that association held an exhibition upstairs last week, but I do not know whether the hon. Gentleman organised it—the Take-Away and Fast Food Federation, Kentucky Fried Chicken Ltd, the Cement and Concrete Association, the National Bus Company, Pye Telecommunications, London Country Bus Services Ltd and the Scottish Transport Group. I had a word with the hon. Gentleman just before the debate started and told him what I would say. He has defended himself on the ground that his parliamentary salary is inadequate —£16,000-plus is not enough. However, we may not know how much he is paid for his consultancy work or what he does to earn it. God knows what these companies think that they will get from a Back Bencher for this service, but they must think it is worthwhile.
  Mr. Peter Fry: To be attacked by the hon. Gentleman is often regarded by Conservative

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  Members as a compliment. It is almost a battle honour that one wears with pride. So far, the hon. Gentleman has not shown that anything that my hon. Friend the Member for Cambridgeshire, South-West (Sir A. Grant) or I have done is in any way improper or in any way offends against the rules of the House. It is up to the hon. Gentleman to make it clear if he thinks that there is anything improper. If so, he owes it to us, as Members of Parliament, to spell out his claim so that we can adequately answer it.
  Mr. Hamilton: The hon. Gentleman can make his own speech. I am putting on the record what is in the Register of Members' Interests. That is a voluntary register. Of course the hon. Gentleman is acting within the rules, but certain conventions should be followed. I believe that a Member is elected to represent his constituents, not to line his pockets, as is so blatantly done by an increasing number of hon. Members, especially Conservatives.
  Sir Anthony Grant: I am grateful to the hon. Gentleman for giving me notice that he would raise this matter. Is he, or is he not, alleging any impropriety against me or any of my hon. Friends?
  Mr. Hamilton: Indeed, I am. The hon. Gentleman never misses an opportunity to ask the Leader of the House, as he did last Thursday, for a debate on an early-day motion that specifically refers to the privatisation of local authority services in which he has financial interests.
  Mr. Deputy Speaker: Order. I think that I heard the hon. Member allege impropriety or improper conduct. He may disagree with the rules, but he must not make personal allegations of that kind.
  Mr. Hamilton: If I implied impropriety, of course I withdraw. I would not act in that way. I would not use the Order Paper or the procedures of the House to further my outside financial interests, which have nothing to do with the people who elected me. I leave it at that.
  When I was talking to the hon. Member for Cambridgeshire, South-West about this matter, he asked, "Why pick on me?" That is a fair question. I could have picked scores of others. I shall put the activities of some hon. Members on the record. They are all Conservative Members. The list includes the hon. Member for Horsham (Sir P. Hordern), who registers— I do not know how many are not registered—three directorships and four consultancies, the hon. Member for Wealden (Sir G. Johnson Smith)——
  Mr. Nicholls: Will the hon. Gentleman give way?
  Mr. Hamilton: I shall continue. The list includes the hon. Member for Wealden, who is the Chairman of the Select Committee on Members' Interests and has four directorships and three consultancies, the hon. Member for Bury St. Edmunds (Sir E. Griffiths)——
  Mr. Nicholls: On a point of order, Mr. Deputy Speaker. Is it in order for an Opposition Member to refer to all the directorships which he thinks Conservative Members have without pointing out that many of his colleagues have directorships as well?
  Mr. Deputy Speaker: It is quite in order. This is not a matter for me.
  Mr. Hamilton: The hon. Member for Teignbridge (Mr. Nicholls) can make his own speech.
  Mr. Nicholls: Will the hon. Gentleman give way?
  Mr. Hamilton: The hon. Gentleman has made his point. I am going to put on the record what should be on the record.
  The Lord Privy Seal and Leader of the House of Commons (Mr. John Biffen): Perhaps I can help the hon. Gentleman in getting this point on the record. Is he implying that the possession of these outside interests influences the way in which those hon. Members behave in the House?
  Mr. Hamilton: It may well do. The code of conduct laid down for local councillors is much more stringent than the code for hon. Members. Farmers and directors of companies can go into the Lobbies——
  Mr. J. F. Pawsey: Will the hon. Gentleman give way?
  Mr. Hamilton: I know that this is irritating Conservative Members, but I shall put these points on the record. I am asserting that the code of conduct laid down for local councillors is much more stringent than the code for hon. Members who can vote for vast sums of money for their farms and companies without fear or favour. That is a big temptation. From the record of hon. Members' outside interests it is clear that they are using this place to further their private financial interests. A few weeks ago I gave an example of that in the House when a lobby correspondent drew to my attention the fact that two hon. Members were in the pay of drug companies. When the drug companies were in bad odour a few months ago, those two hon. Members tabled 70 oral questions to the Department of Health and Social Security.
  Mr. Deputy Speaker: Order. I remind the hon. Gentleman that he must relate his remarks to whether we should adjourn in accordance with the motion before the House. Secondly, he must not allege that hon. Members are using this place to further their financial interests.
  Mr. Biffen: On a point of order, Mr. Deputy Speaker. This is a legitimate matter for debate, but debate cannot proceed with this type of innuendo, unless it is clearly established that hon. Members are using this place to enhance their financial position. I suggest that to make that allegation is an infringement. It is important that the House should know your ruling on the matter.
  Mr. Deputy Speaker: Order. I have made it clear that the hon. Member for Fife, Central (Mr. Hamilton) must not make an allegation of that sort.
  Mr. Biffen: Further to that point of order, Mr. Deputy Speaker. The allegation has been made. May I suggest that it be withdrawn?
  Mr. Hamilton: The allegation has not been made. I am merely laying the facts before the House to let hon. Members and the country make their deductions from them. I have put some of the facts on the record. As the Leader of the House has made it clear that he is sympathetic to such a debate, I hope that he will find time for one in the autumn because much more remains to be said about these matters than I have been able to say now.
  A few weeks ago, when I attended the annual meeting of the United Kingdom America Parliamentary Association, the secretary, my hon. Friend the Member for Walthamstow (Mr. Deakins), said that a dinner was to be held later in the year for an anniversary celebration or some other reason. He sought to book a room downstairs,

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  but they were all booked until the end of the year. I am not making any assertions, but the Select Committee and I are worried at what goes on in those rooms night after night. I hope that if I ask the Chairman of the Select Committee, the hon. Member for Cheltenham (Mr. Irving), for a list of the names of hon. Members who have booked the rooms and for whom, he will give me that information.
  Mr. Charles Irving: Will the hon. Gentleman allow me to correct him? The rooms are all booked until the end of next year because the quality is so good.
  Mr. Hamilton: I hope that the hon. Gentleman will accede to my request for that information. Will he give me the names of hon. Members who have booked those rooms, and state the purpose?
  Mr. Nicholas Soames: The hon. Gentleman may care to know that on Monday night this week I addressed the Kettering rotary club—an institution of the highest probity—in Dining Room A. I hope that he does not seek to cast a slur on it.
  Mr. Hamilton: I am not casting slurs on anybody. [HON. MEMBERS: "Answer."] Will the hon. Member for Cheltenham guarantee to give me that information because even the Select Committee has expressed anxiety about the probable abuse of both Dining Rooms and Committee Rooms in the House? When the Speaker, who was at the meeting, heard that the rooms were fully booked, he generously offered his banqueting room, or whatever it is called, to the association, which it accepted.
  The report is an important one. It impinges on the integrity of the House. If it is not debated, rumours will circulate in the press and outside. When the Leader of the House replies, I hope that he will undertake to find time to debate the report in October.
  7.36 pm
  Sir Anthony Grant: The only comment I would make on the mean speech of the hon. Member for Fife, Central (Mr. Hamilton) is that it tells us something about his mind. I am satisfied that, when compelled to do so, he withdrew allegations of impropriety.
  To return to more serious matters, it was with great regret that last night I found myself unable to support the Government. Tonight I have no hesitation in supporting them. I resent the fact that the official Opposition have chosen to take up time with this motion. They had the whole of yesterday to debate the matter, but they chose to put up only one speaker. Traditionally, this is a time when Back Bench Members can raise constituency matters, as I propose to do now.
  I can give the House a much better reason for not adjourning than that offered by the Opposition Front Bench. I do not want the House to rise until there has been an opportunity to consider coroners' courts and the appointment of coroners. I am prompted to do so by the tragic case of Harriet English, the daughter of my agent in south-west Cambridgeshire.
  Harriet died in horrific circumstances in the London Clinic. She was 22, and a completely fit and, indeed, athletic girl. On 19 May she felt tired after playing
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  badminton, and later she complained of a pain in her shoulder. A general practitioner, Dr. Barretto, was consulted. He diagnosed a torn ligament, and administered an injection to ease the pain. During the following days, she became extremely ill, and, in the absence of Dr. Barretto, she was treated by his partners. During four days she got worse, and was ultimately rushed to the London Clinic where she died in agonising circumstances. The cause was said to be septicemia, which was at no time diagnosed. Obviously, the doctors recognised that something serious was wrong because the pain-killing drugs were strong ones used only in serious cases.
  The death of a healthy 22-year-old girl in four days after being injected for a painful shoulder calls for a meticulous investigation. On 17 July the inquest at Westminster raised as many questions as it sought to resolve. How did she get septicemia? Why was it not diagnosed? What drugs should have been used? What was the effect of the drugs that were administered? Yet the verdict of the coroner, Dr. Knapman, was natural causes. That seems extraordinary. A verdict of death by misadventure would have been more realistic. However, probably an open verdict would have been the wisest decision.
  I intend to bring the whole matter to the attention of my right hon. and learned Friend the Attorney-General so that he can consider whether there should be a judicial review to bring out the missing facts. However, in the House now I want to raise the broad question of coroners' courts and the appointment of coroners. Coroners' inquests are inevitably highly emotional, being concerned with life and death, and tragedy. They must be conducted with scrupulous care and in accordance with the highest judicial standards. Unlike some courts dealing with quite minor matters, the only appeal from them is by leave of the Attorney-General. Perhaps the informal style of conducting inquests is appropriate in some cases, but in major cases that is not so.
  Coroners must, by statute, be lawyers of five years' standing or more, or legally qualified medical practitioners. Most frequently coroners seem to fall into the latter category. They seem to be primarily doctors and only to a lesser extent people with legal qualifications. For my part, I believe that it is desirable for a corner to be a person of legal and judicial experience rather than primarily medical experience. Very often at inquests, the conduct of medical practitioners comes into question. Let me emphasise that I am not making any suggestions of impropriety against Dr. Knapman, but it is important that inquests be conducted in such a way that justice is not only done but seen to be done, as we require in the major courts. That is especially so if complex medical evidence is involved and has to be sifted by lawyers. It might even be desirable for major inquests, or ones of great complexity, to be conducted by a High Court or senior judge brought in for the occasion. That would give greater confidence to the unfortunate people involved.
  That is the point of principle that I seek to make. My unfortunate constituents know that nothing can bring their daughter back, but they seek all the facts so that others may be spared Harriet's tragic fate.
  7.42 pm
  Mr. Ian Wrigglesworth: I am mindful of the comments that the hon. Member for Cambridgeshire, South-West (Sir A. Grant) made about the use of the time in this debate, particularly because I

  1105
  am sympathetic to the views that he has just put forward, which many hon. Members with experience of coroners' courts will share. There is widespread anxiety about the way in which they operate, particularly in some recent prominent cases.
  However, I am sure that the hon. Gentleman will understand the anxiety, which many hon. Members share, about the implications of the events over the past two or three days connected with the top pay award, which further undermines the Government's economic policy. I am sure that he will also understand our belief that, because of that, there is a case for extending the present Session to provide an opportunity for a much fuller debate than last night's debate to consider the implications of the past two or three days.
  In the light of the amendment moved by the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley), this is also an opportunity to consider Labour's alternatives to what the Government have done and to the pay policy that the Government are or are not pursuing, as the hon. Member for Wolverhampton, South-West (Mr. Budgen) said in an intervention. The credibility of the case put by the right hon. Member for Sparkbrook was undermined by the fact that he had no alternative to bring forward to the House and the country from the Labour party's locker as a way of resolving such problems.
  Last night's vote was unprecedented in the Government's period of office. It was in fact a vote of no confidence in the Government by their own supporters. I think that it will be seen by the country as a vote of no confidence. As Conservative Members so ably showed last night, it is a vote of no confidence in the Government's pay policy.
  On several occasions, in interventions to the Chancellor and other Ministers, I have criticised the lack of a coherent pay strategy or policy. That was made absolutely clear in Conservative Members' speeches during last night's debate. The events of the past two or three days, the Government's acceptance of the top pay award and the reaction to it are an inevitable consequence of the Government having no strategy for pay in either the public or the private sector.
  Pay in the private sector is now increasing by around 9 per cent. a year. Clearly, that will further undermine the Government's economic policy. However, in the public sector there has been different treatment for different public sector workers since the Government came to office. For example, the police and the armed services have been marching ahead of people in other parts of the public sector, whereas teachers, those in the National Health Service and civil servants have been held back unjustifiably compared with increases in the private sector.
  There is no doubt that the award, which the Government have allowed to go ahead with no staging, has undermined the Government's exhortations to workers in the private sector to restrain their claims, and their exhortations to members of the Confederation of British Industry and employers to resist pay claims that will make British industry less competitive. It has undermined the Government's policy towards the teachers and the nurses, to whom a staging agreement was offered, so that their 8·5 per cent. increase was phased over a period. It has undermined the whole of that strategy, if one can give it that name.
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  That is the result of the high pay awards and seeking to accept the basis of comparability contained in the top salaries review. The problem has been with us for many years. Not only Conservative but Labour Governments have had a great deal of experience over the past two decades. A great deal of work has been done. The Government swept away the pay research unit after they came to office and established the Megaw committee to look into ways of introducing a new system of settling Civil Service pay, but as yet, after all those years in office, the Government have still not succeeded in reaching any agreement on a sensible method of comparability and settling pay disputes and negotiations in either the Civil Service or other parts of the public sector.
  Our view, based largely on the detailed and comprehensive work by the Megaw committee, is that the recommendations from the ad hoc and inconsistent inquiries should be swept away and replaced by a comprehensive system of comparability between the public sector and the private sector. A proper non-inflationary comparability system is the only real solution to the problem. Different sectors of different workers have been left to catch up after a period, such as the teachers with the Houghton award, or other public sector workers with the Clegg award. If public sector workers fall behind, as they have done in those instances and on this award, inevitably any hope of a sensible pay strategy for the whole country is undermined.
  The past two decades show that that system is the key to getting the economy into equilibrium and to getting expansion and people back to work without inflation. That is why there is an overwhelming case for supporting the amendment and for giving the House an opportunity to debate this central economic issue—how to determine public sector pay and avoid the knock-on effect of high and unjustifiable pay awards such as the Government have given top people.
  7.50 pm
  Mr. Christopher Murphy: I support the anxieties expressed by my hon. Friend the Member for Harborough (Sir J. Farr) regarding the future relationship between Northern Ireland and the Republic and the request by the leader of the Ulster Unionist party for a statement on current discussions between officials in Dublin, Belfast and London. That must be essential for the stability and development of the Province, which should be of concern to us all.
  Before the House rises for the summer recess, it should have the opportunity to consider wind energy. Any mention of the advantages of wind for hon. Members is open to misinterpretation and perhaps energy at the end of the Session is more than usually difficult to summon up. However, alternative sources of power deserve increasing attention.
  Several options have been considered, including geothermic, wave and tidal power, but current development shows that the greatest potential might lie with wind energy. Its advantages are considerable, but the most striking is that it derives from a consistently available resource which is natural and renewable.
  Additional to the economic pluses of saving or replacing the use of expensive fossil fuels arid the reduction of dependence on imported energy or on unreliable sources due to industrial disruption are the environmental advantages, including the lack of

  1107
  atmospheric pollution. British Aerospace is a major company in my constituency and its experience, derived from propellers and high performance engineering, has been put to good effect as a member of the Wind Energy Group. Windmills, which are often less romantically referred to as wind turbine generators, are already in use and under construction, making a valuable addition to the production of electricity, but anxiety that we may not lead the way as we should in windmill technology must be sounded.
  Because of a lack of speed in initial Government support for such activity in the United Kingdom, despite undoubted and leading expertise, the competition must now be overtaken. It would be another example of lost opportunity if the Central Electricity Generating Board and others had to look overseas to buy windmills.
  Mr. Pawsey: Is my hon. Friend aware that, in south Warwickshire, the National Coal Board is proposing to invest £500 million to develop a new super-pit? Would my hon. Friend care to speculate on how the companies involved in the development of alternative sources of power might spend that money if it were made available to them?
  Mr. Murphy: I am grateful to my hon. Friend. His deep understanding of the problems of energy leads me to my next point. The involvement of different Ministries has perhaps contributed to the difficulties to which I have referred. The Department of Energy and the Department of Trade and Industry are already involved, and the Overseas Development Administration might now also be involved, with potential for export to Third world nations. The Government should consider a lead Ministry for alternative energy development. Companies such as British Aerospace, which are involved in the Wind Energy Group projects, would then benefit directly from such money.
  British Aerospace has also been deeply involved with the European Space Agency, which has pointed the way on international co-operation. An example of the benefits of such co-operation has been the company's prime contractor role for the Giotto spacecraft, which has successfully been launched to encounter Halley's comet and deserves all our congratulations. Such an agency might be an appropriate way in which to advance with alternative energy to minimise experimentation costs and to maximise earning potential. New job opportunities might also flow from that.
  Right hon. and hon. Members are often accused of tilting at windmills. On this occasion, before the House rises, perhaps such tilting will have been put to some good effect.
  7.55 pm
  Mr. Stuart Bell: I shall not follow what the hon. Member for Welwyn Hatfield (Mr. Murphy) said about Northern Ireland but rather follow what my right hon. Friend the Member for Birmingham, Sparkbrook (Mr. Hattersley) said about the amendment concerning the thorny subject of whether the Lord Chancellor's salary should be £77,000 a year to stay £2,000 a year ahead of that of the Lord Chief Justice. That is a singular reason for giving a man £77,000 a year.
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  I recall a time in my distant past when, if I may quote L.P. Hartley, things were done differently. I remember why pit pay was kept low—pitmen had free coal and lodging. The houses in which they lived belonged to the coal owners. When the Lord Chancellor is given £77,000 a year, no reference is made to his having free coal and lodging — or rather, free heating, rates and accommodation.
  As it happens, I have a soft spot for the Lord Chancellor. When I heard that his salary increase was to be debated in the House, I laid a side bet that he would not take it. I knew my man, or rather I knew the noble Lord who sits on the Woolsack, and who has the unique distinction of being head of the legal profession, a member of the Cabinet and at the same time Speaker of the upper House. The post was not envisaged by Montesequieu when he wrote about the separation of the powers.
  I have a soft spot for the Lord Chancellor because he was part and parcel of my first political act. I heckled him during the general election campaign of 1964 when he visited Newcastle upon Tyne. I doubt whether, in this day and age, I could have got close enough to a Conservative Minister to heckle him, but that is how it was in those days.
  Mr. Murphy: The hon. Gentleman is making very kind references to my noble Friend. Is he aware that my noble Friend's involvement has enhanced many a Conservative cause? I can bear witness to that in my constituency. He has come to support me in each general election I have fought there and each time I have been returned with an increased majority.
  Mr. Bell: I am sure that, during his long career, the noble Lord has enhanced many Conservative causes. I remember that, in the late 1950s, I shared one distinction with Lord Soper—we never understood the noble Lord when he talked about the British empire. I have not had an opportunity to discuss his views since then, but I am sure that he may have been as opaque in other directions as he was on that subject.
  There is another reason why the Lord Chancellor is close to my heart. He was Minister with responsibility for the north-east in 1963 when we had a compassionate Conservative Government which sent him to the nort-heast——
  Mr. J. D. Concannon: Wearing a flat cap.
  Mr. Bell:—when we had high unemployment there.
  My right hon. Friend refers to his flat cap. The fact is that the noble Lord got as far as Darlington in a bowler hat, but when he reached Darlington he changed it for a flat cap. However, his visit resulted in the building of the Newcastle and Teesside airports and a road infrastructure in the north-east. He helped us to build up the region so that when, thankfully, in 1964 a Labour Government were returned to power we were able to build upon his efforts. I have to tread somewhat carefully because the noble Lord is also the head of my profession. That happens to be one of my declared interests. I am aware of the fact that I am sailing close to the wind. The point is that the Government have deemed it necessary to give a salary increase to the noble Lord that increases his salary to £77,000 a year.
  A great deal was made of what the Chief Secretary described as "synthetic indignation". Unfortunately, there was nothing synthetic about the public indignation. Those

  1109
  who receive invalidity benefit live in dread that a Department of Health and Social Security medical examination will remove them from the sick list to the dole queue. Those who are seriously ill now find that the prescriptions for the drugs which are necessary for their survival cost £4·50 each. My constituents in Middlesbrough have to wait longer and longer for home improvement grants. The changes in the regulations mean that those who are young and homeless have to sleep rough. These people, and others like them, realise that under the social security review they will be the losers. They perceive that there is one rule for the rich and another rule for the rest of us.
  Last night, one hon. Member referred to the fact that the implementation of the 1978 top salaries review by the Labour Government was followed by the general election in 1979. More aptly, he might have said that the freezing of nurses' pay in 1962 led to the electoral defeat of the Conservative party in 1964. To use a colloquialism, by implementing the top salaries award the Government have revealed to the people of this country that they believe in a fundamental and irreversible shift in the balance of wealth and power to the rich. This perception will not be clouded by rhetoric, news management or any other manipulative sleight of hand. It has left an indelible impression upon the low paid.
  I ought to refer briefly to what low pay is. The Low Pay Unit defines low wages as
  "at or below two-thirds of the median (mid-point of the distribution) earnings of full-time male workers, giving a figure for 1984–85 of £107 for a basic 39 hour week or £2·75 an hour for part-timers). This is very close to the TUC's minimum wage 'target' of £104 and to the Council of Europe's 'decency threshold' for earnings as specified under Article 4 of the European Social Charter. 'This is set at 68 per cent. of average male/female earnings, yielding a 1984–85 figure for Britain of £108·32 a week."
  All those people must wonder why the Government are giving top salaries to special categories of people while they have to live upon what is described as a "decency threshold". If that is linked to the fact that wages councils are to be abolished for those under the age of 21 and that the role of wages councils is to be limited to fixing hourly rates and overtime rates, one wonders how shop workers will be affected by the Government's trading proposals.
  The entire purpose of the Government's review of shop opening hours was that if shops were to be allowed to open on Sundays there was no need to make special provision for shop workers; they could be dealt with by means of other legislation and their wages could be settled by the wages councils. If legislation is to be introduced which allows shops to open on a Sunday and if shop workers are expected to have recourse to the wages councils to look after their rights, they will find that the role of the wages councils has been reduced and that for those under 21 years of age they have been abolished altogether. This legislation will therefore lead to the low paid being put at a disadvantage.
  In a letter, the Union of Shop, Distributive and Allied Workers says of the Government's proposed legislation on Sunday trading and its consequences in my constituency of Middlesbrough:
  "Some of us want to go to church on Sundays in order to give expression to our religious beliefs. Others of us find that Sunday is the only day of the week when all the family can be together, and it is important that the bonds with our families and friends should not be broken. Our employers have told us they do not
  1110
  want to open the shop on Sundays and will not be the first to do so, but they warn us that if the shop across the road is open and we are not, we will be forced to do likewise."
  That letter relates to Sunday activities, to low pay and in the end to the Government's policy.
  The Government are on a slippery slope. They have found that events are slipping out of their reach. Instead of having control over events, they have lost control. It will take some time before the walking on the pavement, to which the Chief Whip is alleged to have referred when his colleagues were threatening to vote against the Government, comes about, but when that walking on the pavement takes place it will be the walking of voters to the polls. When they do so, they will decisively reject this Government. We have to wait patiently, but:
  "Though the mills of God grind slowly, yet they grind exceeding small;
  Though with patience He stands waiting, with exactness grinds He all."
  The electorate are in that position. They will grind slowly, but they will grind properly. They will grind this Government into the dust.
  Several hon. Members rose ——
  Mr. Deputy Speaker (Sir Paul Dean): Order. Most speeches in this debate have been admirably short. I hope that this pattern will continue. Eight other hon. Members wish to speak before the wind-up speeches at about 20 minutes to nine o'clock. I therefore appeal for brevity.
  8.9 pm
  Mr. J. F. Pawsey: I should like to follow in the footsteps of my hon. Friend the Member for Thanet, South (Mr. Aitken) and refer to the National Coal Board. One matter which should be drawn to the attention of the House before we rise for the recess is the NCB's proposals for mining coal in Warwickshire in what it calls the south Warwickshire prospect. That includes a substantial part of my constituency.
  The matter is urgent, and we should discuss it before rising for the recess, because the National Coal Board is even now having discussions with local authorities to fix a site for the proposed new pit complex. Those discussions are taking place without the benefit of any debate in this House.
  We should have an opportunity to consider three basic principles. First, taking into account changing technology, will the coal be required in the 21st century? Secondly, can the expected investment of about £500 million be found? Thirdly, if the earlier conditions are satisfied, could not the coal be obtained from existing pits in Warwickshire, such as Coventry colliery and Daw Mill? The House should have an opportunity to express its opinion on those important matters.
  The board's quoted investment figure of £500 million represents a substantial sum of public money — large even by the standards of the House——
  Mr. Allan Rogers: Hear, hear.
  Mr. Pawsey: I am glad that the hon. Gentleman agrees with me.
  It might help the House if I gave some details of the National Coal Board's time scale. By the end of this year, it hopes to have fixed a site for the pit complex. By the middle of next year, planning applications will have been submitted. By 1988, the board hopes that the site works will start, and hopes that the first coal will emerge by 1998. That time scale should not blind the House to the

  1111
  size and urgency of the problem. Once projects of this size begin, they seem to develop their own momentum, a momentum which it becomes difficult to control.
  The NCB would not have put forward this proposal if it did not believe that the funding was readily available. Indeed, it would not now be discussing with the local authorities the site of the new super-pit if it did not believe that the money was available.
  The south Warwickshire prospect will produce about 3 million tonnes of coal a year. It will be high-quality coal extracted from deep seams about 14 ft thick. The coal will be of sufficient quality to be used in industry, in the domestic market and in power stations. Indeed, about 60 per cent. of it is earmarked for the power stations of the Central Electricity Generating Board. However, will the CEGB require those enormous quantities of coal? We should remember the nuclear alternative, which is cheaper and cleaner than the extraction of power from fossil fuels. With nuclear power, there is no problem with acid rain or with the disposal of ash. There is no need for trucks and trains to move the coal to power stations. The NCB must prove that this enormous investment will benefit the nation, and not merely the board.
  Hon. Members will recall that we have just come through a long and bitter coal dispute, which produced intimidation on a scale never envisaged in the United Kingdom. Those activities do not demonstrate responsibility. It is noteworthy that Mr. Scargill still preaches no pit closures, the class war, and the message of the strike. Against that background, are we justified in investing £500 million in this new super-pit?
  Mr. Rogers: Will the hon. Gentleman come clean and say that the real reason why he and his constituents are against the pit is that it will intrude into a beautiful area of Great Britain? I might support him if he put forward that argument, and I will expect his support when I ask for some marginal investment by the coal board in areas such as the Rhondda valley, which I represent, and which has between 30 and 90 per cent. unemployment, skilled miners available, an infrastructure of education, transport and communications and people extremely anxious to work. We also live in a beautiful part of the country, but we have learned how to get rid of our despoliation. I will support him if he is honest, and I expect him to support me in future.
  Mr. Pawsey: The hon. Gentleman anticipates my speech. If he listens patiently, he will hear my argument. I look forward to his continuing support.
  The NCB says that the area of search lies between Coventry and Kenilworth. To paraphrase the words of the hon. Member for Rhondda (Mr. Rogers), it is a green and pleasant land. The pit complex will cover one square kilometre. I am delighted to see my hon. Friend the Under-Secretary of State for Energy, who has responsibility for coal, now in his place. Knowing his interest, concern and conscientiousness, I would have been surprised were he not here. I am grateful to him for listening to my arguments.
  The pit complex, which will cover one square kilometre, will include winding towers, a coal treatment plant, car parks for trucks and a massive coal storage area. The operation will involve between 300 and 500 lorry
  1112
  movements a day. It will involve the movement of 10 large trains each day. All this is in a green belt, which is already under considerable threat.
  If the National Coal Board can justify the need for the coal, why should it not be extracted from the pits at Daw Mill or at Coventry? It seems that the only argument against the development of those pits is an economic one, but there is more at stake than pure economics. The environment must be protected. If there is a larger national interest, I take note of it, but the interests of those who live in what the hon. Member for Rhondda and I agree is a green and pleasant land should also be considered.
  I recognise that planning applications must be submitted to the likely mineral authority, which is Warwickshire county council. I am also aware that we can have section 52 agreements and environmental impact assessments. Those conditions will help to safeguard the amenities of the area, but they are not enough. Therefore, will my right hon. Friend the Leader of the House consider using the machinery that exists in the Town and Country Planning Act 1971 to set up a planning inquiry commission? That commission would be empowered to examine the entire issue in depth. It would examine the board's proof of needs and the environmental issues, and it would assess the transport considerations and implications, and the attitude of the public. It would give us an opportunity to evaluate the views expressed at two large public meetings—one attended by 350 people and the other by more than 700. The hon. Member for Rhondda was right to imply the depth of feeling in my constituency.
  The position has changed since the inquiries into the Asfordby and Vale of Belvoir pits. We have had the Sizewell inquiry, with all its implications for the CEGB. We have had the miners' strike, and we know its implications for the industry. We are aware of the changing demands for coal and of the new technology that is emerging. All those matters would fall within the remit of a planning inquiry commission. It could and would examine those matters, and there is certainly time for such a commission to be set up. I ask my right hon. Friend to consider my suggestion and, at the right time, to give it his unqualified support.
  8.20 pm
  Mr. Don Dixon: I support the amendment because it highlights the Government's attitude to two nations. It speaks about both the Top Salaries Review Body awards and the treatment of the wages councils. The Government believe in the north and the south, the rich and the poor, the healthy and the sick being divided.
  It is disgraceful that the Government have singled out the lowest paid and then suggested that the abolition of the wages councils would create jobs. All that will happen is that unscrupulous employers will sack workers over 21 and employ youngsters on a lower wage than they are already getting under the wages councils. Wages councils wages are already low. In 1974, they were 73 per cent. of the national average and in 1984 only 65 per cent. Some of the wages in the hairdressing profession are only £57 a week. My hon. Friend the Member for Middlesbrough (Mr. Bell) spoke about the Council of Europe's decency wage threshold of £108 a week, which shows how poorly some people are still paid.
  The Government have already attacked the wages councils. They have cut the wages inspectorate and

  1113
  unscrupulous employers are not being prosecuted when they do not pay the already low wages suggested by the wages councils. Last night, there was a rebellion on the Tory Benches. I would have been more impressed if it had been because they recognised the injustice of the TSRB awards rather than because they were looking after their own skins for the next general election.
  None of my constituents will be affected by the TSRB awards, but a number will be affected by the proposals about the wages councils. A few days ago, we had a statement from the Secretary of State for Defence about the naval dockyards. He spoke about commercial management, but I do not think that he realised that, until 1977, the shipyards had commercial management, which virtually ruined the shipbuilding industry. One of the reasons for the high unemployment in my constituency is the commercial management of the shipbuilding industry. We do not need any lessons from the Government about that.
  The Secretary of State for Defence spoke about reports, but in 1962 we had the Paton reports on the shipbuilding industry, in 1966 the Geddes report and in 1972 the BoozAllen report. Every one of those independent reports criticised the commercial independent and private management of the shipbuilding industry. If the right hon. Gentleman were to take his suggestion of commercial management to its logical conclusion, he should sign the armed forces over to the mercenaries rather than have to pay the admirals and generals the fat increases suggested by the TSRB.
  My constituency has been damaged by this Government since 1979. We have miners not millionaires, engineers not racketeers, shipbuilders not shipowners; they have all been hit by the Government's policies. In 1930, unemployment in Jarrow was 30 per cent. above the national average. Today, it is 40 per cent. above the national average and 46 per cent. of those who are unemployed have been unemployed for more than 12 months. That is the effect of the Government's policies.
  We should not adjourn and swan off on our foreign holidays until we have had a statement from the Government about their attitudes and policies to the second nation that they have created.
  Not only have the unemployed and the sick been hit; the pensioners have suffered. When the London Regional Transport Act was in Committee, the Government underwrote concessionary bus passes for pensioners in London, but refused to do so for pensioners in the rest of the country. That exemplifies the Government's attitude. Pensioners have also been hit by the closure of sub-post offices and the loss of such services as doorstep delivery of milk. They need protection, not attack, from the Government.
  I support my right hon. Friend's amendment because I want the Prime Minister to make a statement on the wages councils and to explain to the House and the nation why she is attacking those at the bottom of the scale while she is giving fat increases to those at the top. My hon. Friend the Member for Middlesbrough referred to the Lord Chancellor's salary. We in the north realise that, when the noble Lord was Minister with responsibility for our region, he did a tremendous amount of work on the infrastructure there. It is a pity that the Government do not continue the philosophy that he carried out when he was a Minister.
  8.25 pm
  Mr. Patrick Nicholls: Despite the way in which the debate was opened, I suspect that my right hon. Friend the Leader of the House is still thinking of taking a holiday in the near future. If he is still of that mind, he could do a lot worse than consider going to Teignbridge. It is an excellent constituency, the full delights of which I set out in my maiden speech so many years ago. However, if my right hon. Friend were thinking of going down to Dartmoor and of dropping in at. Two Bridges, which is a beauty spot in that area, he would find that others had got there before him. He would find there the remnants of the "peace convoy" of Stonehenge fame.
  Perhaps many hon. Members regard hippies and hippydom with a certain nostalgia and think that hippies are an arcadian delight, splendid and marvellously charming creatures with long flowing hair, even if it no longer meets in the middle. However, the reality for the people in my part of the world is different.
  I can do no better than quote from a letter in which the 'director general of the National Trust wrote to The Times about the peace convoy when it was at Stonehenge. He said:
  "Crowds of festival-goers disported themselves on the stones in scenes closer to desecration than to religion. About 1,000 young trees were torn or cut down; trenches and holes were dug with disregard for the ancient barrows; fences were ripped up, and a scarred landscape of burnt-out vehicles and rubbish was the legacy of the festival."
  The people who live in my constituency and own private land that has been invaded by these people are now having to endure such conditions, as I saw when I went clown there.
  The rights of an Englishman come in many shapes and sizes. I would be the first to concede that one of them is that if a person wants to live his life in foulness, degradation, indolence and squalor, he should be allowed to do so. However, it is not his right to expect that such a life should be paid for by the taxpayer. Neither is it right that he should expect to be entitled to flout the law because of the way that he exercises his lifestyle.
  Despite the fact that the vehicles in the peace convoy are manifestly unroadworthy and profoundly dangerous to anybody who might come into contact with them, the law is powerless. Mercifully, after the Police and Criminal Evidence Act comes into effect on 1 January 1986, the sections of it that deal with this problem will ensure that that side of things is taken care of. No longer will a hippy be able to tell a policeman that he is a little ray of sunshine or Donald Duck from Disneyland and be certain that his vehicle will not be taken off the road.
  I hope that my right hon. Friend will take on board the fact that, under the Supplementary Benefits Act 1976, anybody who qualifies for supplementary benefits should be available for work. It is manifestly clear from the way in which these people live and travel from one part of the country to another and try to disguise who they are and what there whereabouts are that they are not making themselves available for work.
  I hope that my right hon. Friend the Leader of the House will be prepared to consider the guidance being given to the adjudication officer, who has to decide these matters if supplementary benefit officers are not convinced that a person is available for work. I hope that he will say that this is an abuse of the way that the supplementary benefit system works, and of the system and should not be

  1115
  countenanced. People should not be able to use taxpayers' money in that way, because that is not the reason for which supplementary benfits were instituted. I hope that my right hon. Friend will be able to give me some comfort that in future outrages of that sort will not be financed by the taxpayer.
  8.31 pm
  Mr. Allen McKay: I always understood that supplementary benefits were intended, as the name implies, to supplement inadequate income. Supplementary benefits do not require an applicant to be available for work as is the case with unemployment benefit. If people had an adequate income there would be no need for supplementary benefits. One out of every six of my constituents is unemployed and I am sure that people like that would be grateful not to have to rely on supplementary benefit.
  I hope that this does not turn out to be a debate on mining. The hon. Member for Rugby and Kenilworth (Mr. Pawsey) mentioned the investment of the Coal Board in his area. I can assure the hon. Gentleman that if such investment is not welcome in his area, it would certainly be welcome in ours, if we could find a place to put it. Unfortunately, the 20 collieries which have closed have probably worked out all the reserves in the area.
  I am reminded of the time when we were looking at Selby. The people in Selby had visions of hordes of cloth-capped, clogged miners appearing over the horizon and coming into the green acres of Selby. They were quite surprised when the gentlemen who work in the mining industry appeared in the Selby area, because they were quite different. The people probably thought that the miners would use the twin towers of York minster as up and down shafts to exploit the Selby coalfield. They found out after the planning arrangements had gone through that they could hardly see the Selby complex because it merged into the beautiful green countryside. The constituents of the hon. Member for Rugby and Kenilworth have no need to be afraid of the massive investment that the Coal Board will put into their area. If he does not get the investment, he will find himself with a lot of unemployed constituents, because the board is replacing pits and reducing capacity rather than extending it.
  We shall have to debate the matter in about 10 years' time because, according to forecasts, much will happen around the year 2010. The gas and oil fields in the North sea will not have run out, but they will be so expensive to exploit that it will not be possible. In that same year, coal for the coal-fired power stations will have been burnt out. Therefore, many decisions will have to be made in about 10 years.
  According to the gas undertakings, they will need about 100 million tonnes of coal a year in 2010, and that is the amount that the Coal Board intends to produce. The generating boards are a little worried about what is to happen after 2010. In 10 years' time, we will have to make decisions about what will replace the present power stations, whether they will be coal or oil-fired, and whether they will be of the conventional type or of the type which will counter the problem of acid rain. How many nuclear power stations will we have then, and will we have new forms of propulsion? All those matters could have been debated today if we had had time.
  1116
  I support the amendment. There is no doubt that people realise how insensitive the Government are about the pay increases for top people. People are incensed about it. The unemployed rely on supplementary benefit and have seen welfare provision eroded. They have lost their earnings-related supplement because the Government abolished it, and their welfare benefits have been eroded by about 10 per cent. Those people are awaiting the Fowler review to see if it will make further inroads into their benefits.
  Because of Government policies and rising unemployment, the Government have insufficient money to compensate for the disastrous policies that they have heaped on the country. One of my constituents, Mr. Eric Moxon, attempted, as many others have attempted, to take part in a job release scheme. That is a good scheme because it means that people are able to leave work early and create vacancies for others. That is what Mr. Moxon and a number of others did.
  Then, suddenly, Mr. Moxon found out that the Government had conned him about increases for inflation. People in the job release scheme found out this year that they had received an increase of 60p. We made inquiries about such a low increase when everybody else was getting £3 to £4. I have a letter which says:
  "The taxable allowances have been increased by a lesser percentage than the tax-free allowances to allow for favourable developments in the Inland Revenue personal tax allowances."
  That means that those people have paid for their own tax allowances. By a sleight of hand, the Government, through the Chancellor, have given those people an increase in the base of their tax allowances, then clawed it back by not giving them an increase in the job release scheme. Thousands of people are incensed and hurt about that, and suddenly they read that the Government have decided that top salaried people are to get an increase of £25,000. When a person receives an increase of 60p and learns that someone else is getting an increase of £25,000, he is going to be incensed. That is one reason why I will be voting for the amendment, and it is the reason why millions of people who have realised what Government policies are doing will say at the next election, "We have had enough." I endorse that sentiment.
  8.38 pm
  Mr. James Hill: It is now almost one year since the establishment of the six free trade zones in the United Kingdom. The principle is right, and in the optimum location a free trade zone can in principle become the focus of a significant increase in economic activity, attracting trading and in the right environment manufacturing, which in turn attracts investment and revenues from overseas, and encourages the growth of United Kingdom companies.
  The Southampton free trade zone, with its enormous potential for industrial growth, is the optimum United Kingdom location. Given encouragement, it could be a significant catalyst for growth in employment and for additional wealth creation, and would be a major boost to the United Kingdom invisible earnings. After a year's experience, however, we face two serious and persistent areas of difficulty. It would not put too strong an emphasis on these difficulties to say that if they are not resolved, free zone development at Southampton and the other five areas will not be commercially viable.

  1117
  The two areas of difficulty are over-regulation and the national dock labour scheme. I will not deal with the problem in any detail, but a brief explanation is essential.
  We have found that, far from being a regime which is relatively free from bureaucratic interference and restrictions, there is a plethora of regulations. Many of them relate to VAT. The restrictions imposed, by their very existence, present a major problem, and this is exacerbated by confused and complex interpretation on the part of the relevant authorities, particularly the Customs and Excise. A full list of the regulations is set out in early-day motion 820.
  The regulations and their interpretation are driving potential business away from the United Kingdom. We need to debate the matter when we return from the recess, and the national dock labour scheme must be analysed in regard to work within the free trade zones.
  Southampton and Liverpool are both battling against the scheme and registered dock workers. I do not have time to explain the problem fully, but I stress that the scheme and the areas within ports that should be controlled and worked by registered dockers will have to be reviewed.
  8.40 pm
  Mr. Peter Shore: It was not in a spirit of masochism that we tabled our amendment to force the House to sit for an additional two days. We tabled it because we thought that it was right for the House to have a full and proper debate on a matter that the country considers to be of the greatest importance.
  We believe that the issue of public pay policy, with all its implications for millions of people at work, should be debated this side of the recess rather than our being forced into silence until the House resumes late in October. The speeches in the debate—I have counted 17 so far—have justified our decision, because nine hon. Members, from both sides of the House, have devoted their remarks, in whole or in part, to public sector pay and particularly to the Top Salaries Review Body report. We witnessed an astonishing event last night. During my time as an hon. Member I have never witnessed such a large Government majority plummeting so low. I believe that that genuinely reflected the great unease felt not only on the Opposition side, but, clearly, in a large part of the Conservative party.
  Hon. Members on both sides of the House must have realised that there is a direct and personal link between the Prime Minister and the decision taken on the TSRB report. After all, the review body reports directly to the Prime Minister and all of us who have served in Governments know that, while the Cabinet should certainly play its part, this is a matter in which a Prime Minister's personal judgment is bound to play an important part.
  It was interesting to read the comments of The London Standard, a great friend of the Prime Minister, on Monday — before last night's development. It said in an editorial:
  "The Prime Minister's political acumen has always lain in appealing to the popular instinct … In this second administration, especially during recent months, this acumen seems to be failing her. But it has taken the storm over top people's salaries—a storm which everyone but Mrs. Thatcher had seen approaching—to show that she has, with cruelly sudden completeness, lost the common touch."
  The way in which the review body report has been handled reveals an astonishing insensitivity and an astonishing lack
  1118
  of touch, common sense and instinctive understanding of how ordinary people in their millions respond to such issues.
  A succession of Ministers has exchanged views with us, always in somewhat restricted form. We had a private notice question on Friday, which was taken by the Chief Secretary to the Treasury, though hardly to his great credit. We had exchanges with the Prime Minister during her Question Time on Tuesday, the Leader of the House opened a restricted one-and-a-half hour debate on a statutory instrument yesterday and the Minister of State, Treasury was wheeled on today.
  I am inclined to think that it is right to describe top people's pay policy as being explosive material. Indeed, it is a sort of political gelignite. We are told that gelignite sweats, and I suspect that Ministers who have handled the issue so far have also sweated. The Minister of State, Treasury concealed his embarrassment with a great deal of bluster, but he did not add much except another attempt to describe the events of 1978 as though they were relevant to this year's decision. That is not the case and the hon. Member for Beckenham (Sir P. Goodhart) put the issue fairly.
  I assure the Minister of State, Treasury and the House that there is a genuine difference of perception and view. When we were in government our approach to top salaries was clearly that people at the top of the public services should be asked to take a lead.
  Mrs. Kellett-Bowman: What about the 35 per cent.?
  Mr. Shore: Including the 35 per cent. During the period of Labour Government, the real incomes of those on top salaries were considerably reduced. Top people did not have the sort of treatment under a Labour Government that they have received under the present Government. Not only did those on top salaries not even keep pace with the rise in the cost of living under the Labour Government, but they were held well below the average wage increases of ordinary people in that period.
  In the present Government's handling of TSRB reports we have witnessed the precise opposite. In the six years that the Government have been in power, the pay of those with top salaries has substantially outstripped the cost of living and even more substantially outstripped the rise in average earnings. It is precisely the recognition of that unfairness and lack of even-handedness that has been noted and deeply resented by the country.
  Mr. David Heathcoat-Amory: Will the right hon. Gentleman give way?
  Mr. Shore: I shall not give way, because I do not want to encroach on the limited time of the Leader of the House.
  We are not debating only a matter of principle, although a principle is involved. I do not have to convince the House that the Labour party generally favours greater equality in earned and unearned incomes, whereas the Conservative party favours greater inequality in those incomes. That is one of the great divides between the two sides of the House. Therefore, our approach is bound to be different and has been different.
  The Government's failure to understand the reactions of ordinary people to the review body's report and the Government's acceptance of it has serious practical consequences as well as being a matter of principle. Some of those consequences were stated clearly in The London Standard today. It said:

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  "The point is that the Government is operating a policy on pay restraint, and at a single stroke it has been torn to shreds."
  It goes on to say:
  "These pay awards will not be forgotten in the lifetime of this Government. They destroy every shred of moral authority it has to lecture the public and private sectors about holding down pay."
  The practical consequences of that will face the Government and the country in the Government's inability to find a solution to the teachers' pay dispute. The dispute will go on, the schools will come back in September and, I fear, be subject to further disruption and the House will not be recalled until the end of October, with all kinds of developments, which could be of great damage to millions of families and their children. We shall have been rendered incapable of influencing these events by the lack of any proper debate in the House on a matter which we jolly well ought to have debated.
  I believe that the Government have made a profound misjudgment of the national mood. I believe that there is a great and growing resentment of what they have done, and that they would be prudent to accept the amendment.
  8.51 pm
  The Lord Privy Seal and Leader of the House of Commons (Mr. John Biffen): The right hon. Member for Bethnal Green and Stepney (Mr. Shore) has concluded the debate for the Opposition with characteristic courtesy. I join him in paying a tribute to all those who have taken part in a wide-ranging consideration of our affairs before we recess.
  The debate, like the debate this time last year, has to some extent been hijacked by Front Bench considerations. Last year it was the situation in the coal industry. This year it has reference to the report of the Top Salaries Review Body. I quite understand that. Nonetheless, as Leader of the House, I feel that I have an obligation to take account of the traditional nature of the debate, which is that of Back Benchers raising all the topics which are of concern to them. If I have a somewhat truncated period in which to deal with the fairly well argued matters of the Top Salaries Review Body, I am sure that the House will understand.
  First, I pay regard to the speech of the right hon. Member for Lewisham, Deptford (Mr. Silkin), who explained that he could not be present for the reply, in which he said that I should try to secure a direct reply from my right hon. and learned Friend the Home Secretary concerning a constituency case—that of Mr. Michael Thynne, whose parole case is being considered, the right hon. Friend Gentleman thought, somewhat tardily. Of course I will concur with that request, and do all that I can to see that he receives a reply.
  My hon. Friend the Member for Thanet, South (Mr. Aitken) reminded us of the fortunes of the Kent coalfield, and what good prospects there might be if one could move to much lower cost production. I thought that contribution Appropriate, because this time last year we were locked in the drama and agony of the coal dispute. Now we are liberated from that, and we can think in terms of recreating an industry on a happier basis than hitherto. It is a timely reminder that the processes of conciliation have proceeded. Perhaps it is a pity that we do not have a few days under our belt in which to discuss the coal industry and, more particularly, to inquire a little more closely into the attitude of Opposition Members to the organisation
  1120
  which is sought by mineworkers in Nottinghamshire and adjacent coalfields, and to hear from them a ringing denunciation of any comparison of that development with the Spencer movement of the 1920s and 1930s. I am sure that the hon. Member for Rhondda (Mr. Rogers) would be at my side in urging unity in the situation.
  My hon. Friend the Member for Rugby and Kenilworth (Mr. Pawsey) made a powerful speech advocating the interests at stake in his constituency in the face of proposed National Coal Board development. When I campaigned with him some while back, the constituency did not have its current boundaries. I note that its name has been changed by the addition of Kenilworth. I have an uneasy feeling that my hon. Friend has been gentrified.
  Mr. Pawsey: I needed it!
  Mr. Biffen: Indeed, it is a gentrification which I would welcome. I can understand his concern that there should be use of the 1971 legislation on the planning inquiry commission. I will make the point to my right hon. Friend the Secretary of State for the Environment. However, I am sure that my hon. Friend is aware that the NCB has issued a consultative document, and that he will be giving evidence in that context.
  The hon. Member for Barnsley, West and Penistone (Mr. McKay) made a thoughtful contribution about our future energy requirements. I reflected how Conservative Members should all be struck with great humility because, heaven knows, time and again all the forecasts which have been so confidently assertive about the future energy requirements of the country have been falsified by our experience. I was delighted that he made his observations with what I thought was a correct sense of humility.
  My hon. Friend the Member for Teignbridge (Mr. Nicholls) told us of the difficulties in his constituency with the peace convoy, and the supplementary benefit situation which affects those involved. I will certainly refer his remarks to my right hon. Friend the Secretary of State for Social Services.
  Finally— in the sense of constituency interests — I much appreciate the points made by my hon. Friend the Member for Cambridgeshire, South-West (Sir A. Grant) about coroners' courts, and I will of course reinforce his representations to the Attorney-General on the matter.
  My hon. Friend the Member for Harborough (Sir J. Fan) and the right hon. Member for Lagan Valley (Mr. Molyneaux) discussed the prospects for Northern Ireland in the next few months. It is a great tribute to the attention and dedication which the right hon. Gentleman pays to the House that these debates always feature a contribution which reminds us all that the Province, no less than any other part of the United Kingdom, derives its authority from this Westminster Parliament. I am sure that the words of my hon. Friend the Member for Harborough, who has confidence that the Union will be preserved, will be echoed throughout the Chamber. Of course I understand the points made by the right hon. Member for Lagan Valley. He will not expect me to comment upon them. The physical presence of my right hon. Friend the Secretary of State for Northern Ireland was greater evidence than any words which I could say.
  My hon. Friend the Member for Welwyn Hatfield (Mr. Murphy) told us of the virtues of wind power as part of the alternative energies. Although one tends to mild hilarity about such thoughts, I strongly underline what my hon.

  1121
  Friend said. The benign sources of energy, I suspect, will pay an increasing part in our total energy requirements and, as long as the House remains insensitive to these issues, we will insulate ourselves from what is potentially one of the most destructive facets of our public lives—green politics.
  I deal next with the point of the hon. Member for Fife, Central (Mr. Hamilton). I had a mild exchange with him, because I was anxious to protect our respective positions about Members' interests. I appreciate that there is a very real interest in the House in the Select Committee's report, and an anxiety that it should be debated when Parliament returns in October. But I remind the hon. Gentleman of an incident that occurred in this Chamber earlier today. The hon. Member for Linlithgow (Mr. Dalyell) objected to something in a Select Committee report which he avowed was untrue. That avowal was immediately accepted because this House proceeds on the basis that a Member's honour and integrity are assumed. When this House is not able to make that assumption, it will not be able to function by its traditional methods.
  Of course Members' interests are a perfectly natural topic for anxiety both in this House and outside, but the hon. Member for Fife, Central used the words "the integrity of the House". The integrity of this House is better protected in this debate if it is not laced with innuendo and some kind of McCarthyism. That does not get us anywhere in our objectives, which I believe are common to both sides of the House. The hon. Gentleman would think the less of me if I did not say exactly what I meant, but, having said that, I believe that there is a good case for the House turning to that matter in the autumn.
  In the closing minutes I wish to deal with the Top Salaries Review Body. The hon. Member for Jarrow (Mr. Dixon) made a powerful contribution on wages councils. I can promise him that the matter will be the subject of debate and hard-fought discussion in the autumn. The hon. Member for Middlesbrough (Mr. Bell) showed thoughtful concern for the pay of the Lord Chancellor. On at least two occasions he could have registered his objection, but he allowed the measure to go through, so it is a little late in the day to develop such acute sensitivity.
  The hon. Member for Stockton, South (Mr. Wrigglesworth) talked about the Labour party having no economic policy. He ended with a rehash of precisely what was Labour party policy in the late 1960s, when the Labour party was fit for Shirley Williams. That is the slogan of contemporary social democracy. It is back to some kind of statutory incomes policy or one that leans heavily upon nudge and wink and political interference and direction.
  My hon. Friend the Member for Beckenham (Sir P. Goodhart) reminded us that the Government had received a shock. He underlined that by saying that he had voted against the Government last night. However, he said he would be voting for the Government this evening. Well, there is no fallen angel like a born-again Tory. I am delighted to receive his support.
  A great deal of the argument about the TSRB report related to structure. That is what, in some senses, made the report distinct from other reports. The House had to decide whether, given the judgment of the TSRB about what it thought would be the likely deterioration in the quality of senior ranks of the public service, we should take the remedial anticipatory action that it recommended.
  1122
  I think that I summarised that fairly. The decision was taken, and whatever its short-term popularity it is of longterm significance and advantage.
  The hon. Member for Newham, North-East (Mr. Leighton) showed an end-of-term spirit. Having been called to make a speech on the basis of an intervention — which I know is an emotionally destabilising experience — he said that the Government were proposing increases of 50 per cent. It is, of course, increases of 15 per cent. I wave farewell to the hon. Gentleman, who is not at this moment with us, and dispatch him with a pocket calculator in the hope that he will come back in the autumn that much better equipped to take part in our debates.
  I have tremendous affection for the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley). He fits classically into the Macmillan description of politicians — that they are either bookies or bishops. He has a particular skill, in that he is a bookie on most days of the week and a bishop on Fridays, Thursdays, or whatever day happens to suit him. Today was the bishop's day, 'when we were told that the policy was flawed because it lacked social equity——
  It being three hours after the commencement of proceedings on the motion, MR. SPEAKER put the Question, That the amendment be made, pursuant to Standing Order No. 12 (Periodic adjournments).
  The House divided: Ayes 172, Noes 311.

  Division No. 291]

  [9.04 pm

  AYES

  Abse, Leo

  Craigen, J. M.

  Alton, David

  Crowther, Stan

  Anderson, Donald

  Cunliffe, Lawrence

  Archer, Rt Hon Peter

  Dalyell, Tam

  Ashdown, Paddy

  Davies, Rt Hon Denzil (L'lli)

  Ashton, Joe

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

  Atkinson, N. (Tottenham)

  Deakins, Eric

  Bagier, Gordon A. T.

  Dewar, Donald

  Banks, Tony (Newham NW)

  Dobson, Frank

  Barnett, Guy

  Dormand, Jack

  Barron, Kevin

  Dubs, Alfred

  Beckett, Mrs Margaret

  Duffy, A. E. P.

  Beggs, Roy

  Dunwoody, Hon Mrs G.

  Beith, A. J.

  Eadie, Alex

  Bell, Stuart

  Eastham, Ken

  Benn, Tony

  Evans, John (St. Helens N)

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

  Fatchett, Derek

  Bermingham, Gerald

  Field, Frank (Birkenhead)

  Bidwell, Sydney

  Fields, T. (L'pool Broad Gn)

  Blair, Anthony

  Fisher, Mark

  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

  Bruce, Malcolm

  Garrett, W. E.

  Buchan, Norman

  Gilbert, Rt Hon Dr John

  Caborn, Richard

  Godman, Dr Norman

  Callaghan, Rt Hon J.

  Golding, John

  Callaghan, Jim (Heyw'd & M)

  Gould, Bryan

  Campbell-Savours, Dale

  Hamilton, James (M'well N)

  Canavan, Dennis

  Hamilton, W. W. (Central Fife)

  Carter-Jones, Lewis

  Hancock, Mr. Michael

  Clark, Dr David (S Shields)

  Hardy, Peter

  Clarke, Thomas

  Harman, Ms Harriet

  Clwyd, Mrs Ann

  Harrison, Rt Hon Walter

  Cocks, Rt Hon M. (Bristol S.)

  Hart, Rt Hon Dame Judith

  Coleman, Donald

  Hattersley, Rt Hon Roy

  Concannon, Rt Hon J. D.

  Haynes, Frank

  Conlan, Bernard

  Healey, Rt Hon Denis

  Corbett, Robin

  Heffer, Eric S.

  Corbyn, Jeremy

  Hogg, N. (C'nauld & Kilsyth)

  1123

  Holland, Stuart (Vauxhall)

  Prescott, John

  Home Robertson, John

  Radice, Giles

  Hoyle, Douglas

  Randall, Stuart

  Hughes, Dr. Mark (Durham)

  Redmond, M.

  Hughes, Robert (Aberdeen N)

  Rees, Rt Hon M. (Leeds S)

  Hughes, Roy (Newport East)

  Richardson, Ms Jo

  Hughes, Sean (Knowsley S)

  Roberts, Ernest (Hackney N)

  Hughes, Simon (Southwark)

  Robertson, George

  Janner, Hon Greville

  Rogers, Allan

  Jenkins, Rt Hon Roy (Hillh'd)

  Rooker, J. W.

  John, Brynmor

  Rowlands, Ted

  Johnston, Sir Russell

  Sheerman, Barry

  Jones, Barry (Alyn & Deeside)

  Shore, Rt Hon Peter

  Kaufman, Rt Hon Gerald

  Short, Ms Clare (Ladywood)

  Kennedy, Charles

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

  Kirkwood, Archy

  Silkin, Rt Hon J.

  Lambie, David

  Skinner, Dennis

  Lamond, James

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

  Leadbitter, Ted

  Snape, Peter

  Leighton, Ronald

  Soley, Clive

  Lewis, Terence (Worsley)

  Spearing, Nigel

  Lloyd, Tony (Stratford)

  Steel, Rt Hon David

  Loft house, Geoffrey

  Stott, Roger

  McCartney, Hugh

  Strang, Gavin

  McDonald, Dr Oonagh

  Straw, Jack

  McKay, Allen (Penistone)

  Thomas, Dafydd (Merioneth)

  Maclennan, Robert

  Thomas, Dr R. (Carmarthen)

  Madden, Max

  Thompson, J. (Wansbeck)

  Marek, Dr John

  Tinn, James

  Marshall, David (Shettleston)

  Torney, Tom

  Mason, Rt Hon Roy

  Wainwright, R.

  Maynard, Miss Joan

  Wallace, James

  Michie, William

  Wardell, Gareth (Gower)

  Mikardo, Ian

  Wareing, Robert

  Millan, Rt Hon Bruce

  Welsh, Michael

  Nellist, David

  Wigley, Dafydd

  Oakes, Rt Hon Gordon

  Williams, Rt Hon A.

  Orme, Rt Hon Stanley

  Wilson, Gordon

  Park, George

  Winnick, David

  Patchett, Terry

  Wrigglesworth, Ian

  Pavitt, Laurie

  Young, David (Bolton SE)

  Pendry, Tom

  Penhaligon, David

  Tellers for the Ayes:

  Pike, Peter

  Mr. Don Dixon and Mr. John McWilliam

  Powell, Raymond (Ogmore)

  NOES

  Adley, Robert

  Bruinvels, Peter

  Aitken, Jonathan

  Bryan, Sir Paul

  Alison, Rt Hon Michael

  Buchanan-Smith, Rt Hon A.

  Ancram, Michael

  Buck, Sir Antony

  Arnold, Tom

  Budgen, Nick

  Ashby, David

  Burt, Alistair

  Atkins, Rt Hon Sir H.

  Butcher, John

  Atkins, Robert (South Ribble)

  Butterfill, John

  Atkinson, David (B'm'th E)

  Carlisle, Kenneth (Lincoln)

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

  Cash, William

  Baker, Nicholas (N Dorset)

  Chalker, Mrs Lynda

  Baldry, Tony

  Channon, Rt Hon Paul

  Banks, Robert (Harrogate)

  Chapman, Sydney

  Batiste, Spencer

  Chope, Christopher

  Beaumont-Dark, Anthony

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

  Bellingham, Henry

  Clark, Dr Michael (Rochford)

  Bendall, Vivian

  Clark, Sir W. (Croydon S)

  Best, Keith

  Clarke, Rt Hon K. (Rushcliffe)

  Bevan, David Gilroy

  Clegg, Sir Walter

  Biffen, Rt Hon John

  Cockeram, Eric

  Biggs-Davison, Sir John

  Conway, Derek

  Blackburn, John

  Cope, John

  Blaker, Rt Hon Sir Peter

  Couchman, James

  Boscawen, Hon Robert

  Cranborne, Viscount

  Bottomley, Peter

  Crouch, David

  Bottomley, Mrs Virginia

  Currie, Mrs Edwina

  Bowden, Gerald (Dulwich)

  Dorrell, Stephen

  Brandon-Bravo, Martin

  Douglas-Hamilton, Lord J.

  Bright, Graham

  du Cann, Rt Hon Sir Edward

  Brinton, Tim

  Dunn, Robert

  Brittan, Rt Hon Leon

  Durant, Tony

  Brooke, Hon Peter

  Dykes, Hugh

  Brown, M. (Brigg & Cl'thpes)

  Edwards, Rt Hon N. (P'broke)

  1124

  Eggar, Tim

  Kershaw, Sir Anthony

  Fairbairn, Nicholas

  Key, Robert

  Fallon, Michael

  King, Roger (B'ham N'field)

  Farr, Sir John

  King, Rt Hon Tom

  Favell, Anthony

  Knight, Greg (Derby N)

  Fenner, Mrs Peggy

  Knight, Dame Jill (Edgbaston)

  Fletcher, Alexander

  Knowles, Michael

  Fookes, Miss Janet

  Knox, David

  Forman, Nigel

  Lamont, Norman

  Forsyth, Michael (Stirling)

  Lang, Ian

  Forth, Eric

  Latham, Michael

  Fowler, Rt Hon Norman

  Lawler, Geoffrey

  Fox, Marcus

  Lawrence, Ivan

  Franks, Cecil

  Lawson, Rt Hon Nigel

  Freeman, Roger

  Lee, John (Pendle)

  Fry, Peter

  Leigh, Edward (Gainsbor'gh)

  Gale, Roger

  Lennox-Boyd, Hon Mark

  Galley, Roy

  Lester, Jim

  Gardiner, George (Reigate)

  Lewis, Sir Kenneth (Stamf'd)

  Gardner, Sir Edward (Fylde)

  Lightbown, David

  Gilmour, Rt Hon Sir Ian

  Lilley, Peter

  Glyn, Dr Alan

  Lloyd, Ian (Havant)

  Goodhart, Sir Philip

  Lloyd, Peter, (Fareham)

  Goodlad, Alastair

  Lord, Michael

  Gorst, John

  Luce, Richard

  Gow, Ian

  Lyell, Nicholas

  Gower, Sir Raymond

  McCrindle, Robert

  Grant, Sir Anthony

  McCurley, Mrs Anna

  Greenway, Harry

  Macfarlane, Neil

  Gregory, Conal

  MacGregor, John

  Griffiths, Sir Eldon

  MacKay, Andrew (Berkshire)

  Griffiths, Peter (Portsm'th N)

  MacKay, John (Argyll & Bute)

  Ground, Patrick

  Maclean, David John

  Grylls, Michael

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

  Hamilton, Hon A. (Epsom)

  Major, John

  Hamilton, Neil (Tatton)

  Malins, Humfrey

  Hampson, Dr Keith

  Maples, John

  Hanley, Jeremy

  Marland, Paul

  Hannam, John

  Marlow, Antony

  Hargreaves, Kenneth

  Marshall, Michael (Arundel)

  Harris, David

  Mates, Michael

  Harvey, Robert

  Mather, Carol

  Haselhurst, Alan

  Maude, Hon Francis

  Havers, Rt Hon Sir Michael

  Mawhinney, Dr Brian

  Hawkins, Sir Paul (SW N'folk)

  Mayhew, Sir Patrick

  Hawksley, Warren

  Mellor, David

  Hayes, J.

  Merchant, Piers

  Hayhoe, Rt Hon Barney

  Meyer, Sir Anthony

  Hayward, Robert

  Miller, Hal (B'grove)

  Heathcoat-Amory, David

  Mills, Sir Peter (West Devon)

  Henderson, Barry

  Mitchell, David (NW Hants)

  Heseltine, Rt Hon Michael

  Moate, Roger

  Hickmet, Richard

  Montgomery, Sir Fergus

  Hicks, Robert

  Moore, John

  Higgins, Rt Hon Terence L.

  Morrison, Hon C. (Devizes)

  Hill, James

  Morrison, Hon P. (Chester)

  Hind, Kenneth

  Moynihan, Hon C.

  Hirst, Michael

  Murphy, Christopher

  Hogg, Hon Douglas (Gr'th'm)

  Neale, Gerrard

  Holland, Sir Philip (Gedling)

  Needham, Richard

  Holt, Richard

  Neubert, Michael

  Hordern, Sir Peter

  Newton, Tony

  Howard, Michael

  Nicholls, Patrick

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

  Normanton, Tom

  Howarth, Gerald (Cannock)

  Onslow, Cranley

  Howell, Ralph (N Norfolk)

  Oppenheim, Phillip

  Hubbard-Miles, Peter

  Oppenheim, Rt Hon Mrs S.

  Hunt, David (Wirral)

  Osborn, Sir John

  Hunt, John (Ravensbourne)

  Ottaway, Richard

  Hunter, Andrew

  Page, Sir John (Harrow W)

  Hurd, Rt Hon Douglas

  Page, Richard (Herts SW)

  Irving, Charles

  Parkinson, Rt Hon Cecil

  Jackson, Robert

  Parris, Matthew

  Jenkin, Rt Hon Patrick

  Patten, Christopher (Bath)

  Jessel, Toby

  Patten, J. (Oxf W & Abdgn)

  Jones, Gwilym (Cardiff N)

  Pattie, Geoffrey

  Jones, Robert (W Herts)

  Pawsey, James

  Jopling, Rt Hon Michael

  Peacock, Mrs Elizabeth

  Joseph, Rt Hon Sir Keith

  Pollock, Alexander

  Kellett-Bowman, Mrs Elaine

  Porter, Barry

  1125

  Portillo, Michael

  Tebbit, Rt Hon Norman

  Powell, William (Corby)

  Temple-Morris, Peter

  Powley, John

  Terlezki, Stefan

  Prentice, Rt Hon Reg

  Thatcher, Rt Hon Mrs M.

  Price, Sir David

  Thomas, Rt Hon Peter

  Proctor, K. Harvey

  Thompson, Donald (Calder V)

  Raffan, Keith

  Thompson, Patrick (N'ich N)

  Raison, Rt Hon Timothy

  Thornton, Malcolm

  Rees, Rt Hon Peter (Dover)

  Thurnham, Peter

  Renton, Tim

  Townend, John (Bridlington)

  Rhodes James, Robert

  Tracey, Richard

  Ridley, Rt Hon Nicholas

  Trippier, David

  Ridsdale, Sir Julian

  Twinn, Dr Ian

  Roberts, Wyn (Conwy)

  Vaughan, Sir Gerard

  Robinson, Mark (N'port W)

  Viggers, Peter

  Roe, Mrs Marion

  Waddington, David

  Rost, Peter

  Wakeham, Rt Hon John

  Rowe, Andrew

  Waldegrave, Hon William

  Rumbold, Mrs Angela

  Walden, George

  Sackville, Hon Thomas

  Walker, Bill (T'side N)

  Sayeed, Jonathan

  Wall, Sir Patrick

  Shaw, Giles (Pudsey)

  Waller, Gary

  Shelton, William (Streatham)

  Ward, John

  Shepherd, Colin (Hereford)

  Wardle, C. (Bexhill)

  Shepherd, Richard (Aldridge)

  Watson, John

  Shersby, Michael

  Watts, John

  Sims, Roger

  Wells, Bowen (Hertford)

  Skeet, T. H. H.

  Wells, Sir John (Maidstone)

  Smith, Tim (Beaconsfield)

  Wheeler, John

  Soames, Hon Nicholas

  Whitfield, John

  Speed, Keith

  Whitney, Raymond

  Speller, Tony

  Wiggin, Jerry

  Spencer, Derek

  Winterton, Mrs Ann

  Spicer, Michael (S Worcs)

  Winterton, Nicholas

  Squire, Robin

  Wolfson, Mark

  Stanbrook, Ivor

  Wood, Timothy

  Steen, Anthony

  Woodcock, Michael

  Stern, Michael

  Yeo, Tim

  Stevens, Lewis (Nuneaton)

  Young, Sir George (Acton)

  Stewart, Allan (Eastwood)

  Younger, Rt Hon George

  Stewart, Andrew (Sherwood)

  Stewart, Ian (N Hertf'dshire)

  Tellers for the Noes:

  Stradling Thomas, J.

  Mr. Tristan Garel-Jones and Mr. Tim Sainsbury.

  Sumberg, David

  Question accordingly negatived.
  Main Question put and agreed to.
  Resolved,
  That this House at its rising on Friday 26th July do adjourn until Monday 21st October, and the House shall not adjourn on Friday 26th July until Mr. Speaker shall have reported the Royal Assent to any Acts which have been agreed upon by both Houses.

Orders of the Day

  Consolidated Fund 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.

  Local Authority Services (Tendering)
  Motion made, and Question proposed, That this House do now adjourn. —[Mr. Lang.]
  9.18 pm
  Mrs. Angela Rumbold: My objective in initiating this debate is to persuade the Government to consider including in the 1985–86 legislative programme a measure that would compel all local authorities to put perhaps all of their services out to some form of competitive tendering. At present some functions are supposedly undertaken by the private sector. I intend to persuade the Government to consider measures designed specifically to prevent the evasions which are practised and which negate seriously the philosophy behind my proposals.
  A simple change in management procedures would Lead to significant financial savings in the services rendered by local authorities to ratepayers and taxpayers. All taxpayers and ratepayers contribute to the money spent by local authorities. The savings would be considerable, and obviously the delivery of the service can be as efficient and effective, if not more so, through the private sector. The margin of choice within the private sector would be sufficient to benefit all local authority services and their recipients—taxpayers and ratepayers.
  There are already cases of privatisation and of putting local authority services out to tender. Since about 1980 local government has moved in that direction. Southend was probably the first local authority to privatise rubbish collection. It bravely decided to put rubbish collection out to private tender to see whether its in-house service was effective and, if it was not, to see whether the private sector services, which were beginning to be drawn to the attention of local authorities, could be more cost effective. Southend proceeded and discovered that it was a good idea. Because of that, other authorities, mainly Conservative-controlled ones, were persuaded to discover whether savings could be made, while maintaining cost-effective and efficient services.
  The approaches of local authorities were hesitant because it was a new area for them. The advice of their senior officers was negative and they were told that there would be considerable public relations and trade union difficulties. Moreover, local councillors and politicians everywhere tend to be conservative and careful, and to believe that their accountability to ratepayers is such a burden that they must be absolutely certain that their proposals are carefully thought out and will not place a greater burden on taxpayers and ratepayers, whom they are supposed to serve.
  Mr. Richard Tracey: My hon. Friend may be coming to one of the most powerful arguments for privatising services, which is the borough of Wandsworth. Such savings have been made there that its rates are now half of those in the neighbouring borough of Lambeth, which persists with the services of its staff.
  Mrs. Rumbold: I had every intention of coming to that point, not merely regarding the significant savings made in the London borough of Wandsworth by its brave entry into private sector transactions, but my London borough of Merton, whose courageous leader has led it into new private sector tendering, which has brought considerable savings.
  I want to make this point absolutely clear, because it is important. When we talk about the effectiveness of local authorities tendering for services in the private sector, we must always accept that part of the philosophy behind that is to seek financial savings as well as good services and to look for the lowest tender, which had been the practice of every local authority which has gone out to and had dealings with companies in the private sector.
  I urge the House to consider carefully that there is always a possibility of councillors, advisers and others making mistakes from time to time. The private sector is not always the absolute panacea. However, the possibility of a mistake and of having to retender is no reason for not pursuing the theory and, I hope, the practice of going out to competitive tender. Local authorities would always be able to extricate themselves from a tender that was proving less than satisfactory. I hope that they would always be able to go back to the market place to get a more suitable tender should the one that they have chosen prove not wholly satisfactory for the ratepayers in the delivery of services.
  All that can be clearly demonstrated by boroughs such as Wandsworth and Ealing, which followed Merton in the last financial year and put out to tender its catering services and part of the provision for meals on wheels. The saving was over £700,000 on a £2 million contract — an extensive saving. At a time when local government is rightly under pressure to seek ways in which to reduce expenditure, but does not want to endanger the services that it delivers, it should examine more effective ways of delivering those services. It has been proved beyond doubt that the private sector can help in that regard.
  Wandsworth has gone to the private sector for street cleaning, vehicle maintenance and other public cleaning services, and saved more than £1 million on a contract worth nearly £3 million. Many other district and county councils make similar or smaller savings in that way.
  This is only the fifth year in which serious attempts to put out to tender have been made and become fashionable. The record of privatisation shows that many local authorities, of which there are well over 500, do not put any of their services out to tender in the private sector. Many have tried to do so and have then retracted. That is an even worse sign that local government lacks the motivation and is suffering from inertia, and therefore needs Government pressure to make it imperative that local authorities put their services out to competitive tender in the private sector.
  Only one metropolitan borough outside London —Solihull — is actively involved. At least nine county councils have not put any of their services out to
  1128
  competitive tender. Even Conservative councils, which should be ideologically sympathetic to the concept, are far from a good example. That is a matter of some shame.
  It is important to explain why councillors find it difficult to steel themselves to go out to tender. Many hon. Members will be familiar with the problems. A group of councillors decides to venture into the private sector. The imperative is usually the need to live within a budget. The councillors tell the officers that they have the brilliant idea of putting catering, cleaning or street cleaning out to tender. Many private firms are quick to attract local authorities.
  The process is complicated because the officers tell the councillors that the idea is good and that the officers will make a report. Six weeks later, the report says that the idea is excellent and could achieve X or Y savings. The councillors think it is all good stuff and then turn over the page and see the big but. They are told, "If you follow that course, councillor, you will have problems with the work force. You will not make savings for at least two years because the redundancy costs will be enormous. Anyway, the direct labour force could probably come up with just as good an offer. Frankly, councillor, it would be better not to bother."
  Many councillors will then consider that there is an election in 18 months and that they do not want difficulties with the work force and an adverse press. The easiest thing is to agree with the officers. The private firm then says that it has taken on board all of the on costs and other things in the complicated tender documents.
  The councillors reply, "We will take the offer from the in-house people because, although we shall not make quite the same savings, it is better to keep our people and easier and safer for us."
  That is the problem — there is no compulsion for local authorities to go out to the private sector. If local authorities have to go out to competitive tendering, councillors would concentrate less on protecting direct labour and more on getting the best services. There would be plenty of competition because there are plenty of people in the private sector who want to provide local authority services.
  We must not set our sights too low in terms of what can be put out to competitive tendering. We have limited ourselves to manual functions such as council house maintenance, street cleaning, rubbish collection, park maintenance, school meals and some social services meals. But that is not nearly enough. Many more local authority services could be put out to competitive tender. There are many accountants, solicitors, surveyors, estate agents and architects in the high street, yet very few of them are employed by local authorities to do a complete job. It is possible to envisage a situation in which the high street professionals are just as much involved in local authority dealings as are the manual workers.
  It is high time that we looked at in-house services. I wonder how many administrators in town halls disappear from council lists when contracts for rubbish collection, street cleaning, maintenance or school catering are given to private contractors. I am not saying that local authorities are not good at reducing the number of people that they employ. They have a very good track record. Indeed, it is far better than that of the Government who are supposed to be dedicated to the principle of reducing——
  Mr. Jim Craigen: If I follow correctly the hon. Lady's logic, does that mean that the jobs of the town clerk and the director of finance will be put out to tender?
  Mrs. Rumbold: I am not opposed to the idea that eventually councils could spend most of their time looking at competitive tenders and very little time looking at whether or not they will have 17 or 18 meetings each month.
  Mr. Michael Brown: My hon. Friend may care to know that when it was Labour controlled the Humberside county council decided to dispense with the services of its chief executive.
  Mrs. Rumbold: I am grateful to my hon. Friend. Many councils have toyed with the idea of dispensing with their chief executives, and many of them have done so. I have not found that many of the authorities that dispensed with the services of their chief executives have been won over to the idea of reappointing them.
  Mr. Jeff Rooker: Apart from Birmingham.
  Mrs. Rumbold: Yes, indeed, apart from Birmingham. That says something about the efficiency of local authority chief executives. I hasten to add that I have no prejudice against chief executives. The chief executive of Birmingham is an excellent gentleman who does his job, I am sure, just as competently as when he was the chief adviser to the Association of Metropolitan Authorities.
  It is important to realise that nothing in local government is absolutely sacred. There is nothing sacred about any of our bureaucratic services. We must make it seem important and necessary for local authorities to consider competitive tendering. The sooner we do so, the better will be the services that are provided for the consumer. The ratepayer should be given every possible consideration.
  I have no objection to paying some form of local tax, but the local rate or tax that is administered by locally elected councillors, for whom I have a great deal of admiration, should be spent to the best effect upon those who are least able to help themselves. It should not be squandered on massive bureaucracies when those in the private sector could do the job just as effectively for half the price. I urge the Government seriously to consider introducing some form of legislation as early as possible to make competitive tendering an absolute necessity for local government.
  9.39 pm
  Mr. Neil Hamilton: The House should be grateful to my hon. Friend the Member for Mitcham and Morden (Mrs. Rumbold) for introducing the debate. She spoke for the vast majority of Conservative Members. Indeed, 205 hon. Members have signed early-day motion 895, in the name of my hon. Friend the Member for Cambridgeshire, South-West (Sir A. Grant), which states:
  "That this House believes that, in the interest of obtaining better value for money, local authorities should be required by law to submit to competitive tender a wider range of their functions and services."
  I hope that the Government will pay attention to the strong feelings among Conservative Members, and will recognise our disappointment if the Queen's Speech in November does not contain a provision to extend contracting out and privatising in local authorities. It has
  1130
  been of great benefit to the ratepayers in the authorities where it has already been tried. My hon. Friend the Member for Mitcham and Morden, with her customary eloquence, deployed the arguments with irrefutable logic. I hope that that view will be shared by my hon. Friend the Under-Secretary of State and that, even if he cannot leak the details of the Queen's Speech in public, he will at least give us a hint of what it will contain.
  The argument behind our request that local authorities should be required to put out contracts to tender is that councillors are trustees of ratepayers' money. The little empires over which they preside, with their chief officers and all their employees, are not there for their benefit or to boost their pride; they are there to serve ratepayers and to provide value for money. Competition inevitably produces a downward pressure on costs and an upward pressure on standards. If that spur is removed, there is bound to be a diminution in standards and an increase in costs. That benefits no one except those who derive their incomes from the inefficiency which it disguises.
  Those municipal empires should be broken up where there is palpably no will among those who are presently responsible to break them up. That would be in the interests of ratepayers and of those who benefit from the services provided by local authorities. Therefore, I disagree with my seven hon. Friends who signed an amendment to early-day motion 895, saying that it would be an attack on local democracy. It would be precisely the opposite. It would achieve what is desired by ratepayers in many parts of the country, even in areas that are Conservative-controlled, but which they are being denied.
  There are many theoretical arguments to show why competition would be likely to reduce costs and improve standards. The experience of the private sector should be ample evidence. Many companies do not have so-called direct labour departments, because they believe that it is much more efficient to contract out their cleaning services and office maintenance provision. The reason is that contractors must provide high standards. If they do not, they will lose the contract. During the contract period, they may render themselves liable to penalties. With a direct labour department, it is almost impossible to apply discipline, because it is difficult to dismiss employees. However, it is easy to end a contract or to sue someone who has breached a contract. The person who purchases the services provided by a contractor removes from his overheads the worries and other complications that arise from running an in-house service.
  As my hon. Friend the Member for Mitcham and Morden so eloquently explained, considerable cost savings can be made. As a ratepayer in the borough of Wandsworth, I am well aware of the great benefits that I have derived from the eight years of Tory control. That was first under the leadership of my hon. Friend the Member for Southampton, Itchen (Mr. Chope), who can be said to have pioneered this drive to efficiency in local government. This was recognised by Her Majesty, who made him an officer of the Order of the British Empire. We might extend the honours system to encourage councillors to provide the benefits provided by my hon. Friend for myself and other Wandsworth ratepayers as an alternative to making competitive tendering compulsory. This might be a more efficacious way to achieve the beneficial results that we all desire.
  The difference between the borough of Wandsworth and the borough of Lambeth, part of which is represented

  1131
  by the hon. Member for Norwood (Mr. Fraser), is marked. They have similar populations, about 250,000 inhabitants, but the number of staff employed to provide identical services is radically different. In Wandsworth, for example, there are 1,300 labourers, whereas in Lambeth there are 3,500. In Wandsworth, there are nearly 3,000 non-manual workers, whereas in Lambeth there are over 5,000. The borough rate in Wandsworth is 26·44p in the pound, whereas in Lambeth it is 129·34p in the pound. Between 1979 and 1983 Wandsworth decreased spending by 6 per cent. whereas Lambeth increased spending by 69 per cent.
  The costs of the services provided by the authorities are directly responsible for the difference between those two figures. For example, refuse collection in Wandsworth costs £8·70 per head a year, whereas in Lambeth it is more than twice that—£17·58 a head. Caretaking costs £8·81 a head a year in Wandsworth and £25 in Lambeth. Street clearing costs £3·38 a head a year in Wandsworth and £9·17 a head a year in Lambeth.
  Nobody visiting those two boroughs would think that Wandsworth's provision of services is any less expensive than it is in Lambeth. The difference in cost is accounted for entirely by the differences in efficiency. One could go through the services that Wandsworth has either contracted out or privatised and compare that with Lambeth and other boroughs and come to the same conclusion. I fail to see what arguments can be deployed against making it compulsory for local authorities to provide value for money in the provision of services for their ratepayers.
  It is a mystery to me why, given the difficulties that the Department of the Environment has had with local government in recent years, particularly with rate capping, we have not fastened upon this before now as a means of keeping the rates down, thus obviating the necessity to introduce rate capping, which has been controversial. Such a move would not be controversial except for those who have something to hide or an empire to defend and are frightened of opening themselves to the spur of competition with somebody who would be more efficient in providing the same service.
  We know how defensive the unions can be. They employ not logic but the bully-boy tactics that we saw in the miners' strike. In Wandsworth, some appalling examples of violence occurred in the early years when the council was contracting services out. Machinery was vandalised, lorries burnt out, sugar and sand put into fuel tanks of vehicles, tyres slashed, hydraulic systems severed, depots and offices burgled, papers and work rotas stolen. This abominable story occurred in other local authorities. Where such people cannot succeed with argument, rationality, logic and experience, they will resort to the bully-boy tactics which have happily proved ineffective but which, for those who had to suffer them, are frightening.
  Mr. Peter Lilley: Did the National Council for Civil Liberties demand an inquiry into these actions in the same way as it did in the miners' strike?
  Mr. Hamilton: I regret to say that my knowledge of the National Council for Civil Liberties is hearsay only. I am not a member of that organisation, and will probably now be disqualified from membership, as its concern for civil liberties seems to be rather partial.
  1132
  The experience of recent years is clear. It must now be in the interests of all ratepayers to oblige authorities to put contracts out to tender. Nobody is saying they have to be awarded to private enterprise, because if a direct labour organisation can produce a competitive tender, the work can be awarded to it. Many factors then have to be borne in mind to decide whether the contracts are being awarded on the same terms, but the evidence from authorities around the country appears to be that the requirements placed on contractors are much more onerous than those placed upon the direct labour organisations. Some of my hon. Friends who are hoping to speak might dilate upon that.
  I will content myself with those few remarks, and seek to reinforce what I said at the beginning to my hon. Friend the Minister: there will be grave disappointment in the country if we do not take this radical but beneficial step which will benefit ratepayers and will also at the end of the day electorally benefit the Conservative party. That is not something which in present circumstances we are entitled to ignore.
  9.51 pm
  Mr. Peter Lilley: I congratulate my hon. Friend the Member for Mitcham and Morden (Mrs. Rumbold) on having the inspiration to call this debate, and on the eloquence with which she has deployed her powerful arguments, ably seconded by my hon. Friend the Member for Tatton (Mr. Hamilton).
  I must declare an interest. I am a ratepayer, and as such I have a vested interest in keeping my rates as low as possible and keeping the quality of my services as high as possible. There is only one conceivable way in which those twin objectives can be reached, and that is by improving the efficiency with which services are provided. There is only one way in which the efficiency of services can be improved, and that is to give those who provide and manage the services a financial incentive. The most likely way to achieve that is to follow the suggestions in this debate and introduce compulsory competitive tendering for local authority services.
  There is ample evidence that competitive tendering works when it is applied. There is even evidence that it works when it is merely sniffed at. In every case where local authorities have suggested looking at compulsory tendering, savings have been found with almost miraculous ease by those providing the services in-house. Trade unions came forward with suggestions for improvements in manning which they had long resisted, and managements came forward with suggestions for new techniques and new ways of approaching problems which they had for years failed to suggest to elected members. If the smell of competitive tendering produces those desirable results, tasting it is likely to be even better.
  The second piece of evidence that competitive tendering works is that it is applied by commercial companies. I recently visited a number of companies in my constituency and had the pleasure of eating in their canteens. In each case I asked the management who had provided the canteen facilities and I was told that management had contracted it out to the most efficient and most competitive supplier. I was told that that had been done not simply to save money on the service but also to save time and involvement in supplying a facility which

  1133
  was necessary for the staff, in which management had no particular expertise and did not want to become unnecessarily involved.
  I have visited a BUPA hospital in my constituency which puts its cleaning service out to tender. It goes much further than the state sector because the cleaners are not only required to clean the floors, but are responsible for ensuring that all the services in the wards and rooms in which they work operate effectively —that light bulbs and loo rolls are replaced, and so on. The hospital gets additional value for money from its cleaning services.
  The third piece of evidence that competitive tendering works is that it is already applied by many local authorities that have made well-documented savings on various services by replacing in-house facilities with outside contractors.
  In the blissful days when the district council in my constituency was still in the hands of the Tories, it contracted out the cleaning of toilets. In that small aspect of local government, the council saved £20,000 per annum to the benefit of the ratepayer, while improving the quality and cleanliness of the toilets so that people actually used them.
  It is noteworthy how far people go to try to conceal the obvious savings that are being made by contracting out services. We saw an extraordinary example of that attitude in the sixth report of the Select Committee on Social Services which said that the £9 million savings made by putting NHS services out to tender constituted a saving of only 1 per cent. The Committee said that that was a derisory amount, but it failed to say that the saving was about 1 per cent. of the NHS budget, but more like 25 per cent. of the budget for the services that were contracted out. That shows the scope for savings if the practice is extended more widely throughout the NHS and among local authorities.
  My main purpose is to emphasise that savings made by contracting out services are almost invariably far greater in the long term than those that can be measured in the short term. When a local authority contracts out a service, it makes the easily measurable, short-term savings in increased efficiency, but it also gains the immeasurable long-term benefit of flexibility.
  We live in a changing world and demands for services are constantly changing, as are ways of supplying those services. If the supply is in-house, the council is fixed to a method and quantity of provision and it is difficult for it to adapt to changing needs and opportunities. Consequently, one finds throughout local government services that reflect past demands and not current needs. The ability of local authorities to adapt is hindered by the fact that they have a vested interest in the continued provision of a service.
  If a local authority has regularly bought in its architectural services and requires less architecture and building for a while, it ceases to buy in so much service. The onus is then on the architects to find work elsewhere, which they are geared to do.
  The long-term savings from contracting out are far greater than the short-term savings, which are already large enough to justify our making it compulsory for local authorities to go out to tender much more.
  We should consider whether it ought to be compulsory for local authorities that contract out to use an external contractor or whether they should be allowed to continue using in-house services if they can show themselves to be
  1134
  as competitive or nearly as competitive as external contractors. Most of my hon. Friends would accept that in-house services should be allowed to win the competitive tendering process and continue to provide services. The reason why some people would advise against that possibility is that they believe that the contracting-out process is inevitably biased in favour of the in-house service and that no proper measurement can be made of the costs that that service imposes on the ratepayers.
  Plenty of contentious costings have occurred in contracting out. In my local area, the North-West Hertfordshire health authority considered contracting out laundry services. It concluded that its in-house supplier was more efficient than any outside supplier. I have received a letter from an organisation called the Association of British Laundry, Cleaning and Rental Services, which claims that the costings of the area health authority concealed the fact that many costs were not taken account of when the in-house facility won the contract. I know many of the people in my local area health authority. They are able and competent people, and I am inclined to believe them rather than this body, with which I have no connections.
  If the in-house service is more competitive than the private enterprise competitor, surely the in-house service should be hived off as a separate unit and enabled itself to compete in the market place and to provide the service. If the public sector has built up expertise and ability to satisfy demand more efficiently than the private sector yet can, the in-house services should be liberated to extend their provision. Indeed, my area health authority laundry service already caters for other hospitals from further afield, not just St. Albans. Surely those excellent and efficient local workers should be enabled to operate more commercially, and provide the benefits of their efficiency to other aspects of the Health Service. A similar process should take place in the local authorities when competitive tendering is extended to them.
  If the in-house service in an area proves competitive and effective, the law should be changed to encourage and enable it to be set up as a commercial enterprise competing in the market place and extending its skills.
  I join other hon. Members in urging the Government to recognise that this policy should be a pivotal part of the strategy in improving the quality and reducing the cost provision of the public sector. I hope that legislation will be introduced before too long to ensure that the country and my constituents gain the benefits of compulsory competitive tendering as soon as possible.
  10.2 pm
  Mr. George Gardiner: I am grateful for the chance to make a brief contribution to the debate, which was opened so admirably by my hon. Friend the Member for Mitcham and Morden (Mrs. Rumbold). My hon. Friend has summarised the arguments so eloquently and others of my hon. Friends have amplified them so effectively that there is not a great deal left to say.
  My hon. Friends gave their own examples and the experience of councils that have gone to privatisation and competitive tendering, starting with the pioneer work at Southend. My hon. Friend the Member for Mitcham and Morden referred to the experience in her constituency. My hon. Friend the Member for Tatton (Mr. Hamilton) gave eloquent evidence of the experience in Wandsworth. These are not isolated examples.

  1135
  Anybody who consults an admirable publication entitled "The Public Service Review", which is backed up by a distinguished academic council on these matters, and details all the developments in an admirable way, will see a long list of local authorities — apart from health authorities, which are also covered—that have made substantial annual savings as a result of putting out certain works to competitive tendering.
  We make a mistake if we concentrate entirely on the financial gains that are to be achieved for ratepayers. In many cases, real improvements are made in the quality of service. As it is so well documented, I refer to the experience of the city of Bath. In 1983, it awarded contracts for four municipal services, street cleaning, domestic refuse collection, trade refuse collection and public convenience cleaning to a private contractor, which got on with the job quickly and efficiently and established good local relations with the employing council and the local population.
  It is interesting that six months after the contractor had begun work, the local daily newspaper, the Bath and West Evening Chronicle, which I know well, printed a questionnaire asking its readers what they thought of the new service. Ninety three per cent. said that the service was at least as good as hitherto and, significantly, more than one third said that it was far better. The ratepayers of Bath said that it was a welcome all-round improvement; that the dustmen kept to their scheduled days and were more reliable; that the services were provided by a civil and obliging work force and that in every respect the service that they were receiving was superior to the previous service. In addition, the council will save £1 million over a five-year period.
  With those benefits available, why do not more local councils take up the opportunities offered by this policy? My hon. Friend the Member for Mitcham and Morden summarised the sort of restricted choices sometimes put to councillors by their officers. Undoubtedly, the activities of many of the public service unions, organised and coordinated by the National Union of Public Employees in particular, constitute a positive disincentive to local authority leaders wishing to embark on that road.
  My hon. Friend the Member for Tatton listed the gruesome experiences of workers in Wandsworth when services were first privatised. Many councillors have said that they do not want to suffer a similar experience. That is why I argue that local councils need the protection of a statutory duty to go for competitive tendering. That will protect them against bullying.
  I echo what my hon. Friend the Member for Tatton said. I and many of my hon. Friends will be deeply disappointed if there is not a positive reference to this matter in the Queen's Speech and if steps are not taken in the coming Session to achieve far wider competitive tendering in local council services.
  It is an appropriate day to say that I yearn for some popular decisions and popular policies to emerge from our Government. I have the feeling sometimes that my right hon. Friend the Secretary of State for the Environment has, perhaps, forgotten what it is to be popular in the policies that he advances. Perhaps he shies away from it from fear of the unknown. I hope that I am being unfair to him and that in his review of these matters he will recognise that
  1136
  the policy that more than 200 of my hon. Friends have endorsed in an early-day motion will be popular not only throughout the Conservative party but in the country.
  10.8 pm
  Mr. Michael Brown: I echo the remark of my hon. Friend the Member for Reigate (Mr. Gardiner) that more than 200 of our hon. Friends have signed the early-day motion. It is something that my right hon. Friend the Secretary of State for the Environment could embrace in the certain knowledge that on the Conservative Benches it will be a policy which is popular and successful and which will be endorsed in the Division Lobbies.
  It has been a difficult year for Ministers at the Department of the Environment. They have had to pilot through contentious legislation. My right hon. Friend the Secretary of State is now invited to envisage legislation for next Session which would have the support of the overwhelming majority of Conservative Members. My hon. Friend the Member for Mitcham and Morden (Mrs. Rumbold) explained, in an eloquent speech containing some fine examples to support the case she was making, why that support would be forthcoming.
  My county council of Humberside was Conservative controlled until 1981. I am pleased to say that, after the local elections earlier this year, it is again Conservative controlled. The policy of privatisation was clearly endorsed by the electorate who, having had the opportunity of privatisation removed from them between 1981 and 1985, now recognise the penalty that they had to pay for not having Conservative representation locally. As they voted they recalled the high rate demands that had been imposed on them during those four years.
  However, there is a hesitancy to take positive action on the part of some local authorities which are still in pawn, as it were, to their chief executives and chief officers. I confess that the councillors in one of the district councils which I represent and which is Conservative controlled are more frightened of the council officials than of the electorate. I suspect, however, that as we move towards the 1987 district council elections, those Conservative councillors will recognise, as have Liberal councillors, the power of the electorate over the permanent officials.
  There is a reluctance on the part of less professional councillors to initiate action which would conflict with that of the permanent officials. I am not criticising councillors who are not particularly professional. They bring to bear their experience of public life and it is important to have that reflected in local authorities. However, they become victims of the power of public officials, and I regret to say that there are some Conservative-controlled authorities in which the non-elected professional official is more concerned for the empire over which he presides than for savings that can be made for the ratepayer. Many disappointed Conservative voters look to the Government to redress the balance where there has been an overbearing influence on the part of public officials over the elected representatives.
  I need not add to the illustrations that have been given by my hon. Friends of savings that have been made in recent years. Bath, among other local authorities, has been mentioned. I have with me a list showing every authority that has voluntarily submitted itself to competitive tendering. The document contains the local authorities, contractors and savings that have been achieved, and it is

  1137
  interesting to note that in the financial year 1984–85, the savings totalled £31,106,785. Ratepayers of every political complexion were saved that sum by local authorities which submitted themselves to competitive tender.
  The time has come when we have had sufficient experience of competition in this sphere for the Secretary of State to acknowledge that if £31 million-odd could be saved by those local authorities, enormous additional sums could be saved if every local authority tried to achieve similar economies.
  I accept that there are some professional well run in-house services that are as efficient as any private enterprise service, but competitive tendering would enable the in-house service to prove its efficiency. Unfortunately, my experience of voluntary competitive tendering is not a happy one. The local councillors of one of the authorities in my constituency decided finally to take note of the electors' voice and to accept competitive tendering. The lowest tender was provided by a private contractor, but the power and the voice of a public official was such that he had an overbearing influence on the councillors. Accordingly, they were minded to invite the in-house service to re-submit a new and lower tender. That is not good practice. Ratepayers should be protected from that experience by legislation, which Ministers at the Department of the Environment have the authority to bring to the House.
  A relevant early-day motion has been tabled this year and the same motion was tabled in the 1983–84 Session, when it was supported by over 200 of my hon. Friends. My right hon. Friend the Secretary of State for the Environment richly deserves some popularity and the early-day motions on this issue signal that if the necessary piece of legislation is introduced in the next Queen's speech, it will have the support of the overwhelming majority of Conservative Members and that of the overwhelming majority of ratepayers and voters throughout the kingdom.
  10.18 pm
  Mr. Gerald Howarth: I congratulate my hon. Friend the Member for Mitcham and Morden (Mrs. Rumbold) on initiating the debate. Likewise, I congratulate my hon. Friend the Member for Brigg and Cleethorpes (Mr. Brown) on having contributed to it in such a spirited fashion. It has been a useful debate and many interesting arguments have been advanced on the advantages of competitive tendering.
  One of the most distinguishing features of the previous Labour Government, much to the chagrin of many Labour Members, was their virtual surrender of policy-making to the trade unions. When the Industrial Relations Act 1971 was repealed, the trade unions were given the right to immunity over a wide range of industrial disruption practices. Direct labour organisation and dock workers were given exclusive rights to jobs. Like Cromwell's new model army, trade union organisation became a monster. Finally, in the winter of discontent, it throttled its masters, and in 1979 the Labour Government fell, to be replaced by a Conservative Government. Some of the slogans that appeared at that time illustrated clearly what was going on. When the gravediggers were on strike, the following slogan appeared, "Vote Labour and dig your own grave".
  It had become clear at that time to the British public that the monopoly supply of public services in the state sector
  1138
  had concentrated power in the hands of politically inspired union leaders. That led to an undesirable stranglehold over the public, with costly and inefficient services to boot. I put my remarks in this context because contracting out is not designed, as has been suggested by the unions, to line the pockets of private contractors. It has been designed for three specific purposes: first, to ensure that there are multiple sources of supply of services to prevent patients and the public from being held to ransom; secondly, to ensure the cost-effective supply of those services—often saving substantial sums of taxpayers' and ratepayers' money—and, thirdly, to ensure that those who supply the services can have the benefits of working in the private sector
  It is thanks in large measure to the efforts of my lion. Friends the Members for Stirling (Mr. Forsyth) and for Southampton, Itchen (Mr. Chope) that the concept of contracting out local authority services has rapidly taken hold. It is true that a number of United Kingdom companies have already been engaged in the provision of ancillary services—for example, Crothall and Co. has been responsible for all the domestic services at Stoke Mandeville hospital for no less than 23 years. There is nothing new about what is happening. Crothall's parent company, Pritchards, and companies like Grand Met are extensively active overseas earning valuable foreign exchange for the United Kingdom.
  What has been the record to date? According to the "Public Services Review", which an excellent publication —we can provide you with a copy Mr. Speaker, should you so desire because, if you find the rest of tonight's debate boring, it would make fascinating reading—no less than £31 million in public funds will be saved by using private companies instead of in-house labour to provide public services. Many of those savings have come from the NHS. The Select Committee's report was misleading in this respect. If the savings that have been made so far in the 3 per cent. of hospitals that have put their services out to tender were translated across the board, about £200 million would be saved—a substantial sum.
  I welcome the answer that my hon. Friend the Under-Secretary of State for Health and Social Security—the hon. Member for Oxford, West and Abingdon (Mr. Patten)—gave on 29 May when he said:
  "The competitive tendering policy in the NHS is proving a great success. These are real savings in the cost of support services. They are not being achieved by lowering standards."
  Significant annual savings have also come from local authorities. In Southend, the street cleaning operation has saved £600,000. Under the guidance of my hon. Friend the Member for Itchen about £2,670,000 per annum is being saved. Wandsworth will be the first local authority in London to hand over council estate caretaking to a private firm. That company will employ 23 caretakers and is expected to save the council £400,000 per annum and to give improved services.
  It looks as though this is a catching mood, because not only is the Conservative party committed to this policy but the Liberals appear to have jumped on to another bandwagon — this time a sensible one. That is extraordinary. I notice that the hon. Member for Leeds, West (Mr. Meadowcroft) has joined us. It is a pity Liberal Members were not here earlier to hear much that would have enlightened them. Six Liberals on Bristol city council recently supported a Conservative proposal calling for all council work over £20,000 to be open to competition.

  1139
  instead of being handed to the council's direct labour organisation. Last year, the DLO lost more than £2 million. As the Liberal deputy leader on the council said:
  "We don't want to keep the organisation afloat by feather-bedding. It must become viable and efficient."
  Undoubtedly, those words will haunt his colleagues when they find themselves voting for Socialist measures.
  Further progress is threatened for three reasons. First, some Conservative local authorities are reluctant to put their services out to tender. They think somehow that going out to tender is an admission of their inefficiency. A couple of years ago, I asked my father, who was a member of the council of the royal borough of Windsor and Maidenhead, what services he had put out to tender that week. He said, "We have the finest refuse collection service in the country." When I said, "Put it out to tender and then you will see whether it is right" he was less than keen to do so.
  Tendering should not be seen as an admission of inefficiency. It is felt that the public sector alone can handle these matters, but we must not forget that the private sector provides our fighter aircraft and our food. The private sector can provide those goods.
  The second reason why further progress is threatened is union sabotage. Mr. Sid Cresswell, branch secretary of the Transport and General Workers Union, commenting on his campaign against the privatisation of refuse collection by Rugby borough council, said:
  1140
  "We have to meet atom bombs with atom bombs."
  In many other cases the unions are clearly endeavouring to prevent the privatisation programme from continuing by disrupting it. I hope that Opposition Members will reject that.
  The third reason is because of the unfair conditions being imposed on private contractors. I shall cite two examples. First, to compare like with unlike, in-house departments, sometimes intentionally and sometimes in all innocence, omit overhead costs from their tenders. Typically, they include a share of central administration costs, such as payroll, training and recruitment. Other examples abound. Secondly, regarding obstructive contract conditions, NUPE's education pack,
  "Improve Public Services … Shut Out Contractors"
  —note that contradiction—states
  "If action to prevent the council (or by implication health authority) proceeding with tenders fails, then the next tactic should be to make the tendering conditions as tough as possible. Imposing conditions will cost the contractor money and that means (his) tenders will be higher.
  That is absolutely disgraceful.
  Competitive tendering has been a proven road to greater efficiency of operation, reduced burdens on the ratepayer, and better job satisfaction for the employees. To encourage our more timid councillors of all three parties, I hope that my hon. Friend the Parliamentary Under-Secretary of State will take back to his Department the clear message from my hon. Friends and me that we should like to see compulsory competitive tendering in the next Queen's speech.

  Local Authority Services (Tendering)
  10.27 pm
  Mr. John Fraser: There are many propositions on competitive tendering. The first is that every service or all goods that are bought in by a local authority should be subject to competitive tender. I endorse that proposition, and have helped it by tabling an amendment to the Competition Act 1980, as a result of which local authorities can be accused of anti-competitive practices if they try to have cosy anti-competitive arrangements, for example for demolition contracting. There is no difference between the two sides of the House on that.
  The second proposition was adopted by the Government in 1980 with the Local Government Act 1980. It is that direct works departments should be subject to tendering. From that comes a further development in the Government consultative document, which is that some other services should be put out to competitive tendering, not as a matter of choice for an elected local authority, but of compulsion. It includes refuse collecting, cleaning buildings and vehicle maintenance.
  Tonight a fourth proposition is being argued, which is that virtually every service run by a local authority should, if possible, be put out to private tender. That seems to fit in with some of the Government's suggestions, for example on housing management, and that the ownership of housing should be placed in the private sector. In other words, there should be limitless opportunities for the private sector to compete.
  The Opposition agree that ratepayers are entitled to efficiency from their local authorities. I constantly urge my local authority to be efficient and to get value for money, as I am sure many hon. Members do with theirs. That is why I tabled an amendment to the Competition Bill, as it was.
  We are not opposed to direct labour organisations being able to compete on fair and equal terms and being exposed to the wind of competition. For instance, in Sunderland, the passenger transport executive is putting the construction of a bus station out to tender. Previously bus stations were built by the direct labour organisation. We see no reason why the direct labour organisation should not even be able to compete with people in the private sector. That is an excellent idea.
  One often sees large scale renovations undertaken by direct labour organisations. One or two houses on an estate bought by people under the right-to-buy legislation might need a new roof as badly as houses owned by the local authority. We see no reason why a direct labour organisation should not be entitled to compete with the private sector on such house renovation and improvement work. The odd thing is that in several contributions to the debate we have not had a single word about such competition from the public sector——
  Mr. Lilley rose——
  Mr. Fraser: I shall not give way, as I am short of time.
  The GLC's supplies department is now being broken up. It has added a great deal to the competitive buying edge of local authorities in Greater London.
  Those matters should be subject to the choice and judgment of the local authority, not compulsion. Local
  1142
  authorities are entitled to make a rounded judgment on how they spend their money and provide their services. Those are matters for local authorities chosen by electors who have a vote. If electors do not like the way in which a local authority is conducting its affairs, they can change those arrangements.
  Local authorities are also entitled to consider a wider measure of performance than mere price, such as the quality of service and the fulfilment of social objectives. They can take account of employment policies, equal opportunities among different races, and the elimination of sexual discrimination, for example. The real reason for debates such as this, for the one-sided attack on local authorities and the desire to push out to competitive tendering, is that Conservative Members want the private sector to get more noses in the trough and to make more profits. Those profits are made with low pay, lack of security and the Government's 20th century version of slave labour——
  Mr. Christopher Chope (Southampton, lichen): Will the hon. Gentleman give way?
  Mr. Fraser: No, because I must press on.
  The Government want those profits to be made through the abolition of wages councils. They want to see Tory strength through suffering—the strength of the private sector at the expense of those who work for some of the services put out to tender.
  The Government are concerned that not enough noses are in the trough. Even some Tory authorities are cutting off that access to private profit making. Many of the district councils are controlled by the Conservative party. I know what Conservative Members are worried about. Despite all the propaganda and the fact that we have had a Tory Government since 1979, they are worried that the number of local authorities that go out to private tender is dropping in the light of experience. It has dropped from about 12 per cent. in 1982–83 to 11·3 per cent. in 1984. In Scotland, only Orkney and Shetland goes out to tender. Conservative Members are concerned that not enough is happening. In the words of Rodney Bickerstaffe, they know — [HON. MEMBERS: "Oh, him."] That gives the game away. They know the cost of privatisation. In Wandsworth, Merton, Dudley, Eastbourne and Gloucester there have been unswept streets, uncut grass, uncollected rubbish, late, missing or cold meals, thousands of people thrown on to the dole queue and an exploited work force. Local authorities are entitled to make a judgment.
  We should consider what companies are undertaking the work. Reckitt Cleaning Services does cleaning for local authorites and hospitals and has interests in other parts of the world. It has interests in South Africa where it employs 2,000 staff. It has just opened a new factory outside Johannesburg. It is investing in South Africa when many firms are taking investment out, sometimes under pressure from their Governments, as a sign of their disagreement with what is happening there. A local authority is entitled to say that it does not want to employ a firm that wants to invest in South Africa.
  There is worse——
  Mr. Michael Forsyth: How does it make its profits? Selling mustard.
  Mr. Fraser: I will tell the hon. Gentleman how it makes its profits. Virtually all of its employees in local

  1143
  authority cleaning servics are employed for less than 16 hours a week. That is deliberate—they therefore have no protection against unfair dismissal and have few labour rights under their terms of employment.
  Mr. Forsyth rose——
  Mr. Fraser: I shall not give way.
  ICC Cleaning Services has been employed by some local authorites. [HON. MEMBERS: "NUPE."] Yes, I am quoting from a NUPE document. I am very grateful to NUPE. I am sure that I am as grateful to NUPE as the Tory party is to ICC Cleaning Services, the parent company of which gave £3,250 to the Tory party in 1984, which won a contract to clean schools in Shepway. Officials had to alert Kent county council to the fact that there were uncleaned schools and that the firm had to draft in cleaners from London and Essex because a local recruitment drive had failed. There were headlines in local papers saying:
  "Cleaners Crisis May Shut Down Schools."
  Heads of schools were worried about the operation of that firm.
  We should consider how these cleaning firms make their money. I shall give some examples of the grave abuses. Staff are employed part-time, so they are subject to instant dismissal. In one well-known case, the staff were subject to dismissal even for taking a tea break. There has been outright refusal to recognise trade union membership, as happened, for example, with the Victoria Cleaning Company. There has been a case of compulsory weekend work in a six-day week for which the remuneration was only £62·90 — I refer to ISC. Other companies have given no holiday entitlement.
  In many cases, the profit is made by lowering the pay and conditions of employees. A local authority, which has a social objective, not a profit objective, is entitled to make a judgment about proper terms and conditions of employment and about what is in the best interests of the community as a whole, rather than just shareholders.
  Office Cleaning Services is a typical company. A Conservative Member of Parliament is one of its parliamentary consultants. Wages in that company have been driven down while the director's pay increased by 42 per cent. in 1982–83. In direct labour organisations, more than the price for the job has to be taken into account. There are other social responsibilities such as training. One of the results of competitive tendering has been a 36 per cent. reduction in apprentices being trained by local authorities. We do not need any lessons from the Government. On capital finance for local authorities, a member of the Audit Commission was able to tell the Government:
  "If I were asked to design a system that would produce more waste and inefficiency to control capital expenditure it is not immediately certain to me what additional complication I would build in".
  We know the reason for this assault on local government. It is an assault on their democracy and autonomy and it is intended to bring profits into private purses at the expense of the pay and conditions of working people who are already badly off.
  10.39 pm
  The Parliamentary Under-Secretary of State for the Environment (Sir George Young): The hon. Member for
  1144
  Norwood (Mr. Fraser) started his speech quite well. He reminded us that when he was in office he was on the side of the consumer, championing their interests against the vested interests of other large organisations. He even made a passing criticism of the extravagance of Lambeth council, but towards the end of his speech there was a Pavlovian over-reaction. Having to listen for an hour and a half to six speeches from my hon. Friends was obviously too much for him.
  There was a lot of emotional ranting about snouts in the trough and a list of what he regards as abuses. But what about the abuses on the other side? Look at what is happening in Southwark's social services department; look at the abuses in Liverpool city council, where there is far too close a relationship between the direct labour organisation and the councillors; look at the restrictive practices in Lambeth. The hon. Member for Norwood said that these matters should be left to the good sense of the local authorities, but as my hon. Friends showed during the debate, a whole range of abuses have been introduced by local authorities to make sure that a choice cannot effectively be made.
  For example, in Chesterfield Mr. Ernest Grosvenor, a caterer, has been barred from catering for next month's banquet for the new mayor of Chesterfield because he provided tea and sandwiches for the police during the miners' strike. Mr. Bill Flanagan, the Labour leader of the council, said:
  "Mr. Grosvenor has been blacklisted for feeding policemen drafted into the area to confront strikers during the pits dispute."
  If one looks at what Labour councillors get up to in order to avoid the existing regulations, it is no argument to say that this should be left to the good sense of local authorities; where there is a good case they will put it out to tender; otherwise they will leave it to the DLOs. In Burnley, the DLO put in a bid that was £90,000 higher than the contractor's bid, but it subsequently reduced it, by various means, to bring it below the outside figure. I received in today's post some minutes from Councillor Lobenstein, a Conservative councillor in Hackney, giving details of how Hackney had abused its position and reduced its price, after all the other tenders had been opened, in order to get a particular item of work.
  In opening this debate, my hon. Friend the Member for Mitcham and Morden (Mrs. Rumbold) put the case absolutely correctly when she said that the Government are not insisting that everything should be put out to tender, because that is not a universal panacea. She said that outside contractors should be invited to put in bids in competition with the DLOs to see who could provide the best deal for the ratepayer. I do not understand how anybody can possibly object to that.
  As my hon. Friends made clear, good, efficient DLOs have nothing to fear from Government policies that have already been introduced, or from those that my hon. Friends urge us to implement. Indeed, in 1975 the then Under-Secretary of State in my Department—a Labour Minister—said that the efficiency of the direct labour departments would be tested in competition with private contractors. That is exactly what my hon. Friends have been urging the Government to do for the last hour and a half. The emotional response of the hon. Member for Norwood to the sensible and realistic package of proposals put forward by my hon. Friends does him no credit.
  My hon. Friend the Member for Tatton (Mr. Hamilton) reminded us of the contrast between the rates paid in

  1145
  Wandsworth and in Lambeth, a point that was followed up by a number of my hon. Friends. Ever solicitous of the fortunes of Ministers in the Department of the Environment, my hon. Friends urged us to find popular legislation which the Department could introduce and which my hon. Friends could support with a spring in their step in the Division Lobby. The right-to-buy policy was introduced by my Department. That has been successful. Many of my hon. Friends have urged my Department to introduce very quickly more legislation to build on the initiatives that we have already introduced. I thought I detected some impatience among my hon. Friends about legislation from my Department. After the abolition Bill and rate capping, I thought they might have seen enough of Ministers from the Department of the Environment. However, I was heartened to hear my hon. Friends say that they want even more legislation from the Department, which they would be more than happy to support.
  May I outline the position that we have reached? As my hon. Friends know, in February this year, we sent out a consultative document with some proposals for building on the initiatives that we have already introduced, and extending the obligation to go out to tender to several other services. We have received about 400 representations. Nothing in them has affected our determination to proceed down this path. We are convinced that it is right and, what is more, we have seen growing evidence from other commentators in this area that more should be done.
  For example, in a recent publication, the Chartered Institute of Public Finance and Accountancy reported:
  "Competition offered by private contractors has undoubtedly contributed towards the general improvements in performance measures of council operated refuse collection in recent years."
  Speaking of the existing DLO legislation, the chief executive of West Midlands metropolitan county council —a well-respected officer on local government—said:
  "The DLO legislation has resulted in increased efficiency and improvements in accountability that were long overdue."
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  Those who run the DLOs in local government say that, for the first time, our legislation has enabled them to manage, instead of being at the mercy of spendthrift councils and militant unions. Of course if is far easier to terminate an unsatisfactory agreement if one puts services out to tender than it is if one relies completely on in-house services, which are often dominated by local government trade unions.
  The Municipal Journal, which does not always support the Conservative Government's initiatives, states:
  "It is regrettable that these improvements"——
  the improvements in the DLOs—
  "resulted from initiatives taken by Government rather than local government professionals."
  The question is not whether there should be competition, but how we can extend it.
  My hon. Friends asked me this evening to give commitments about the Queen's Speech in a few months' time. Their argument is that we must build on the momentum of tendering and extend the advantages to other services. My hon. Friends will understand if I say that it is not within my gift to outline the proposals in the Queen's Speech. That is for others. As I am sure they know, there are always more bids for legislation than can be accommodated, and the Government will have to take some hard decisions. I say that on the day when the House has voted, with a fairly substantial majority, to rise at the end of this week—not a day too soon, in my view. We must weight the merits of the legislation that has been urged on us this evening against other attractive packages, which I know my hon. Friends hope will be included in the Queen's Speech.
  Of course my right hon. and hon. Friends in the Government have noted the substantial number of Back-Bench Members who have signed early-day motion 895. That is eloquent testimony of the strength of feeling that has been demonstrated in tonight's debate. I shall ensure that my right hon. and hon. Friends are made aware of those strong feelings.

  South Africa
  10.48 pm
  Mr. Jeff Rooker: It is right that the House should not rise for the recess before it discusses in more detail than we could today at Question Time the current position in South Africa. We are grateful to you, Mr. Deputy Speaker, for allowing us a longer debate than the one that has just ended. It will give us the opportunity to deploy some of the arguments at length and, I hope, allow the Government to deploy their arguments on a position that is clearly changing hourly.
  Discrimination against people for various reasons is widespread on our planet. Our task should be to expose and oppose it wherever we find it. Without doubt—my hon. Friends will agree with me entirely—the most evil form of discrimination is that based on the colour of a person's skin. A Government whose existence depends on such discrimination are, by their nature, an evil Government. South Africa has such a Government. It is an evil system, where the Government rule by terror, and we should play no part in sustaining them. That is one of the reasons why we wish to put some reasoned questions to the Government about why they are not changing their policy.
  By any international definition, South Africa is a high risk and unstable country. This has to be taken on board as much by those—if there are any left—who think of emigrating there as by those who are trustees of investment funds and have to approve investments there. There is no obligation on the trustee of a pension fund to approve investments in a high risk, unstable country.
  For decades, warnings have been given inside and outside the House, and inside and outside the country, that South Africa would one day blow apart unless its rulers abandoned the evil system of apartheid. These warnings have been ignored both inside South Africa and, by and large, by United Kingdom companies operating there. There is the classic situation of a lack of movement and a stubborness to respond to reasonable demand, leading in the end to a clash that will be more serious and violent than it would have been if reasonable demands had been met.
  As we sit here in the comfort and security of the Mother of Parliaments and debate the issues of the day, people are being arrested without charge—665 in the past few days —and are being killed by the hour. Concerned human beings around the world have trembled as they switched to the broadcasts of the past few days. World leaders, in the West in particular, are beginning to wake up, and we hope that our Government are not last in the queue.
  We do not have to go back too far to see how much complacency there was in the West. I do not intend to recite the catalogue of history, as I need go back only a few months. I quote one question and answer in a press conference in December last year, just after the United States President had met Bishop Tutu. The questioner asked President Reagan:
  "But the regime has become more repressive and the arrests have increased. Would you consider any kind of economic sanctions? And do you feel that your policies have, at all, given credibility to that regime?"
  President Reagan answered:
  "I know that there has been a surge of violence here and there, and that has resulted in violence from the other side. We regret this. But, as I say, I think the policy we're following—and it
  1148
  wouldn't be quiet diplomacy any more if I started talking about things openly — but, we have made solid progress, and we want to continue doing that."
  In December last year, he was talking about "solid progress" and "quiet diplomacy". He now talks about "constructive engagement", a phrase that our Government have picked up parrot fashion. It means nothing, although the Minister may try' to explain to us later what it means. At the moment, there is constant violence, a state of emergency in South Africa, with literally hundreds of people killed in the past few months. There was another large massacre on the 25th anniversary of Sharpeville, which came after the United States President spoke. People in South Africa are disappearing, in the well-known way of South America. There will be a catalogue of people who have disappeared.
  Since President Reagan spoke, at least the Senate and the House of Representatives have voted for some form of economic sanctions. They have not voted for the same form, and I understand that discussions on that are taking place. At least the United States Government recalled their ambassador after the raid into Botswana—a raid purely designed to take out the peaceful opposition.
  As an aside, I thank the Foreign Office and the Home Office for enabling two young teenagers to make a quick trip to Botswana to attend the funeral of their uncle, who was killed there, by making passports available. I know the Minister of State who deals with South Africa has put on record the Government's position about what happened.
  We do not want our country to become isolated on the issue of South Africa. Between Question Time in the House today and this debate, it appears that France has moved. It has recalled its ambassador and has taken a United Nations initiative and banned all new investment. Some months ago, France was threatening to ban new investment after 18 months if things did not change. France has now responded to the changed situation and is to be commended.
  I have a slight criticism of the BBC. When this was being reported on the "PM" programme earlier this evening, the BBC reporter in a London studio spoke to a reporter in France, and could not resist asking him if the news would be welcomed in France or would it be seen as a sop to the Left wing. The reporter in Paris said the public in France were scandalised by what was happening in South Africa. I do not know why the BBC have to put that kind of innuendo about a French action designed to meet the situation.
  Norway has initiated a ban on the flights of Scandinavian Airlines System to South Africa. There will be no new investment from Sweden or Denmark, and Canada has also taken action. The Republic of Ireland has considered economic sanctions, although I admit it has been pushed on by what the South Africans would describe as 11 urban guerillas working for a Dublin supermarket. They were sacked for refusing to handle Outspan oranges and grapefruit at a checkout as a sign of solidarity over what was happening in South Africa. At least that Government have taken cognisance of that and they have to be followed by other Governments. New Zealand has called it a day and has broken off diplomatic relations.
  When the United States imposes some kind of economic sanctions, as everyone knows it will, our Government will look stupid and isolated—until the day that we fall into line and then we will look like a client state

  1149
  of the United States. That situation can be avoided. We do not want it to arise and, I suspect, neither does the Government. It is in their hands to do something about it.
  I am not sure whether the Foreign Secretary in his speech yesterday called for six bold steps, or said that if anyone wanted to take six bold steps, here they were, or whether he said, "Here are the ones we think should be taken, and this is what we are going to do to see they are taken." I am not sure what he said, but I expect the Minister will give us more details. The Foreign Secretary called for the unconditional release of Nelson Mandela; for an end to forced removals and detention without trial; an early end to the state of emergency; for progress on the abolition of discriminatory legislation; and for a commitment to some form of common citizenship. I would welcome an elaboration on the words "some form".
  We also want to know what plans Her Majesty's Government have for turning the six bold steps the Foreign Secretary talked about into reality? Have the Government imposed a time limit before they will take some action to try to make the South African Government do something about the situation? Do the Government think that those six bold steps add up to political equality in South Africa? Do they think they meet that test? A generation of young South African blacks under the age of 24 have lived all their lives while Nelson Mandela has been in prison. Look at their existence today. They do not have a vote and 3½ million of them are unemployed. That is one in seven whereas the figure is one in 60 for the whites. They see after 23 years that there is still a stubborn refusal on the part of the white regime to meet and discuss the issues of political equality. They are told, in effect, that they will remain subjugated by the whites. In heaven's name, what is their choice? They will fight for freedom, as people all over the world will fight for freedom — to echo the phrases that the Prime Minister has used in the House—and they will fight in the knowledge that they will suffer most in the early part of the struggle. But they have no other road to take. They will pay the price that others have had to pay if they wanted to be free.
  That is the position facing the young blacks. Their future looks hopeless and terrible. I wonder what people expect them to do when they see no hope. In the interview published in The Times today, Nelson Mandela was asked about one aspect of the "six bold steps". I accept that the interviewer said that the interview was conducted without notes, but the report says:
  "I asked Mandela if he took hope for the Government amending laws banning interracial marriage and easing laws that limit black entry into urban areas. He smiled: 'you are speaking about pinpricks', he said. 'Frankly, it is not my ambition to marry a white woman or to swim in a white pool. The central issue is political equality. Our programme is clear', Mandela went on. 'It is based on three principles: a unified South Africa —no artificial `homelands'; black representation in the central Parliament, not membership in the kind of apartheid assemblies that have been newly established for the Coloureds and the Asians; and one man, one vote.'"
  How does that square with the "six bold steps" for which the Foreign Secretary has called and how can it be related to the situation facing young blacks in South Africa?
  Mr. Jerry Wiggin: I apologise to the hon. Gentleman for missing the start of his speech. Perhaps he told the House when he was last in South Africa. If not, I hope that he will inform us. The hon.
  1150
  Gentleman proposes economic sanctions against South Africa, but will he tell us on whom those sanctions will bear?
  Mr. Rooker: The hon. Gentleman can make his own speech. It goes without saying that I have never been to South Africa. One does not need to go to South Africa to understand the British Government's relations with that country.
  Why have Governments of both parties tried to impose restrictions, conditions and codes of conduct on British companies operating in South Africa? There must be a reason for that. Even the Government understand that there is a problem. Otherwise, they would not propose codes of conduct. Is the hon. Member for Weston-super-Mare (Mr. Wiggin) saying that there is no problem in South Africa?
  I accept that people in South Africa know that they will have to pay a price. It is easy for me in the security of the Mother of Parliaments to say that I will help to impose that price on them. Some in South Africa say that sanctions will hurt them more than the Government, but people are prepared to pay a price for freedom. If the hon. Gentleman wishes to contradict me, I shall argue that case with him, but I know that my right hon. Friend the Member for Leeds, East (Mr. Healey) will recite chapter and verse how Governments have imposed economic sanctions to bring about changes in internal conditions in countries with which we disagree. There is nothing wrong with that. In this case, the ends justify the means because of the refusal over decades of the South African Government to act reasonably towards the majority of citizens in their own country.
  Mr. David Winnick: Does my hon. Friend agree that the question of the hon. Member for Weston-super-Mare (Mr. Wiggin) is almost inane? Before the war, Labour Members could have been asked whether they had been to Nazi Germany. Was it necessary for people to go to Hitler's Germany to understand the terrible tyranny there? Is not it unfortunate that a number of Conservative Members go to South Africa quite frequently as guests of the South African authorities?
  Mr. Rooker: I could not have responded better than my hon. Friend.
  Mr. Wiggin rose——
  Mr. Rooker: No, I will not give way. If the hon. Member for Weston-super-Mare is prepared to participate in the debate, I assume that, should he catch your eye, Mr. Speaker, he will be able to make his own speech, as he is clearly such an expert on the situation.
  We are told that British companies can help by following the code of conduct. I know that the code of conduct has been changed over the years and incorporated into European situations, but I want to raise two questions on the code, which British companies are supposed to follow. Why on earth should the blacks in South Africa have to rely on the company house, the company bus, the company school or the company medical centre as a wary of improving their living standards? These are all points in the code of conduct. It is the right of the blacks in their own country to be able to organise the Government and the running of these facilities for themselves. It should not be for the British Government to say to a British company,

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  "Help create the odd company town to help the blacks, because their own Government are not interested in doing it".
  I raise this matter because some of these companies are the same companies which, in the United Kingdom, have refused British workers the right to hold ballots on political funds at the workplace. How on earth can we trust multinational companies which act in that way in our own country to do the right thing thousands of miles away in South Africa? They clearly cannot be trusted.
  According to a reply to a parliamentary question on 2 July, United Kingdom exports of data processing equipment since 1982 have jumped into second place as our principal export commodity. Data processing equipment is the very equipment for running the bureaucracy of apartheid, and the exports should be stopped. The equipment did not appear on the list three years ago. The only use for it is in assisting that bureaucracy.
  There are plenty of places in the world from which to get fruit and vegetables other than South Africa. It is not necessary for supermarkets to deal almost exclusively in products from South Africa. It is not necessary to fill up the stores with Cape and Outspan. People do not have to buy it, the supermarkets do not have to stock it and we should not have to import it. I accept that, in the early period, this would have a damaging impact on the economy of South Africa, but it is the purpose of economic sanctions to have a damaging impact so that the South African Government will effect some internal changes to bring about a situation acceptable to the civilised world.
  What do we want from the Government? I will list a few points, and my hon. Friends can develop others. Will the Government and the Minister condemn the new apartheid constitution? I do not know whether the Minister has gone on record as condemning it. Will the Government support sanctions on the question of Namibian independence? We ought to have an answer to that before the international discussions which are to take place later this year. Will the Government stop blocking the efforts at the United Nations to improve collective international measures? Indeed, will they support today's new initiative of France, a country which is our closest geographical partner in the European Community? Will the Government agree to meet the President of the African National Congress for consultation? Will the Government implement the arms embargo strictly? It should be borne in mind that earlier this months five people were sentenced at Birmingham Crown court for arms smuggling. That may still be an issue which entrepreneurs somewhere are considering, and stricter implementation of the arms embargo is necessary. Will the Government accept the 10-point plan of the anti-apartheid movement?
  Ministers can change their policy. I would rather that they followed the French and withdrew our ambassador for consultations than that they followed the Americans later. As sure as night follows day, when the Americans move, we follow them. I do not want that to happen. I hope that the Government will respond tonight to the changing position in South Africa in at least the same minimal way that the French Government have responded.
  11.10 pm
  Sir Patrick Wall: About 20 years ago I found myself as the British representative on the third committee of the United Nations which dealt with colonial problems. My references to apartheid caused official complaints from the then South African Foreign Minister. At that time I and a number of my hon. Friends now in the House fought to keep Cape coloureds on the parliamentary lists. The Nationalist Government removed them and have now put them back into Parliament. We objected to the gerrymandering of the boundaries by the Nationalist Government to favour their party in the elections.
  Since then I have visited South Africa many times and I have always made a point of talking to black African leaders such as Chief Buthelezi, the Chief Minister of KwaZulu and Mr. Motlana of the Soweto committee of 10. Each visit showed me a change, although slow, for the better. Under President Botha these changes have accelerated. Black trade unions are now legal: they were not some years ago. Pass laws, mixed marriages and influx control are being altered or abolished. That is progress. The Indians and the coloureds now have seats in Parliament — perhaps in a separate Chamber, but they have seats and votes. A commission of the Cabinet is sitting to try to find a constitution for the future of the black majority in South Africa. Their probable place in the kaleidoscope of states was explained to me some years ago. As yet it is not official, but we hope that the commission will report in the near future.
  The trouble is that when there is a loosening of controls, those who want revolution rather than evolution resort automatically to violence. How can this House demand an end to the state of emergency when more than 500 black men have been killed mainly by fellow blacks—not by the police? They have been killed by members of the ANC or UDF. Would we like to listen to a debate in the South African Parliament interfering with our relations in Northern Ireland? How can we demand the release of Nelson Mandela when he refuses to give up violence? Would we release a convicted leader of the IRA if he refused to do the same in similar circumstances? Of course we would not. The trouble is that here, in the United States and in Europe, South Africa is equated with a European country and is treated by European standards. South Africa is not a European country. it is an African country. To be fair, we must compare what happens in South Africa with what happens in other African states such as Zimbabwe, Nigeria, Ghana and so on. Then we shall have a fair perspective. But that is not done by the western nations, which is part of the trouble.
  It is estimated that 1·5 million blacks from other countries may now be working in South Africa, and on whose work some 10 million non-South African blacks depend for their livelihoods. In other words, they prefer South Africa, with all its imperfections and all its racial overtones, to their own countries, ruled often by dictators or generals.
  Our colonial history has shown that once we proceed along the road to liberalisation, there is violence, followed by concessions, followed by more violence, followed by a hand-over to a group or a tribe and then one man, one vote, once.
  South Africa is not a colony. It is the most powerful industrialised state in the continent of Africa. The Government of South Africa will not, for reasons that must

  1153
  be obvious to everybody, surrender to the concept of one man one vote. They see the consequences of that in the rest of Africa, where there are not large numbers of indigenous white people. They want progress towards some form of confederation between the various racial groups. That will take time to achieve, but it cannot be achieved under the threat of violence.
  By all means let us apply moral pressure on the South African Government to move faster, but it is wrong to use that country as a whipping boy, and it would be wrong to impose sanctions or disinvestment. That would only cause the Afrikaaner section of the population to laager up and have disastrous effects on the black population, whose leaders are almost wholly opposed either to sanctions or to disinvestment.
  Who can deny that progress was being made before the latest violence started? Only 2·9 per cent. of all job categories are now reserved for whites. It was a much higher percentage only five or six years ago. About 1·3 million people are members of 77 black or mixed trade unions. There were no African trade unions some years ago. Black workers' salaries increased by 40 per cent. between 1970 and 1979. The incomes of black people in South Africa are two to five times higher than in other independent African states. That is why the country attracts so many people from those African states. In 1970, the ratio of black workers' salaries to those of whites was 25 to 75 per cent. By 1980, that gap had been narrowed to 40 to 60 per cent. respectively. In other words, the salaries of the blacks are moving up rapidly, and there is now quite a large black middle class.
  Since 1970, black wages have risen in real terms by 95 per cent., compared with a rise in white wages of 11 per cent. Thus, a levelling up is taking place. Not enough is being done, many will say, but give them time. All of that would be destroyed by revolution, which, there is no question in my mind is desired by some Opposition Members. Bloody revolution would destroy the whole country, and that would delight some of them.
  Mr. Michael Meadowcroft: Can the hon. Gentleman explain the paradox? If the situation for blacks in South Africa is as beneficial to them as he suggests, why is it necessary to deny them the vote that would enable them to express their satisfaction with the system?
  Sir Patrick Wall: I am not saying that it is entirely beneficial for the blacks. I am simply suggesting that to bring them to equality, economically and politically, takes time and education, and that is not fully widespread at present. [Interruption.] If we imposed sanctions or disinvestment, black Africans would receive little education. One need only think of some of the other countries in the continent.
  Nor should we lose sight of British interests. Those are often forgotten by some hon. Members. British investments in the Republic of South Africa are said to total £3 billion. Many British jobs would be at stake if, as the hon. Member for Birmingham, Perry Barr (Mr. Rooker) suggested we were to impose sanctions. South Africa controls many of the world's key minerals, not to mention the Cape oil route.
  In a black Marxist state, or even in a non-aligned state that we should see if somebody such as Nelson Mandela came to power, would South Africa be likely to be a friend
  1154
  of the West in any future conflict? I doubt it. One need only look at some of the other states, for example, a little further north at Zimbabwe.
  To sum up, we should stop comparing South Africa with Europe. They are completely unalike. Give the South Africans time. They have moved, and they are moving faster than ever before under P. W. Botha. Give them a little more time and I am sure that they will evolve a prosperous society which is fair to all. Their leaders—black, white, coloured or Indian—face the most difficlt task in the world today. They will succeed if only we stop interfering with them.
  11.20 pm
  Mr. David Winnick: The hon. Member for Beverley (Sir P. Wall) has defended southern African regimes for a long time, including South Africa itself, what was Southern Rhodesia and a number of other countries, some of which were occupied by Portugal. He is well known for his views. He has lost out on all these places except South Africa, and I am convinced that he will lose out there as well.
  Sir Patrick Wall: Is the hon. Gentleman satisfied with what has happened in Mozambique, Angola, Zimbabwe and many other countries, either economically or politically?
  Mr. Winnick: It is clear that the hon. Gentleman would like to revert to the former colonialism. When I said that he would lose out on South Africa, I meant that the regime and the sort of rule which he defends will not win. It is that to which I shall address myself, like my hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker), whom I congratulate on initiating this important debate.
  No one should be surprised by events in recent months in South Africa. They are the inevitable results of policies pursued since the National Party won the election in 1948. All the instruments of the South African state have been used to oppress, harass and humiliate the large majority of that country's people. It is said that changes have taken place, but in the main the changes have been cosmetic. They have done nothing to give the African majority basic political and human rights. The hon. Member for Beverley has spoken about outside pressure; even the small changes which have taken place have arisen only because of international pressure. Does anyone imagine that there would have been any modification in the apartheid system if there had not been international pressure?
  Mr. Wiggin: Of course there would. Has the hon. Gentleman been to South Africa?
  Mr. Winnick: It was said that international pressure would merely harden the attitude of the authorities. There has been that pressure, and it will continue as long as the majority are discriminated against because of the colour of their skin. That is the reason for the unrest and the explosion in South Africa over recent months. That explains the renewed interest in the country, especially in the United States as well as some European countries, and the events taking place within it.
  Many of us deeply resent the attitude of the Minister of State's ministerial counterpart, the hon. Member for Edinburgh, Pentlands (Mr. Rifkind), who I understand is now in Moscow. When he was interviewed on the radio the other day he gave a sort of lecture about Bishop

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  Huddleston. We deeply respect the bishop, who has championed human rights and proved himself to be a steadfast campaigner against apartheid. Someone like him does not require any lectures from Ministers.
  Mr. John Carlisle: Will the hon. Gentleman give way on that point?
  Mr. Winnick: I shall not give way now.
  Mr. Carlisle rose——
  Mr. Winnick: Not now. I am not giving way at this moment. I remember listening to and watching Bishop Huddleston interviewed as long ago as 1960 on "Panorama", when he was explaining the boycott of South African goods that was about to be imposed. Even before 1960—those who have read his book will understand—he was a steadfast champion of human rights in South Africa.
  Mr. Carlisle: The hon. Gentleman should be fair to my hon. Friend the Minister of State, the hon. Member for Edinburgh, Pentlands (Mr. Rifkind). The criticism that he made of Bishop Huddleston was directed to his attack upon Alan Paton, the writer, whom he described as a broken man when the latter was criticising disinvestment. My hon. Friend was criticising the bishop for that reason and not because of the position that he held generally.
  Mr. Winnick: The interview to which I listened made it clear to me that the Minister was wider in his criticism of Bishop Huddleston. What a contrast between the bishop and others like him, including of course Bishop Tutu in South Africa, and the attitude of the Prime Minister, who last year welcomed Mr. Botha to Britain. He was given a warm reception by her and he was a distinguished state guest. No doubt the Prime Minister told him that changes were necessary in South Africa. Mr. Botha expected her to urge changes along those lines. She was only going through a ritual.
  Mr. Nicholas Winterton: What about Gorbachev?
  Mr. Winnick: The Prime Minister is not at all concerned about events in South Africa. She went through the ritual of telling the South African Prime Minister that certain changes were necessary, but she had no deep commitment. The Prime Minister has no greater commitment to fundamental changes in South Africa than the Conservative Members who are busy heckling me.
  I welcome, as far as it goes, the statement on the state of emergency in South Africa issued by the Foreign Ministers of the European Community. We should bear it in mind, though, that more than 50 per cent. of foreign investment in South Africa comes from EEC member states. Britain remains the biggest single investor, with £7 billion of investment, accounting for 10 per cent. of total British overseas investment. A good part of the capital that should be invested in Britain to create employment goes to places such as South Africa. More than 600 British firms have invested there, some of them heavily. A third of the leading British firms in South Africa do not recognise independent black unions. Many invest to make the maximum profit by paying the lowest possible wage in a place where black employees cannot bargain collectively over conditions. These companies have a profitable stake in apartheid.
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  Conservative Members who do not like criticism of one of their favourite states will have to accept that their view differs greatly from ours. Let us give some credit to the Tory party—the views that are being expressed by the half a dozen Tory Members in the Chamber do not reflect, I hope, the views of the majority of that party.
  I warmly welcome the French Government's action which was announced today. They were right to say that no more investment will go to South Africa. I am also pleased that they have recalled their ambassador. At Question time today I said that the British ambassador should be recalled. The trouble with the British Government is that they give the impression that they are firm allies of the South African authorities. They do not want to take any action that would be seen in South Africa and on the international scene as liable to cause embarrassment there.
  There should be a policy of disinvestment towards South Africa; disinvestment along the lines announced today by the French Government should be pursued by the British Government. However long the fight, the African majority and its allies will win their rights in South Africa.
  The hon. Member for Beverley said that some of us want revolution in South Africa. Surely this has been the essence of the argument all along—as long as apartheid continues and the large majority are denied their rights, there are bound to be events that lead to conditions like those at present. There is no better way of achieving outright revolution in South Africa than continuing with the policy that has been followed in that country since 1948. For all we know, some of the Conservative Members who are present may be underground revolutionaries who pretend to be otherwise. Perhaps their motive is the very revolution about which they warn.
  On what side of the struggle in South Africa is Britain to be seen? For a long time we have said that the British labour movement is on the side of the oppressed majority in South Africa. We have made our position clear at conference after conference in the Labour party and in the trade unions. We shall want firm action by the next Labour Government, including economic sanctions. We want the United Kingdom completely to dissociate itself from the tyranny in South Africa.
  There are many repressive regimes in the world, and I would be the last to claim that South Africa is the only tyranny. There are far too many dictatorships and regimes which my hon. Friends and I would in no way defend or condone. Some are in Africa and some are elsewhere, and there have been many in the past. However, there is one obvious difference between the tyranny in South Africa and other repressive regimes, which some Conservative Members refuse to acknowledge, which is that only in South Africa is one penalised from the moment one is born to the day one dies for one reason—the colour of one's skin. Even present Ministers have acknowledged that. No other regime is based on that vile principle. That is why there is such strength of feeling, and why, during the past months, the United States Senate has passed resolutions and the groundswell there has continued to press for firmer and far more effective action by their Government against South Africa.
  There is no doubt in my mind that the people of South Africa will win their rights, despite the Conservative Right wing. No doubt there were such Tory MPs before the war. When Labour Members, such as Philip Noel-Baker raised the plight of what was happening in Nazi Germany, such

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  people said, "Why exaggerate? Why should we interfere in the internal affairs of Germany? What business is it of ours? Has the hon. Gentleman been to Germany?"—the same sort of reaction as that from Conservative Members tonight.
  The Labour party stands with the large majority of people in South Africa—the blacks, the coloureds and their white allies. We want to see fundamental changes, and apartheid destroyed. Our message to them is that we are on the side of those who fight to overcome the evil that exists there, we stand for the liberation of South Africa, and we shall not yield any more than we have done in the past. We support Nelson Mandela and his colleagues, and I hope that the Government will adopt the same attitude.
  11.32 pm
  Sir John Biggs-Davison: Among men without hope there is no insurrection. When expectation rises, violence erupts. The Government of President Botha have aroused expectations by constitutional and other reforms, which only a few years ago most people would have thought impossible.
  The hon. Member for Walsall, North (Mr. Winnick) said that the changes and improvements in South Africa were merely cosmetic, but I disagree. My hon. Friend the Member for Beverley (Sir P. Wall) cited examples of the withering away of many aspects of apartheid. Nowadays white soldiers and policemen salute black commissioned officers. A decade ago, few would have imagined that Indians, coloureds and whites would combine in a parliamentary partnership and in government. That achievement serves to magnify the sense of grievance of blacks, now politically awakened but left outside the new parliamentary process.
  The homelands are not merely to be dismissed and decried. They are as independent and as dependent as some other states in Africa. Nor is the Transkei, for example, just a barren waste. But the National party no longer regards the homeland policy as any solution, and by giving title to black householders in Soweto, the authorities have in effect announced the demise of apartheid. Nor can they expect anything other than black discontent with unemployment as high as it is—the hon. Member for Birmingham, Perry Barr (Mr. Rooker) referred to this — and 16 per cent. inflation. Black discontent will not be assuaged by even the most admirable schemes of local self-government.
  There are movements in South Africa today that reject reforms because their aim is revolution. Often in the townships, vicious and murderous attacks on mayors and councillors, policemen and policewomen, are directed against the agents of evolutionary change by the forces of revolution. What has been happening in the townships is bad enough, but it should not be exaggerated. It is localised and is largely confined to the Rand and the eastern Cape.
  There is complaint opposite of the state of emergency. I fancy that, if one were an ordinary black in a disturbed township, one would be less likely to complain that a state of emergency had been imposed. Like the violence, the state of emergency is localised, covering 36 magisterial districts——
  Mr. Nicholas Winterton: Out of 300.
  Sir John Biggs-Davison: —as my hon. Friend says, out of about 300. It is the duty of any Government to try
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  to keep order and to protect life and property. This state of emergency prevails in part of the republic of South Africa, but emergency powers exist in a part of the United Kingdom. I know that they are challenged by the Opposition, but the state of emergency is challenged in South Africa, in parliamentary debate and question, and in the columns of a free press. In the republic of South Africa, there is an independent judiciary, and a judicial commission set up by the Government has censured police excesses and called for urgent reforms. In which other African country could these things happen?
  The sanctions called for by the Opposition can only do harm. They can put British workers out of a job and ruin South African workers and producers, coloured and black. Have we not learnt anything from Rhodesian sanctions? They harden resistance, and Afrikaners are not soft people. They induce economic self-sufficiency, and they work to the disadvantage of former trading partners. Have not African states suffered enough from Rhodesian sanctions? They would suffer at least as grieviously if they were deprived of their trade with South Africa and the aid that they get from South Africa.
  Disinvestment is called for by the Opposition. Thai has been rejected as a policy by Bishop Tutu. Frankly, I am not impressed by the withdrawal of the French ambassador. The French conduct their diplomacy and commerce with dexterity. There is an arms embargo, subscribed to by France, and France has replaced Britain in the supply of the South African navy. Indeed, had the Labour Government not denounced the Simonstown agreement, the hazardous operation for the liberation of the Falkland Islands could have been undertaken at less cost.
  This very complex and agonising question of South Africa is bedevilled by humbug, self-righteousness, double standards and a willingness to sacrifice human life — overwhelmingly black African human life — to abstract principles of little interest to the poor and the hungry.
  Mr. Nicholas Winterton: On this very point, I——
  Sir John Biggs-Davison: I am about to conclude.
  I hope that when the Minister replies to the debate, he will assure us that it is the purpose of Her Majesty's Government to maintain the trade and influence of the United Kingdom, using that influence to encourage President Botha and his colleagues to persevere in dialogue. In the wise words of the Times leader of 23 July,
  "he should be encouraged to stand firmly behind his reforms and to contain his emergency measures required to protect blacks who support his regime from the bloody fate which has overcome so many of them."
  11.42 pm
  Mr. Michael Meadowcroft: I commend the hon. Member for Birmingham, Perry Barr (Mr. Rooker) on the topic he has introduced this evening and on the way in which he introduced it. I must say, though, that, on looking around the House, I feel it is perhaps a shame that a more widespread body of opinion is not represented on the Government Benches that might have participated in the debate. It seems to be a particular strand of Conservative opinion that wishes to involve itself in this debate. As I did not hear the radio broadcast which has been referred to and which involved the hon. Member for Edinburgh, Pentlands (Mr. Rifkind), I can only speak

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  as I find him in the House. I want to put on record my tribute to his forthright responses at Question Time on the issues of South Africa and apartheid.
  Conservative Members have asked previous speakers in the debate whether they have been to South Africa. I have been there, although not for any great length of time. I had a job at one time that took me to parts of white Africa generally. There are great problems for those of us in such jobs who wish to go there partly, I suspect, because if one has any sensitivity one finds it virtually impossible to conform to the restrictions placed upon one. I found it difficult, if not impossible, to conform to signs that said "Whites only" or "Blacks only". I could not do that.
  In addition, those of us who were involved in work with various groups in and out of Mozambique or Zimbabwe particularly found it difficult to work with people who were conscious that there were informers about the place. My presence with them was therefore in some way a challenge to their safety. It is not always easy to travel in those circumstances. One must thus discuss with a certain amount of candour what action is actually effective. I do not believe that many Conservative Members wish to maintain the present system. The difference in approach by hon. Members on both sides is in respect of how change is achieved. It is at that level that one's remarks and intentions should be related.
  Mr. Jeremy Corbyn: Will the hon. Member give way?
  Mr. Meadowcroft: I shall develop my remarks a little further and then I shall willingly do so.
  It is often a mistake to underestimate the skills of the South African regime in maintaining itself. At times, it gives little tokens which appear to contain the substance of change, such as the Bantustans. At times, the regime has worked quietly to undermine other countries such as Lesotho, which is wholly contained within the Republic of South Africa. It has given tokens in Namibia as if it was the reality of change when it was not. It has sought to undermine the precarious stability of Angola by involving itself with Unita within that country. That is all part and parcel of a trend. Latterly, to the surprise of many people who have to consider and deal with the situation in South Africa, the regime managed to find some basis of agreement with Mozambique, partly because of the pressure that was put on that country in its economic difficulties after independence. All those are interesting ways and means of demonstrating South Africa's skills in maintaining its own unpleasant and oppressive regime. We must address ourselves to the situation that we face in the light of what we have seen in recent years.
  Mr. Corbyn: I was intrigued by a statement that the hon. Gentleman made earlier, that the only thing that divides hon. Members is not whether but how apartheid should be abolished. Does he seriously believe that all the Conservative Members who have such close links with the present South African regime seriously want to get rid of apartheid? Are they not acting in the House as apologists for the apartheid regime?
  Mr. Winnick: Some of them are paid.
  Mr. Meadowcroft: During many years in politics, not just in the House, I have always tried to work on the basis
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  that, just as I object to people trying to attribute to me motives that I do not possess, I am not prepared to try to look into people's hearts and minds. I dislike what Conservative Members——
  Mr. Winnick: They are paid. Mr. John Carlisle: Name them.
  Mr. Meadowcroft: I dislike what Conservative Members say—[Interruption.]
  Mr. Deputy Speaker Mr. Ernest Armstrong): Order. The sedentary arguments across the Floor are not helping the debate in any way. If an hon. Member wants to intervene, he should do so in the proper way.
  Mr. Winnick: I entirely take your point, Mr. Deputy Speaker which was perhaps directed at me. However, I hope that I can draw your attention to the way in which the same sort of interruptions were made constantly during my speech.
  Mr. Deputy Speaker: Order. I remind the hon. Gentleman that I was talking about sedentary dialogue across the Chamber, not just sedentary interruptions.
  Mr. Meadowcroft: I fear that if some hon. Members lead with their chin, they always get it punched.
  I am distressed by Conservative Members' remarks. I reject their arguments, but I am not prepared to say that they have an ulterior motive. If they have, so be it, but they must speak for themselves.
  I am anxious to find ways and means of altering the oppressive regime, which is the disastrous consequence of the history of that continent. It is crucial that Conservative Members realise that and it is the other side of the coin. Their attitude is unfortunately self-fulfilling of the conditions that they talk about. If one says that the regimes that might follow will be unstable, that people are incapable of assuming office, that they are Marxists and that people who are now in prison are not safe to be released, it is as certain as night follows day that when change takes place, there will be instability, Marxist regimes and the oppressive regimes that we have seen elsewhere in Africa.
  The problem is that if one resists people's ordinary aspirations and democratic desires, it is almost certain that there will be instability thereafter. That is true whether it is in Zimbabwe, with the imprisonment of Robert Mugabe for so many years, the present situation where black is killing black because of the complete frustration and inability to achieve democratic change, or the history of what happened in Kenya with Kenyatta and in Cyprus with Makarios. People who were thought to be terrorists eventually had to become the leaders of their countries, and had to be treated with. It would have been better had we not had such appalling attitudes to them beforehand.
  Throughout my time working in South Africa, I found black leaders impressive. It was sad that because they could not achieve their legitimate aspirations, some were assassinated before they could achieve office. One of the great problems is the loss of leadership in black Africa because of the failure on the part of whites to give way when they should and let people assume office.
  Sovereignty is a confusing and difficult problem. The boundaries of many of the states in Africa are not logical, partly because they were divided 100 years ago by a convention, with the consequence that natural tribes are divided between countries. That in itself causes instability.

  1161
  Unless one addresses that problem, and looks at pan-Africanism and what one might do in terms of sovereignty, there will continue to be difficulties.
  Which policies might have some effect? The hon. Member for Walsall, North (Mr. Winnick) legitimately, emotionally and properly expressed moral outrage. I feel exactly the same moral outrage, but it is not a policy or a strategy. It will not bring about change.
  The recent history of Zimbabwe shows that the thought that sanctions could bring down Rhodesia was a falsity. Countries under such pressure will consider what might be done from outside and plan for sanctions. That will certainly be true of South Africa. There is no way that sanctions imposed by Britain alone would be effective. If sanctions are to have any chance of being effective, there must be unanimity on the part of the European Community and the United States. Unless the hon. Gentleman believes that that is possible, he is displaying no more than moral outrage. I do not reject the importance of having personal standards. I will not buy produce from South Africa, but I do not pretend that my not buying such produce will bring down the regime there.
  Conservative Members have asked who gets hurt by sanctions. I do not doubt that, in the short term, blacks would probably get hurt most. That is not such an important consideration in South Africa. What matters is whether the people are prepared to accept the consequences of sanctions. One of the slogans of African nationalism is that they prefer the poverty of freedom to the riches of slavery. There is no validity in the paternalistic argument that we know what is best for the African people, that we know that they will suffer and that we will therefore maintain a certain economic standard.
  Mr. Nicholas Winterton: The hon. Gentleman is presenting a rational case and the House is grateful to him. Is he aware that Professor Schlemmer has undertaken precisely the type of survey that the hon. Gentleman is talking about? An overwhelming majority of black South Africans have stated in two surveys that they are utterly opposed to disinvestment in their country. Will the hon. Gentleman give credit to the black people for voicing their opinions through those surveys?
  Mr. Meadowcroft: The flaw in the hon. Gentleman's argument is that it is illegal in South Africa to call for a boycott. People there are so aware of informers in the black and white communities that no survey could properly represent the feelings of people there. Those who have been to South Africa and felt the repression there because of paid informers would never suggest that such a survey could be accurate.
  Mr. Robert Hughes: Is the hon. Gentleman aware that the Schlemmer report is a survey of 551 male black production workers in multinational companies and that their views were thought to represent the views of more than 20 million people? If the views of the African people are to be taken into account, why are they not given a vote and a real choice rather than a public opinion survey?
  Mr. Meadowcroft: The hon. Gentleman has put his finger on the flaw in the argument of the hon. Member for Macclesfield (Mr. Winterton). If matters are progressing so well, it is strange that the South African Government are not prepared to test it at the ballot box.
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  Many of us who have worked to end the apartheid system have viewed with trepidation the approaching disorder and instability that now exists. None of us wanted that, but we believed that it was inevitable. We might be seeing the beginning of the end. If that is true, I take no comfort from the fact that it is ending in this way because many people will get killed and others will get hurt in the process. Bearing in mind the concessions that have been made, the South African Government might even now realise that they cannot maintain apartheid and would like to get rid of it but cannot because they have only a white electorate. Then the paradox would be that if there were a wider franchise they could get rid of apartheid and achieve what they may already accept as inevitable. Therefore it behoves this Government to say to the South African Government with all the diplomatic force that they can bring to bear that only one immediate step can be taken which might save South Africa from a bloodbath: the release of Nelson Mandela. That step must be taken as quickly as possible. Change might then be introduced more peacefully than will otherwise be the case.
  Whenever I look around the world I realise that liberty never comes easily. I sometimes wonder why we in this country believe that the liberties that we would fight for are gained easily. They are not. They are gained by a lot of sweat, struggle and toil. That will be the case in southern Africa. Those hon. Members who care deeply about the people in that country are not satisfied with moral outrage or with ritual confrontation across these Benches. We are interested in effective action. I hope the Government will bring pressure to bear by taking the kind of action that will solve this problem once and for all.
  11.55 pm
  Mr. John Carlisle: The House will have enjoyed most of the speech of the hon. Member for Leeds, West (Mr. Meadowcroft). He spoke a great deal of sense and brought a somewhat calmer atmosphere to the various altercations we have had on both sides of the House on southern Africa Many hon. Members are grateful to him for the tone of his remarks. He will understand that I do not entirely agree with all that he said; however, he introduced a fresh approach to this debate, which Conservative Members welcome.
  I apologise to the hon. Member for Birmingham, Perry Barr (Mr. Rooker) for the fact that I missed his opening speech, but I welcome him to the ranks of those who are interested in southern Africa. I hope that he will take part in future debates on this subject, because future debates there will obviously be. It is interesting that Labour Members have, as usual, turned out in force tonight, although perhaps not so many as turned out for the South Africa (Sanctions) Bill of the hon. Member for Sheffield, Central (Mr. Caborn). I understand that they were under a very heavy three-line Whip to attend a vote that did not take place. There are probably more Labour Members in the Chamber tonight than we have seen since the debate on the Queen's speech in 1979.
  Apart from the speech of the hon. Member for Walsall, North (Mr. Winnick), which was characteristically boisterous and characteristically inaccurate, I think that so far it has been a fairly sensible debate. I refer in particular to the contributions of my hon. Friends. The Leader of the Opposition, who is now on the African continent, may return with a rather deeper knowledge of that country than

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  he had before he went there. He may bring to our debates some sense of experience, which Conservative Members, but not Opposition Members, are able to bring to bear.
  South Africa always seems to be a fairly convenient whipping boy for Opposition Members. Understandably, they are outraged by the so-called violation of human rights in Southern Africa, just as they are outraged by the so-called violation of human rights in other parts of the world. Where we take issue with them is that, in their persistent arguments about South Africa, they rather conveniently forget what goes on elsewhere. If they showed the same passion about events in Chile, South America and behind the Iron Curtain as they show about South Africa, I think Conservative Members would accept their arguments with a little more understanding.
  The argument about South Africa in this House will always be on the basis of whether or not apartheid is acceptable. We in this country believe that it is an unacceptable form of government and an unacceptable form of society. The argument is whether that system can be dismantled overnight, whether the pace of change can be dictated by the British Government or by this House, or whether the reason for the existence of that system should be understood. Before the hon. Member for Walsall, North jumps to his feet I will say again, as I have said before, that I deplore apartheid, but I understand the reason for its existence. Understanding of the system by Conservative Members will help to dismantle it in a far more humane way than will the histrionics that are so often displayed by Opposition Members.
  Mr. Winnick rose——
  Mr. Carlisle: I give way to the histrionic Member who is about to rise.
  Mr. Winnick: We know the views of the hon. Member, but may I return to his earlier remarks, when he said that Labour Members were selective. Does he know of any dictatorship that I have defended? Have I not constantly criticised the regime in Chile and the junta in Argentina? Have I not criticised eastern Europe? If the hon. Gentleman knew anything about these matters, he would know that I have criticised eastern European politics in some Labour movement journals, and I shall continue to do so. The explanation is simple. I am a democratic Socialist. I favour parliamentary democracy, and I oppose dictatorships completely.
  Why does not the hon. Gentleman try to answer the point I made earlier? South Africa is different, in that it is a racial tyranny. Therefore, people are penalised, not for their politics or for anything they do, but because of the colour of their skin.
  Mr. Carlisle: I am an avid follower of the hon. Gentleman's career and of what he says in the House. As a keen supporter of parliamentary democracy, he will understand that, even in the parliamentary democracies that we have bequeathed to Commonwealth countries, there are systems of apartheid. In the context of South Africa having been a member of the British colonial empire, perhaps the hon. Gentleman would compare the systems that still exist in some black African and other Commonwealth countries with the one in South Africa. If he did so, I might listen to what he says with a little more understanding.
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  Since hon. Members know my views on the subject, I shall confine my remarks to three subjects. The first must be the reaction of the British Government and people to the events in South Africa during the past few days—events that have been vividly portrayed on television and in the press. I say immediately how sad it is to see the terrible atrocities that have taken place in South Africa, mainly — as those of us who are interested in such matters will know—of the black communities attacking other black communities; of blacks attacking their elected representatives within their communities; of blacks attacking policemen; of blacks attacking administrators; and of the terrible atrocities that have not been reported.
  This afternoon, at Question Time, when I asked about the alleged cannibalism, Opposition Members were surprised. They must understand that such things are happening in the present troubles such is the depth of the problems in South Africa.
  Mr. Robert Hughes: Absolute rubbish.
  Mr. Carlisle: I hear what the hon. Gentleman says, but if he took a little more interest in the subject, he would understand that what I said was accurate.
  Mr. Nicholas Winterton: Would my hon. Friend highlight to the House the recent statement by Bishop Tutu, who is so often quoted by Opposition Members——
  Mr. Winnick: Bishop Tutu has a right to speak, unlike the hon. Gentleman.
  Mr. Winterton: I have a right to speak in the House. I hope that the hon. Member for Walsall, North (Mr. Winnick), who professes to support democratic processes, will grant me that right.
  Will my hon. Friend highlight the statement by Bishop Tutu, who has urged his people in South Africa to desist from violence, saying that if they continue to burn their fellow citizens in the black townships, he will be forced to leave the country because he cannot be a party to this brutality?
  Mr. Carlisle: My hon. Friend is right. We welcome those words, as they were welcomed by all responsible commentators in the media this morning. My hon. Friend is the vice-chairman of the all-party British South Africa parliamentary group. It is a great shame that the Labour party has not seen fit to send any representatives to that group——
  Mr. Corbyn: Is it all-party?
  Mr. Carlisle: The hon. Gentleman must understand that the all-party Whip states that the meetings are open to all Members of the House. The fact that the Labour party chooses not to attend and not to put any officers up for election is its decision. Not many weeks ago, some black South Africans came as witnesses and they testified to the atrocities that are taking place in the eastern Cape.
  Mr. Winnick: Derisory.
  Mr. Carlisle: I found that their words were easier to believe than the hon. Gentleman's spurious words. He admits that he has had party political propaganda fed to him from the anti-apartheid party.
  Mr. Robert Hughes rose ——
  Mr. Carlisle: I should like to give way, but I must get on.

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  My hon. Friend the Member for Epping Forest (Sir J. Biggs-Davison) expressed a sentiment expressed by Mr. Harry Oppenheimer not long ago in London, which is that when hope exists, as it now does, for the black majority in South Africa, almost inevitably trouble occurs. We have the experience of America in the 1930s to prove this. There is no doubt that the position of the black in South Africa has changed considerably over the past 10 years. There are now trade unions, which there were not before. The wage gap between the blacks and whites is now much narrower than before. That hope, and the fact that some of the frustrations that existed 10 years ago are being diluted, has given a hostage to fortune for those who are intent on wrecking South African society, and have used for their own evil political means among the black community. That is why we have had the terrible black on black problems within South Africa, and it is part of the whole frustration of the system. The changes that are taking place are being encouraged by the Government.
  Mr. Meadowcroft: Does the hon. Gentleman accept that when people live in extreme poverty, some suffer severe pressure to be paid informers?
  Therefore, it is not surprising that in such instability, some of those informers will be murdered? What is different from the situation in the north of Ireland, for instance, where people are killed because they are paid informers? How does one achieve the change that will prevent that? We must not simply say that we must apply more pressure from the top to try to repress the people still further. Someone must turn the light out from underneath, and I have heard nothing that convinces me that the hon. Gentleman is going to do something about that.
  Mr. Carlisle: I am sorry that the hon. Gentleman has tried to broaden the argument. I shall not follow him into the subject of Northern Ireland.
  I reiterate the view of Mr. Harry Oppenheimer, who is, as the hon. Gentleman will know, a persistent opponent of the South African Government. It is that the hope that now exists among the black South Africans is much greater than it was 10 years ago and the frustrations that were there then have now been alleviated. Such a situation is fertile ground for those intent on wrecking the system. That is why there are now problems in South Africa.
  That is why the South African Government were inevitably forced to declare a state of emergency within those sections where the troubles have occurred. Innocent blacks—the majority of black South Africans—were finding that they could not go about their daily business as they wished. It was somewhat regrettable that the EC reacted as it did, but at least this afternoon my right hon. and learned Friend the Foreign Secretary half-disassociated himself from the statement by the EC. The constitutional changes in South Africa should be applauded by the House, however inadequate Labour Members might find them.
  My second point is about trade. It was heartening to hear this afternoon my right hon. and learned Friend the Foreign Secretary reiterate that the Government would not engage in trade sanctions against South Africa. This argument is raging throughout the world, and a little more fuel was added to it this afternoon with the news from France. At least our Government understand that trade sanctions do not work; here I reiterate what the hon. Member for Leeds, West (Mr. Meadowcroft) said.
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  Secondly, they harm those whom they are intended to benefit. I recall the words of the hon. Member for Swansea, East (Mr. Anderson), who is not in the Chamber at present, when I intervened on a debate on Barclays bank some months ago to ask about the loss of jobs which would occur in South Africa. He said— and I paraphrase—"Some sacrifice has to be made."
  I am not willing to sacrifice black jobs in South Africa on the sanctimonious basis of trade sanctions, in the same way that I am not going to sacrifice jobs in this country. I remind Opposition Members, and particularly the hon. Member for Islington, North (Mr. Corbyn), who is without a tie, that some of them represent constituencies with far higher unemployment than I have in my constituency, and that some 250,000 jobs would be lost in this country if full sanctions were applied to South Africa. Those jobs would be on their heads, and if they believe that would help black South Africans, then I am somewhat saddened by their view.
  There is a political bandwagon in the United States and political shenanigans are going on about sanctions, which would lead one to believe that the people involved do not understand the full implications of sanctions upon the blacks in South Africa. If sanctions happen, the implications will be on the heads of Opposition Members and not on the head of this Government, who have stood firm and I trust will continue to stand firm, on trade sanctions.
  My last point of the three that I mentioned is the farce of continuing sporting sanctions against South Africa. If my hon. Friend the Minister has a chance to advise the Prime Minister before she goes to the Commonwealth conference in the Bahamas in the autumn, he should tell her that if there is any way in which the innocuous Gleneagles agreement—[HON. MEMBERS: "Innocuous?"] —can be abandoned, she should take the opportunity to do so. If there is one place in South Africa where apartheid has been broken down and where integration now takes place, it is on the sports field.
  It is a tragedy that we in this country, with our sense of fair play and with British sport so highly respected throughout the world, should continue non-co-operation with those in South Africa who are seeking within the laws of that country to bring sport into a fully integrated system. The courage of their sports administrators and of their sportsmen and women who are fully integrated within their own rules and associations and within the rules of society in South Africa, is admirable. The argument that we will help those so-called oppressed majorities in South Africa by staying away, is an argument I cannot accept.
  The Gleneagles agreement is now beginning to bite and is doing real harm to the prospects of the blacks in South Africa. I admit that the sanctions in sport applied by the Gleneagles agreement, and sanctions taken by sporting authorities, have pushed the sports authorities in South Africa towards a fully integrated system. I have always admitted that. But there comes a time when the carrot must replace the stick, but now the goalposts have been moved, and for political reasons we are not engaging in sport with South Africa.
  The conditions of the Gleneagles agreement about organised sport on the basis of race, colour or ethnic origin no longer exist. It is highly immoral of the British Government to continue such a policy when those

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  conditions no longer prevail in South Africa. I hope my right hon. Friend will take that message to the Prime Minister and to those in authority.
  Mr. Corbyn: Will the hon. Gentleman give way?
  Mr. Carlisle: No, I will certainly not give way to that hon. Gentleman.
  We should offer South Africa and the black, the coloured, the Indian and the white South African some sort of understanding and encouragement. I regret to say that the weasel words of Opposition Members will strike terror into the hearts of many black South Africans. If we are to make a positive contribution, and if we believe in the dismantling of apartheid and that one day everyone in South Africa should enjoy an equal franchise, we should take encouragement from the changes that have taken place. That is why the argument of Conservative Members is that we should offer encouragement and co-operation.
  12.15 am
  Mr. Dennis Healey: Like other hon. Members, I am grateful to my hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker) for giving us the opportunity to discuss a matter which clearly arouses strong feelings on both sides of the House and for his excellent speech.
  Like the hon. Member for Leeds, West (Mr. Meadowcroft), I regret that the speeches of Conservative Members have so far represented only a single strain in the attitudes of their party. They regard the Government's policy as being too liberal in many respects and do not reflect the much more far-sighted strain that was represented by, for example, Mr. lain Macleod, the Earl of Stockton and Lord Carrington.
  To save Conservative Members the trouble of intervening, I should say that I have visited South Africa and most parts of Africa, north, east and west. When I was in South Africa I met Ministers in the then Government, representatives of all communities, Gatsha Buthelezi and Nelson Mandela in prison on Robben island. I also had what I regard as the great privilege of spending a day with Steve Biko, a young man of exceptional political and human qualities who, a few years later, was beaten to a pulp in a South African gaol, thrown naked like a dog into the back of a truck and driven 200 miles over bumpy roads to a hospital where he died.
  If Conservative Members had more feeling for those who have opposed apartheid, their speeches would be different from those that we have heard tonight.
  We are witnessing in South Africa an historic tragedy which is in not its final but its penultimate stages. Just over a year ago, the South African Prime Minister left Britain after a visit that was described in The Times as a diplomatic triumph for him, and an unmitigated disaster for the blacks in South Africa.
  The British press told us that our Prime Minister had taken Mr. Botha to task, but his Foreign Secretary, Mr. Pik Botha, said:
  "If that is what she is like when she is taking you to task, then I would like to see her when she is friendly."
  That is not the Maggie we know. My impression from talking to Conservative Members is that when the right hon. Lady disapproves of someone she makes her views crystal clear. But there is no doubt that Mr. Botha left
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  these shores with a different impression from that which the Prime Minister tried to convey to the House about his visit.
  The right hon. Lady told us that we should expect significant improvements in South African behaviour following the visit, if not as a result of it. Let us look at how Prime Minister Botha rewarded her. Almost his first act was a slap in the face. He broke a solemn commitment to send four South African agents to stand trial for breaking the law in Britain, even though his embassy in London had put up bail of £400,000. The only reaction of the British Government was some verbal whingeing from a junior Minister at the Foreign Office.
  Meanwhile, in Mr. Botha's own part of the world, he sent his troops to invade a friendly Commonwealth country and to carry out a massacre in Gabarone, he sent troops to invade Angola after saying that he was withdrawing all his troops from that country, he sent special forces to blow up an American installation in northern Angola and he sabotaged the United Nations resolution on Namibia by setting up a puppet Government there in straight violation of the policy that he had promised to pursue.
  Inside South Africa's own borders, what have we seen in the last 12 months? Mr. Botha has presided over the killing of 500 blacks, often shot in the back or beaten up by police in balaclava helmets. All hon. Members deplore some of the atrocities which have been referred to, but the fact is that this whole terrible cycle started with the massacre at Uitenhage, in which a young officer was allowed to fire at people who were offering no provocation whatever, as was later demonstrated in an inquiry. We have also seen the death squads murdering the political opponents of the regime, and finally we have seen the declaration of emergency which has established a storm-trooper state in which the agents of the Government are licensed to kill without fear of legal retribution.
  These are very serious developments, and it is not surprising that they have produced reactions in South Africa and in the rest of the world. Indeed, the wind of change, to which an earlier Conservative Prime Minister referred in a famous speech in South Africa, has now become a hurricane.
  One of the most disturbing things I have read recently is the findings of the survey by an institute sponsored by the South African Government themselves. It reported that a majority of the South African people now react positively to using violence as a means of political change. That majority includes 63 per cent., nearly two thirds, of the blacks in South Africa and, surprisingly, I expect, to all hon. Members, 30 per cent. of the whites and somewhere between 30 and 50 per cent. of the Asians and coloureds.
  These are facts which we cannot shut out of our minds. Much as I appreciated, if I may say so, the thoughtful speech of the hon. Member for Epping Forest (Sir J. Biggs-Davison), who made a classical case for a Conservative approach to the problem with moderation and some insight, the plain fact is that the situation which I have just described is one to which this type of Conservativism has become totally irrelevant.
  As has been pointed out, we in this House have a long historic connection with South Africa, and we have a moral responsibility, though no political responsibility, for the welfare of the people there; and the real question we must face is this. Is there anything which we can do which

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  may slow down or divert this accelerating race to catastrophe in South Africa, or must we, as the Foreign Secretary implied in his speech last night, rely wholly on Mr. Botha's good will? I do not think, in the light of what has happened in the last 12 months, that anybody can honestly expect the situation to improve without external intervention in some form.
  I want to suggest, without total confidence that this will be effective, some measures which I believe must be tried, and which the Security Council, in a resolution which the British Government did not oppose, has already asked all countries to consider immediately. Indeed, as I understand it, the British Governent had a hand in drafting the resolution, although at the last moment they would not vote for it.
  The Security Council asked all countries to consider immediate voluntary measures to try to shift the policy of the South African Government. In my opinion, what we in Britain should immediately do would include the following five steps. The first would be to withdraw our ambassador from South Africa. That does not mean withdrawing the embassy or ceasing all contact with the South Africn Government. Withdrawing our ambassador is a sign of displeasure, as President Reagan has already done, and as France announced today that it is doing.
  Secondly, we should ban all new loans and investment, as France has now decided to do and as the American Congress—both Houses —has decided should be done by the United States. I believe that President Reagan will find it impossible to avoid doing so in the coming weeks.
  Thirdly, we should make compulsory the Community code of conduct for European—including British—firms in South Africa. A voluntary code of conduct will not be effective. We have seen that already in the behaviour of the British BTR company, which has been found guilty by the International Confederaton of Free Trade Unions and the TUC of paying starvation wages to its employees in South Africa.
  Fourthly, we must tighten the arms embargo to shut off the scope for the supply of licences for spare parts and components for a whole range of aircraft that could be used for military purposes—a loophole that has been opened by the new Export of Goods (Control) Order that comes into force tomorrow.
  Finally, the Government must begin to establish informal contact with the African National Congress, as they have already done with the PLO. The case is similar. It is inconsistent of the Government to ask the South African Government to release Nelson Mandela, who has refused to forswear the use of force, and at the same time to use the ANC's commitment to force when necessary as an argument for having no contact with it.
  Against that background of unilateral measures —many of which I freely admit will be symbolic rather than practical—we must begin seriously discussing what sort of United Nations mandatory sanctions it would be sensible to introduce if and when that proves to be necessary.
  Mr. John Carlisle: I remind the right hon. Gentleman that the Government have always insisted that they have contact with the UDF, who have close contact with the ANC, much to the dismay of some of my hon. Friends. Does he agree that if such contact were to be continued, it would be better with the UDF rather than with the ANC, which has declared publicly within the past 48 hours on
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  British radio that it intends by violent means to attack what it calls soft targets and is committed to revolutionary change in South Africa? Will he not give the Government some credit for at least having a line to the UDF, if riot to the ANC?
  Mr. Healey: Of course I give the Government some credit. They are steadily forced back by events and public opinion in what I regard as the right direction. I am glad that they are establishing contact with the UDF. However, they should also establish contact wth the ANC. The Minister is well aware of the distinction in Israel between PLO representatives and people close to the PLO who are not members of it and with whom we have always maintained contact, such as the mayors of some of the villages on the west bank.
  I do not think that contact with the UDF is an adequate substitute for contact with the key people in the ANC. I do not ask the Prime Minister to invite Oliver Tambo to Chequers next week—perhaps next year—but contact at an official level with these people would be desirable. We had such contact in the final stages of many colonial episodes, as Conservative Members will know, such as Rhodesia, Kenya, Cyprus and many other parts of the world.
  The Foreign Secretary addressed himself to these problems in a notable speech last night and he repeated some of the points he then made in answering questions in the House this afternoon. His basic argument—it has been made by some Conservative Members in this debate —is that all economic sanctions are counter-productive and are bound to fail in their purpose.
  To the amazement of many of us, the right hon. and learned Gentleman quoted the failure of sanctions against Rhodesia. Of course they failed. Because the South African Government acted as a free conduit for supplies from all over the world to Rhodesia, sanctions in that case never had a chance.
  The Government are selective in their approach to sanctions. They imposed sanctions against Poland to influence the internal situation there. To do so in the case of South Africa, it is said, would be contary to international law. The Government are at this momemt applying sanctions against Nicaragua by instructing their officials in Washington and elsewhere to block economic assistance to Nicaragua from international institutions such as the IMF and the various ancillaries of the International Bank by confecting false reasons for refusing assistance. The House knows that because of the honesty of a junior official in the Overseas Development Administration who has since been sacked for his honesty.
  Let us not forget that we imposed sanctions against Iran following the taking of American hostages. Those sanctions were certainly effective because the freeze on Iranian financial assets was a key issue in the release of the hostages. The final negotiations about the unfreezing of those assets clinched the deal and led to their release. The Government's arguments against sanctions against South Africa are contradicted by their own behaviour now and in recent years.
  If we do not start by taking at least the minimal measures that I have listed, we shall not only be failing in our political and human duty, but we shall be isolating ourselves from our friends all over the world.
  Mr. Robert Hughes: My right hon. Friend said that sanctions against Rhodesia had failed. Although I agree

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  that sanctions by themselves did not bring an end to UDI, does he accept that if there had been full diplomatic recognition of Rhodesia, with totally free access of arms, finance and so on, the war would have been prolonged significantly?
  Mr. Healey: I agree with my hon. Friend.
  I come to the problem of Britain's isolation on this issue. The Prime Minister will meet her fellow Commonwealth Prime Ministers at a conference in the Bahamas in October. Every other Commonwealth country supports economic sanctions against South Africa. The white Commonwealth countries—Australia, Canada and New Zealand — have already announced types of sanctions, including many of the measures that I have suggested. The Third-world members of the Commonwealth pressed for that at a meeting in London, at which the British Government were the only dissenter from a communiqué published only last week. There is growing support for sanctions in Europe. The Scandinavian countries already impose them; France announced today that it is imposing them; and there is not the slightest doubt that other European countries, particularly the Netherlands, and probably Germany, will follow.
  In the United States, too, sanctions are already being applied, although not yet by the Government. Most of the big banks have already decided to stop new loans to South Africa and are trying to disengage from their activities there, as are a couple of British banks; Standard Chartered bank has already got rid of its majority holding in its subsidiary in South Africa. A growing number of businesses in the United States and large multinationals are trying to disengage from South Africa, as are many public authorities, including New York. Both Houses of Congress have recently voted resolutions urging the imposition of economic sanctions. A conference will be held between them in the next few weeks to try to compose their differences. It would be remarkable if President Reagan chose to veto their agreed resolution.
  The Government do not have a leg to stand on with their present policy. I respect the hopes that the Government entertained — although I never agreed with them — of constructive engagement with South Africa. However, the South African Government have already made a mockery of those hopes. The policy of constructive engagement lies in shambles. The Government have a clear duty to play an active role in shaping events in southern Africa, so far as that is possible for outsiders, as that is the only hope of avoiding a catastrophe which I believe hon. Members on both sides of the House wish to avoid.
  12.36 am
  Mr. Nicholas Winterton: I shall endeavour to be brief. I do not have a prepared speech and I hope to speak from my experience of visiting South Africa and Namibia on a number of occasions—[HON. MEMBERS: "Who paid?"] My entry in the Register of Members' Interests will provide Labour Members with all the information that they require.
  Mr. Allan Rogers: Will the hon. Gentleman give way?
  Mr. Winterton: I shall not give way.
  Mr. Rogers rose——
  Mr. Deputy Speaker: Order. The hon. Member for Macclesfield (Mr. Winterton) has made it clear that he is not giving way.
  Mr. Winterton: I found the speech of the right hon. Member for Leeds, East (Mr. Healey) to be extremely negative. I shall comment on the constructive and useful speech of the hon. Member for Leeds, West (Mr. Meadowcroft). His contribution was thoughtful and positive and I believe that it will be heeded by the media and the press in the Republic of South Africa and elsewhere. I am interested that he and the leader of his party, the right hon. Member for Tweeddale, Ettrick and Lauderdale (Mr. Steel), have advanced the proposition that the present chaos, riots and disorder in South Africa, which have necessitated emergency powers, might be defused if the South African Government released Nelson Mandela unconditionally. I hold reservations about that and I am not sure what dangerous precedent it might set.
  However, if the South African Government believed that Nelson Mandela's release could be a useful initiative, I should not discourage them from taking it. There is no doubt that Nelson Mandela holds an important place in the eyes of many of the South African blacks. If he were released from prison, he might feature as one of the major black leaders with whom the South African Government could enter into negotiations and discussions to seek a way for the black majority people of South Africa to have a meaningful input into the Government of that country.
  My message in this important debate—I am grateful to the hon. Member for Birmingham, Perry Barr (Mr. Rooker) for initiating it — is that the Government of South Africa should consider seriously the unconditional release of Nelson Mandela. It is a possible initiative which could be acceptable to the black people and enable them, as it were, to enter into meaningful discussions.
  I am sad that the right hon. Member for Leeds, East with his considerable experience of many areas of the world, including South Africa and Africa as a continent did not mention the plea of Bishop Tutu, the Anglican bishop of Johannesburg. He has spoken to his people in a loud and clear voice. He has said, "Please stop the violence. Please stop the killing. This no way to make progress in our country." I have been an outspoken critic of the bishop, but having sought to read everything that he has said, it seems that he has said to the Government of South Africa, "I am not at this time in support of disinvestment in my country. I believe that our Government deserve a breathing space of about two years to follow through even faster the reforms that they are introducing. If no meaningful progress has been made at the end of that period, I may support sanctions and boycotts which will bring great suffering to the majority of the black people."
  Mr. Healey: I made it clear that I opposed the sort of atrocities that were recently carried out in South Africa. Of course, I endorse the appeal by Bishop Tutu. I think that thousands of people would be more interested if Conservative Members were less selective in quoting Bishop Tutu's words. They have not quoted his appeal to the South African Government to end the state of emergency, his blistering attack on apartheid and his appeal to the Government to end the pass laws and the most serious elements of apartheid and to give the blacks the political freedoms to which human beings all over the

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  world are entitled. When the hon. Member for Macclesfield (Mr. Winterton) is prepared to endorse all that Bishop Tutu says, I will be more impressed by his choise of quotations.
  Mr. Winterton: I do not think that Bishop Tutu would expect me to agree with everything that he says; likewise, I am sure that he would not agree with everything that I say. Bishop Tutu has made a plea for an end to the killing. I hope that his people in the black townships of the eastern Cape and eastern Rand heed him and that the restoration of peace will lead to the rapid return to the reforms that Mr. P. W. Botha, the President, was introducing.
  Mr. Rogers: Will the hon. Gentleman give way?
  Mr. Winterton: I shall not give way now, but I shall be happy to give way in a moment when I have developed my arguments.
  It is sad that the House, the United States and the European Community Foreign Ministers seek to impose a European system of democracy on an African country. I want the system of apartheid to end. I say that unreservedly, as did my hon. Friend the Member for Luton, North (Mr. Carlisle). I must say as well—hon. Members will not like me for this—that I do not believe that, in my lifetime or, indeed, in the history of the Republic of South Africa, there will be a system of one man, one vote in a unitary state. I do not believe that it will work. Africa's history shows that it will not.
  We need look just north of South Africa to see Zimbabwe rapidly moving towards a one-party state. It is based on a tribal system. Mr. Mugabe and the majority Mashona people are determined that their way will be that country's way. The 20 per cent. who are represented by the Ndebele people will not have any meaningful say in the Government.
  That is the history of government in north, east, west, central and southern Africa. I want an end to the abhorrent system of separate development, but I do not believe that the system that will replace it will be a one man, one vote system in a unitary state. I believe that South Africa will move towards a democracy under a constellation of states with common purposes in foreign affairs, defence and economics. Within meaningful state areas however, there will be a one man, one vote system.
  I regret the fact that the recommendations of the Buthelezi commission have not been taken on board by the Government of the Republic. When I was there earlier this year I think that many of the white South Africans in Durban felt that Durban would form a major part of a Zulu state in South Africa under the dynamic and inspired leadership of Chief Gatsha Buthelezi. He is one of the many leaders of the black people of South Africa who have been to many countries speaking on behalf of their people.
  Chief Gatsha Buthelezi speaks on behalf of the largest black group in South Africa. He is perhaps the most important political figure there. I speak of him in his capacity as president of Inkata which is a political movement that crosses the ethnic groups of Zulu, Xhosa, Venda, Sotho and Tswana. He is the president of the largest black political group in South Africa, and is strongly opposed to disinvestment in his country. Should we not listen to Chief Gatsha Buthelezi? Surely he has a part to play as he is expressing a view representative of many people in South Africa.
  1174
  If one does not accept what Chief Gatsha Buthelezi says, what about the most fervent Liberals there, some of whom have already been mentioned? Mr. Harry Oppenheimer for example, has for decades opposed the Afrikaans Boer Administration in Pretoria and Cape Town, and given tremendous support to the move to end apartheid and separate development. Alan Paton and Mrs. Helen Suzman have also been mentioned. Those people, who are widely respected throughout the world, have stated that in their experience of their country and Africa, disinvestment will not be of benefit to South Africa or bring about the changes that we all wish to see.
  Do not the right hon. Member for Leeds, East and others who are critical of the stance of some of my colleagues and me, accept that, despite the fact that the Portuguese have left Angola, there is no democracy there? When was an election held in Angola? Yet is Angola recognised by the United Nations? Of course it is. When was an election held in Mozambique? None has ever been held there. Where is the democratic system about which the right hon. Gentleman boasts, and which he seeks to force on South Africa? The right hon. Gentleman should look at Africa through the eyes of Africans, not Europeans. The only reason why Dos Santos and the MPLA are in control of Angola is that they happened to be in Luanda on a particular date in November some years ago. If Jonas Savimbi had been there that day, he would probably be in power in Angola.
  I ask the House to look at the true position realistically, not from a view tainted by international politics, which in the end does not solve the problems facing the world. I referred to Zimbabwe, and to South Africa as an African country. Please let us deal with that country from an African standpoint, not a European one.
  The United Kingdom Government are taking an extremely constructive stance over South Africa. We may be one of only a few countries who are standing out against the trendy popular view at present, but that does not make us wrong. Nor did it make Winston Churchill wrong when, in the House, he stood out against disarmament, which was a popular policy at the time with both the Labour party and some Conservative Members. He was almost a lone voice in the wilderness, but none the less he stood by his belief. With hindsight was he not proved right?
  Mr. Rogers: Is the hon. Gentleman attempting to equate his position on South Africa with that of Winston Churchill on Nazi Germany? When he asks my right hon. Friend the Member for Leeds, East (Mr. Healey) to listen to the views of Bishop Tutu and to speak to him about development of South Africa, is he prepared to ask the same of the South African Government, who have paid for his many trips to South Africa?
  Mr. Winterton: That is cheap.
  Mr. Rogers: It is not cheap. I wish that the hon. Gentleman would come clean with the House——
  Mr. Deputy Speaker: Order. This is a very long intervention.
  Mr. Rogers rose——
  Mr. Deputy Speaker: Order. The hon. Gentleman has made his point, and he must resume his seat.
  Mr. Winterton: Because of the hon. Gentleman's provocative intervention, I am tempted to be immodest and to say that I leave history to judge that. But, as I said

  1175
  at the beginning of my speech, my involvement in, and the visits that I have paid to, Namibia and South Africa are properly registered in the Register of Members' Interests in accordance with the resolution of this House. I do not need to go into any further detail this evening.
  I ask Opposition Members to consider and comment upon the reforms that have taken place in South Africa under the initiatives taken by the state President —previously the Prime Minister of the Republic—and his Government.
  There are now coloured trade unions, mixed trade unions and black trade unions. They are recognised and are part of the industrial scene of the Republic of South Africa. I wonder whether in all the countries of Eastern Europe there is the freedom of labour that there now in the Republic of South Africa.
  We should also appreciate the housing reforms that have taken place. Freehold rights will shortly be granted to blacks living in such major cities as Alexandria, Soweto and elsewhere. That is a major change. I am sure that the leader of the Liberal party would agree that inevitably that must ultimately lead to the complete destruction of the whole system of apartheid.
  Mr. David Steel: The point is—and I discussed this with Mrs. Suzman during her visit last week—that the advances that the hon. Gentleman accurately describes are confined to certain restricted areas. That is not true of other countries.
  Mr. Winterton: I think the right hon. Gentleman means other parts of South Africa. But I believe that the reforms that are now taking place will inevitably lead to free movement within South Africa, just as I believe that the industrial needs and economic growth of that country are also contributing to a very marked extent to the breaking up of the system of separate development. Industry in that country needs skilled labour, and that cannot be provided by white South Africans. It is therefore inevitable that the other population groups will play an increasing part in the industrial and commercial life of that country.
  There are many other areas where reforms have taken place. Forced removals have been suspended. In fact, they were suspended about the time that I visited South Africa earlier this year. That should be welcomed in this country.
  The improved powers granted to black local government should also be welcomed. The additional money now being spent on the education of blacks in South Africa should be welcomed. The increased training of blacks, coloureds and Asians within South African industry clearly indicates that the system of apartheid will shortly end, and I am delighted at that.
  Powers have been assumed by the South African Government because of the riots and disorder that have taken place in 36 of the 300 magisterial areas. The sooner those powers are ended, the better. But they cannot be ended until order has been restored. These powers are as much for the benefit of the law-abiding black, coloured and Indian citizens of the Republic of South Africa as they are in the interests of the Government. The Government have a duty to try to ensure law and order so that all people in that country can go about their work and other activities in the way that they would wish.
  1176
  I also point out that South Africa is of considerable importance to the Western world. It is the only country on the African continent with deep-sea port facilities for Western shipping. All the other ports are used by the growing Soviet navy which operates in the Atlantic and the Pacific.
  We should also not forget that, irrespective of the views of a minority in the Union of South Africa, as it then was, that country was a great supporter of the United Kingdom and the free world in the Second World War.
  Before I finish, I wish to correct something that was said by the right hon. Member for Leeds, East relating to the inauguration of the transitional Government of National Liberty in Namibia. I find it extraordinary that this initiative mounted by the internal political parties of every political persuasion in Namibia should be condemned by the right hon. Gentleman. Mr. Shipanga of the SWAPO Democrats, is a leading Minister in this new transitional Government, which in no way impedes the implementation in due course of United Nations Security Council resolution 435. The politicians who are party to the internal Government of Namibia have made clear that they do not want total power because they do not wish in any way to go against resolution 435. They want that resolution implemented in due course and internationally supervised elections.
  Is the right hon. Gentleman fair when he condemns this grouping of independent internal parties under such people as Andreas Shipanga? He was a founder member of SWAPO with Sam Nujoma. His only crime was that he suggested to Mr. Nujoma the Mr. Nujoma might care to stand for election as Leader of SWAPO, as a result of which he was imprisoned, and only after two and a half years did he win his release. He was then returned to his country to set up, as the right hon. Gentleman knows, the SWAPO Democrats and participate in the internal affairs of that country. Mr. Moses Katjiuongua, the president of the South-West African National Union, a party which existed before SWAPO was even formed, has himself been in prison and has opposed South Africa from the year dot. These men are part of the new Government, which I hope will be an interim internal Government of national unity seeking to bring a country — which is four times in geographical terms the size of the United Kingdom and which has a population of 1 million people—towards evolutionary independence ultimately, with internationally supervised elections. I ask the right hon. Gentleman whether that is something that he really can deplore.
  Mr. Healey: I think this is one issue on which I happen to agree with the present British Government and the American Administration, both of whom have condemned the setting up of this puppet Government.
  Mr. Winterton: I am not sure the word "condemned" has come from the mouth of the British Minister. I believe that the British Government have said that in their view the Government in question are null and void. [Interruption.] Well, politicians use language that is often considered one way by one group and another way by others. I do not consider that that is a robust condemnation by the British Government. Certainly it does not amount to recognition, but I do not believe that it is a condemnation, either. I say to the right hon. Gentleman that I believe that the example set in Namibia, if it is successful, could when order has been restored in the

  1177
  Republic of South Africa, be an example to follow, and set a faster rate of progress in South Africa. I say publicly that I wish every success to the new transitional Government of national unity that is operating from Windhoek in Namibia. I hope that what goes on in that country will be an example to the rest of the African continent.
  South Africa is a country important to the prosperity and stability of the whole of southern Africa. The African continent is vital to the free world. Let us try to encourage South Africa to make the necessary progress so that the abhorent system of separate development—apartheid—can be brought to an end as soon as possible. But let us not bring about a system whereby all the peoples of southern Africa are plunged into chaos, and the country into disorder. If we do, we shall be criticised in the years that lie ahead. We have a heavy responsibility at this time.
  1 am
  Mr. Tom Clarke: I hope that the hon. Member for Macclesfield (Mr. Winterton) will not think that I am treating him too harshly when I say that when he appeared to be comparing himself with Winston Churchill, he reminded me more of the period when Winston Churchill was opposing the inevitable in India than when he was dealing with Nazi Germany. The inevitable cannot be avoided in South Africa. If Harold Macmillan did not succeed almost a quarter of a century ago in persuading Conservative Members that the wind of change was making an impression, the events of the past few weeks in particular make it clear that South Africa is heading in a different direction from the one that appears to appeal to Conservative Members.
  I was particularly pleased that my right hon. Friend the Member for Leeds, East (Mr. Healey) intervened to say that the quotations from Bishop Tutu were selective. That was especially right in view of the fact that his enthronment address when he was installed as the Bishop of Johannesburg was word by word and line by line, an utter condemnation of almost every expression of opinion that we have heard from Conservative Members in the debate.
  I am pleased that my hon. Friend the Member for Birmingham, Perry Barr (Mr. Rooker) was successful in obtaining the debate. As usual he made an excellent speech. It was lucid and appealed to the House. When Conservative Members were asking him whether he had been to South Africa, I thought that my hon. Friend showed particular tolerance. I look forward to the time when he speaks in his normal role as Front Bench spokesman on housing matters, and when he in turn asks Conservative Members when they last saw a council house or visited a council estate.
  Nevertheless, my hon. Friend spoke with great authority. I was particularly pleased when he referred to the article in The Times about Nelson Mandela. It told us a great deal about Mandela and South Africa, the man and his aspirations, and his love for South Africa, when he talked about the beauty of the city of Johannesburg and even about the role of the whites in the future of South Africa. That is a man who loves his country and who should not be in prison. He should be given the opportunity to express his ideas, which are much more representative of the future than those reflected in the British Government's policies.
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  In the article there was a most moving message from Mandela in prison, when he said to his fellow citizens:
  "Your freedom and mine cannot be separated."
  That is true of South Africa in the context of the rest of the world.
  We cannot be complacent about human rights, human dignity and progress for mankind if we have the blot of South Africa on the international landscape. In spite of the examples of America, France and the EC which have been given today, we have had a tepid response from the Government. That is especially astonishing in view of South Africa's record in respect of Commonwealth countries. What about Swaziland, Lesotho and Botswana? Did the British Government offer solidarity with those countries when faced with provocation from South Africa? No. We urged them to sign treaties to comply with South African demands. The invasion of Botswana is outrageous and has not been condemned sufficiently by the Prime Minister or any other Ministers.
  We have been asked to judge the record of the South African regime this evening. The hon. Member for Macclesfield asked us especially eloquently to do so. I should like to refer to a compelling letter that appeared in the Glasgow Herald of 9 July, signed by the high commissioner for Botswana. Of South Africa he said:
  "Their recent activities in the region and their pressures on Botswana indicate that they now want from Botswana more than a commitment to our well-known policy of good neighbourliness. They now want Botswana, through the use of their overwhelming military force, if necessary, to commit itself, by treaty, to be co-opted in the enforcement of apartheid in South Africa and the perpetuation of colonialism in Namibia."
  The letter described the invasion thus:
  "The so-called 'ANC operators' killed in the raid were: a 60-year-old man who had emigrated from South Africa in the early 1950s and was a temporary resident; a 71-year-old South African man who came to Botswana in 1981 to spend the remaining days of his life in peace and freedom in exile; a 47-year-old refugee businessman and his social worker wife who worked for our Ministry of Local Government and Lands; a refugee student at the University of Botswana who had tied the country to avoid the military draft; a musician; and a secondary school teacher who had just graduated from university in Nigeria and a South African student visiting relatives in Botswana. The rest were a six-year-old child from Lesotho, two Botswana housekeepers and a Dutch citizen of Somali origin working for a computer company, all of whom may never have heard about the ANC."
  Mr. Rogers: On a point of order, Mr. Deputy Speaker. It is in order for Conservative Members to use the Government's facilities to obtain statistics and information from the civil servants? My hon. Friend the Member for Ogmore (Mr. Powell) raised this matter recently with Mr. Speaker. If there is to be a connection between the British Government and the Government of South Africa through that Box, it is a travesty of democracy——
  Mr. Deputy Speaker: Order. The matter was indeed raised. Mr. Speaker gave his ruling and I ask the hon. Gentleman to refresh his memory of it. The civil servants in the Box are there to advise Ministers.
  Mr. Rogers rose——
  Mr. Deputy Speaker: Order. The debate will end at 1.48. The Minister who is to reply to the debate would like to begin his speech at 1.30. These interruptions mean that hon. Members who have been sitting throughout the debate will not be called.
  Mr. Clarke: I realise, Mr. Deputy Speaker, that time is not on my side.

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  The state of emergency in South Africa means that violence and injustice prevail. More and more power has been given to the police and army chiefs. To those hon. Members who argue that this was inevitable I put this question: why has Mr. Botha gone out of his way to brief the press and ask them to take the view that the state of emergency was forced upon him by the police and the military? Powers which are absolutely disgraceful and indefensible have been taken: the power of arrest and detention, the power to supervise free journalists, and the power to police
  "including the right to use force resulting in death."
  People do not even have the right to disclose the name of a detainee without official permission. If they do, they have to accept that it is a crime.
  I believe that my right hon. Friend the Member for Leeds, East was right to remind the House that Britain is in grave danger of becoming isolated. We have ignored the United Nations, the Commonwealth and those countries whose commitment to democracy is at least as great as ours. They have taken action to bring to South Africa's attention the repugnance that is felt by all.
  Notwithstanding the atrocious record of the South African Government and the determination of all civilised people to put an end to apartheid, there are hon. Members who offer apologies and excuses and who make speeches in an effort to defend the indefensible. But it will be impossible to defeat the progress of the human spirit. Injustice in South Africa will be defeated. Ultimately justice will prevail.
  1.13 am
  Mr. Bill Walker: The hon. Member for Monklands, West (Mr. Clarke) made a speech, as did other Opposition Members, which, if one were a stranger from another planet listening to this debate from the Strangers Gallery, would lead him to believe that the whole world is like this country and that all the debates that take place throughout the world are like ours. Anybody who knows anything about the world realises that in many respects this country is unique. The way in which we can debate issues in this Chamber is unique.
  Equally, this stranger would look at the world and realise that South Africa, like many other parts of the world, faces tribal problems. The difference between South Africa and many other parts of the world is that one can tell the difference between the tribes by the colour of their skins. But is that not true of other parts of the world? It is true of the Indian subcontinent, of the south American continent and of large parts of south-east Asia. One can tell the difference because of their different appearance and because of the religions that they practise. We have to ask ourselves whether we are pretending to ourselves or whether we are prepared to look at the world as it really is. Only a tiny minority of the world's population enjoys democracy. More than four fifths of the member states of the United Nations are not democracies.
  If we are to make any attempt to understand the problems of southern Africa—problems which, like so many others, began as accidents of history—we must show tolerance and accept that regimes exist which are unpalatable by our standards and values. Regardless of our political positions, all hon. Members support democracy, freedom and free speech.
  1180
  We know that the world at large is not like that. most of us abhor the administration in southern Africa. Few of us would compliment it or wish to have any association with it. I am sorry that the right hon. Member from the borders is not here. Since I am advised that he would not recognise me, I shall refrain from remembering his constituency. It was interesting to note that the right hon. Gentleman entered the Chamber during our debate for only a few minutes. Since he has recently spent some time in that part of the world, one would have hoped that he would have spent more time in this Chamber of democracy and made a positive attempt to do something about the matter, but he did not. [Interruption.] He has such a poor memory that he has probably forgotten what he saw there. He cannot even remember hon. Members who come to the Chamber every day.
  If Opposition Members genuinely believe, as they claim, that it is right for the Scottish tribe to have its own homeland and its elected assembly in Edinburgh, why is it wrong for the Benda tribe to have its homeland? I make no apology for being a member of the Scottish tribe. I do not understand these double standards. Apparently for good political reasons north of the border, it is right to have a Scottish tribal conclave and a Scottish Assembly. However, they do not believe that it is right for the Benda nation.
  Hon. Members delude themselves and the rest of the world if they believe that the House can provide a solution to the problems of southern Africa, because they are complicated and difficult problems that were created by accidents of history. However, we cannot escape the fact tht Britain is a manufacturing nation. We must purchase vital minerals for the manufacture of essential goods. Whether we like it or not, 98 per cent. of those essential minerals are in southern Africa or south-west Africa or under the control of the USSR. Those minerals are necessary for the manufacture of high-grade steel and alloys. If, as Opposition Members suggest, we did not buy those minerals, the effect on Britain would be far greater than the effects of the problems with OPEC.
  The OPEC problems would shrink into insignificance in comparison. One cannot manufacture all the modern appliances that we manufacture and sell abroad without these essential minerals, and we could not have the avionics, aviation and shipping industries or most of the equipment used by our armed forces if these essential minerals were not available to us.
  Instability in southern Africa cannot be in the best interests of the manufacturing nations of the West. The problems in South Africa now should remind us that it is one of the few countries in Africa that has not had a coup in the past 50 years. Nearly every other country has had a change of administration that did not take place under the normal process that one would expect.
  That being so, we have to ask ourselves whether the speeches that we make inflame a difficult situation or help it. If it is the former, one should be careful about the speeches that one makes. We feel that way about the speeches that some politicians from other countries make about Northern Ireland, which we know inflame the situation there unnecessarily. Is it not also possible that if we take the licence that our freedom allows us —[Interruption.] I am not telling individuals that they should not make such speeches. I am saying that they should think

  1181
  carefully before doing so. There is a difference between saying that one should not do something, and saying that one should think carefully before doing so.
  With democracy come certain conditions that should be recognised. One is that one is required to apply oneself sensibly in a way that will not unnecessarily damage others. [Interruption.] I do not find that funny.
  I make no apology for the situation in southern Africa, because history shows that these things evolve slowly. The white tribe is in control. It has control that allows freedoms, and greater freedoms than I found in other parts of Africa. I am not talking about military control. We should think carefully before we do things that inflame the difficult situation, and we should apply tolerance.
  1.23 am
  Mr. Richard Caborn: I have only seven minutes tonight; at least I had 10 when I moved my South Africa (Sanctions) Bill a couple of weeks ago. Some of the things that have been said tonight are appalling. They have not taken account of what has been happening in southern Africa. I have not been to South Africa, and I shall tonight be quoting not only from people who have been there but from people who live there and are representatives of the people there.
  The way that Bishop Tutu's words have been taken out of context is appalling. I shall quote what he said in St. Paul's cathedral, when he gave a lecture. He said:
  "Ensure that your country exerts political, diplomatic, but, above all, economic pressure on the South African Government to persuade it to go to the conference table at a National Convention with the authentic leaders of all sections of our community, and for us blacks, it would mean the real leaders now in jail or in exile."
  That speech has been published.
  The hon. Member for Luton, North (Mr. Carlisle) said that I had a three-line Whip for the Bill, which I had the pleasure to introduce in the House a couple of weeks ago. The contrary is the position. I was heartened to speak to many Conservatives, some of whom wrote to the antiapartheid movement saying they would be supporting the Bill, and quite a number said that they would not be prepared to go through the Lobby with certain elements on the Conservative side who were opposed to that.
  Those elements have formed the voice of the Conservative party in this debate, and one could say it is a hard, Right-wing voice. It is a pity that a distortion of the Conservative party has come through in the debate. A number of people in the United Kingdom in all political parties would agree on the rejection of apartheid. The Government have adopted a platitudinous attitude and are taking no positive action. At Question Time today, the Foreign Secretary clearly underlined the position of the Government on the matter of constructive engagement.
  The matter of Nelson Mandela and the ANC has been raised forcefully in the debate. For many years, Nelson Mandela and the ANC took exactly the course of trying to start a dialogue with the South African authorities. The abrupt end came in the 1960 massacre in Sharpeville. That was then the ANC and Nelson Mandela, together with his colleagues, said, "Enough is enough. We cannot tolerate the situation any longer." The ANC tried desperately for years to engage in a dialogue with the authorities, and it was the massacre of 69 people which drove Mandela and the ANC to take the decisions they did.
  Some 25 years ago, a state of emergency was imposed in South Africa after the actions of the security forces in
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  Sharpeville. The ANC was banned in 1961. Comments on constructive engagement have been made in the last 12 months by the Financial Times They were made just after President Botha embarked on a tour of European capitals. In April, the Financial Times said:
  "Barely one year ago President P. W. Botha embarked on a tour of European capitals to explain changes in South Africa's domestic policies, against a background of apparent accommodation with the black states in the region.
  Mr. Botha would not be welcome in European capitals today. Such credibility as he may have enjoyed has been undermined by a series of events, including last weekend's incursion by South African troops into southern Angola. At the same time, the credibility of the western powers, which have often been prepared to give Mr. Botha the benefit of the doubt, has been eroded too. Washington's policy of constructive engagement with South Africa, adopted by Mrs. Thatcher, is looking increasingly threadbare. In the United States the growing strength of the disinvestment and sanctions lobby is pushing President Reagan closer to selective action."
  In conclusion, it said:
  "Washington's patience has already been strained by events in Angola, where again diplomacy has taken second place to military ambitions.
  Throughout this period there is scant evidence that the west's cautious diplomacy has had a deterrent or constructive effect."
  I want to go briefly through the last 12 months of involvement or lack of it on the part of the British authorities and actions that have been taken in South Africa. As I said in my speech two weeks ago, the role of the British authorities in South Africa is greater than that of any other western nation. In August 1984 there occurred the detention without trial of United Democratic Front leaders prior to the coloured and Indian elections. In September 1984, the British Government refused to condemn the new constitution and was represented at the inaugural ceremony of the new state president. Also in September 1984, six leaders of the UDF sought sanctuary from detention orders in the British consulate in Durban, and British Ministers refused to meet with their representatives. In October 1984, the South African cabinet decided that four senior members who were convicted should not be returned to Britain to stand trial on arms smuggling charges in Coventry. Also in October 1984, all visits to those still in the Durban consulate were banned by the British authorities. In December 1984 the sit-in ended and those arrested were charged with high treason. They were the main UDF leaders.
  In February this year, there were further arrests of UDF leaders. In March, there was the massacre in Langa on the 25th anniversary of the Sharpeville killings. In April, the South African president announced that a transitional Government would be established in Namibia in defiance of United Nations resolution 485. In May, there were South African commando raids on Gulf Oil installations in Cabinda. So it goes on.
  Unfortunately, time is short, but I wish to quote two important statements. We have been told about developments in the trade union movement in South Africa. A Statement issued by the South African Congress of Trade Unions said:
  "The Botha-Malan Regime has imposed a naked military dictatorship on our people. The South African Congress of Trade Unions (SACTU) together with other democratic and fighting forces of our country, views this as a desperate but futile attempt to crush the democratic movement.
  In the light of this situation, SACTU calls on the international Trade Union Movement to take immediate action to cut off Apartheid South Africa by:

  1. Refusing to handle all maritime, air or land traffic to or from South Africa

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  2. Refusing to handle any goods to and from South Africa

  3. Refusing to handle all telecommunications to or from South Africa

  4. Refusing to handle all postal and telegraphic traffic to or from South Africa, and

  5. Mounting massive demonstrations at all diplomatic missions representing the white minority regime abroad.

  The South African Congress of Trade Unions call upon all Trade Unionists to urge the governments of their respective countries to impose immediate comprehensive mandatory sanctions against the Pretoria Regime."
  We have quoted Bishop Tutu and others, and on 28 April a conference of the South African Council of Churches passed a resolution calling for disinvestment. It was drawn up not by visitors to South Africa, but by people who are there all the time. They have to live with apartheid; they do not flit off to South Africa for three or four weeks. They echo Bishop Tutu's call. The statement says:
  "This conference therefore resolves:

  (a) to express our belief that disinvestment and similar economic pressures are now called for as a peaceful and effective means of putting pressure on the South African government to bring about those fundamental changes this country needs.

  (b) to ask our partner churches in other countries to continue with their efforts to identify and promote effective economic pressures to influence the situation in South Africa, towards achieving justice and peace in this country and minimizing the violence of the conflict;

  (c) to promote fuller consideration of the issues by placing the case for the imposition of economic sanctions and disinvestment before the Executive Committee of the SACC and the Regional Councils, and the Councils of our member churches and organisations with the request that they encourage congregations to study and debate them;

  (d) to ask the Executive to appoint in consultation with the Director of Justice and Reconciliation a task force to examine the whole question of economic justice as well as issues of disinvestment and economic sanctions, to review and co-ordinate the responses from the churches, and to assist the church leaders by making available to them information and analyses;

  (e) to call member churches and individual christians to withdraw from participation in the economic system that oppresses the poor, by re-investing money and energy in alternative economic systems in existence in our region."

  Conservative Members referred to the trade union movement, but when the movement gives its considered opinions on the crisis in South Africa, Tory Members reject those opinions. They want to have their cake and eat it. I hope that the Minister will be a little more conciliatory than some of his hon. Friends have been.
  1.33 am
  The Minister of State, Foreign and Commonwealth Office (Mr. Richard Luce): It is the end of July, the middle of the night and the middle of the Consolidated Fund Bill debate. In normal circumstances, many of us would be dropping off to sleep. However, not once in the last three hours have I felt like dropping off to sleep and, when I have looked round the Chamber, to my amazement, every hon. Member has been awake.
  It has been a stimulating debate. I congratulate the hon. Member for Birmingham, Perry Barr (Mr. Rooker) on raising an issue which is of profound importance not only to the people of South Africa and southern Africa, but to this country as well. It is, of course, an issue which raises
  1184
  great passions and feelings in the House, and they were expressed sincerely and strongly this evening. I believe that it has been a valuable and lively debate.
  Like the right hon. Member for Leeds, East (Mr. Healey), I have travelled around the African continent a great deal and, indeed, many times to South Africa. My first job was in east Africa. I think that it is a wonderful continent, a colourful continent and a continent of great extremes—the extremes of harshness, but the extremes also of kindness and good humour. When I look back on my experience of being the Minister of State responsible for African affairs for three years, which was a great privilege, I remember in particular the Lancaster house conference on Rhodesia. I sometimes think, when I look back on that occasion, that the only basis on which we got through was the good humour of the British and of the Africans. It is a simple humour that permeates the African continent.
  Apartheid casts a long shadow over Britain's relations with South Africa. Let there be no doubt about our detestation of apartheid, and all the repressive measures used to enforce it. It is contrary to all civilised values. The existence side by side of two communities—a ruling minority and a majority excluded from participation in the Government—is made doubly repugnant by the fact that the glaring inequalities between the two are founded on institutionalised racial discrimination. Such a system is basically unstable and dangerous. It makes economic nonsense. Apartheid is wasteful of resources. By putting barriers in the way of movement and opportunity, it inhibits economic growth. The South African Government know, because we have repeatedly made the point, and shall continue to do so, that the policy of apartheid is an affront to our most cherished values.
  The Government have followed closely, and with deep concern, the mounting unrest in South Africa and the tragic death toll that has resulted. We have continued to condemn repression and human rights violations, and have repeatedly impressed on the South African Government the deep concern with which we view such things as forced removals and detention without trial.
  What has been happening in South Africa is not simply a law and order issue. The continuing violence reflects the deep-seated frustrations of the majority of the people. We condemn violence, from whatever quarter, and we welcome the clear call from Bishop Tutu for an end to it. The declaration of a state of emergency last weekend will add to the growing numbers who languish in detention without trial or any legal recourse.
  Mr. Robert Hughes rose——
  Mr. Luce: I must say to the hon. Member for Aberdeen, North (Mr. Hughes) that the hon. Member for Sheffield, Central (Mr. Caborn), who had some very strong views, went over his time, and I must proceed rapidly if I am to answer the debate.
  Mr. Hughes rose——
  Mr. Luce: I must answer the debate.
  Such action will solve nothing. It underlines the urgency of fundamental reform.
  I believe that it is not for us to prescribe solutions. This point came out in a remarkable speech by my hon. Friend the Member for Macclesfield (Mr. Winterton), to whom I listened with the greatest care. He takes a very close

  1185
  interest in that part of the world. The point came out also in a speech made by my hon. Friend the Member for Tayside, North (Mr. Walker).
  We have made it clear to the South African Government that urgent progress must be made towards a system of government which commands the support of the people of South Africa as a whole. We do not dismiss the reforms introduced earlier this year. They are only a very small beginning, but they are not insignificant. I thought that the right hon. Member for Leeds, East was far too dismissive of — indeed he paid no attention to — some of the changes, however modest they may be, which are taking place. Indeed, I recall that, in the debate of 25 April, the hon. Member for Swansea, East (Mr. Anderson) said very much the same thing in welcoming some of the changes.
  The fundamental reforms which we all seek are still not in prospect, and such changes as have taken place have been overshadowed by repression in its ugliest form. It is, indeed, difficult to reconcile the South African Government's call at the beginning of the year for a wider dialogue with their subsequent action in arresting many of those whom black South Africans regard as their leaders.
  We and our partners in Europe have issued an urgent call for the Government of South Africa to begin a dialogue with the genuine representatives of the non-white community, which will deal with the fundamental question of black political aspirations. We have called on them to take certain steps that we believe would create an atmosphere of confidence for such a dialogue. Those steps should be, first, the unconditional release of Nelson Mandela and other acknowledged political leaders. I noted with interest that the hon. Member for Leeds, West (Mr. Meadowcroft) advocated that. My hon. Friend the Member for Macclesfield said that that could be helpful to the climate in South Africa. There was some disagreement from my hon. Friend the Member for Luton, North (Mr. Carlisle).
  Secondly, there should be an end to forced removals. Then there should be an end to detention without trial, then an early end to the state of emergency, then the progressive abolition of discriminatory legislation such as the pass laws and the Group Areas Acts and then a commitment to some form of common citizenship for all South Africans. Only by building on such a dialogue can the future security and prosperity of all South Africans be guaranteed.
  I wish to come now to the heart of the debate—the question of engagement or disengagement with South Africa. Many hon. Members disagree with the Government's policy of developing and maintaining contacts, but we firmly believe that without contact there can be no influence on events. The disagreement is about means, rather than about ends. To turn our backs on South Africa would be irresponsible. Our conviction is that we should remain involved and use the means at our disposal to work for peaceful change. That reflects our belief that economic growth in South Africa, and especially the benefits it brings to the black community, can act as a catalyst for peaceful political change and will hasten the collapse of apartheid. My hon. Friend the Member for Macclesfield referred to that.
  Black skills are needed on a greatly increasing scale and at all levels, especially in the urban areas. Already that has led to the virtual ending of job reservation and a commitment to accept blacks as permanent residents in the urban areas. Moreover, in the longer term South Africa will face the problem of how to feed its growing
  1186
  population. Without economic development it will be unable to do so. Africa is suffering enough without our seeking to make it suffer more. Improvements in the education and training of non-whites in South Africa are vital elements in the strategy. Our aid programme is devoted almost entirely to improving the standard of black education. The European Community code of conduct can play a useful role in encouraging representational rights for black workers through organisations of their choice and by urging companies to open up career opportunities through better training.
  The European Community is now urgently to consider strengthening the code so that it will contribute more effectively to the abolition of apartheid. We believe that British companies have made an important contribution to that process and that there is room for further initiatives by the private sector—community work, social welfare of employees, equal opportunities and so on.
  We understand why many now press for the alternative strategy—sanctions and disengagement, but we do not believe that such policies would produce the changes we all wish to see in South Africa. The right hon. Member for Leeds, East was a member of a Government who for many years followed the policy of dialogue between this country and South Africa. I was interested to hear him say that his package of five measures, which I noted carefully, would be only symbolic——
  Mr. Healey: No.
  Mr. Luce: I thought that the right hon. Gentleman used that word.
  The Government remain opposed to economic sanctions, and I make that absolutely clear in reply to my hon. Friend the Member for Luton, North. We oppose them because they simply will not work. They have virtually never worked when they have been tried. In Rhodesia they served to strengthen parts of the white business sector at the expense of the blacks. The South African economy is much stronger than was Rhodesia's and would undoubtedly adapt to sanctions.
  Listening to the "End of Empire" series on the BBC the other day, I was interested to note that on the programme on Zimbabwe Mr. Smith himself said:
  "We were worried for I suppose a month or so, uncertain, but nothing terrible happened. In fact, it was a little better than we had expected, and then gradually got better not worse"—
  [Interruption.] I hope that hon. Members will listen to me; it is better to listen.
  "We became industrially self-sufficient. We developed a much broader base to our whole economy and industry. It was a shot in the arm."
  That was Mr. Smith speaking of his experience of the imposition of sanctions. I say, to be honest, that had I been in the House in the 1960s, I believe that I would have voted in favour of the imposition of sanctions against Rhodesia. Like the majority of my hon. Friends, I continued to vote in favour of them throughout the 1970s.
  Despite that, the evidence is that they would not work. Sanctions would merely stiffen the resistence of the white South Africans to external pressure. Far from being persuaded to introduce more reforms, the Government in Pretoria would be more like to abandon their attempts at further advancement for the blacks. White South Africans are already an isolated society. Sanctions would merely reinforce the laager mentality. My hon. Friend the Member for Epping Forest (Sir. J. Biggs-Davison) referred to that.

  1187
  The brunt of economic measures would be borne by the black South Africans, and that would be bound to increase the bitterness and violence that already exists. The House cannot ignore the views of remarkable people such as Mrs. Suzman, Alan Paton, Chief Buthelezi and, in certain circumstances, Bishop Tutu, all of whom have spoken about the grave consequences of cutting off economic contact with the people of South Africa.
  Sanctions would affect the economies of South Africa's neighbours, even if the latter did not formally participate in the sanctions policy. There is no doubt that the economic survival of the majority of South Africa's neighbours depends on their ability to continue trading with each other and with the republic.
  There would, of course, be adverse effects for our economy, too. We have much at stake in South Africa, including jobs in this country — jobs about which Opposition Members as well as my hon. Friends and I care. There would be no point in sacrificing jobs and prosperity in Britain for the sake of measures which would not only be ineffective but which would do most harm to those whom we are seeking to help.
  We are under no illusions about the difficulties of working for peaceful change in South Africa, but we believe that there is no constructive — I emphasise "constructive" — alternative to remaining closely and continously involved and to working for positive and peaceful change.
  1.47 am
  Mr. Robert Hughes: Only a few seconds remain for the debate. It is difficult to obtain information from South Africa. However, I have been advised today that the number of people detained is now well over 1,000, that at least one detainee has died and that there is great anxiety about the condition of many others.
  For that reason, I have today sent a telegram to the International Red Cross asking it to intervene and to seek access to the people concerned. Will the Minister back that demand and call for access to be given so that the detainees may be seen and steps taken to look after their welfare?
  In accordance with Mr. Speaker's Ruling—(Official Report, 31 January 1983; Vol. 36, c. 19)—the debate was concluded.

  Civil Defence
  1.48 am
  Mr. Gary Waller: The Prime Minister has stated on many occasions, with some justification, that she has transformed the political agenda in Britain. One policy area that has been put back on the political agenda is civil defence.
  In the five years up to 1978–79, Government spending on civil defence halved in real terms, and that was the culmination of a period in which the subject had been almost entirely ignored. Indeed, in the eight years to 1976, only one debate took place on that subject in the House.
  That situation has changed radically in recent times and the Government must be credited with having made the necessary commitment in terms of resources and having established new standards of preparedness. My hon. Friend the Member for Ilford, South (Mr. Thorne) has made a vital contribution in keeping the issue before Parliament. As chairman of the National Council for Civil Defence, he has helped to stimulate a wider debate throughout the country.
  Unilateral disarmers and those who have encouraged local authorities to declare their areas non-nuclear zones, thus perpetrating almighty hoaxes on the ratepayers, have resisted any commitment to civil defence, linking it exclusively with the issue of nuclear deterrence. Refusing to take part in civil defence exercises such as exercise Hard Rock, and ignoring the duties which central Government require local councils to undertake, does nothing to mitigate the dangers of nuclear warfare. On the contrary, such irresponsibility has extremely damaging effects.
  It would be unwise to assume that the United Kingdom could never again be involved in hostilities which fall short of a nuclear conflict. During this century, nearly all the wars have been fought in ways that the experts failed to foretell. If preparations are based only on official expectations, a country will be ill-armed to deal with a crisis. Even a small chance that Britain may be sucked into a conventional war surely justifies the spending of a relatively small sum on civil defence. Many have suggested that conventional war might be much more likely a scenario, given the appalling consequences that are known to all nations of nuclear war and the devastation that would ensue. Lord Hill-Norton has said that in many ways nuclear war is the least likely option open to the Soviets.
  We can all agree that the possibility, if not the probability, of a period of rising tension and the outbreak of conventional war before the use of any nuclear weapons might provide an opportunity for world leaders to pause and to step back from the brink. That presupposes that we shall have a nation, continent or world that is worth saving.
  We tend to think only of the horrors of nuclear war. If they could rise from their graves, millions of victims of conventional war could tell us how terrible that is. More died in the fires of Dresden than at Hiroshima or Nagasaki. Time and time again in the second world war, and in other wars known by our contemporaries and predecessors, those who survived were those who were prepared, whether they called their preparedness civil defence or used another term.
  There have been many wars since 1945, although the policy of deterrence has ensured that Europe has been

  1189
  spared them. None of these wars has been nuclear. We cannot afford to neglect the possibility that the pattern could continue and that such a war could touch us too.
  The policy of deterrence has averted a world war involving the major powers for 40 years, and as long as we remain a part of NATO and continue to maintain and modernise our defences, the possibility of nuclear war remains extremely low.
  If we are to believe the results of attitude surveys, a high proportion of young people expect a nuclear war in their lifetime. I remain an optimist, but even an outside chance cannot be ignored. If we spend £50 billion annually on social security and the Health Service in protecting our people against sickness and unemployment and in making their old age tolerable and, we hope, productive and rewarding, should we not spend one thousandth of that sum in protecting them against obliteration?
  Defence must surely be the first responsibility of any Government, for without defence there is nothing else. Our defence is rightly based on the thesis that any potential aggressor must believe that the price of his aggression will be too high to contemplate. However, a small part of the equation is the need to provide some protection if all our calculations are confounded. That is the belief of my hon. Friends and myself.
  There used to be a consensus across party lines on this issue, but judging by the statements of many Opposition Members, and the absence of many other Opposition Members tonight, that seems, regrettably, no longer to be the position, although I know that, whatever their party, individuals such as the hon. Member for Isle of Wight (Mr. Ross) support the National Council for Civil Defence.
  It is our responsibility and duty to think the unthinkable. No one who cannot imagine a fire or a burglary in his or her home takes out insurance. If one never has a fire or burglary, it does not mean that that insurance has been wasted. Those who vote to ban the bomb, whether or not potential enemies ban it, are not necessarily opposed to our democratic way of life. Many are extremely sincere and honest in their beliefs, but they tend to regard the prospect of nuclear war as so horrific that their reaction is to ask why we should contemplate what would follow. Hence, there is an over-eagerness to show that nuclear winter — an as yet unproven hypothesis — must preclude any planning for the aftermath. Hence also, we have films that predicate only despair and death.
  We should be ready to assert that, even in the remote event of all-out nuclear assault, as many as half our population could survive. Without civil defence, that proportion could be much lower; with civil defence, it could be higher. Whatever the scenario, there would almost certainly be some survivors. Self-preservation dictates that we should salvage as much as we can after the event.
  Even Hiroshima was survived by many. Hiroshima was in a non-nuclear zone—if we need reminding of that—and, if its population had been prepared, many more people could have survived or escaped the appalling injuries from which they suffered then and from which many continue to suffer now.
  More modern weapons would produce more catastrophic effects but, even then, many of those living some distance from a blast would undoubtedly survive, if sufficient protection were provided. The proportion who
  1190
  survived could be increased at a relatively small cost if they knew what action to take. Education is a relatively inexpensive but vital part of civil defence planning.
  Civil defence represents a small but vital element in the theory of deterrence. The threat to use nuclear weapons in self-defence could hardly be credible to a potential adversary if it were obvious that the Government could not contemplate such a decision because its effects would be utterly calamitous and were not even prepared to take the minimum action necessary to fulfil their responsibilities of protecting their people. That was the signal that the previous Government were sending out before the Conservatives were elected in 1979. I am glad that that signal has now altered.
  Britain spends less than £1 a year per head on civil defence; the Swiss spend more than £10, showing not only that neutrality does not make one immune from nuclear fallout but that civil defence is vital whether one believes in unilateral or multilateral disarmament. Nuclear-free, as has been pointed out, is not nuclear safe. It is estimated that in Switzerland 85 per cent. of the population might survive a nuclear strike. Our geological and geographical situation is different. I would not suggest that we should go to the same lengths as the Swiss, but we can certainly learn from them, just as we can learn from the Swedes. In the Soviet Union nuclear survival is taught in the schools and public buildings are designed with nuclear wars in view. If civil defence is right for the Soviets, why do so many people think that it is wrong for us?
  New factors must be considered. Trident and other weapon systems developed by NATO and the Warsaw pact are more accurate than their predecessors. By providing pinpoint accuracy aimed at military targets, they provide the option of a response short of total annihilation. The ability to shelter one's population must be seen as a vital part of a credible deterrent. I have severe reservations about the strategic defence initiative, but if one day it comes to fruition, it must increase the possibility of conventional war, even if it provides a defence against nuclear weapons. In that case, the priority to be accorded civil defence would be immeasurably increased.
  It is important to appreciate that civil defence should not exist only to deal with total war. I hope that the Government will expand its role to help deal with any civil emergency—for example, a land slip, a flood, a plane crash in a heavily populated area or any comparable disaster. Such a development would also help to unite people who vary greatly is their conception of a proper defence posture, but who could agree on the life saving role of volunteers in peace and war. The possible need to amend the Civil Defence Act 1948 to take account of such a change should be urgently considered.
  Last month the Home Office issued its updated emergency planning guidance to local authorities. It still seems that a high proportion of local authorities will fail to complete their emergency plans by the end of this year. My local authority of Bradford, which at one time sheltered under the nonsensical self-deception of being a nuclear-free zone, has, I am glad to say, given up that dubious status. But I doubt whether civil defence has adequate authority there, let alone in counties and districts which are controlled by more Left-wing regimes. I think of the authority in which my lion. Friend the Minister of State, Home Office has his constituency.
  A properly manned inspectorate should be established to ensure that all local authorities fulfil their legal

  1191
  commitments, especially with regard to the 1983 regulations. It is not up to local authorities to decide unilaterally that they will not make proper preparations for people's protection. For some limited civil defence purposes, central Government provides councils with 100 per cent. grants, but for other purposes only 75 per cent. grants exist. Civil defence is too important to be threatened by rate capping and penalties on overspending, even if such overspending is in reality brought about by less vital projects. If there is any danger that councils may justify their neglect of civil defence by reference to such factors, surely 100 per cent. grants should in all cases be made available by Whitehall. The progess made by local authorities should be monitored and reported on annually to Parliament.
  Unfortunately, public education is still inadequate. Much more should be done, not to alarm people but to reassure them. We need to exercise as much sensitivity in getting our message across about civil defence as we do on the drugs menace, where the message can easily be distorted and misunderstood.
  We all like to switch off when the stewardess on our aircraft demonstrates the use of life-saving equipment, but in our heart of hearts we are glad that it is there. We must be prepared for any eventuality, although we know that it is unlikely. The price of civil defence is a small price to pay for greater security, but it is a price we cannot afford not to pay.
  2.3 am
  Dr. Alan Glyn: I am most interested in this subject. As my hon. Friend the Member for Keighley (Mr. Waller) said, we rarely get the opportunity to discuss one of the most important aspects of life. Only once in the past two years has the subject been raised in the House.
  I was interested in what my hon. Friend said about reporting to Parliament, because it is important that my hon. Friend the Minister should keep a close watch on and monitor what local authorities are doing. It would be interesting every year to have a report of what they had achieved, how much of their quota they had spent, and what further funds were required to make a comprehensive safety net. We have already been told that some authorities are reluctant to do this, and some compulsion may be necessary. It is up to my hon. Friend the Minister of State to ensure that happens. I know that he is doing all he can by means of persuasion, but compulsion may be necessary in spite of all his persuasive powers.
  It is quite wrong that civil defence should be under civilian control. In war, all our defences, be they protective or military should be under military control. It is quite wrong that civil defence should be under the control of an unelected area representative—it should be either a civil servant or an elected person, but preferably it should come under the control of the military.
  There are two aspects to civil defence—protecting our citizens against nuclear or conventional attack, and protecting them against an attack that is becoming more and more apparent. The Warsaw pact has small teams of people who are capable of disrupting our vital installations. That perhaps poses an even greater danger than the first aspect of civil defence, because if our vital
  1192
  installations, such as electricity and water, are tampered with, all the other precautions that are taken to defend our citizens against nuclear attack will be quite useless.
  The home defence force consists of only 5,000 men. I believe that we need 100,000. We are told that in the event of war, either conventional or nuclear, we shall be left with only 100,000 people here to protect our citizens. That is not sufficient. The additional 5,000-strong home defence force is important, but a much greater number of people should be capable of coming to the fore to be mobilised and trained for both defence and military aid to the civil power.
  Small units of 30 or 40 people would be extremely valuable, provided they were properly trained and equipped and came under military control. We know that the Warsaw pact has small teams of people who speak very good English, are highly trained and know the country. In many cases, they have been living here for some time and know the area.
  Hon. Members will be aware that schemes exist, such as Lord Hill-Norton's under which volunteers can be trained quite cheaply. A comparative table shows that 100,000 volunteers cost £17 million and that 700,000 cost £120 million. Such volunteers would not be paid but would have arm bands and equipment and could render military and other services to the community, including civil defence. They would be ready at the drop of a hat to come to the aid of the military forces and the civilian power. We shall require such people in the event of hostilities, when very few people will be left to man the country.
  The Regular Army costs about £11,000 a soldier, the Territorial Army about £2,500 and the home defence force only about £574.
  We need to do three things. First, my right hon. Friend the Minister has to force local authorities to carry out their statutory duties. Secondly, at the end of the year, I should like to see him produce a table showing those who have defaulted and those who are up to standard. Thirdly, we need to provide the additional money required to bring the whole of our civil defence up to strength.
  We must look at the whole of our home defence forces. I believe that, under the Warsaw pact, if we were engaged in either nuclear or conventional war, we would be left at home with too few to protect our citizens. That is the danger. The additional numbers we provide for that purpose can also be used in civilian occupations to help perform numerous tasks. These home forces need to be considerably increased—5,000 is not enough. I should like to see many more people properly trained and armed, and capable of carrying out not only military but also many civilian tasks that they are called on to perform. A wealth of voluntary effort in all skills is waiting to be mobilised.
  2.12 am
  Mr. Andrew Hunter: I welcome the opportunity for this debate on a general theme which, as my hon. Friend the Member for Windsor and Maidenhead (Dr. Glyn) has just said, perhaps too often has received too little attention.
  At the outset I wish to endorse all the comments of my hon. Friend the Member for Keighley (Mr. Waller), although I may put a different emphasis on one or two of his points. Of all the many aspects and assets that make up what we may loosely term civil defence, I choose to deal with three cases. I shall therefore be selective and, I hope, brief.

  1193
  As so often with so many debates on civil defence, this debate will suffer from what I label a double defect. With no personal malice whatever towards the hon. Member for Hammersmith (Mr. Soley), I believe his party must take the blame for this. By a double defect, I mean, first, the failure of some many members of Opposition parties to grasp the totality and the importance of civil defence. Secondly, following from the first defect, there is a total absence of positive and constructive input into the debate by so many members of Opposition parties.
  On that point, I make one half-concession. The term "civil defence" is misleading. It concentrates the mind excessively, and sometimes exclusively, on wartime emergency. Perhaps it would be better if we scrubbed "civil defence" out of our vocabulary entirely, and spoke of "civil emergency planning".
  Surely the essential point is that we are concerned to protect the civilian population from the effects of all disasters, whatever their cause, in which the regular services of fire brigade, police, ambulance and so on, either would be severely strained by the size of the particular disaster, or unable to operate effectively in time.
  Of course, nuclear, biological and chemical warfare constitute potentially the worst forms of disaster we can suffer, but man-made disasters of a different sort and natural disasters are the equal concerns of civil emergency planning. All too often Opposition parties do not seem to have realised that. To be fair—I like to try to be fair—neither did the Conservative party in its 1983 election manifesto. In it, we concentrated exclusively on wartime emergency planning. To be even fairer, as my hon. Friend the Member for Keighley said—I hope that the Minister will take note of this—the Government have tarried too long in amending the Civil Defence Act 1948.
  Mr. Clive Soley: The hon. Gentleman is being so incredibly fair that I want to help him be a little fairer and go that little step further. I ask him to recognise that if, like the Minister and myself, he had served on the Committee on the Bill to abolish the metropolitan counties, he would know that we said that lack of effective civil emergency planning would be made infinitely worse by the abolition of the metropolitan counties and the Greater London council.
  Mr. Hunter: I do not wish to be drawn into all those details. Continuing the amicable theme of being fair, I welcome the opportunity of having learnt a little more.
  I wish to explore three points. I hope that my hon. Friend the Minister of State will take my comments as the positive, constructive and friendly criticisms that I intend them to be. First, it can he argued that since 1979, the Government's attitude and actions on civil defence have shown signs of a lack of interdepartmental co-operation. The laudable exhortations and actions of the Home Office have not been matched by other Departments. For example, "Civil Defence and the Farmer" was too long in appearing and is too light in content. Moreover, there has been inadequate research into providing effective guidance for preparing a viable policy for food and agriculture in times of emergency. Farmers need more guidance on civil defence measures. There is also a strong case to be made for identifying a nucleus of farmer wardens from among current civil defence volunteers and training them in conjunction with local authorities.
  In the Department of Health and Social Security, all is far from acceptable in the provision of emergency health
  1194
  and medical services. In 1983, the British Medical Association reported on the medical demands that a nuclear war might create. It found the present Department of Health and Social Security war plans quite ineffective. Interestingly, by a vote of 248 to 78, the BMA voted to be actively involved in the governmental war planning process. There are grounds for concern about emergency supplies of insulin, as I know from my dealings with a pharmaceutical company in my constituency. There should be greater emphasis on planning peacetime emergency provision sufficient to deal with the Bhopal category of emergency, when some 25,000 people were in sudden and dire need of medical treatment.
  Similar concern can be expressed about emergency planning for industry. There is need for improved civil emergency advice to industry through the reintroduction of guidance circulars and liaison between industry and local civil defence authorities. The Department of Trade and Industry line hitherto has been that responsibility for civil defence lies with industry itself. However, that attitude is not good enough. I understand that last January the Department announced the setting up of a study to assess the essential civil defence requirements that industry can be called upon to supply and its capability to meet those requirements. That is to be welcomed. The essential point is that there are grounds for concern about interdepartmental co-operation and motivation.
  My second major point is that the 1983 civil defence regulations required local authorities to undertake certain duties that incurred capital and current expenditure. As my hon. Friend the Member for Keighley said, the response from local authorities has not been impressive. The requirements in themselves were and are laudable. The charge against them, arguably, is that they do not go far enough, but what is needed is more detailed guidance by Government to local authorities on the raising and training of civil defence volunteers. Defined and timed objectives must be stated.
  We need a civil defence inspectorate with powers and resources to monitor performance and to enforce compliance with the 1983 regulations. We need Government guidance on the required levels of emergency planning staffs employed by local authorities. At the end of last year, about 50 per cent. of the emergency planning staffs were undermanned even by 1972 standards, and scarcely a handful of the 54 local authorities had completed emergency plans in accordance with the 1983 regulations. All this is far from satisfactory.
  The greatest defect, however, is financing. All civil defence and emergency expenditure must be taken outside the rate support grant framework and be completely reimbursed. Nor should capital expenditure on civil defence be counted against normal local authority allocations. There is still much work to be done with the implementation of the 1983 regulations.
  Thirdly, there is a dire need for a clearer and more succinct overall civil emergency planning strategy. The most adverse comment that can be made about the Government's actions is that they are making well-intentioned but ineffective noises and paying lip service to the need more than they are delivering the goods. It must be acknowledged, however, that the Government are doing infinitely more than a Government of any other political party would be doing.
  Within the overall civil emergency planning strategy, priority must be given to restoring public confidence in

  1195
  emergency planning. A long-term strategy must be adopted, and it must have defined and timed objectives just as the Swiss and Swedes have had for many years. Planning and preparation by all agencies must be coordinated and monitored at all levels. There must be provision to ensure compliance with the law. It can be argued that insufficient thought has been given to how civil emergency planning can be most effectively and economically organised and delivered. There is certainly scope for academic research. Above all, the public will have no faith in civil emergency planning which fails to protect the individual. That can only mean shelters and relocation schemes. Local authorities must prepare—and keep updated—effective evacuation and reception plans. The absence of such plans is a major defect in existing regulations. There should be research into the viability of a long-term public and domestic shelter programme, now notable by its absence. All of those things should appear in a civil emergency planning strategy.
  Good intentions and considerable advance characterise civil emergency planning during the past few years, but there is still much work to be done. I hope that my hon. Friend the Minister will give us assurances that the work will be done.
  2.23 am
  Mr. Lewis Stevens: Many people do not want to talk about civil defence. It frightens some, and others belittle it as irrelevant to modern war machines. It is rather like people not wanting to talk about a serious illness because not much can be done about it. I congratulate my hon. Friend the Member for Keighley (Mr. Waller) on raising this subject, although I should have congratulated him even more if he had secured an earlier debate.
  None of us expect to have to call upon an emergency service. The more we can do to prevent our having recourse to emergency services, the better we like it. But we know that it will sometimes be needed. The quality of the trained personnel is then critical. That is how one must consider civil defence. We hope that it will be in much less demand than the fire service, but unless we make sure that in our local communities there are those who can help in emergencies we shall suffer an even greater catastrophe.
  My hon. Friend the Member for Keighley referred to what could happen in the event of a nuclear war. My hon. Friend the Member for Basingstoke (Mr. Hunter) referred to civil emergencies. The sooner the Government change the 1948 regulations to include civil emergencies the better.
  The emergency services come very much into their own on the fringe of a catastrophe. It often takes time before the professional services can arrive on the scene in strength, and before they arrive the emergency services perform a very useful role. When the professionals arrive the emergency services can help with evacuation. Emergencies do not normally last only for a few minutes; they can last for days or even weeks. During that period a volunteer force that is trained in certain specialties and that has communication facilities available to it can greatly relieve the pressure on the professional services.
  Furthermore, this is very much a community activity. The service will know the locality well. It will also know what communication facilities are available. Although the
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  main emergency services were quickly sent to the disaster area when a dam burst its banks in Italy last week, a great deal had to be done initially by the local volunteer force.
  We adopt a very low-key approach to civil defence. It is not very well publicised. We shall have to do a public relations job and sell the idea of joining the civil defence force because it is a worthwhile community service, not only in the remote event of warfare but in the event of civil emergencies. We must also sell the idea of a credible civil defence strategy. The Government must put forward a meaningful strategy and sell the idea that if war should break out it is important to have people in certain key positions. It will need a great deal of selling. After two world wars people feel tremendously relieved that it is all over. It will be difficult, after such a long gap, to get people thinking again about civil defence. But we must do so, because there are so many different types of weapon about. The Government must try to do as good a PR job as they can.
  Local authorities will play a key role in civil defence. It is disappointing that, so far, few authorities have approached the task with enthusiasm, or even with a commitment to do it at some time in the future. More than half of the emergency centre programme has not been completed. Some authorities have ignored civil defence completely. Other authorities and organisations have expressed outright hostility to the idea that civil defence is important. My hon. Friend mentioned nuclear-free zones. I live in a nuclear-free zone, but I feel no more safe than do my constituents who do not live in such a zone. We must overcome those delusions.
  Our communications systems for civil defence must be appropriate for wartime as well as for civil emergencies. The implementation of the recommendations in the report of the Home Office working party on communications will be a key factor in setting up a network that can be coordinated nationally. In an emergency, communications are critical. If we had an emergency in one of our cities, two great problems would be communicating with people to tell them what to do, and moving people around the area. In some cities, a small stretch of roadworks is enough to cause traffic jams. We are talking about bigger problems than that.
  The best way to encourage local authorities to undertake civil defence programmes would be for the Government to reimburse their capital expenditure and their expenditure on emergency planning personnel. They will not respond unless the Government offer a carrot as well as a stick. It is only right that the Government take responsibility for civil defence and pay for it through the Exchequer. They should not expect local authorities to bear the entire cost. I realise that the benefits will be seen in local communities as well as in the national Parliament, but with the present restraints on local government expenditure, we cannot expect authorities to co-operate willingly on the current terms.
  We should also consider chemical and biological warfare. The public seem to know very little about that. I am sure that our colleagues in the Ministry of Defence know much about it. If there is a deterrent balance in nuclear weapons, I am sure that the alternatives of chemical and biological weapons will be considered. We must provide information about such weapons to the volunteer force, and we should publicise the precautions that can be taken to cope with chemical and biological

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  warfare. Such provision will be essential if we are to create a civil defence force that will be effective, should the need arise.
  We must remember that major emergencies come out of the blue. If they did not, we would not need so many preventive measures. Major civil emergencies especially are completely unexpected. It is then that the local volunteer force can do so much to avoid the worst results of such a catastrophy.
  I ask my hon. Friend the Minister of State, Home Office, who does so much to publicise the need for civil defence, and the importance of the volunteers to the community, to continue to put across the message that civil defence has an important part to play in a modern society, despite the terrible weapons that are available to major countries.
  2.35 am
  Mr. John Powley: Even at this early hour of the morning, I am glad to add my words to this well-initiated debate on civil defence. I suspect that the numbers in the House represent the feeling of our respective parties towards civil defence. My party and Government have a strong feeling for civil defence, but all the Opposition parties have little of it. That is adequately represented this evening—I was going to say to the tune of 10:1, but the hon. Member for Birmingham, Ladywood (Ms. Short) has just entered the Chamber, so the odds have shortened slightly to 10:2. We are glad that the hon. Lady has joined us, because I am sure that she will hear something to her benefit from the Government Benches.
  There are many definitions of what civil defence is and should be. I draw the attention of the House to the definition that it is the means to protect the civilian population from the effects of all natural disasters, in which the regular services would be severely strained by the size of the disaster, or unable to act in time. We should concern ourselves with it whether it is in wartime or peacetime, because there are disasters at both times for which we should make provision. Thankfully, we live in a time of peace, but that time has come about because of the defence policies followed by this country and others since the last world war—a policy of deterrence in the main. We have had that peace for 40 years.
  However, even in peacetime, many horrific disasters have occurred, such as that at Bhopal and those in Canada and Italy. At such times, we need civil defence provisions. Just because we live in peace does not mean that disasters will not happen. It does not mean that we should not make provision. We hope that we shall never see such disasters, or that they will never happen to us or our friends, but inevitably, things do happen. We should take proper precautions against such art eventuality. I am speaking of major disasters that affect countries or cities.
  In our lives, we all make insurance arrangements against things that we hope will never happen. We now wear seat belts as a precaution against an accident in our car that we hope will never happen. In a minor way, that is a civil defence arrangement. We take out insurance for many other things. We insure our homes against contingencies and make provisions of that kind.
  Those are precautions in a small way, but we can multiply them into the need for a local authority, an area or a country to make civil defence arrangements for local populations. There is general recognition by the public of the need for civil defence, but the public at large need to
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  be wakened up to the eventualities that could occur and to the need to guard against them. The public accept and understand the need for civil defence, and the Government and we as Members of Parliament have a responsibility to bring that home to our constituents and to people at large.
  As many of my hon. Friends may remember, I was on a local authority and we tried to accept our responsibilities. I refreshed my mind about those responsibilities before coming to the House, and as I understand it, county councils should have the following obligations:
  "To make and keep under review plans for the continuation of a number of essential services in war.
  To arrange for the training in civil defence of their own staff and those of districts and London Boroughs.
  To participate in training or training exercises organised by the designated ministers.
  To make arrangements for the organisation of civil defence volunteers.
  To provide emergency centres for civil defence direction.
  To implement plans as directed by the designated minister."
  Those are the responsibilities of the county councils throughout this country, and one would like to see them taking those responsibilities a bit more seriously than they do. Many are conscientious in that respect, but some are not as good as others. The lower tier, the district councils, have an obligation to assist the county councils wherever that is possible, although, of course, the counties have overall responsibility.
  Ours is not the only country to have civil defence, but to hear some Opposition Members one would think we were. Of course, as my hon. Friends said earlier, Russia and China have active civil defence organisations and many countries in Europe also accept their responsibilities for civil defence. We are doing nothing more than keeping pace with other countries. It is easy to talk of wartime precautions and one understands them more readily, but we should look more seriously at the prospect of local disasters.
  One of my hon. Friends referred to nuclear-free zones. I live in a nuclear-free zone, but I do not feel any more secure there than I felt when I was the leader of Cambridge city council and did not live in a nuclear-free zone. In fact, I felt more secure in my previous city in terms of civil defence than in the city in which I now live. That is because we observed civil defence precautions whereas my present local authority, the district council, makes no provision for civil defence.
  It seems that we have a nuclear-free zone, which includes a civil defence-free zone, or a civil defence zone. I should prefer to live in the civil defence zone. I should feel safer if my local authority took the issue seriously. The authority takes its support for CND seriously, but that will get my constituents nowehere and will mean that they are less secure. I wish that the council would pay as much attention to its civl defence responsibilities, becaue my constituents would then feel more secure.
  Heaven forbid that it should happen, but there could be a civil disaster in Norwich. We have a modest airport and there could be a plane disaster over the city or a plane could hit a multi-storey block of flats. There should be proper civil defence arrangements for such a contingency. The local authority does not make such arrangements.
  I regret the attitude of many other Labour-controlled authorities. I understand that South Yorkshire county

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  council has condemned the Government's "irresponsibility" in suggesting that it is anything but futile to plan for a nuclear emergency. A spokesman for Labour-controlled Hackney borough council has said:
  "We should not be doing civil defence at all. It is an absolute waste of time."
  The right hon. Member for Chesterfield (Mr. Benn) has gone so far as to say:
  "Civil defence plans now being developed are a thinly veiled cover for a policy of military repression always available to deal with any opposition to Government policy."
  I cannot imagine a more ludicrous attitude.
  The Government have an honourable attitude to civil defence, but I hope that they will be firmer. We are too often wise after the event. With peacetime or wartime planning in civil defence, it is better to be wise before the event than to have regrets afterwards. The Government must take civil defence more seriously—commendable though their attitude is already—and impress on local authorities the need for better arrangements. Better publicity must be given to the arrangements. Then we shall all feel safer in our beds. I hope that the Minister who is to reply will give us that reassurance.
  2.48 am
  Mr. Gerald Bowden: The problem that civil defence has in projecting a proper image has emerged directly or indirectly from the speeches of all my hon. Friends. The concept of civil defence in the public mind seems to be one of an outdated procedure which is irrelevant to the needs of modern disasters and warfare and is an inadequate response to the ultimate threat. As such, this rather weary impression has provided a perfect target, a focus for the anti-nuclear lobby.
  Some part of our job, I think, must be to redefine the role of civil defence, to change the emphasis that we attach to it. To this extent, the National Council for Civil Defence and the Trebah Trust have done a great deal to give it a new orientation by emphasising the all-hazards approach as opposed to the single response to the nuclear threat.
  The all-hazards approach accepts the fact that, in the most extreme circumstances, there must be a response to the nuclear threat. However, this is perhaps the most unlikely scenario to occur. While we maintain the strategy of deterrence, it is unlikely that we will be attacked with nuclear weapons. But there is a much more likely hazard in natural or industrial disaster. It is in this area that the all-hazards approach can be best developed.
  This raises the question not only of redefinition but of presentation. My hon. Friend the Member for Nuneaton (Mr. Stevens) alluded to this by saying that we should perhaps have a better PR presentation of the approach of civil defence to hazards. My hon. Friend the Member for Basingstoke (Mr. Hunter) suggested that the phraseology "civil emergency planning" might more accurately describe what civil defence, in our view, is attempting to do.
  This more positive response should alert the Government and local authorities to their responsibilities. The Government's role is clearly, if broadly, defined in that they have the responsibility for long-term planning, which means that there must be some co-ordination between the different Departments of state. It is apparent, from the Questions that we have tabled to different Departments in the last year or so, that there are different
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  degrees of priority within different Departments, a different emphasis and sometimes, it would seem, a different sense of direction. There is a need for a comprehensive civil defence strategy, and for that to be co-ordinated in the first instance.
  Secondly, central Government have a duty to provide the finance. It is an unfair and unrealistic burden on local authorities to imagine that, through their ratepayers, and in the difficult circumstances in which some of them have been placed recently, they can make provision for the finance to do what is necessary to meet the risks.
  Having said generally what central Government should do, I think that it is in local authorities that the operations can be most effectively deployed. Local government must seek to adopt a realistic approach to its responsibilities, to co-ordinate local needs and to recognise how local services can be brought into operation in conjunction with civil defence services so that they meet the needs of the locality. This is particularly important when dealing with the sort of localised industrial disaster in which the efforts and energies of those outside the local community have to be harnessed to bring help and support.
  It is sad that many local authorities have been indifferent or downright obstructive to suggestions that they should carry out civil defence planning. My hon. Friends have alluded to experiences in their local authorities. Mine is perhaps, regrettably, typical. The London borough of Southwark, in one of its committees, discussed the Government's 1983 civil defence regulations, and took a positive decision that it would ignore or not implement them. It has not even taken this decision to the full council for further discussion. It compounds what I feel to be contemptuous irresponsibility by making positive and substantial contributions to the Campaign for Nuclear Disarmament. I am conscious that a number of the members of council belong to the CND, and I am surprised that they have not declared their interests in the members' declaration of interests, which all members of Southwark council are required to make.
  A further cynical posturing by that council is to declare itself a nuclear-free zone. Such cynicism, such a contemptuous attitude to the needs of those whom it is there to serve, suggest that the Government must play a positive role in leading and directing councils in the way in which they should go. Only by so doing can the public at large be protected from and reassured about the threats and hazards.
  There is a need for public relations presentation, not in any superficial way, but to reassure the public and to restore public confidence that the emergency and planning services exist to meet any hazard that might arise. In restoring confidence, there is the need to recruit and harness public participation. There is a willingness by many to volunteer to help in extreme cases. If that can be seen to be professionally organised and the training to be professionally directed and relevant to the need, I am sure that recruits of the right calibre and quality will come forward.
  We need a positive response to the likely and less likely threats that might arise. That is what civil defence is about. I am pleased that my hon. Friend the Minister is here this evening because I hope that he will be able to give a sure-footed lead in the direction in which we must go in future.
  2.56 am
  Mr. Neil Thorne: I congratulate my hon. Friend the Member for Keighley (Mr. Waller) on the admirable way in which he introduced this debate. Fourteen hon. Members sought to table a motion on civil defence for debate this evening, and he was fortunate to come out at the top of the list. I regret that the lateness of the hour means that there is a smaller attendance than I had hoped. Indeed, there is only one hon. Member on the Opposition Benches. Distinguished as the hon. Member for Hammersmith (Mr. Soley) may be, it shows how his party regards civil defence. I very much regret that.
  Until relatively recently, civil defence had all-party support. The humanitarian and other advantages of a civil defence policy were considered to be above politics. For some strange reason the campaign for unilateral nuclear disarmament has adopted the view that civil defence is not a good thing. It claims that it encourages the thought that war is survivable, while at the same time it advances a strange and quaint theory that the Soviet bloc would feel threatened by an effective civil defence service.
  Clearly no sensible person could possibly believe that. The Russian civil defence system in Moscow is comprehensive, and we do not feel threatened by that. We feel much more threatened by their very effective arsenal of nuclear, chemical and biological weapons that are pointing in this direction.
  We know positively that there were about 150,000 casualties in the war in Vietnam. We also know that 3 million civilians died. That is a significant factor in this sphere. It shows that the civilian population in any conflict is extremely vulnerable. Unless it is given proper protection and facilities for looking after itself, together with proper leadership, the chances of it surviving are much less than they would otherwise be. That is an unfortunate state of affairs.
  Apart from preparing for war, civil defence has much to do in preparing for civil emergencies, and I commend the admirable decision that the Minister has taken to follow an all-hazards approach, for only by adopting such an approach can we hope to generate the commitment and enthusiasm of the man in the street.
  We in this country have been fortunate in having had 40 years of peace. During that time, people's memories of war have dimmed. Nevertheless, we have often seen the advantages of proper civil emergency planning, which has enabled necessary services to be provided in emergencies.
  I have in mind the blizzards that occurred a few years ago in the west country, when the civilian population became acutely aware of what civil defence could contribute to their general welfare. That experience encouraged large numbers of people to volunteer for civil defence service. They realised that it was necessary to be equipped to look after not only oneself and one's family, but one's friends and neighbours. A proper course in civil defence is of great advantage to people.
  At Flixborough in Lincolnshire, an incident involving a chemical works a few years ago caused devastation. That, too, demonstrated how the civil defence services play a leading role. Many other examples in other countries remind us of the need for emergency planning. For example, at Three Mile Island in the United States there was an escape of nuclear radiation and the emergency planning services played a major role.
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  In Seveso, dioxin gas escaping from a chemical plant caused many casualties. Had the civil emergency caring services been better equipped, the casualty rate would have been much lower. The same applies to the Bhopal tragedy in India. Had the emergency planning services been as well equipped as those in Pakistan, the casualty rate of 2,000 deaths and 100,000 severely ill would have been much smaller. In Canada, a chloride gas discharge occurred as the result of a. rail crash. The most recent example of such emergencies was the Stava dam breaking in Italy.
  Nearer home, there were the events on the M25 when fog descended on a short stretch. Yesterday the coroner declared that it was an act of God. Fourteen were killed on a bright sunny morning. It was the gathering of fog in one area that caused that devastation. Again, the emergency services came into play. It might have been possible to save more lives if some of those involved in the accidents had had experience and knowledge of emergency service work. We must pay a great compliment to the fire service, the ambulance service, the St. John Ambulance Brigade, the Red Cross, the Women's Royal Voluntary Service and many other voluntary services that we are so fortunate to have. They do so very well on occasions such as the M25 tragedy. There is still a major role for the private individual to play if he is given the opportunity to become an emergency or civil defence volunteer.
  It is unfortunate that we still have local authorities which maintain that they are nuclear-free zones. It seems entirely inappropriate that in 1985 there are those who are so short-sighted that they cannot see the need for nuclear systems in medical treatment and other areas. These systems make nonsense of the claim that the areas that they represent include no nuclear capability. It is an essential aspect of medical treatment that such facilities are available and it is nonsense to claim that an area that includes a hospital with a unit dealing with cancer, for example, does not have a nuclear facility. To pretend that it does not exist is ridiculous.
  There have been some excellent contributions to the debate. Apart from the speech of my hon. Friend the Member for Keighley, I was intrigued by the contribution of my hon. Friend the Member for Windsor and Maidenhead (Dr. Glyn), who spoke of voluntary service in defence of the home in a more general context. There is a major role for those who are involved in the Territorial Army and the general services in leading the civilian population in protecting itself when the occasion demands. As we experience such a low-key civil defence provision, we should take advantage of the knowledge of those who have received training in raising the standard of preparedness and knowledge.
  My hon. Friend the Member for Basingstoke (Mr. Hunter) was helpful in mentioning various other aspects of civil defence and highlighting the nonsense that is talked by local authorities which claim to be nuclear-free. He spoke of the need for a comprehensive system and to provide adequately for a service throughout the country.
  I sympathise greatly with my hon. Friends the Members for Nuneaton (Mr. Stevens), for Norwich, South (Mr. Powley) and for Dulwich (Mr. Bowden), who have to suffer under nuclear-free local authorities. These authorities are neglecting their duties and responsibilities to those who they represent. We have to make up a lot of lost ground. Since 1968 we have not made adequate

  1203
  provision for civil defence. This Government are doing their best to catch up, but the major investment in terms of shelter and other materials that is needed cannot possibly be provided within a short period.
  The Swiss, Swedes, Germans, French and people of other civilised countries have got on with the job over the past 20 or 30 years and have built up a nucleus of civil defence capability. It is sad that we have not made that provision. Immediately after the last war, all the buildings that were constructed in the City of London and. I imagine, in most of the other major cities specifically provided for a civil defence capability. The majority of underground car parks were built with that point in mind. I am sorry that that process has not been continued. In many other countries, especially Sweden, allowances are made for the additional cost of providing this type of accommodation.
  For a long time I have advocated giving special rate relief to those buildings that are capable of being used for alternative purposes—storage or underground parking—and of being converted quickly and satisfactorily into shelters.
  We must press the Government on a number of matters, especially the need to provide 100 per cent. funding for civil defence. Treasury Ministers shy away whenever it is suggested that more money should be spent. However, it is not necessary to spend more money. It is necessary only to readjust our present finances. It is possible for the Government to withhold funds from rate support grant to ensure that 100 per cent. funding for civil defence can be provided. This is essential because, in an emergency, the population would tend to move towards those parts of the country that had provided a civil defence capability, and would leave their own areas. It would be unfair if the areas that had provided adequately for their population faced a massive influx of people from other areas.
  We must provide for civil defence in the same way that we provide out of central funds for the Territorial Army and a number of other essential national forces. It is wrong to ask local authorities to make a 25 per cent. commitment, especially when such expenditure would mean that they were liable to pay a penalty in terms of Government grants. The Government must take this message on board. They must deal with this problem properly and sensibly and say, "We shall provide 100 per cent. funding because this is such an important issue."
  The same conditions should apply to the Manpower Watch figures. Local authorities are being told that, if they recruit more than their previous manpower numbers, the extra recruitment will be excluded. Nevertheless, I believe that total expenditure—not just extra expenditure—and total manpower devoted to civil defence should be taken out of the limitations that have been imposed in recent years by central Government on local authorities. This measure is far too important to be treated in any other way.
  The other important issue that I beg my hon. Friend the Minister to support is the amendment of the Civil Defence Act 1948 at the earliest possible opportunity. We are endeavouring to obtain support for such an amendment through a private Member's Bill, but if that support is not available, the Government must deal with the matter; clearly we can properly exercise the all-hazards approach only if the Act is amended. That all-hazards approach is the best and safest way of ensuring all-party support.
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  I compliment the hon. Member for Isle of Wight (Mr. Ross) on leading his party towards the need for civil defence, and I hope some of its members will soon follow his lead, just as I hope that Opposition Members will follow the rather more statesmanlike lead of their colleagues in the other place. Labour Members in the other place who may not be so hidebound by the reselection process, undoubtedly made some valuable speeches in the debate in February. They do not have those worries and problems, or the fear of a reaction from the local Campaign for Nuclear Disarmament, so they could make a more positive contribution.
  Mr. Soley: Much like the Top Salaries Review Body.
  Mr. Thorne: The analogy is not quite right. Members in the other place looked at the matter realistically and came up with sensible arguments and solutions. They made it clear that people in all parties viewed the matter most seriously, and believed that something must be done about it sooner rather than later.
  I cannot understand why Opposition Members are not pressing harder than we are for money to be spent on civil defence, on the basis that that might leave less money for general defence expenditure. I would not wish that, but I would have thought that that argument might have appealed to them.
  Finally, terrorism is a much greater problem now than ever before because the range of equipment available to a potential terrorist has grown considerably. We are undoubtedly entering an era in which a terrorist is likely to be able to use sophisticated equipment and certainly to cause a chemical, biological or nuclear explosion. We are inadequately prepared to meet that.
  Some Governments support terrorism, as President Reagan and others have made clear in recent weeks. Terrorists are supported by a blind eye being turned to their activities, often by countries actively supplying them with equipment to export elsewhere. That is worrying. Until relatively recently, only five countries could build a nuclear weapon. That number will soon approach 19. Inevitably, before the end of this century — possibly even before the end of this decade—a country with terrorism at heart could be in possession of this information. That causes considerable anxiety.
  Moreover, those countries with chemical works capable of producing fertiliser are able to produce nerve gas that could be discharged into an area, thereby causing enormous casualties. The Government must turn their attention to that. They would be severely criticised indeed if an explosion or discharge occured in a densely populated area, be it an airport or the centre of a major city, as a result of terrorist attack. The Government must ensure that adequate medical supplies and other equipment are on hand to deal with such a situation. Clothing, blood plasma and many other things would be required very quickly.
  The medical profession has made it clear that at present in adequate resources have been made available. It is incumbent on the politicians to ensure that that state of affairs does not exist for any longer than is absolutely necessary.
  The case for civil defence had been made by my hon. Friends. I hope that the Minister will be able to give us extremely promising news about a major boost in this area and that he will ensure that no stones are left unturned in giving adequate protection to the population as a whole.
  3.22 am
  Mr. Clive Soley: If I were an optimist I would be encouraged by the number of Conservative Members who so willingly support increased public expenditure. We have even had calls for this area to be excluded from rate capping. I have recently made calls for excluding victim support schemes from rate capping but the Government do not seem to be too keen on doing that. I therefore suspect that they will not be too keen on excluding civil defence.
  The myth is that the Government are always willing to put money galore into defence, civil defence and law and order, despite the fact that they know that without other social, economic and political policies all one gets is more instability. In fact, one is throwing good money after bad and creating the very instability that one does not wish to see. That applies to defence systems and to law and order.
  Another theme running through the debate has been the request for a co-ordinated response in civil defence, or civil emergency planning, as I, along with the hon. Member for Basingstoke (Mr. Hunter) would prefer to call it. That is a very good idea. This is where my heart goes out to the Minister. He is not a bad chap. He is really quite nice. Along with myself and the hon. Member for Norwich, South (Mr. Powley) he sat for long hours discussing the Local Government Bill, which abolishes the metropolitan counties. That Bill devastated the civil emergency systems, and the Minister knew it. He admitted it, and Lord Whitelaw said it as well. In fact, they all said it.
  The hon. Member for Windsor and Maidenhead (Dr. Glyn) is right to talk of the way in which the Soviet Union and Warsaw Pact countries have highly trained people who speak good English ready to be strategically placed in the United Kingdom to disrupt this country. Few Conservative Members realised it, but the hon. Gentleman was talking about the Secretary of State for the Environment, because when he decimated the major conurbations and their local government, he also decimated a co-ordinated response towards civil emergency planning between the fire, ambulance and police services. Those are three of the most crucial services. The Minister knows that that is the case, and it is on the Hansard record of the Committee stage. The hon. Member for Windsor and Maidenhead had better speak to the Prime Minister and decide just who these well-spoken, highly paid agents of this alien power really are, and what they are up to.
  I am afraid that the speech of the hon. Member for Keighley (Mr. Waller) was full of fallacies. He came out with the fine old assumption that we hear repeated by Tory Members—that the deterrent factor has kept the peace for the past 40 years. It would be wrong of me to involve myself in a long debate about that, but I will respond in this way: at best, all we can say about that assumption, to use the good old Scottish phrase, is that it is not proven. At worst—and this is the point to which Tory Members always fail to address themselves—such an assumption can lead to a dangerous self-deception, whereby a country thinks it can continue to deter war by producing more and more sophisticated weapons, when in fact the history of warfare shows that the more a country plans to use its weaponry against another power, the more likely is war to occur. I cannot expand further on that point, now, Mr. Deputy Speaker, or you would rule me out of order, but
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  if any hon. Member wants to develop it he should listen to the lectures of A. J. P. Taylor on how wars begin. They are most instructive.
  The second fallacy of the hon. Member for Keighley was his claim that defence is and must be a first priority. At a superficial level that is true. However, what happens is that the more a country makes defence its first priority and pours money into it, the more is caused in political systems the very instability that causes war. Deterrents do not prevent war, as most people who, over many years, have thought about the causes of war will agree. Instability in power relationships is the cause of war.
  When it comes to talking about what should be done if a major war occurs, Conservative Members start talking about civil defence, and get confused, as the hon. Member for Basingstoke became confused. He said that we should talk not about civil defence but about major disasters, and I go along with that. But like other of his hon. Friends, the hon. Member then fell into the trap of talking about civil defence in relation to nuclear war.
  The problem is that to create a major programme of civil defence to deal with nuclear war a Government would have to raise the level of fear of nuclear war. The programme would have to ensure that virtually every citizen in the country knew how to cope with the early and later stages of radiation. People would have to know how to avoid radiation—how to avoid ingesting air, food or water that had been irradiated. They would have to know how long they had to stay out of certain areas and how long not to drink water in those areas.
  Hon. Members must know that to conduct such a programme would raise the level of fear amongst the population. It is a fallacy to believe that a Government could run a sensible civil defence programme in preparation for nuclear war without raising the level of fear.
  When the hon. Member for Ilford, South (Mr. Thorne) dismissed rather simplistically the arguments presented against civil defence, he fell into the trap of assuming that if we simply increase our civil defence aid a little we will in some way frighten the Russians. If the whole Western world raised expenditure and intensity of effort in relation to civil defence to a level that made the Soviets think we were planning to fight and survive a nuclear war, the deterrent theory becomes even less meaningful. One of my criticisms of the Soviet and Chinese policies, is that they did, and do in the case of the Soviet Union, plan to fight and survive a nuclear war. That shows the absurdity of the argument that Conservative Members get themselves into.
  The hon. Member for Keighley did not have a stable, consistent definition of what he meant by deterrence. Later in his argument he said that one can show that one can survive a nuclear war. If one can do that, the nuclear weapon is no greater a deterrent than the conventional weapon. The nuclear weapon is only a big deterrent if its use is so dramatically effective that war will not be considered by any rational, sane person. The problem for both the western and eastern world is that that system worked tolerably well in the 1950s and 1960s, but the new war-fighting technology of the 1970s and 1980s has undermined that deterrent theory. Whether it is in the House, the Soviet Union, the United States or anywhere else, if the hon. Gentleman creates the impression that one can fight and win a nuclear war, the theory of deterrence in its original sense, or in terms of nuclear weapons, is meaningless. It becomes similar to the conventional

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  deterrent theory only when the effect of war is so overwhelming and devastating as to make the act of warfare irrational.
  The other problem about that theory is that most wars do not break out in a rational way. As I have already said, the situation develops when political systems get out of control. In many ways I would feel much safer if I thought that President Reagan or Mr. Gorbachev were in control of the system. We kid ourselves about that—we really do. The history of great powers throughout the centuries, for example Britain, Rome classical Greece or Egypt, shows that there is an assumption that people are in control. In fact wars break out without the intention of a war. The classic example is the first world war. A great Foreign Secretary, Lord Grey, said in the House that when war came, it would not be wanted by any of the major powers, but it came. Lord Grey could have taught Conservative Members far more about the nature of deterrence, the concept of defence and how wars break out than I can tonight.
  There is a strong case for well co-ordinated, well resourced civil emergency planning. The Government have already undermined that by their abolition of the GLC and the metropolitan counties and their replacement by boards, which, taking the words of Lord Whitelaw, will be difficult to make work effectively. They have further undermined that planning by having no coherent policy towards civil defence, but one that is confused between civil defence designed to deal with nuclear war, civil defence designed to cope with conventional war and civil defence designed to cope with emergency planning. Obviously one can overlap those three to some extent, but it is limited. That is a dangerous illusion. I share the view of several people inside and outside the House who think that if one leads people to believe that one can fight, win and survive a nuclear war, one increases the risks of such a war happening. Similarly, if one goes about it in such a way as to make one's opponent think that one is planning to win and survive a nuclear war, again, one increases the chances of it happening. The Government do not address themselves to that view.
  There is another area that the Government do not address. It was interesting that only about two Conservative Members mentioned the nuclear winter. When they did, they mentioned it in such a way as to say that it is unproven. It came across to me that they do not want to believe that it is possible. I believe that it is probable. I certainly think that, once a nuclear war has broken out, it will be almost impossible to contain and that if we managed to contain it, that would be by luck rather than by an act of judgment. That is what makes it so profoundly dangerous and what has led so many people in the professions to say, having thought about the matter carefully, that it is not realistic to plan civil defence for the type of nuclear war that Conservative Members have talked about.
  The British Medical Association is not a bunch of CND supporters. It is not known to comprise strong, card-carrying members of the Labour party. It might be among the group of whom the hon. Member for Windsor and Maidenhead talked — well-spoken placemen of the Soviet Union—but I doubt it. It is a group of people which believes that it is not possible to plan effectively to deal with the consequences of nuclear war. It has said so
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  clearly. Many scientists have said the same. Conservative Members, however, persist in talking about civil defence in the confused way that I have described, which suggests that they are clinging to concepts of the past. Another of the dangers of wars is that they tend to be fought on the assumptions of the previous war. Conservative Members are guilty of that serious misjudgment.
  The hon. Member for Ilford, South rightly mentioned terrorists. The more weapons are available and the more they can be made and used, the greater is the likelihood of their being used. That is almost a mathematical fact, not just a statement on human behaviour. The hon. Gentleman is rightly worried about the terrorist threat and the threat of a minor Government having and using weapons of enormous potential. He must recognise that, as long as we continue to run the world on present assumptions. we are heading for every nation state having its own nuclear weapon to deter and every group in a state asking for a nuclear weapon to deter the other side. The greater the instability, the greater is the danger of that, and we need look no further than Lebanon to see it. There can be no civil defence in those circumstances.
  I am not pretending that there is any simple solution. I do not believe that there is. Human beings have been too good at bashing each others' brains out for many thousands of years for me to give a simple solution from the Dispatch Box. The one lesson that comes over strongly from human history is that when we plan to fight wars, we tend to end up fighting them, and with the people we plan to fight. The more weapons are available, and the more that is spent on them, the greater the political instability and hence the greater the need for the authoritarian approach to national and international problems.
  The hon. Member for Ilford, South would do well to dwell on what I have said in regard to what President Reagan has done with, I am sorry to say. the support of some Conservative Members, in Nicaragua. It is unacceptable to use terrorist methods. The mining of Nicaraguan harbours was an example of unacceptable behaviour and gave some Governments precisely the type of example that they are only too willing to follow. When the hon. Gentleman picks up clear statements by President Reagan against terrorism, he should put them in perspective and recognise that, when Western leaders such as President Reagan do such things, they feed the problem that they claim to oppose.
  Mr. Neil Thorne: Is the hon. Gentleman saying that if we give up nuclear weapons or any other kind of weapons this will disinvent them from a terrorist point of view? Is he saying that they will discard any knowledge that they have acquired? That is not my understanding of the argument. If terrorists have this knowledge they will use it.
  Mr. Soley: It is not, and it never has been, part of my argument that terrorists would automatically give up such weapons. My argument is that as the political system gets out of control, the more we spend on arms, the more unstable the political system becomes. Consequently, the more the spread of arms, and information about them, the more they are likely to be used. History is on my side. We have to reverse that process without further destabilising a system that is already dangerously unstable. I could refer the hon. Member for Ilford, South to many other examples of the case I am putting forward. If he believes that he can

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  solve this problem by spending more money on arms and civil defence, he is not only under a dangerous illusion but he is feeding fires that he would not wish to burn.
  It has been an interesting debate. It has told us a great deal about the attitude of the Conservative party. It is out of touch with the political changes that have taken place in the world. What is even more important, it is dangerously out of touch with technological change. This Government have quite cheerfully disrupted and undermined the civil emergency planning that is available to this country, not least by their abolition of the metropolitan counties, rate capping, targeting and other public expenditure cuts.
  3.42 am
  The Minister of State, Home Office (Mr. Giles Shaw): The House will have listened with interest to the speech of the hon. Member for Hammersmith (Mr. Soley), but it will have heard the same siren voice calling from the other side as it has heard on other occasions. That voice says that if we seek to make ourselves strong we encourage conflict and that therefore we should seek to get rid of defence and lie down in the unilateralist path. I hope that all Conservative Members reject that argument. However, I understand the hon. Gentleman's difficulties in arriving at a theologically satisfactory position. He has managed to shelter behind the claim that the abolition of the metropolitan counties and the Greater London council is the biggest disincentive to civil defence that this country has yet seen.
  I congratulate my hon. Friend the Member for Keighley (Mr. Waller) on introducing this debate. As he rightly said, this is a rare occasion. It is possibly even more rare that we should be debating civil defence issues in the early hours of the morning. I congratulate also my hon. Friends who have taken part in the debate on their individual contributions.
  My hon. Friend raised a number of issues. I shall deal with two of them at once. He asked the Government to confirm that they will amend the Civil Defence Act 1948. My hon. Friend knows that this was a manifesto commitment. Although the Government have not yet succeeded in finding a vehicle for it, the objective must be to achieve that during the next Session of Parliament. By means of a private Member's Bill a very important contribution could be made towards securing a major Government policy objective. We would prefer to consider that route, and to review our position should we fail to achieve our aim during next Session. However, that remains our commitment.
  All my hon. Friends who spoke in the debate mentioned the grant aid to local authorities to ensure that civil defence planning is taken seriously. I understand that the 75 per cent. grant, which is considerable in terms of local authority expenditure, is not regarded as sufficient. A 100 per cent. grant is available for amongst other items the purchase of capital equipment for communications networks and centres. The grant aids available have not been in position for long, and we have not yet decided to review the 100 per cent. grant. But the pressure has been consistent, and was continued in the campaign recently launched by the National Council on Civil Defence, so I am bound to take it seriously. We should not close our minds to reviewing this matter in the light of the progress that we wish to make. I hope that I can convince my hon. Friends that, such is the extent of progress that we wish
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  to make, if it should be shown that grant aid is a serious impediment to the pursuit of that progress, we shall consider the position.
  My hon. Friend the Member for Windsor and Maidenhead (Dr. Glyn) asked about monitoring and reporting on local authority performance. I agree that we should do that, and I shall make arrangements to provide regular reports to the House on how local authorities proceed. My hon. Friend may recall that some answers have already been given on this matter, and I undertake to provide such information as we proceed.
  My hon. Friend the Member for Basingstoke (Mr. Hunter) urged full central funding, with which I have already dealt, and also introduced the concept of civil defence or civil emergency planning. I agree with my hon. Friend that that is not simply a change in nomenclature, but a change in policy. To start widening the concept of civil defence to include civil emergencies or emergency planning is a genuine attempt to recognise that, in today's world, that is probably a more effective way of describing the protection of the population, which is a duty of Government. I welcome my hon. Friend's suggestion, and I hope that we can offer—in our all-hazards approach—a reasonable answer to his point.
  My hon. Friend the Member for Nuneaton (Mr. Stevens) argued for a volunteer force. This is always an important factor in any major movement, and it is an aspect of preparation that makes Britain the envy of the world. My hon. Friend will be aware that about 13,000 people are involved as community volunteers, which is not a bad figure. In addition, we must remember the 11,000 people involved in the United Kingdom warning and monitoring organisation, which is probably the most effective organisation of its sort anywhere in Europe. This is a large cadre of people who give their time to preparing Britain for times of potential difficulty and conflict. However, I accept that we must find a way of ensuring that we have a corps of trained volunteers, and the local authority provision in the civil defence regulations will encourage this. I take on board my hon. Friend's commitment to the volunteer component of our civil defence plan.
  My hon. Friend the Member for Norwich, South (Mr. Powley) mentioned the civil disasters that have occurred, despite the fact that, for a considerable time, the western world has been at peace. He is right. The disasters in Bhopal, Seveso and Flixborough have reminded us, if we needed reminding, of the vulnerability of civil populations to major industrial or natural disasters. Again, this adds weight to his view that it is time to broaden the preparation for civil defence to include preparation for such civil emergencies.
  My hon. Friend the Member for Dulwich (Mr. Bowden) said that there should be better co-ordination with other Departments, and I accept that. The Home Office is the prime sponsor for civil defence, but almost every other Department is involved in emergency planning. Arrangements need to be made for matters such as fuel and emergency supplies, housing, environmental issues, health, food and so on. In the past, I agree that these things have tended to develop piecemeal, with emergency planning representing just one of the vast multitude of activities undertaken by each Department. Recently, we have taken two important initiatives. Centrally, we are developing a fully co-ordinated plan

  1211
  embracing all Departments, which will improve the effectiveness of our planning and enable us to pursue a balanced plan across Government as a whole.
  Secondly, at regional level, we have started a pilot study that, over the next 18 months or so, will explore the scope for improving regional co-ordination of civil defence by all the agencies and services of Government and local government that have a part to play. I hope that my hon. Friend will take the assurance that not only do I accept what he says, but I have acted upon it, and will ensure better co-ordination of our policies.
  My hon. Friend the Member for Ilford, South (Mr. Thorne) gave us, as he is always wont to do, a robust, full, tour d'horizon of the civil defence scene. He asked that we should commit ourselves to an all-hazards approach, and I accept that we should do so. He also referred to the 100 per cent. funding and the amendment of the 1948 Act. He spoke about Manpower Watch and extracting civil defence figures from that. In our examination of local authorities' performance, and in our monitoring, we shall be looking closely at the manpower figures as well as at the fulfilment of the regulations laid upon the authorities. I shall then bear in mind what he wished us to do.
  My hon. Friend also spoke about terrorism. I understand the anxiety that he and the National Council for Civil Defence have about the terrorist threat. We are well aware of that threat in this country, and as my hon. Friend will recognise, we have an important role to play in counter-terrorism. I accept that in any civil emergency on any scale, the civil defence services will have a part to play, but if he is suggesting that civil defence has a role to play in counter-terrorism, I beg to differ. He must recognise that the Government's anti-terrorism policies are essentially covert and skilful and are not determined by large groups of people who are trained, albeit in a relatively small number of activities, to a reasonably high extent. We are dealing with a highly-skilled international threat, and something that requires a highly sensitive and sophisticated response. In that aspect of terrorism, I would not expect a civil defence body to play much part although I understand his point of view.
  The threat of war and our foreign and defence policies are our starting point. Those policies and our membership of defensive alliances such as NATO, our participation in its policy of deterrence, and our determined effort with our allies to reach agreement on arms reduction and multilateral disarmament have been instrumental in giving us 40 years of peace in Europe. We have every reason to believe that this will continue. That is the fundamental background that allows us to review civil defence planning and to discuss it in a different context.
  I should make it quite plain that we do not consider that war in Europe is at all probable, let alone inevitable. But I should also make it plain that it would be quite irresponsible to neglect entirely the remote possibility that war might come and that we might suffer attack. Civil defence must be seen in that light. It is a humanitarian and commonsense effort to reduce suffering and loss of life, and to enable the recovery of our country if such an attack should occur, whatever the twists and turns of contrary arguments offered. My hon. Friends have urged upon me the view that we should redefine our objectives in terms of civil emergencies, but we must keep in mind the need to prepare for certain emergencies, which may be military
  1212
  in character. Many detractors seek to cloud the issue, but the simple fact remains that if there is a threat and the realisation of that threat would bring disaster, it is our clear duty to take all reasonable steps to mitigate the likely effects.
  When we took office in 1979, civil defence was still on a care and maintenance basis. Despite the difficult economic circumstance we inherited then, and the constraints on our economy now, we are today spending twice as much in real terms on civil defence as was being spent in 1980. Moreover, despite the continuing need to maintain control over public expenditure, we intend to pursue the planned provisions for civil defence over the next three years.
  Let me turn to how this Government's commitment to civil defence has been realised. If this country was ever to come under attack, a warning of that attack, even if it was very short, could make a considerable difference to the number of survivors. Hence the importance of the United Kingdom warning and monitoring organisation. That organisation is near to the completion of a substantial programme of improvement. It stands ready to warn of an attack and to monitor and disseminate information on the effects of hostilities. Its state of readiness is probably better than any other such organisation in any other country in the world. Even now we are giving consideration to how this efficient organisation could be adapted to deal with the needs of detection, warning and monitoring against the possibility of the chemical threat, which figures in our present planning assumptions.
  Dr. Glyn: Does my right hon. Friend agree that, if emergencies do arise in the form of a war, it is vital for the civilian and military sides to work in close cooperation? I have always said that the military should be in charge. If it is in charge, close co-operation, especially in communications, must take place.
  Mr. Shaw: My hon. Friend will recognise that in a war, there will be a high military component to civil defence. But in the planning we seek to establish now, what we are concerned with, and what on reflection perhaps my hon. Friend will agree we should be concerned with, is to supply a civil organisation based upon the local regions of this country and essentially through a regional authority structure. That is the basis of the present planning and the present commitment. Even now we are considering how this organisation could be adapted to deal with other threats.
  Just when we needed the most effective direction of coordination of effort, communications would be at their weakest. For a time it would therefore be either difficult or impossible to sustain central control of essential functions. Plans for wartime decentralisation of Government are therefore a necessary part of our policy and we have recently overhauled and improved them.
  We have an emergency communications network whose purpose is to support arrangements for decentralising Government so as to ensure that those in need could be helped as quickly as possible, and that the effort available is co-ordinated and directed in the most effective way. That network, vital to our emergency arrangements, is well into a substantial programme of modernisation which will further help to pull together all our plans and resources in time of need.
  I have already stressed co-ordination within Whitehall in commenting upon the contribution by my hon. Friend

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  the Member for Dulwich. Co-ordination of planning, a feature of our central and regional initiatives in civil defence, is also a crucial factor at local authority level.
  In that context, I come to the remarks of the hon. Member for Hammersmith. When the abolition Bill was proceeding, we took the view that the abolition of the Greater London council and the metropolitan counties should result in civil defence functions being placed with the new joint fire boards. That is another illustration of how they should be working alongside a civil emergency procedure, which the fire services clearly are. We agreed to amend the Bill to ensure the same provision was made for the metropolitan counties.
  Over the last few years, we have gradually extended our base for research and development into civil defence and we have developed an effective R and D programme.
  A number of my hon. Friends mentioned public relations activity. I should mention our preparations for a new information booklet for the public and for a civil defence film—all material which we hope will set the record straight and do much to counter the misleading propaganda so beloved of Opposition hon. Gentlemen.
  Ms. Clare Short: What about the hon. Ladies?
  Mr. Shaw: Indeed, there are hon. Gentlemen and hon. Ladies who prefer misleading information.
  The Government are not confused by spurious and misguided arguments against the straightforward humanitarian case for protection of the public in time of emergency; we are getting on with the job. If the time should ever come when the plans needed to be put into operation, the case for civil defence will be crystal clear to all—even to those who now profess to doubt.
  Let me outline the progress in civil defence preparedness by our local authorities. Last month we issued comprehensive emergency planning guidance to local authorities. It was a consolidation and revision of existing guidance and is designed to help local authorities to fulfil their humanitarian duty to prepare for the protection and survival of people in their area. It sets out the expanded planning assumptions, first issued in 1984, which in particular emphasise the possibility of conventional attack.
  The former prominence of a nuclear attack in our planning assumptions has receded, and the guidance makes it clear that planning against conventional attack and planning flexibly are essential. That is an important part of the anxieties expressed by a number of my hon. Friends about how local authorities will get on with the job.
  I accept that we need not only to monitor activity and to lay information before the House but to persuade local authorities to take their statutory obligations seriously. If they do not do so, the Government have powers to act and will use them if it is found that local authorities are failing to implement the 1983 regulations. The Government introduced the regulations, which lay statutory obligations on local authorities. They are required to make and to keep up to date plans for the protection of the people in time of war, to make plans for the use of buildings as public shelters, to plan for the accommodation of the homeless, to make arrangements for emergency feeding, to make plans for the recruitment and training of the many people who wish to volunteer their services in time of need—in
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  short, they have to provide and maintain the services essential to the life of the community in time of tension and in war. The emergency planning guidance has been restructured to reflect those statutory responsibilities and to assist local authorities in their implementation.
  Civil defence is a partnership between central and local government. That is what we must build on, by working together to improve our preparedness. The majority of local authorities recognise both their humanitarian and their statutory duties in civil defence.
  We are determined that all local authorities shall meet their obligations. They have been asked to complete their plans by the end of the year and we intend to take stock of the situation at that point. We have made it clear that while we intend to proceed by reason and persuasion we shall hold in reserve the use of formal directions and the default powers available to us, and we shall not hesitate to use them if necessary.
  We do not expect local authorities to go it alone. We have made available guidance and plans for them to do their job and we shall continue the existing rates of grant aid for civil defence expenditure. I have already said that we may wish to review that matter if we are unable to persuade local authorities to proceed on the present basis.
  We have heard much about the need to plan for peacetime emergencies. Indeed, I accepted at the outset the importance of the all-hazards approach. We have Long recognised that many of the problems faced locally in planning to alleviate the effects of war are the same in kind, if not in scale, as those in peacetime emergencies. The recent debate in another place called attention to the duty of the Government and local authorities to deal with peacetime emergencies and to provide civil defence in case of conventional, chemical or nuclear attack. There was widespread support on all sides of the House for planning against war and peacetime emergencies. No one argued that there were not similarities in the planning required, that they were not required, or that one should be undertaken without the other.
  It was in recognition of this argument that our election manifesto committed us to legislate to allow civil defence resources to be used by local authorities to meet peacetime emergencies. Hence the importance of the amendment to the 1948 legislation, which will be a statutory expression of the Government's recognition that we should be prepared for any kind of disaster, be it military or civil.
  As we see civil defence now, I recognise that the time is right to bring the all-hazards aspect of emergency planning to the fore. There is much that can be achieved by this approach. We need, as a matter of Government policy, to be committed to the premise that an all-hazards broadly based approach to civil defence is now the way to go forward.
  The Government have raised the level of civil defence preparedness, and it is our firm intention that the performance will be maintained. We have done much in recent years to develop the co-ordination and planning of central Government. We have done much to encourage and guide the local authorities to play their vital part. We have made available the guidance and resources that they need to do their job. We have done much to modernise our civil defence facilities, when this has seemed necessary, and we are giving consideration to extending them where this might be of benefit. That, as I trust my hon. Friends will recognise, is a very good record of achievement, but there is much to be done centrally and locally. We intend

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  to take what measures are necessary to ensure that the momentum which we have generated on civil defence is not lost. We are committed to civil defence in peace or war as a policy to provide a humanitarian response to all emergencies, military and civil, which may threaten our people. That is a prime duty of Government, and only a Conservative Government will deliver it.

  Wages Councils
  4.6 am
  Mr. Dave Nellist: Later today, Thursday 25 July, the Tory Government will communicate to the International Labour Organisation the instrument of denunciation of ILO convention No. 26. Hidden in that coded medieval language, which characterises much of the workings of this place, is an insolent attack, a malevolent and spiteful class attack, on some of the poorest paid workers in Britain today. In particular, by 25 July 1986, one year from today, the Tory Government intend to remove from the inadequate legal protection of the wages councils 500,000 young workers under the age of 21, as well as making cuts in other legal minimum employment protection for adult workers. The political attitudes and intentions behind that announcement, and the effect which it would have, if brought about, I shall deal with later.
  The debate, although it takes place at 4 o'clock in the morning, could not begin without a mention of how and when that announcement was made. On Monday 15 July, Tory Members of Parliament were falling over themselves, as were Cabinet Ministers, to bask in the reflected glory of the generosity of people following the Live Aid concert the previous Saturday, when a reported £50 million was raised for famine relief in Africa. Let us leave aside the hypocrisy of a Government who have cut aid in real terms, run down industries such as the bus and truck plants at Bathgate and elsewhere which, in a sane society, could have provided crucial transport, and who have co-operated in the stockpiling of massive food mountains in Coventry and throughout the country when a quarter of the world's population is hungry. Even leaving that aside, for the Government to laud the efforts of young people one weekend and, three days later, on Wednesday 17 July, to attack many of those same young people would be breathtaking if we had not understood the real nature of this capitalist Government by their actions in the previous six years.
  Twenty-four hours later, on Thursday, after saying that young workers on wages as low as £29·70 per week were pricing themselves out of jobs, the Government offered the generals, the judges and the top civil servants, whose wages were already 20 or 25 times that received by young workers, an increase of 30, 40 and 50 per cent. to give them an incentive—rises which, in the words of the Prime Minister,
  "can be regarded not only by themselves but also by Parliament and the public as fair but not generous".—[Official Report, 18 July 1985; Vol. 83, c. 219.]
  Although £500 a week for Sir Robert Armstrong may not be generous in his terms or those of the Government, fair is not the word that young people have used for such a rise.
  The announcement on 17 July stated that the Government intended to remove all under-21s from the legal protection of minimum wages. The Government often quote in this House examples from abroad. It is worth pointing out that if that denunciation takes place later today, Britain will be the only industrialised country in the world without legal minimum wages for young workers.
  During previous debates and at Question Time Labour Members have been told, "Look to Europe." I asked the Secretary of State this week to cite examples. He referred me to a document in the Library, the most recent version

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  of which was 1983. I picked the nearest and most comparable European countries to see whether young workers in Europe are so much more badly paid than young workers in Britain that the Government's need to drive down their wages had any validity. The figures were for December 1983. In France, the minimum wage for a 16-year old was £60 per week, for a 17-year old it was £66·40 and for an 18-year old and over £74. In Luxembourg, at 16 it was £52; at 17, £60; at 18 and over £74·40. Skilled workers receive 20 per cent. higher rates. In Holland it started a little lower at 16—£36·57. At 17 it was £41·87; at 18 £48; at 21, £76.
  It is interesting to note the enforcement of those minimum wage rates for young people in European countries. In France it stretches from fines on employers of £100 to £250 per worker found underpaid to a point where if that is repeated within a year of the infringement the fines rise to £500 per worker and 10 days' imprisonment for the employer. Those are the examples the Secretary of State told me to look at in the Library to prove his point that young workers in Europe were getting far less than young workers in Britain. The truth is the opposite.
  The Government's claim that removing the protection of young workers' wages would reduce unemployment was never the intention. For the past six years the Government have used mass unemployment to cow the trade union movement into some form of submission, to drive down the wages, both directly and indirectly, of working people, purely to raise the rates of profit for the employers and industrialists that the Tory party represents in Parliament. In particular, they have sought to put into the bank balances of a few tens of thousands of the superrich shareholers the wealth that has and will be stolen from workers, especially young workers.
  Unemployment in this country has nothing to do with the wage rates paid to workers. It is certainly not, as Tory Members and Ministers try to portray, the fault of workers on £30 or £50 a week. It is worth noting the wage rates for under-21s. The lowest rate paid to a 16-year-old under the wages councils is £29·71. It would not pay for a "decent" meal for one or two Tory Members of Parliament. The lowest wage for a 17-year-old is £34·11. That would not cover a week's gin and tonics for some hon. Members. For 18-year-olds it is £37·50, and the lowest adult rate is £47·50.
  I have in front of me the rates for the largest industries covered by wages councils. For clothing, it is £59 for under 18-year olds —£41 at 16. For hairdressing it is £31·75 for first-year apprentices. The highest minimum wage is £68·50 for a worker after two years of training. For hotels, the wage is £55, or £69 for those over 18. For licensed premises which are residential, the wage is £44·16 for a 17-year-old, going up to £52, with £72 being the highest minimum rate of pay. For shops, the rate is £47 a week, £45 for non-food shops. The lowest rate, in the toy manufacturing industry, is £29·71 a week. Yet the Tories are trying to tell working people that those rates must be driven even lower if youth unemployment is to be reduced.
  Why has employment not gone up in Britain, particularly in the last six years? The one most important reason is that there has been a deliberate refusal by employers and industrialists to invest, particularly in manufacturing industry. According to leading British banks, there is now an estimated gap, which needs to be
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  bridged by new investment, between Britain and the major countries of the Common Market, Japan and America of £200 billion. That must be applied to manufacturing investment if we are to catch up with the productivity levels and competitiveness of those advanced capitalist countries.
  That is 35 or 40 times as much as is invested in manufacturing industry in any one year in Britain. That is why British industry does not produce goods as quickly and as cheaply as its competitors. It has nothing to do with wages in hairdressing, hotels, shops, clothing or catering. The fault lies in the fact that under the Tories manufacturing investment has fallen. We have even reached the stage when for every £1 of a machine that wears out, only 84p of a new machine is put in its place.
  The action of those who take the profits and run rather than reinvest in manufacturing industry has meant that for the first time in 400 years, Britain is importing more factory-made goods than it exports. From being the workshop of the world, this country is becoming the warehouse of the world as cookers, fridges, washing machines, TVs, cars—the products of whole sections of industry—are imported. The rate of those imports is at or over 50 per cent. of sales in Britain.
  That lack of investment has nothing to do with a lack of money in Britain. Since the Tories lifted exchange controls, employers and industrialists have sent their money abroad. About £50 billion has gone to South Africa, Brazil, Argentina and other countries where, in the main, wage rates are kept low, often by military dictatorships through the barrel of a gun.
  Perhaps the yardstick that Cabinet Ministers have for working people in this country is to reduce wage rates to what they determine Third world countries such as Bangladesh have already established. That is the impression that anyone would have from reading the reports of the Government's advisers. For example, when Sir John Hoskins, who now runs the Institute of Directors, was adviser to the Prime Minister, he wrote four years ago a paper that led to the establishment of the youth training scheme.
  His aim for the scheme has been to increase the differential between the wages of young people and adults, and we know what has happened as a result of that aim. If the allowances for youngsters on YTS courses had gone up since April 1978 by the rate of inflation or in line with wage rates generally, they should be receiving £40 a week. Instead, they are getting £26·25. That is the bench mark that the Government have in mind for the abolition of wage protection. Their aim is to drive down wages to supplementary benefit and YTS levels.
  Their argument is that that will create jobs. Where is the evidence to substantiate that claim? In the last five years, according to information supplied to me by the Department of Employment, young people's wages relative to adult wages have fallen by 12 per cent. for boys and 13 per cent. for girls, and during the same period youth unemployment has trebled. It is clear that driving down young people's wages has not increased their employment prospects.
  Wages councils cover almost 3 million workers and about 90 per cent. of them work in the councils' major industries, such as hairdressing, catering, shops, clothing and hotels. They are part of an army of 9 million low-paid workers. Wages council industries offer average adult wages of £60–£70 and £40–£50 to most young workers.

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  The councils were established at the turn of the century in New Zealand, and in Britain in 1909, and their influence was extended during the 1920s. They were seen then, as they are seen by many employers now, as a tool to prevent or settle industrial disputes and to head off trade union organisation. Two or three months ago, the CBI—this was reflected in an editorial in the Financial Times—advanced that reason in explaining why it was not in favour of the abolition of the councils. It fears that the next Labour Government will institute a national minimum wage and that trade unions will move into the old wages council areas and recruit.
  In the next 12 months before the wages councils are subject to changes, I hope that working people, through the trade unions, the Labour party and organisations such as the youth trade union rights campaign, will turn the CBI's nightmare into a reality.
  I do not intend to spend the summer during the parliamentary recess on holiday, on lecture tours or writing books. Instead, I shall endeavour to identify each and every young worker in Coventry who will lose the minimum legal protection of the wages councils if they are abolished in a year's time. I shall make sure that the appropriate trade unions recruit them, such as USDAW, the TGWU and GMBATU. The youth trade union rights campaign can play a similar role nationally. In the past four years we know that thousands on the YOP and YTS schemes have joined trade unions because of our campaigns and those of trade unions.
  Ministers say that although it was all right to set up wages councils in the 1920s to deal with "sweating"—the payment of extremely low wages—they are not appropriate in the 1980s. We are moving towards "sweating", but there are 8,000 millionaires in Britain, twice the number that existed when the Government took office. Over 1 million people earn more than £20,000 a year, but there are 9 million who are low-paid. Members of Parliament are on a minimum of £300 a week and many Tories have a few other jobs—some have 10 or 15 other jobs. Cabinet Ministers are on £400 or £500. How can they understand what it is like trying to eke out £40 or £50 a week?
  Workers deserve decent minimum rates of pay. That is what I have tried in this Session to introduce a couple of Private Members Bills on minimum wages and conditions. In one Bill I sought to set a national minimum wage, in line with TUC and Labour party policy, of £115 for a 35-hour week with a guaranteed minimum rate of 75 per cent. for 16 year-olds and 85 per cent. for 17 year-olds. It sought minima in other areas — for example, five weeks' holiday and an hourly rate of £3·28 to protect part-timers. I sought to introduce a private Member's Bill on working conditions for Government trainees. Its purpose was to introduce trade union rates of pay and organisation rights to Government training schemes, with a minimum payment of £55 a week. Of course, Tory Members argue that such a measure would price young workers out of jobs.
  I heard the Chancellor of the Exchequer say that if only we could have a 1 per cent. fall in wage rates, 150,000 new jobs could be created. Where is the evidence for that? Over the past 10 years, wages council rates as a percentage of average wages have fallen from 73 per cent. to 65 per cent., yet unemployment has rocketed. If it is true that
  1220
  high wages cause unemployment, why is there no condemnation from the Treasury Bench of the wages of Riachard Giordano, the highest paid director in Britain, who is on £13,000 a week as the managing director of British Oxygen? Why is there no condemnation of the pay rises of generals, judges and high-ranking civil servants over the past week? Why is there no condemnation of the bank chiefs? The head of Barclays is on £132,000 a year while the heads of Lloyds, the Midland and the Nat-West are on £113,000, £84,000 and £105,000 respectively. Why is there no condemnation of the top 100 directors who, between 1981 and 1983, took pay rises of 61 per cent.? Why is there no condemnation of the average chief executives who, according to The Guardian yesterday, have average wages of £55,000 a year— an 11·5 per cent. increase on last year? We are told that 95 per cent. of board members get company cars, that the company bears the maintenance costs of those cars for 98 per cent. of board members, that 73 per cent. of board members receive loans at preferential interest rates for house purchases, that three quarters receive free medical insurance and that 61 per cent. get free or subsidised lunches. There is no condemnation of those people that their high wages cause unemployment.
  Why do not Tory Members of Parliament explain what it is like to be at the bottom of the pile in regions like the west midlands? According to a report published four or five weeks ago by the West Midlands Low Pay Unit,
  "Sexual harassment, verbal abuse, unpaid overtime, dirty conditions and wages as low as 48p an hour have been uncovered by an investigation into the plight of working teenagers in the Midlands.
  A girl machinist, aged 16, complained that female staff were left in no doubt how they could find an extra £10 in their pay packet by an employer who regularly tried to touch her breast; a clerk typist, aged 19, received £25 for a 49-hour week; an employee, aged 18, with 11 0 levels, earned just £32·25 a week, while a young roofer was paid £6 for 12½ hours' overtime.
  Other youngsters spoke of spider-infested lavatories, no meal breaks, and getting annual holiday entitlements of 10 days after two years' service."
  I appreciate the fact that many of the examples in the report do not concern industries that were covered by wages council legislation. Unfortunately, for hundreds of thousands of young workers, that is the reality of the low-wage, ice cream economy which the Tory Government are attempting to introduce.
  The abolition of wages council protection for the under 21-year-olds will do nothing to increase the number of jobs. The Under-Secretary of State may trawl up the favourite quote of Ministers in these debates from a pamphlet written by Henry Neuberger for the Low Pay Unit. He said that the Treasury computer estimated that the total abolition of the wages councils could create 8,000 jobs in five years. What does that mean? It means 16 jobs per constituency when the average level of official unemployment is 5,000 per constituency. That is 64 jobs in Coventry. In the last week of June 1985, there were 1,000 redundancies in Coventry. We know that 17,000 people have not had a job for more than a year and that 10,000 of them have not worked for between two and five years. According to the Chancellor, we are supposed to be in the fifth successive year of economic growth. Half a million of the 1·5 million young people out of work have not had a job since leaving school.
  The last "great scheme" that the Tory Government introduced to reduce unemployment was the young workers scheme, which gave a direct subsidy to employers

  1221
  to reduce wages. An analysis of that scheme by a House Committee showed that three quarters of the jobs covered by that scheme were already there and that 80 per cent. of the additional jobs were jobs taken from adults to be given to young people.
  That is what the abolition of the wages councils will be like. It will be about fiddling the figures, because that is the only solution that the Government come up with to reduce unemployment. They say, "Switch the unemployment among the age groups. Forget about the over-55s; they will not get a job anyway. They do not matter. Forget about most young people when they are leaving school. Just alter the statistics, either on a geographical or an age basis." That is the redefinition of unemployment that the Government come up with.
  Just because I oppose the abolition of the protection of the wages councils for the under 21-year-olds, that does not mean that I am merely in favour of the retention of existing powers. I favour a campaign by the trade unions to which I referred—including the TGWU, USDAW and GMBATU—to recruit workers to the movement. Wages councils are by no means perfect. What minimal protection they have provided has been consciously obstructed over the past five or six years by the Tory Government.
  Wages councils' inspections have decreased since 1979 from about 50,000 to fewer than 40,000. A quarter of inspections showed underpayment. Are there many prosecutions? Starting in 1981, the prosecutions for the past four years were eight, seven, two and two. Although there were about 9,000 illegal underpayers in 1984, there were only two prosecutions. The average fines for infringement of the wages councils' orders decreased from £466 in 1981 to £107 for the two prosecutions in 1984.
  The Conservative party is supposed to stand for law and order. When it finds 9,000 employers evading the law, does it sharpen the law, increase inspectors' powers, or ensure that the law is obeyed? No, because its business friends are involved. It alters the law to let them off the hook. During the past five years the Government have cut the wages councils' budgets by £2·5 milion in real terms, that is a 36 per cent. cut. They have cut the number of ors inspectors from 158 in 1979 to 115 in 1984. Whereas in 1979 every establishment covered by a wages council order expected to be visited on average once in seven years five months, now it is once in nine years three months. In the west midlands it is once in 12 years six months. The Government have cut the number of inspectors, and even the number of miles that they are allowed to travel. All that is to let the Government's business friends off the hook.
  At the beginning of the week I asked the Secretary of State some questions to provide information for the debate. I have already used some of the facts. I sought information on his statement last week to clarify some of his points. I asked how many young workers would be affected by the announcement. If the Department of Employment thought that there would be more jobs, it could at least have identified through wages councils the number of youngsters that would be affected. The Parliamentary Under-Secretary of State, the hon. Member for Eltham (Mr. Bottomley), replied,
  "This information is not available."
  I asked him to estimate the costs to businesses of complying with the wages council's orders. It is said to be expensive for them to comply. He answered
  "It is not possible to make such an estimate."
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  I asked him to give the average level of wages of young people by region, the level of unemployment of young people by region, and whether the Department could prove that where young people received higher wages there was also higher unemployment, but that information was not available. I suggest that it is available. All the Minister must do, as I found out today, is to look in the Central Statistical Office's regional trends document, where he will find that the lowest wage areas, such as the north of England, the west midlands, northern Ireland and Wales, have the highest level of youth unemployment.
  I asked the Minister how many jobs he expected to be created by the proposal, and he replied
  "We expect the reforms to create employment opportunities, but there are obvious difficulties in forecasting the number which will eventually be created."
  The obvious difficulty is that the number cannot be forecast because the measure will not create new jobs.
  On 17 July the Secretary of State specifically said that in a number of cases he could name the individual young people who had had to be sacked when their employers discovered what the minimum legal wages were. I asked the Minister to give examples of those cases, and he replied
  "A number of such cases have been referred to in responses to the consultative paper, letters to Ministers and reports from wages inspectors."
  He ducked the question and did not provide the examples that the Secretary of State promised.
  Abolition of the wages councils for the under-21s is a deliberate, calculated attack on young workers who see no future under this Tory Government in a capitalist system. This summer, just over 500,000 youngsters left school—517,000 to be precise — and they chase 12,355 vacancies at the careers offices. In England, the odds against getting a job at a careers office is 37 to 1; in Wales, 129 to 1: and in Scotland, 144 to 1. At the beginning of June, 46 per cent. of all careers offices had 10 or fewer vacancies in England. In Scotland the figure was 94 per cent., and in Wales it was 95 per cent.
  A total of 51 careers offices did not have one vacancy on offer for young people in their areas, and another 36 had only one vacancy on offer. That is the reality of mass unemployment for young people in a Tory Britain. Abolition of the wages councils' legal provision of the maintenance of wages for the under-21s will not provide jobs for them. That will be done only by a Socialist Labour Government who take control of the economy and plan it in a rational way.
  That can be done by sharing out what work is available; through shortening the working week to 35 hours, which could create 1·5 million jobs; through lowering the retirement age; and by bringing together the needs of working people with those whose skills are lying idle on the dole under this Tory Government.
  By bringing together the needs of the 6 million people at present living in damp houses and the skills of 400,000 building workers who are denied the chance to build houses, and through the public ownership of construction and finance companies, it would be possible for a Labour Government to build 1 million houses a year. That would provide genuine training and apprenticeships for tens, if not hundreds, of thousands of young school leavers.
  The Socialists and Marxists in the Labour party are often called the wreckers in society. But this Tory Government are the real Luddites of the 20th century. They have destroyed numerous steel and car plants and

  1223
  engineering facilities; and they have denied the chance of decent jobs to school leavers and young people. Their type of society cannot use the production that those plants generate. Their type of society wastes 30 per cent. of industrial capacity in Britain today and condemns 20 per cent. of the working population to unemployment. Their type of society puts 9 million people on low pay and 9·7 million people in a position in which they cannot afford a week's holiday away from home without staying with relatives. Millions more rely on supplementary benefit.
  Their type of Government and society has turned the city of Coventry from the richest working class city in Britain 15 years ago to a city where, this month, 50 per cent. of the population must rely on state benefits. Today they are saying to hundreds of young workers in Coventry and to 500,000 young workers throughout the country that their wages of £40 to £50 a week are too high in Maggie's Britain of 1985.
  Despite this debate being held at 4 o'clock in the morning, I use this time to issue a warning to the Government. Their attacks on young people, their cuts in supplementary and housing benefits, their use of YTS as industrial conscription, and their attempts to create a cheap labour, ice cream economy in Britain in 1985 will produce a new generation of Socialist class fighters.
  In April this year, 250,000 15 and 16-year-old school students went on a half-day strike against the plans for compulsory YTS. Out of their ranks will come not only the new Labour voters of the next general election but the new shop stewards and union organisers of the 1980s and 1990s. They have been steeled in the harshness of Tory economic reality, and understand that the only language which this Government and the employers who back them respect is the language of industrial muscle and struggle.
  Young people can see the divisions in the Tory party which we have experienced in the last day or two. They realise the desperate nature of a Government prepared to spend £6,000 million to try to crush the NUM. They watch an insane Government spending billions of pounds on useless weapons of mass destruction, on tax cuts to the super rich, and on stockpiles of food while hundreds of millions go hungry in various parts of the world.
  British society over the next 10 or 15 years is approaching a crossroads, where genuine democratic Socialism will be posed as a realistic alternative to this form of government. When that happens the attempts to abolish the protection—the minimal protection—of young workers under the age of 21 of the existing wages councils orders will be seen in retrospect as one of the nails not only in the coffin of this Government but also of Conservatism, monetarism, and capitalism.
  4.41 am
  Ms. Clare Short: Despite the lateness of the hour, I very much welcome this opportunity to debate the Government's proposals announced recently seriously to undermine and weaken further the wages councils that provide some protection to some of the lowest paid workers in the country. The Government's announcement, on 17 July, on the future of wages councils was publicised in a rather limited way. The impression given in publicity around the country was that young workers were the only group to suffer as a consequence of this announcement.
  1224
  As my hon. Friend the Member for Coventry, South-East (Mr. Nellist) has made clear, young workers will suffer significantly, but they will not be the only ones to suffer, as I shall show. The Minister and the Government must have been very pleased that, amongst others they sought to mislead about their intentions, can be included whoever writes the leader of The Guardian. There was an extraordinary leader on this matter suggesting that the Government's climb-down on the wages council issue showed a new outbreak of consensus politics by the Government and a new form of Thatcherism. Indeed, the leader suggested that all reasonable people agreed that young people should be exempted from the protection of the wages councils. That is an amazing assertion. Also it did not seem to recognise that the Government's intention is to weaken further the protection the wages councils afford to adult workers.
  Of course, not only are the young people who are currently protected to be undermined, but the definition of young people is to be extended to 21 years from the 18 years that normally applies now. Thus, a larger group will be included in the definition.
  Beyond that, there is a planned significant weakening in the protection of adults. For example, in future, there will be no protection for adult workers in wages council industries in relation to their holidays; there will be no protection for piece rate workers. In my old constituency of Ladywood—and this is typical of many areas in the West Midlands—we have had a very rapid growth in textile sweat-shops employing significant numbers of Asian women workers at extraordinarily low rates of pay, almost all of whom are paid at piece rates and work in real Victorian sweat-shop conditions. Of course, the Government's announcement means that all of those who are currently protected by the provisions of wages councils will lose that protection.
  There will be no protection for shift workers and no guaranteed minimum rate, so that workers can be sent home on any day at any time wthout any guaranteed minimum income in the week. There will be no differentials for skilled workers.
  Therefore, this attack announced by the Government on 17 July is not just an attack on young workers, serious as that is. It is an attack on all people in this country who are currently protected by wages councils. The Guardian leader writer should really look more seriously at what the Government actually announced. All of this is only part of a further unfolding of the strategy that has been operating since 1979. As my hon. Friend the Member for Coventry, South-East made perfectly clear, the Government have adopted policies that have deliberately increased unemployment in order to restructure the labour market. They have also aimed to cut taxes for the rich and those on high levels of income, and to increase their income, the latest example of which we argued about only yesterday.
  The Government tell us that somehow the well off will work harder only if they are paid more and taxed less, and those on low incomes will work harder only if they are taxed more and paid less. That is a paradox. The Government's philosophy since 1979 is that our economy will be more efficient if the rich are richer and the poor are poorer, we shall all work harder and have more incentives, so somehow greater wealth will be created. Here we are six years later and our economy is devastated, and those of us who represent constituencies in the west

  1225
  midlands see it before our eyes every day of the week as the closure of factories spreads throughout our region. It is clear that apart from the unacceptable nature of the Government's policy in terms of social justice, it is not working economically either.
  However, the Government have been successful in their aims in bringing about the restructuring of the labour market. For example, the proportion of male manual workers earning less than the Council of Europe's decency threshold has doubled since 1979 from one in 10 to one in five. The proportion of manual women workers earning less than poverty wages is up from two in three to four in five over the same period. The number of families forced to rely on family income suplement to top up their low wages has trebled since 1979. In total in Britain today some 8 million adult workers—one third of the entire adult work force—now earn low wages, but the figure excludes young people, homeworkers and many people working in small firms who do not show up in the official statistics.
  The overall result—and this is the success of the Government's strategy so far — has been a dramatic widening in inequalities. According to recently published Treasury figures, the highest paid males have enjoyed increases in their real net pay 10 times as large as those enjoyed by the poorest. As the Financial Times commented on 31 May 1985,
  "The Government has frequently given real wage increases as one of the causes for high unemployment, and argued that lower pay was needed to price people back into jobs. However, the figures show that real take home pay of the poorest single workers fell by nearly six per cent. in the three years to April 1982, the period during which unemployment was rising most rapidly."
  Therefore, the Government have been enormously successful in their aim. Up to now they have managed massively to cut the income of the lowest paid and increase that of the highest paid. They now wish to go further down that road. They are currently using two instruments to attack low-paid workers. The first, privatisation, attacks low-paid workers in the public sector. The whole point of privatisation is to offer lower wages than those currently available to workers in the public sector by requiring them to reapply for their jobs at lower rates. That is proceeding quite effectively and cleverly around the land. The second instrument attacks workers in the private sector who are currently protected by wages councils. Those are the measures that the Government announced on 17 July.
  In order to achieve that disreputable aim, the Government have been required to denounce the International Labour Organisation convention. They gave notice recently of their intention to do so. The original constitution of the ILO, of which the United Kingdom was a founder member, included
  "the provision of an adequate living wage"
  among its objectives. Member states agree to seek to ensure
  "the payment to the employed of a wage adequate to maintain a reasonable standard of life as this is understood in their time and country."
  ILO convention 26, which i requires signatory Governments to maintain minimum wage machinery to protect the most vulnerable workers
  "has become one of the most widely accepted instruments of the ILO."
  As the Institute of Personnel Management recently noted:
  "No country which has ratified Convention No. 26 has denounced it. The Government's denunciation of the Convention
  1226
  will, as the Confederation of British Industry commented last year, embarrass the UK internationally, particularly in the context of penalising competition from less developed countries on the grounds that they are sweatshop labour."
  The Government have already faced some international embarrassment. The ILO has concluded that the United Kingdom is in breach of the agreement, at any rate for failing to provide adequate and properly enforced minimum wage protection. The Government have deliberately cut the number of wages inspectors, so the law is not being enforced. The ILO says that almost all countries now operate minimum wage systems. The Council of Europe has reported that the United Kingdom is in breach of the European social charter for failing to maintain a reasonable standard of remuneration for large numbers of wage earners.
  The Government's intention to weaken wages councils and to exempt young people up to the age of 21 will affect—the Government will not give us the figures but those who study these matters have given us the approximate figure—about 500,000 young people. That is about one in three of all young people in their first job, or one in five of all young workers who will lose the protection of wages councils. The older workers, whose protection will be much diminished, are mostly low-paid women workers, and a significant number of them are black.
  The Minister knows that all this is being done simply on the basis of dogma and ideology. There is no evidence to suggest that jobs will be produced. The Minister and others gave evidence to the Employment Select Committee which concluded that there was no evidence for the claim that the proposals which will reduce the protection and wages of some of the lowest paid workers will produce new jobs in significant numbers. Instead, we have an attack on the living conditions, rights and employment protection of some of the most vulnerable workers in the land.
  We are to encourage bad employers who are unable to organise their workplaces efficiently and to invest al a significant level. The Government's inspiration is to make Britain the sweatshop of the developed world. Britain is a low-wage economy. Compared with any other developed countries, our wage levels are low and the Government want to reduce them even further.
  The Labour party is utterly opposed to these proposals and we intend to make it as difficult as possible for the Government to implement them. When we are restored to power—we hope that that will be sooner rather than later—we shall reverse the thrust of this policy and go further than restoring the current level of wages council protection. It is our policy to introduce a national minimum wage because our inspiration is to have a high-wage, high skill, high tech economy in Britain rather than the sweatshop economy that the Government offer.
  4.53 am
  The Parliament Under-Secretary of State for Employment (Mr. Peter Bottomley): The first time that the three hon. Members who will have spoken in this debate came together was in the debate on low pay on 15 February 1984 at column 325–26. I should like to tell the hon. Member for Coventry, South-East (Mr. Nellist) that his voice has lost nothing since then. His argument has, I suspect, gained nothing either, except that he has given nearly accurately descriptions of the answers that I have

  1227
  done my best to provide him with for this debate so that he could inform his speech. He has put forward a robust and loud argument for his views.
  I suggest to anyone who comes to this debate on paper that they would find greatest value in some of the hon. Gentleman's concluding remarks. They should pay attention to his threat to spend the summer going around his constituency talking to young people. Leaving aside the levity that might be tempting at this time of the morning, I seriously encourage the hon. Gentleman, when talking to young people, to ensure that they consider the opportunities that may be available to them to train, to improve skills and to take jobs that are available now.
  There is common agreement that it will take time for legislation to be put before the House on wages councils. No significant changes will be made to young people's pay rates for about a year. As the hon. Member for Coventry, South-East pointed out, the ILO convention prevents this country from benefiting from de-ratification, so during the next 12 months it is important that each Member of Parliament should do everything possible to help young people to find the best opportunities that are available to them. Whatever hon. Members' views about the youth training scheme may be—and I am grateful to the hon. Member for Birmingham, Ladywood (Ms. Short) for not airing, as usual, her views on YTS in this debate——
  Ms. Clare Short: It is a long time since I said anything about it.
  Mr. Bottomley: I was acknowledging that fact. The hon. Lady is slipping back into her usual habit of answering not only other Members' questions but even my own. I hope that hon. Members will encourage young people to consider seriously the options that are now available to them.
  At the heart of the debate about low pay and young people, or wages councils and young people, is the pay and jobs link. This is not a mechanistic link. There may be a mechanistic element to it, but the greatest change in the employment opportunities for young people comes about when people set out to make it possible for more young people to be employed—when they remember the needs of young people instead of forgetting them. I do not know whether the hon. Lady can tell me how many people under the age of 18 are employed by the Labour party. I doubt whether she can, and it is unfair to ask an off-the-cuff question like that.
  There is one sector that has never been attached to a wages council but that has an industrial agreement very similar to a wages council agreement. It covers the same sort of detail but goes rather further on training. If somebody were to say, "If the starting rate for a 16-yearold were to be reduced from £42 a week to £28 a week, what do you think the job impact would be? How many more job opportunities would be created?" some people would reply, "I do not think that any more jobs would be created", while others would say, "How can one tell?" If somebody gave the second answer, it would be possible for people to make the obvious comment, as the hon. Member for Coventry, South-East did in his speech, that the Government have made no big claim about precisely how many jobs they think will be created and therefore we should not believe that any more jobs will be created.
  1228
  The fact is that in the only example for which we have figures, which is integrated with YTS, 850 people were taken on when the starting rate was £42 a week. Within a year the number went up to 2,500, in the following year to over 3,000 and in the year after that to over 3,000 again. In one relatively small industrial sector the number of jobs for 16-year-olds went up from 850 to over 3,000.
  Mr. Nellist: That was thanks to Frank Chapple.
  Mr. Bottomley: The hon. Gentleman accurately says that that was thanks to Frank Chapple. But it is not only a question of thanks to the electricians' union and to the electrical contractors. This has been of great benefit to young people. Apart from having found a welcome rung on the ladder, there was quality training and an independent future for young people, working either for a firm or as independent electricians. Nobody regards the electrical contracting training scheme as inadequate. In fact, it ought to be a model for other industries.
  Mr. Nellist: The Minister is talking about "jobs". They are not jobs; they are training places. It is easy to say that, because the YTS allowance has been reduced from what its real value should have been—£40—to £26·25, about 500,000 youngsters have gone through YTS. It does not alter the fact that most of those youngsters will not find jobs when they complete their training. His argument is that more jobs will be created by reducing wages. so the example does not support his argument.
  Mr. Bottomley: The assertions that I have made and the facts that I have described are slightly more limited than the hon. Gentleman believes. I was making the point that, had we been asked in 1982—we were not, because Parliament had no standing in this—what would be the training places consequence of that agreed change in the starting rate of pay or allowance for 16-year-olds, none of us could have predicted it with accuracy.
  Ms. Clare Short: I am sure that the Minister does not intend to mislead anyone who might read what he is saying. It will not do to talk about replacing real, permanent jobs with a salary by a scheme financed by the Government, or to argue that that tells us anything about the consequences of cutting wages. We could debate for ever the desirability of that agreement with the EETPU and the merits or demerits of the youth training scheme, but the Minister's example does not fit the point that he is trying to argue.
  Mr. Bottomley: I have no doubt that if the hon. Lady and I were on the same Standing Committee we could explore these matters at a rather more sensible hour than this. The fact remains that if, in 1982, she had been asked how many more people would be taken on, she would not have got the answer right. Nor would I. That is one reason why I told the hon. Member for Coventry, South-East in a written reply that one could not estimate some of those figures.
  It is worth challenging one point made by the hon. Lady. I am sure that, on reflection, she will realise that she could have phrased her remarks differently. She claimed that the Government were setting out, through tax policy, to make the low paid worse off. I do not claim to have quoted her directly. I do not know whether she has made an estimate of the gain from the Budget announcements

  1229
  on tax, national insurance and family income supplement to a married man on low pay, with a non-earning wife and two children.
  Ms. Clare Short: Yes.
  Mr. Bottomley: Will the hon. Lady give us the figures?
  Ms. Clare Short: I can tell the Minister about the effects, not only of the Budget, but of tax policy since 1979. A married couple earning about £95 a week, with two children, now pay 60 per cent. more tax than they did in 1978–79. A single person on a similar wage now pays 26·1 per cent. in income tax and national insurance—an increase of 10 per cent. on the proportion paid in 1978–79. Despite the small cuts in income tax for most people, the low paid have suffered from an increase in their overall tax burden due to greatly increased national insurance contributions and indirect taxes, such as VAT. That goes beyond the Budget, but that is the position. The Minister has nothing to boast about.
  Mr. Bottomley: A great advantage of the Consolidated Fund debate is that we can have a debate. I asked the hon. Lady whether she has, or has asked for, any estimates of what the changes proposed in the 1985 Budget on tax, national insurance and FIS would mean to a married person on low pay, with a non-working wife and two children.
  Mr. Nellist: The replacement of family income supplement by family credit will have a direct effect on the low paid, because it will encourage more low-paying employers to continue to pay low wages. They can be directly subsidised by the Government. It would also increase the stigma among the low paid, because that supplement will be paid through the employer. Perhaps most importantly, the provision removes money from the wife, who normally has responsibility for bringing up the family—who can claim family income supplement now—and pays it to the wage earner, who is usually the man. It removes a sizeable chunk of money from the control of the wife. There are changes in the Budget that, on that one item of family income credit, will be directly detrimental to the low-paid in Britain.
  Mr. Bottomley: One of the troubles in almost any debate involving the hon. Members for Coventry, South-East and for Ladywood is that I spend my time listening carefully to what they are saying, and they spend very little time listening carefully to what I am saying. The hon. Gentlemen is talking about the social security reviews and not the Budget. The answer to the question that I put to both hon. Members is nearly £10 a week. The level of gross pay that would be needed to translate into nearly £10 a week is nearly £25 a week.
  I recognise that I am talking about people with families rather than those without family responsibilities, but is one seriously going to argue for the minimum pay route along the lines suggested by the hon. Member for Coventry South-East, which will have the effect of driving many people out of work, and concentrating most of the extra funds on those who do not have family responsibilities? Both the Labour party and the Tory party will have to start thinking about that carefully.
  One cannot go through life arguing, as people have, that the position of all those on low pay should be raised so that everyone at work can meet the needs of a full
  1230
  household with dependent children from their income. I know that the hon. Member for Ladywood would not suggest that, and perhaps in about a year's time we shall have the opportunity to debate these issues at greater length.
  I prefer to stick to two or three essential points. There is a philosophical argument about legislation to forbid people to offer and take pay at anything up to two and a half times the amount of income that they could get if they were unemployed and getting unemployment pay. The Government have taken the view that it is right to keep wages councils and wages council orders on hourly rates for adults. There have been times when it was thought that we would abolish wages councils altogether. The hon. Member for Ladywood accused me of planting stories in the newspapers to that effect——
  Ms. Clare Short: The hon. Gentleman did.
  Mr. Bottomley: The hon. Lady did not listen to the answer that I gave her in employment questions, w hen the matter first came up, but perhaps we shall get used to each other in time.
  My predecessor spelt out in the debate in February 1984 the fact that we had been looking seriously at those who are forced into greatest poverty by unemployment. Various things contribute to unemployment, one of which is being in a country where the unit costs rise when they are falling among our major competitors, many of whom have standards of living that are higher than ours. We are competing in international trade not with those whose pay rates are lower than ours, but with those whose pay rates are higher than ours, but whose unit costs are lower because of investment, working methods and the way that people work together. It is important that people recognise all the contributory factors to economic and industrial success, and that they give thought to sharing the greater benefits of prosperity more fairly.
  The hon. Member for Coventry, South-East spoke about a shorter working week. That would clearly lead to work sharing, but I was not clear whether he was advocating pay sharing as well or whether, in a shorter working week, those already at work would be able to keep all the benefits and there would be extra costs on the employer, whether in the public or private sector, for the employment of other people.
  I assume the hon. Gentleman is saying openly that he does not believe that one would have proper work sharing, because presumably if one is to maintain a proper standard of living, one would have to produce in 35 hours what people are now producing in, say, 39 hours. If the hon. Gentleman wants to keep unit labour costs roughly the same, that is the logical consequence.
  The next point is about inadequate demand. I do not know whether the hon. Lady has calculated how much pay has gone up in this country in nominal terms in the last live or six years, but the answer is by about £50,000 million. But most of that has been eliminated by inflation and has not been a real increase. If one looks at TUC minimum pay targets over the decades, one will see they have gone up from £15 to almost £115 a week. Nearly all that increase has had a destabilising effect on the economy, helping unit labour costs in this country to rise much faster than they have risen in other countries, or to rise here when they are falling in other countries. The lower paid. and unemployed, and especially unemployed young people have not been helped at all.
  Mr. Nellist: Will the Minister give his definition of unit labour costs? If he means the rate per hour, there are plenty of countries such as Sweden and America where the rate of pay per hour in manufacturing industry is far higher than in Britain. If he is talking about the output divided by the number of workers, then one of the many reasons why that equation has failed in Britain is that manufacturing output is down 20 or 30 per cent. first because Britain is losing its share of world markets and, as I said in a speech some time ago, losing its share of the domestic market. Those two losses are due to lack of investment by manufacturing industry in new technology and in factories and new tooling and so on over the past 10 or 15 years. Which of those two definitions is the hon. Gentleman using?
  Mr. Bottomley: Like the hon. Gentleman, the one which happens to suit my argument at a particular time. But to be more serious about it, if one takes unit labour costs on the hon. Gentleman's first definition, one will find in the Department of Employment Gazette, which comes out today, an article about movement in unit labour costs. I doubt whether the hon. Gentleman can get a copy now. It has yet to be released. It may come out later today. The plain fact is that there are comparative cases between this country and Germany which show that Germany produces 67 per cent. more than we do, because the Germans manage to work more effectively together.
  Ms. Clare Short: What about investment?
  Mr. Bottomley: They are plants with similar investment. The hon. Lady cannot say, "What about investment?" because the investment is similar and the output is very different. It is the way people work. I will move on, because this is not the only occasion on which we will be able to explore some of these issues.
  The hon. Gentleman referred to the low-pay unit west midlands report. The director of the unit knows I have views on some of the things he puts out, in the same way that he has views on some of the things that we put out. I shall concentrate for a moment on the west midlands study. In the conclusion, the evidence on wages refers to under 18-year-olds, and then immediately goes on to a table illustrating the unemployment increases for 18 and 19-year-olds. That may be a mistake, or it may have been an attempt at deliberate confusion. The fact is, like was not being compared with like. It is page 22.
  If the evidence were to be solely devoted to those under 18 it would show that unemployment in this group has fallen as a proportion of total unemployment over the period 1979 to 1984. The report infers on page 7—although it does not actually say—that young people on young worker schemes——
  Mr. Nellist: The Minister says that unemployment among young people under 18 has fallen in the past six years, but if he adds the number of registered unemployed under 18 to those on various bogus schemes such as the jobs sector of the young workers scheme and the YTS he will find that unemployment in the group has not fallen as a percentage of total unemployment in the past six years.
  Mr. Bottomley: The hon. Gentleman has views on the YTS which are not shared by the trainees. If he suggests that trainee electricians are in bogus jobs — [Interruption.] If the hon. Member for Ladywood objects to taxpayers' money being used for training young people, she had better say so clearly.
  Ms. Clare Short: I am making a simple point and I am sure that even at 5.15 am the hon. Gentleman can understand it if he tries. Young people who are employed on a Government scheme and are paid an allowance made available by the taxpayer are not comparable to people who are paid wages by employers to keep them in employment.
  Mr. Bottomley: Why not?
  Ms. Short: Because the cost of one has to be met from the production of the company involved and on the other hand the taxpayer is paying an allowance to someone who is supposed to be a trainee. It is massively different.
  Mr. Bottomley: It seems to me that the hon. Lady will be in difficulties with her party. I hope that she has been re-selected.
  Ms. Short: I have.
  Mr. Bottomley: In that case, I can go on to say that we appear to have reversed roles. The hon. Lady is saying that a job is a real one only if no public funding is involved. Is there any significant difference between the trainee electrician who started in 1982 and the trainees electrician who started this year, except the source of the funding for the allowance and whether earnings are taxed? There is surely no significant difference. If the hon. Lady wants to make a great distinction, she is not the person I thought she was.
  The essential argument is that to deny the link between pay and jobs, Labour Members, and sometimes the low pay unit, implicitly assume that wages are the only determinant of employment and unemployment. I leave aside the common recognition that aggregate levels of demand matter a great deal. The question is how to get that aggregate increase in demand. I have already mentioned the £50,000 million nominal increases in pay during the past five or six years. Is that 50 per cent. increase—about 10 per cent. a year—not enough? If it is claimed that the way to increase demand is to have such massive nominal increase in real demand, Opposition Members should start finding a different way forward.
  The reason why the low pay unit and Opposition Members need to assume that wages are the only determination of employment and unemployment is that that allows any increase in unemployment at a time of pay reductions to be cited as disproving the link between pay and jobs. The description of a deterioration in youth pay and unemployment over the years 1979 to 1984—the figures that the hon. Member for Coventry, South-East kept using—is used to deny the pay and jobs link. The hon. Gentleman seems to ignore any other effects, such as the large demographic cohort passing through the age group during those years. If the hon. Gentleman were willing to split the figures from 1978 to 1982 and from 1982 onwards, which is where we see the impact of some of the Government involvement in new schemes, we should see a slight different pattern.
  There is agreement on the need to ensure that there are more and better opportunities for young people. The Government approach is to say that we will not have statutory restrictions on what employers can offer. The hotel and catering trades believe that they will be able to create more opportunities for young people. When I ask trade unionists what they think will happen, their opinions vary. Some are in trades where they are rather more used

  1233
  to trying to get a trade-off between pay and jobs. Others in the great Labour movement, of which I regard the hon. Member for Coventry, South-East as a member, would deny any link between pay and jobs, and obviously we are not going to get far together in trying to find one. However, there are other people who regard it as part of their responsibility to add to the opportunities available to young people. The Government are going to do the best that they can to encourage people to move forward and make arrangements with freedom and flexibility on setting pay and allowance levels so that the improvement can be seen. Too often people have walked by on the other side when there was a chance and a need to create greater opportunities.
  Mr. Nellist: I am sitting in seeming amazement listening to the description of training opportunities for young people described as a laudable exercise by the Government, which will lead to real jobs. I do not regard The Times newspaper as a particularly Socialist organ, but a couple of weeks before the opening of the YTS scheme, in the early part of September 1983, its editorial described YTS as a crude anti-riot device designed to keep young people out of the unemployment figures and off the streets. That was why the Government planned to change from cutting their provision on youth training by £14 million in 1979 to spending £1,000 million by 1983. It had nothing to do with training, jobs or giving young people hope. It was a knee-jerk response to Toxteth, and a way of fiddling the figures.
  The Minister ought to deal with the realities of 500,000 youngsters who have not worked under this Government, and with the proper provision of jobs rather than trying to masquerade by portraying YTS as some laudable training scheme. That is no criticism of the individual instructors who are trying to make the best of those schemes. The Government's reason for setting up the schemes was to reduce the unemployment figures from the real level of nearly 5 million down to the artificially low level of 3·25 million.
  Mr. Bottomley: I am glad to note that the hon. Gentleman at last has remembered that many people involved in training young people are also likely to be members of trade unions, and he has made his statutory gesture towards their dedication to the needs of young people.
  In addition to joining the hon. Gentleman in praising those involved in YTS in the various modes, and
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  recognising that over 80 per cent. of young people on YTS think that it is useful to them, and many think that it is very useful to them. I want to make the point that having flexibility to set rates of pay which are more realistic is a way not of penalising people but of helping more people.
  One thing that helps young people is being able to get work. The approach of the hon. Gentleman, while we have had the wages councils structure, has been to deny many young people the opportunity of getting on the bottom rung of the employment ladder and moving upwards.
  This year in Germany, 600,000 young people will get recognised qualifications. In this country, the number is a relatively small percentage of that figure. That has happened not just in the last six years. It has been developing because we have taken our eye off the needs of 40 per cent. of school leavers, and we have created a system that has perhaps given some of them the idea that they can sit back and not take one of the options that is likely to be of greatest advantage as they grow up. That is, staying on at school, going on in further or higher education, taking a traineeship and getting a job. We have allowed many of them to dc nothing and to feel that they are not needed and cannot move themselves forward. That has been changing. In this, YTS has played a major part. Having the freedom to set pay rates in the wages council sector is another part. Perhaps the most important part of all is in the 90 per cent. of the economy which has been governed—and restricted—not by wages councils, but by out of date attitudes, whereby people have turned their backs on the needs of young people.
  I do not want to build too much on electrical contracting, but I think that has shown the way forward. In 1982, we did not have even that. If other industries look to their responsibilities in the way that the electrical contractors and the EETPU have, we can have this debate in three or four years with many more examples—some from the wages council sectors and some from outside, some from the private sector and, I hope, many more from the public sector. Then we can discover what happened to the young people to whom the hon. Gentleman intends to devote his summer and we shall be able to test whether my approach or his is right.
  I thank the hon. Gentleman for giving us the opportunity to debate this matter this evening. I thank the hon. Member for Ladywood for providing the meat in the sandwich between us.

  Welsh Language
  5.25 am
  Mr. Dafydd Wigley: I am glad of this opportunity, even at an unusual hour, to raise in the House, before the recess, questions relating to the implications of the ruling by the industrial tribunal at Colwyn Bay last Friday on matters relating to the Welsh language and the social services in the county of Gwynedd.
  There has been a massive reaction of outrage in my county at the decision reached at the tribunal hearing because of its possible implications for people in that whole area, namely, the clients of the social services department. I do not wish to dwell too long on the actual details of the case, although it is impossible to consider the effects of the decision without referring briefly to the complaint. To understand the strength of feeling against the tribunal decision, it is necessary to look at the manner in which the matter came to be considered by the Commission for Racial Equality, which sponsored the two-person case.
  The case involved Mrs. Phyllis Jones of Amlwch and Mrs. Justine Doyle of Bangor, who were aggrieved that they had been turned down for a number of jobs by the social services department of Gwynedd county council. The jobs were in residential homes for the elderly and mentally handicapped in Ynys Môn. They alleged that they had been turned down because they did not speak Welsh. The county defended its position and insisted that to be able to speak Welsh was necessary to give the residents a full service in line with the county's longstanding bilingual policy.
  A significant proportion of the residents of these homes have Welsh as their first language. The objective of the county's bilingual policy is to provide services in whichever language—Welsh or English—is preferred by the client. The county has always held that to provide linguistic freedom for those who receive a service from the authority, there is a need for those who provide that service to be bilingual. The county maintains that that is especially relevant to social services, which deal in direct personal services.
  To the amazement of my constituents, which has been passed on to me in strident and impassioned terms, the tribunal decided against Gwynedd county council. In the words of its chairman, Mr. John Bellis:
  "We take the view that the imposition of a condition of Welsh speaking has been a condition of employment, and can't be justified in a mixed language society in Gwynedd."
  According to press reports, he went on to say
  "To be Welsh speaking was not a genuine occupational qualification."
  Several matters arise from that case. The first, which has aroused enormous comment in Gwynedd, is whether such a case should ever have been brought before the Commission for Racial Equality. The Race Relations Act 1976 was never intended for such purposes. That is quite clear from the White Paper which preceded it. Ministers who were involved with the Bill's passage at that time have confirmed this. The Act defined that a person discriminates against another if:
  "on racial grounds he treats the other less favourably."
  The Act defines "racial grounds" as:
  "any of the following grounds, namely colour, race, nationality or ethnic or national origins."
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  It says nothing about language. yet I understand that language has been accepted by the commission as a basis of indirect discrimination.
  I put it to the House that to require a person to speak Welsh, or English for that matter, to do a job in the way required by the employer has nothing to do with race. Plenty of Welsh people do not speak Welsh, and many English, Scots, Irish and, in my home town of Caernarfon, Chinese do speak Welsh. To assert that the question has anything to do with race is absolute nonsense, and the commission is abusing its responsibilities by allowing itself to be used in such a way.
  The inappropriateness of considering matters relating to the Welsh language in Wales under the Act was recognised by the Government in Dyson v. Department of Health and Social Security in Shrewsbury a couple of years ago, when the Treasury Solicitor argued on behalf of the Government that a language requirement would not be discriminatory under the Act. Likewise, the Manela case in the House of Lords more recently established two essential ingredients for a case to fall within racial discrimination, and neither of them related to language.
  In another case, Fawkes v. Dyfed health authority in 1979, it was found:
  "The speech therapist who would have been appointed to work in Ceredigion would have been providing persons of a racial group, namely, Welsh-speaking Welshmen, with personal services promoting their welfare, and that service could most effectively be provided by a person who was Welsh-speaking."
  That case is important, for it not only found against the proposition of racial discrimination in these circumstances, but related to matters covered by clause 35 of the 1976 Act, which states:
  "Nothing in Parts II to IV shall render unlawful any act done in offording persons of a particular racial group access to facilities or services to meet the special needs of person of that group in regard to their education, training or welfare, or any ancillary benefits."
  I stress the word "welfare".
  Even if my contention that the language question should have nothing to do with race is refuted, there is a specific provision in the Act to cover the access to welfare services of the type involved in the Colwyn Bay case. The tribunal disregarded both the provisions of clause 35 and the finding in the Fawkes case in reaching its astounding decision. The chairman's explanation for his disregard of clause 35 was, in the words of one lawyer, "perverse and ludicrous", and I hope that the Government will look carefully at that part of the written decision when they study it.
  There is a further case which casts even more doubt on the validity of the tribunal's decision, and that was Sweeting v. Amgueddfa Mor Porthmadog in 1983. In that case, it was found perfectly reasonable that the trustees of the museum should have insisted that the manager should be Welsh-speaking, and the case recognised that there is a general discretion on language issues in the sphere of appointments.
  That tribunal was unanimous in its decision, according to its chairman, Mr. Day—I refer to paragraph 15 of the decision in case No. 23217/82—and it is fascinating to note that one member of that tribunal was apparently a Mr. D. L. Hawkins, who, I am told, was also a member of the recent Colwyn Bay tribunal. I trust that the House will want to know on what basis there should have been such a change of interpretation in the law in the last two years when the law has not changed.

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  It is interesting to note, however, that, apparently after the Sweeting case, a Mr. Calvert, who had conducted the Race Relations Commission case, said on a Granada television programme that the commission had its eye on Gwynedd and was particularly keeping its eye on local government. The whole case stinks of vindictiveness and a vendetta by the Race Relations Commission and by the tribunal to put the boot into the Welsh language.
  The Minister should confirm whether it is true that the commission is only now, after that case, intending to set up a body to consider the implications for it, as a commission, of matters relating to the Welsh language. If that is true, where on earth has the commission been for the last nine years, and is it its normal policy to shoot first and only thereafter to find out the facts?
  Perhaps the Minister will confirm that there was a division of opinion under the Race Relations Commission about whether the case should ever have been brought forward and whether Mr. German, the only Welsh member, I understand, opposed the commission's action in the matter but was overruled.
  In any event, the Colwyn Bay case calls for a detailed review by the Government of the working both of the Commission for Racial Equality and the industrial tribunal structure to protect Welsh-speaking people from the type of ignorance and prejudice shown in the case. There is also a need to review the Act to clarify what it is meant to do and what is not appropriate under such legislation.
  I contend that the actions of Gwynedd county council were not discriminatory in law, were within the exceptions provided by section 5 of the 1976 Act, were justified on social and linguistic grounds and, in any event, were valid under section 35 of the Act. I contend also that the tribunal's decision was perverse and malicious. The appropriateness of having a language requirement for a job in Gwynedd—this principle holds in the rest of Wales although its application may vary from area to area—must revolve around the right of the consumer to have the service in the language of his choice, be that Welsh or English. The Gwynedd county council has adopted, since its inception in 1974, a bilingual policy and has maintained the policy that to give its clients the freedom of choice of language, the council must operate in a bilingual manner.
  There are some jobs in which employees have no interface with the public and there is no pressing requirement for them to speak Welsh. In jobs which involve dealing with the public, employees need to speak both languages. It is unacceptable in a largely Welsh-speaking area that the public should be expected to change from their first language to their second for the convenience of local government officers, who are there to serve the public.
  We must remember that at the last census my constituency was 84 per cent. Welsh speaking. Ynys Môn, where the jobs which were the subject of the Colwyn Bay tribunal were located, was 62 per cent. Welsh speaking. About two out of every three letters that I receive from my constituents are written in the Welsh language. Welsh is the normal vehicle of everyday life. Many young children are virtually monoglot Welsh speakers and many of the elderly are markedly happier in the Welsh language. They can express themselves more fluently, can comprehend more clearly and are generally more relaxed and comfortable if they can relate to those around them through the Welsh language. These elderly people have probably spoken nothing but Welsh in their homes
  1238
  throughout their lives. It would be invidious if, having to enter a home for the elderly in their latter years, they were put in an alien atmosphere in which they were at least uncomfortable and at worst positively unhappy.
  That is no imaginary fear, for I have received frequent complaints over the years. They come usually from the children of elderly people, who tell me of the need of their mothers or fathers to have staff looking after them who can speak their language. To be fair, the complaints have been much more oriented against the Gwynedd district health authority than the county council.
  More recently there have been complaints about private residential homes. Only last week I received two separate complaints about a home near Caenarfon which had originally been run by Welsh speakers. When they sold out, an English-speaking family took over. I have nothing against them personally, but the occupants of the elderly persons' residence were distraught, according to two constituents who came to see me separately. For the first time in their lives, these elderly people have had to live through the medium of an English-speaking home. It may not be easy to do anything about the private homes, but I become increasingly uneasy when I hear complaints of the sort that I have outlined. However, in homes run by Gwynedd county council social services department, the linguistic needs of each individual resident should be catered for. English-speaking residents should be helped by staff who are able and willing to chat to them in English, and likewise Welsh-speaking residents should have the same facility in their own language.
  Against this background, it is to fly in the face of reality to claim, as the tribunal did, that
  "To be Welsh speaking was not a genuine occupational qualification".
  If I quote the proportions of Welsh-speaking elderly people who are resident in the homes, it will give the House an idea of the pattern At Plas Penlan, Llangefni, which is one of the homes in question before the tribunal, there are 30 residents and 29 of these are Welsh speaking. Over the whole of Anglesey, 77 per cent. of the residents of county council homes for the elderly are Welsh speaking and 23 per cent. are riot. In the Arfon and Dwyfor areas, which include my constituency, 89 per cent. are Welsh speaking and only 11 per cent. are not. It is clear that the Welsh language needs of the residents must be taken into account for their welfare and happiness.
  Some will argue that, as many of the Welsh speakers are almost as fluent in English, too much regard should not be given to this question. I contend that it is not only a matter of convenience and desirability for the elderly to live through the medium of the Welsh language if they wish, but a question of elementary human rights. If there is a clash between the rights of employees to speak English and the rights of the elderly to have their services through the medium of Welsh, I have no doubt that in a caring, compassionate society the rights of the elderly should take precedence.
  As people get older and more frail, there is sometimes a tendency to live in the past—often, a monoglot Welsh-speaking past. As the chairman in the Fawkes v. Dyfed health authority case noted in 1979:
  "Elderly patients…tended to revert to their first language."
  In evidence during this case which ruled out racial discrimination when a Welsh requirement was stipulated for a job in Dyfed, Dr. Glyn Rees drew particular attention

  1239
  to the strong possibility that a non-Welsh-speaking person could be unaware of his or her disadvantage when communicating with a Welsh-speaking person in English. This is an extremely important point, as many English speakers have little comprehension of speaking in any other language and have difficulty facing those who are using their second language.
  The case that I have made in relation to homes for the elderly is obviously even more valid with regard to homes for those with mental handicaps. There has been an enormous reaction in my constituency against the tribunal's decision, and our office in Caernarfon has been flooded with callers and telephone calls protesting and demanding fair play for the Welsh language. More than 1,000 people have signed a pledge that they will not henceforth, because of this case, use the English language in talk or in writing to any government official, whether local or central. That shows the reaction of the people.
  I shall quote some of the letters that I have received. I shall quote in Welsh a letter that I received from Mr.Lewis from Dyfed. I believe that it is in order for to do so and then translate. The letter stated:
  "Nonsens pur yw cymysgu cymhwyster i swydd a rhagfarn hiliol. Mae'r gallu i gyfathrebu, a hynny yn iaith y bobl yn eich gofal, yn gymhwyster hanfodol i berson mewn galwedigaeth gofal. Ymddengys fod yna ormod o grancod unllygeidiog yn Ilechu o dan ambarel y Comisiwn Hiliol."
  The letter translates as follows:
  "It is utter nonsense to mix up qualifications for a job with racial prejudice. The ability to communicate, in the language of those people in your care, is an essential qualification in a caring profession. It appears that there are too many one-eyed cranks lurking under the umbrella of the Commission for Racial Equality."
  I have received from Mrs. Margaret Moore and 20 people living in the Llandudno area—this will be of interest to the Minister—a copy of a letter sent to the Commission for Racial Equality. The letter states:
  "We, the undersigned, are not all Welsh speaking, but this does not blind us to the rights of all people to speak their native language in certain circumstances and at certain times.
  We should have thought that even rough justice would not deem it a privilege for people to speak their mother tongue in their own country. However, we are prepared to put aside that point at the moment and concentrate on another aspect of this matter.
  Vulnerable people—e.g. minorities, must be protected; the sick, frail, mentally confused and children have a real need to be understood without having to resort to a foreign language. Physical caring is not enough; this is the caring of people for animals and it ignores the needs of the human spirit.
  Your recent decision at Colwyn Bay puts the rights of two women to work in a particular employment above the rights of others to communicate in their own tongue. The two applicants have a remedy in their own hands—they can learn Welsh. What remedy is there for the old people whose rights have been so cruelly dismissed?"
  Another letter recalls the words of a former inspector of taxes, Mr. Norman Price, who was non-Welsh speaking when he came to Porthmadog. He said:
  "I could not do justice to the taxpayer or to the Government if I did not learn the Welsh language."
  A trade union officer has also made a clear stand in support of the needs of the clients when appointments are made in bilingual areas. Mr. Robert Skillicorn, area officer of NUPE, said that he was appalled that the Commission for Racial Equality should have taken this case on and said that such action was
  "an infamous racist slur on the community of Gwynedd."
  1240
  Another NUPE officer has expressed misgivings about the effect of the decision on inner city areas in England, where there are minority communities with special linguistic needs.
  A problem with the whole issue has been the commission's failure to differentiate between racial prejudice and linguistic needs. When I went to its offices in Victoria last year to discuss the matter I got the impression that it was wholly ignorant of circumstances in Wales, and surprisingly lacking in empathy or sympathy, given that it should have some feeling for communities with their own cultural dimensions. Given that the Commission for Racial Equality deals mainly with ethnic minorities of English cities, it is ironic to read the comments of the Swann report entitled "Education for All", which was published in March. Page 410 states
  "We are convinced that a facility, or even a qualification, in a community language should be seen as providing any young person with a skill of direct relevance to work in areas of ethnic minority settlement in fields such as social services, nursing and education, where dealing with people is so important. We would therefore expect to see schools and the careers service emphasising the value of languages in such careers, and employers, particularly local authorities, seeing language skills as one of the criteria to be used when making appointments in these fields."
  The commission which insists on using race discrimination law intended for ethnic minorities to prevent services from being provided in the Welsh language disregards one of the central themes of modern thinking in relation to linguistic minorities, that is that welfare services should be provided in their languages, as the Swann report advocated.
  I cited those examples to show that the case, about which I feel so strongly, is based not on nationalistic reasoning or a cultural analysis alone, but on the sensible needs of people in a bilingual community, and the responsibility of both local and central government to respond to those needs. The Welsh Office recognises that, as was shown in a parliamentary answer to my hon. Friend the Member for Meirionnydd Nant Conwy (Mr. Thomas) when the Secretary of State said
  "The guiding principle with appointments to posts in all parts of the Civil Service is that the best available candidate should be selected. This is however in no way inconsistent with giving appropriate weight in the selection process to ability to speak Welsh in cases where this would be an advantage in undertaking the duties of the post concerned taking account of the linguistic situation in Wales."—[Official Report, 17 January 1985; Vol. 71, c. 212.]
  That answer introduces a further dimension to the argument. Sometimes it is claimed that jobs are given to people solely on their ability to speak Welsh, irrespective of any other qualification. Clearly that would be wrong. The ability to speak Welsh is one of many qualifications for various jobs. It would be as stupid to ignore the need for the other qualifications necessary to undertake a job, as it would be to deny the relevance of the Welsh language as a qualification for many jobs, for example in the social services or in health care.
  On some occasions there are no suitable applicants for a job who can speak Welsh, although the job ideally needs a Welsh speaker, and it may be necessary to appoint someone who does not speak Welsh and to train him or her to speak the language, or to appoint someone who speaks Welsh and to give him or her training to learn the necessary skill. Which of the two alternatives is the more practical will vary from case to case. However, it is not acceptable to allow either a stipulation of "Welsh

  1241
  essential" to lead to unsatisfactory appointments, or to make appointments of persons unwilling to accept a need for acquiring communication skills in Welsh. As the Secretary of State said, there need be no incompatibility between those two different alternatives.
  Regarding the problems of those seeking employment in Gwynedd, if such a person does not speak Welsh he will find that some jobs are not open to him. Clearly, for the foreseeable future Welsh will always be a prerequisite for some jobs. At the clearest level, a person will be unable to be a Welsh teacher or Welsh newscaster if he or she does not speak the language. In those circumstances it is even more important that the bilingual education policy pursued by Gwynedd county council is allowed to succeed. It should ensure that every young person leaving school in Gwynedd is fairly fluent in both languages, and certainly sufficiently fluent to a enable him or her to meet the requirements of jobs where conversational Welsh is required, such as any jobs in residential homes run by the social services.
  It is worth remembering that those who in the past have stood against a bilingual education policy have now caused problems for some non-Welsh speakers in Gwynedd. There is another problem facing people who move into Gwynedd to live and who are not Welsh speakers. My message to such people is, "Please will you realise that you are moving into a bilingual society, and be willing to adapt accordingly."
  Many persons have done so successfully and have learnt Welsh, or at least made a fair effort. I salute them. One who has tried hard is the hon. Member for Ynys Môn (Mr. Best), and I hope that his other constituents in Anglesey who have moved in will make an equal effort.
  If they do, their welcome will be that much warmer and they will find it easier to integrate into the community. They too can achieve for themselves, with a little effort, enough Welsh to overcome the language criteria for many jobs. This year, for example, Gwynedd county council has appointed both a chief officer and a deputy chief officer who have learnt Welsh in the council's service. In both cases Welsh was essential for the post.
  What, therefore, now needs to be done to reverse the damage done to community relations in Gwynedd by this appalling tribunal decision? First, there must clearly be a review of the role of the Commission for Racial Equality in such cases, and possibly new people to serve on it who have a better understanding of areas such as Gwynedd and who will concentrate on their proper role of minimising race difficulties instead of causing them. There should also be an amendment to the Race Relations Act 1976, so that making the Welsh language a qualification for jobs in Wales does not constitute racial discrimination.
  Secondly, the Welsh Office must give a positive lead by spelling out to local authorities, perhaps by circular, that they must have due regard to the linguistic needs of Welsh and non-Welsh speakers in the provision of personal social services, and that the requirement of the client should dictate the language in which the service is provided, not vice versa.
  Thirdly, Gwynedd county council should put more effort into ensuring that everyone who leaves school in Gwynedd is free from a linguistic handicap that will limit his or her job prospects in the county. It should also make greater efforts to ensure that young school leavers have the other technical skills needed to fill the jobs that are available within the community in Gwynedd.
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  Fourthly, there is a need for a new Welsh language Act to enshrine in law the fundamental rights of Welsh speakers to use their own language in their own country, and that in order to give each citizen the equal right to use either language in dealing with authority, there needs to be a policy of official bilingualism in Wales.
  To make this practical, additional resources will be needed to help people to learn the language, whether to open up a broader range of job opportunities or for whatever other reason. There must also be a powerful and dynamic body to co-ordinate Welsh language education.
  There should be an abundance of courses for people to learn the language quickly and effectively. Perhaps a good, symbolic start for a new era of this sort would be for the Secretary of State for Wales himself to undertake to learn the language.
  There is a need to review the performance of industrial tribunals, such as that at Colwyn Bay last Friday, to ensure that the members have a full grasp of the community dimensions of the area in winch they operate and to ensure that we have no repeat of the disastrous performance that we saw last week.
  If these steps could be secured, some good may yet come out of this unfortunate saga. If no such progress is made, there will be a simmering resentment among the Welsh-speaking community in Gwynedd which the Government will ignore at their peril, and the Commission for Racial Equality will have the doubtful honour of knowing that it has been contributory to creating a bitter community conflict that could take years to dispel.
  5.54 am
  Mr. Geraint Howells: I am delighted, Mr. Deputy Speaker, to have caught your eye so early in the morning on this very important issue of the use of the Welsh language—our language.
  I have travelled throughout the night to support the hon. Member for Caernarfon (Mr. Wigley). There is a principle at stake, which is why many of us are here to support the hon. Gentleman.
  The Welsh language is the oldest language spoken within the EEC, and it is our duty to safeguard the interests of our language. For the last few days, I have had the privilege of attending the Royal Welsh show — a national event attended by many thousands of Welsh and non-Welsh speakers. I was delighted to see the Minister at the show. I am sure he will agree that we were both delighted that the commentators were bilingual.
  Many hon. Members on both sides of the House have, over the years, worked hard to ensure that the Welsh language is recognised in Wales, as provided in the Act of 1967. As the hon. Member for Caernarfon said, the Act should be upgraded in the years to come. Many of us fought hard for our own television channel on which Welsh would be spoken. Many of us fought hard for bilingual education in Wales. believe that many of us are doing our very best to try to safeguard the interests of our language and culture. The issue we are debating tonight is different. What one must bear in mind in this debate is the welfare of the old and infirm in our society, for whom the social services have responsibility. In Gwynedd, as in my constituency, I would expect that the vast majority of such people not only speak Welsh but prefer to express themselves in the Welsh language, feeling indeed that they cannot make

  1243
  themselves adequately understood unless they speak in Welsh, the language of their home, their chapel, and a language entirely appropriate to their way of life.
  To force them to discuss their problems and their fears in what is to them an alien tongue is to treat them as second-class citizens. To say that a knowledge of the Welsh language is not a necessary qualification for a situation that involves close contact with these people seems to me to be entirely wrongheaded and extremely obtuse. I should think that communication through a common language is the most important ingredient in the relationship that involves social workers and their clients. I know through my own experience that many elderly people in the rural areas of Wales find it difficult to communicate in English—what is to them a strange and foreign language.
  I have great sympathy with those people in Wales who are unable to speak the language of heaven, but I am sure that the vast majority of them would admit that certain jobs require fluency in Welsh. I am convinced that the position of a social worker caring for the elderly and infirm in the heart of rural Wales is one such case.
  I am appalled that the Commission for Racial Equality should have become involved in this matter, which is not concerned with race, colour or creed. What is concerned is the suitablility of applicants for a certain sensitive kind of work and their qualification to perform it—their ability to communicate with their clients who live in Wales.
  I am here to support the hon. Member for Caernarfon, the Gwynedd county council and other county councils in Wales. I urge the Minister, in closing the debate, to advise local authorities in Wales that certain jobs within the health and social services require fluency in Welsh. I hope that the hon. Member for Caernarfon and the Gwynedd county council will be successful in their deliberations and that people will be employed who are bilingual and who will look after the interests of those who are old and infirm in our society and need care given to them by people who speak their language.
  5.59 am
  Dr. Roger Thomas: I congratulate my compatriot, the hon. Member for Caernarfon (Mr. Wigley), on bringing this important topic to the notice of the House at the break of dawn this Thursday.
  The Welsh language has shot into prominence as a result of the deliberations at Colwyn Bay, and as a result of what happened yesterday in the Welsh Grand Committee debate on Welsh language and training. The hon. Member for Caernarfon has expressed just indignation at what happened at Colwyn Bay. However, I have some sympathy with the two ladies who applied repeatedly for a job for which they were probably adequately qualified. They could not do work at which they would have been skilled and which would have been useful in that community. I fully agree with the early-day motion in the names of the hon. Members for Caernarfon and for Meirionnydd Nant Conwy (Mr. Thomas), but again there are far wider and deeper implications for the Welsh language than are implied in parts of the motion.
  The Welsh language is now going through a difficult period. Parts of the recent census were encouraging, and parts were not. We are dealing with what happened in
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  Gwynedd. Without doubt it is now the most Welsh part of Wales. I was surprised when I heard the hon. Member for Caernarfon telling us of the tremendous dominance of the Welsh-speaking population in homes for the elderly. We who come from other Welsh parts of Wales must be careful because the situation with us is not so black and white as it appears to be in that part of Wales.
  I fully suported the hon. Members for Caernarfon and for Ceredigion and Pembroke, North (Mr. Howells) when they referred to the importance that we in Wales attach to the welfare of the elderly, particularly when they have to go into homes and hospitals. Those are acute and traumatic periods of their lives. If they are then not to be allowed to use the language with which they are most familiar, barriers are set up. In the end, they will work to the detriment of the clients.
  Reference has been made to the Hughes-Parry report, which we thought at the time would safeguard the equal status of the Welsh language in the Principality. Undoubtedly the report needs urgent revision. I hope that the Minister will respond in some way to the setting up of a similar commission, because there is undoubtedly a great deal of tightening up to be done if the Hughes-Parry recommendations are to be carried forward into the conditions obtaining in Wales in the last quarter of the 20th century.
  We are all aware that certain parts of Welsh Wales are desirable places where English people or non-Welshspeaking people, both young and old, wish to move and settle. Many retired people have settled there. The linguistic mix is constantly changing, but we are not doing enough to ensure that the transition is smooth. There is occasionally friction, which leads to intemperate actions, which often carry through into the headlines when the headlines should tell of the more useful and harmonious occasions.
  I have received complaints from parents of young children about the difficulties that Welsh-speaking children encounter when they have to go to hospital. It is essential that paediatric departments should have at least one fluent Welsh-speaking junior doctor. I have often made representations to east Dyfed and the former Dyfed health authorities about the fact that so many nurses are not fully conversant with the Welsh language. It is only natural that children should feel uncomfortable in those circumstances, but some become apprehensive, and we must all be worried about ill children becoming apprehensive.
  I was disappointed to learn recently that east Dyfed does not have a speech therapist able to rehabilitate people in their native Welsh who have suffered cerebro-vascular accidents and others.
  Mr. Wigley: I thank the hon. Member for Ceredigion and Pembroke, North (Mr. Howells) and the Minister for being here. When my two handicapped boys were three and four years old, they had to see a speech therapist in Bangor. The speech therapist did not speak Welsh and the boys did not speak any English. However good the speech therapist was, she could not do the work because she could not communicate. It is not a matter of national pride or culture but the ability to do the work. Does the hon. Gentleman agree that, in circumstances such as those, to say that knowledge of Welsh is not a qualification necessary to undertake the work is nonsense?
  Dr. Thomas: The hon. Gentleman can only feel ill at ease at such a personal incident in his life. It is essential that elderly people and children be able to converse in their first language. It is remarkable that, in any personal conversations, the hon. Members for Caernarfon, for Ceredigion and Pembroke, North, the Minister and I would use the medium of Welsh. In the formal atmosphere of the Chamber we are discussing this matter through the medium of what is the second language of those hon. Members present at this important debate. I do not wish to refer this morning to what happened yesterday, but part of the difficulty that led to the hot-headed action of a certain number of young people lies in the fact that the supportive actions that need to be taken to ensure that the Welsh language is able to flourish and survive are couched in far too vague and ill-defined terms.
  I am extremely disappointed that the Secretary of State for Wales has decided not to set up a Welsh language education development body. It would have helped to unify the position. About 500,000 people out of a population of just under 3 million now speak the Welsh language. In cold figures, that means 20 per cent., but for those who speak the Welsh language it accounts for much more than 20 per cent. A high percentage of Welsh speakers are to be found in Gwynedd, while a low percentage of Welsh speakers is to be found in some of the valleys of Glamorgan and Gwent. Unless a body can be established to bring together all these diverse aspects, the Welsh language will suffer.
  I hope that the officers and Ministers in the Welsh Office will think again about what is needed to keep alive the Welsh language. At the last census it was stated that the decline in the use of the Welsh language had to some extent been halted. The figures, particularly in the anglicised parts of Wales, start from a very low base line, but they show that there has been an increase in the number of people who are learning Welsh. However, I have found during the last 30 years that in Dyfed there has been a decline in the number of children and young people who speak Welsh. These are the ordinary Welsh speakers, those we refer to as the ordinary Welsh speakers of cefn gwlad. There has also been a decline in the standard and style of the Welsh language that they speak.
  I opposed the setting up of the S4C, but I have to admit that its success has been greater than I had expected. That channel ought to be used far more directly so that those whose hold on the Welsh language has become more and more tenuous can discover once again the deep pleasure that can be gained from using the Welsh language.
  Once again I congratulate the hon. Member for Caernarfon on raising this subject. It is unfortunate that so many matters relating to Wales are discussed at Westminster at inappropriate times of the night and day. But, at whatever time it is discussed, the people of Wales believe that no topic should have a greater priority, and no topic will have more influence on the future of our country. I hope that the Opposition have not put up a sort of popular front for the future of the Welsh language. The Welsh language is there for all political parties and for all shades of opinion. Yesterday, I was unhappy to hear people on both sides of the debate engaged almost in an auction, trying to say which party had done best for the Welsh language. If the language is to survive, it needs the help of all people of good will in Wales, irrespective of their political opinions.
  6.15 am
  The Parliamentary Under-Secretary of State for Wales (Mr. Wyn Roberts): There is no doubt in any of our minds about the importance of this subject. I am glad that hon. Members did not go into too much detail about the specific case that was heard before the industrial tribunal at Colwyn Bay, and which resulted in the decisions announced by the tribunal chairman on 19 July, although frequent references were inevitable. Those decisions inspired the hon. Member for Caernarfon (Mr. Wigley) to seek this debate. Nevertheless, as the hon. Gentleman is aware, the decisions could be the subject of an appeal to the employment appeal tribunal within 42 days of the issue of the judgment in writing. Further proceedings are also possible after the appeal tribunal.
  Neither the hon. Gentleman nor I would wish to prejudice such an appeal. The only statements that we can make about the tribunal hearing are based on media reports, for we still await the decisions in a written form. They should be available soon, and we can then study them. In this respect, Gwynedd county council, which was a party in the proceedings before the tribunal, reacted properly after the decisions were announced and offered no comment until it had the decision in writing so that it could consider its implications, and decide whether to appeal. In view of the possibility that the case may become sub judice, it would not be right for me to make any statement which might be interpreted as an attempt to influence the final outcome, and it is certainly not my intention to do so.
  The hon. Gentleman also realises that although the Welsh Office has a responsibility for Welsh language matters and for social services in Wales, my right hon. Friend does not have direct responsibility for industrial tribunals or for the Commission for Racial Equality. Nevertheless, it might be helpful if I briefly outlined their remit. Industrial Tribunals are set up under section 128 of the Employment Protection (Consolidation) Act 1978. Under section 54 of the Race Relations Act 1976, an industrial tribunal has jurisdiction to hear a complaint by any person that another person has committed an unlawful act of discrimination against the complainant in the area of employment.
  A hearing is normally arranged at which both parties have the opportunity to present evidence before a tribunal. The decision of the tribunal may be given orally at the end of the hearing or reserved, and in cases under the Race Relations Act, among others, the reasons for the decision must be recorded in full in a document signed by the chairman.
  Employers or employees dissatisfied with an industrial tribunal decision may appeal to the employment appeal tribunal, established under the Employment Protection Act 1975, within 42 days from the date of issue of the written reasons for the industrial tribunal's decision. An appeal to the employment appeal tribunal can be only on a question of law, not of fact. Employment appeal tribunal proceedings are heard before a High Court judge and one, two or four appointed members with industrial relations experience.
  An appeal can be made to the Court of Appeal from a decision of the employment appeal tribunal, but leave must be obtained. The Court of Appeal decision can be challenged in the House of Lords, again with leave. The Race Relations Act makes racial discrimination unlawful

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  in employment, training and related matters, in education, in the provision of goods, facilities and services, and in the disposal and management of premises. The Act, as I have said, gives individuals a right of direct access to the civil courts and industrial tribunals for legal remedies for unlawful discrimination. The Act affords protection against discrimination on racial grounds to everyone in Great Britain. It would clearly be irresponsible to deprive one particular group of the legal protection that is offered to all others.
  As the hon. Member for Caernarfon said, the Act defines two kinds of racial discrimination, direct and indirect. Direct discrimination arises where a person treats another person less favourably on racial grounds than he treats, or would treat, someone else. Section 3(1) defines "racial grounds" to mean any of the following: colour, race, nationality or ethnic or national origins. Indirect discrimination consists of treatment which may be described as equal in a formal sense between racial groups but discriminatory in its effect on one particular racial group. It arises where a person—the discrimination—applies to another—the victim—who is seeking some benefit from him, for example a job, a condition or requirement with which he must comply, and where the condition or requirement satisfies certain criteria.
  First, it is applied, or would be applied, by thediscriminat or equally to persons of any racial group.
  Secondly, it is such that the proportion of persons of the victim's racial group who can comply with it is considerably smaller than the proportion of persons not of that group who can comply.
  Thirdly, it is to the detriment of the victim because he cannot comply with it.
  Fourthly, it cannot be shown to be justifiable irrespective of the colour, race, nationality or ethnic origins of the person to whom it is applied.
  Racial discrimination by an employer is not unlawful where being of a particular racial group is a genuine occupational qualification, a matter referred to by the hon. Gentleman. A genuine occupational qualification is not an automatic exception for general categories of jobs. In every case it will be necessary for the employer to show, if the exception is to be claimed, that the particular job in question falls within the criteria set out in section 5 of the Act. These include circumstances when the holder of the job provides persons of a particular group with personal services promoting their welfare, and these services can most effectively be provided by a person of that racial group.
  The hon. Member has requested that the Government should review the working of the Race Relations Act. The working of the Act is, I am glad to tell him, kept under constant review by those Government Departments with responsibility for the various areas of the Act's operation, and by the Commission for Racial Equality, one of whose statutory duties is to keep under review the working of the Act. The Government are satisfied that there is already an acceptable mechanism for keeping the Act under review. As I have already said, I am not convinced at this stage that there is a necessity for change. Nevertheless, I note that the hon. Gentleman has presented a Bill to amend the Race Relations Act and when the Bill is printed my colleagues and I will give it careful consideration.
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  The central issue in this debate relates to the place of a knowledge of Welsh in appointments. We are well aware of this in Government because there are public appointments where a knowledge of Welsh could be judged to be essential. I cite as an example the chairmanship of the Welsh Fourth Channel Authority. The authority has a responsibility for Welsh language television programmes, and we could have little confidence that such a responsibility could be properly and effectively discharged unless the chief bearer of the responsibility could familiarise himself or herself thoroughly with the content of the programmes and understood the language in which they were produced and transmitted.
  There are other appointments where a knowledge of Welsh might be judged to be desirable, but not essential, or where it can be an asset. The needs vary from appointment to appointment.
  The hon. Member for Caernarfon referred to the reply given by my right hon. Friend to the hon. Member for Merionnydd Nant Conwy (Mr. Thomas) on 17 January this year at column 212. The hon. Gentleman asked about the relationship of the Welsh language and appointments to the Welsh Office. He was told that the guiding principle with appointments to posts in all parts of the Civil Service is that the best available candidate should be selected. This is in no way inconsistent, said my right hon. Friend, with giving appropriate weight in the selection process to ability to speak Welsh in cases where this would be an advantage in understanding the duties of the post concerned, taking account of the linguistic situation in Wales.
  One specific example of this is in respect of field monument wardens where we take the ability to speak Welsh into consideration when making appointments in areas where Welsh is the predominant language and where, given the nature of the duties involved, it would be an advantage for those employed to have a knowledge of the language.
  Mr. Wigley: In the posts which the Parliamentary Under-Secretary of State mentioned, the chairmanship of the Welsh Fourth Channel Authority was cited as an example. Will he accept that the Welsh language is a genuine occupational qualification for such posts?
  Mr. Roberts: In the most general sense, yes. In the legal sense, it might be open to debate, but I have certainly given my view. Reference has been made to the National Health Service in Wales and, of course, the place of the Welsh language in the Health Service has been the subject of guidance from the Welsh Office. It did not appear to me that the hon. Member for Ceredigion and Pembroke, North (Mr. Howells) was aware of that.
  In March 1975 the Welsh Office issued circular WHSC(IS) 117 to area health authorities, family practioner committees, county councils, district councils and community health councils on the subject of the Health Service and the Welsh language. I will quote from that circular two relevant paragraphs:
  "In a personal service concerned with the health of patients the relationship between the service and individuals seeking advice or treatment must be close and intimate. Much depends on the establishment of confidence between those administering the service and those who seek it. In this, paramount is the skill and devotion of those who provide the service."
  I am sure that hon. Members would not dissent from that sentiment. The circular goes on:

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  "However relationships between those seeking and those providing the services in Wales can often be assisted by recognising the importance of the Welsh language to those whose first language it is…It has a particular relevance to certain groups of patients—the young and the elderly—who in some cases may have difficulty in making their wishes known in a second language — and the mentally ill and mentally handicapped."
  We recognise the problem of communication and the importance of easy communication in health matters. We also recognise that linguistic cirmcumstances differ throughout Wales.
  Mr. Geraint Howells: I know about the circulars that have been issued by the Welsh Office over the years, but I was urging the Minister to get in touch with local authorities again to remind them that they should give more attention to the Welsh language among the elderly, the infirm and those in care.
  Mr. Roberts: I will consider further what the hon. Gentleman has said. The circular that I quoted highlights the difficulties that would be faced in any attempt to introduce a blanket provision on the Welsh language qualification in employment. All our experience of appointments in Wales leads me to believe that it would be virtually impossible to devise a policy that caters for all eventualities that could arise.
  To ensure fairness, every job has to be considered on an individual basis with due regard to all its requirements including the qualifications of applicants and the needs of those to be served, all of which have to be carefully defined and weighed to ensure that justice is seen to be done. That is very important: otherwise there is always the danger of a backlash. The hon. Member for Carmarthen (Dr. Thomas) hinted at that.
  Those of us who represent constituencies in the Welsh speaking parts of Wales can understand the feelings that have been expressed by the hon. Member for Caernarfon in the light of the tribunal's decision, particularly as those most directly involved are people who genuinely need the services of a local authority.
  The fact that Gwynedd county council is responsible for an area which is essentially bilingual is an important factor in the delivery of services. I fully recognise that. The Gwynedd social services department therefore clearly has to plan its services with that in mind to be as effective as possible. It has to deal with a range of client groups, and individuals within those groups will prefer to speak in Welsh and the social services department has to take that into account. The need to ensure an adequate number of capable front line staff who are also fluent in Welsh is a natural consequence of the situation within the county. The social services department is concerned to ensure that the rights of individuals are fully respected in the planning and provision of services. It has to be borne in mind that social services work with the most vulnerable and disadvantaged members of society who are often suffering great personal stress and anxiety when they come into contact with staff. This means that everybody who comes into contact with the social services would expect to be able to express their concern and needs in the language in which they feel most comfortable and are able to communicate most effectively. There is no question of denying such a right to anyone.
  If I single out an example where the language is an important factor in the delivery of services, I do so only because recently I visited Antur Waunfawr in the hon.
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  Gentleman's constituency. This is a project whereby the mentally handicapped are preparing to lead more independent lives in a naturally Welsh speaking community which fully supports the venture. Clearly the support given by the county council to this project would reflect the linguistic nature of the area, and the people employed in the venture —not, incidentally, staff of the county council — reflect this as well. The hon. Gentleman will recall that when I officially opened that venture—he was present—my remarks were almost entirely in Welsh because the audience was predominantly Welsh speaking.
  Of the population of Gwynedd, some 67 per cent. speak Welsh, and in overall terms this accounts for a quarter of Wales's Welsh speakers. Gwynedd has traditionally been in the forefront of developments in the use of the language, and this naturally extends to the county council's services. I understand that the social services front line staff are organised on the basis of the three main client groups of the elderly and physically handicapped, child care and mental health, and the use of the language clearly has an important part to play in delivering a service to individuals within each category.
  It is, however, a matter for the county council itself to ensure that it is able to deliver the most effective service against this background. I agree with the hon. Gentleman's remarks about the county council and what it needs to do. There is, of course, scope for further education and training to ensure that there are Welsh speaking people available to do jobs where Welsh may be considered essential.
  The county council has to ensure that it recruits staff who are able to provide a good service and are abreast of current developments. Clearly the employment of qualified and experienced staff and ability to speak Welsh are relevant considerations in Gwynedd. However, the statutory obligation lies with the county council, and it is not for me to make detailed observations on the way the county carries out its duties.
  It will interest the House to know that the Welsh Office has assisted the department of social theory and institutions at the Univeristy college of north Wales, Bangor, to set up a social work practice centre. One post within this centre will seek to identify and meet the special needs of social work within the Welsh cultural and linguistic setting of the area. I am pleased that, under the grants available for bilingual education under section 21 of the Education (No. 2) Act 1980, we have been able to assist financially with this project. This is a clear indication that I and my right hon. Friend fully appreciate the needs of training through the medium of the Welsh language in this particular field. Naturally one understands the initial public reaction to the tribunal's decisions, but I would suggest to the hon. Member that, although we are grateful for the debate, to seek to come to any conclusions about the possible broader implications of the decision at this stage is somewhat premature.
  As I have said, the Race Relations Act clearly sets out the grounds on which it is unlawful for a person to discriminate against another in the area of employment. It also lays down exceptions to those grounds for genuine occupational reasons. Hon. Members would not expect me to interpret the provisions of the Race Relations Act—that is a matter for the courts, I explained the procedures

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  earlier. It would be totally inappropriate for a Minister to comment about the grounds of tribunal decisions, the terms of which I have not yet seen.
  I can, however, assure hon. Members that if, having considered the written judgment of the tribunal, and in the light of any appeal that might be made and proceedings that may follow, there are issues which directly affect the well-being of a particular client group dependent upon a local authority for the provision of a service or if there are issues concerning the use of the Welsh language in general, I will naturally consider such matters carefully and consult my ministerial colleagues as necessary.
  I hope that the originator of the debate and other hon. Members who have attended at this early hour and taken part will be satisfied with the assurance that I have just given.

  Motor Industry
  6.42 am
  Mr.RogerKing: It is about two years ago that I had the pleasure of introducing a debate during a similar operation to the past 12 hours on the subject of the British motor industry. If my memory serves me right, I drew an early spot and the debate lasted three hours. It was noteworthy that so many colleagues attended because the debate started the right side of midnight.
  I make no apology for introducing a similar, or even identical, subject this morning, because the British motor industry is our largest manufacturer. It employs more people than any other manufacturing industry. We could possibly say that it is our largest industry, including agriculture. Its importance to the country is substantial, and especially to the midlands, where the production of motor vehicles, components and accessories employs a great number of people.
  The history of the industry is well documented, but it is a salutary reminder when one appreciates that in the late 1950s we were the second largest car producer in the world—second to the United States. Today we have slipped well down the league to about seventh or eighth in production capacity. More cars are made in the midlands than anywhere else in the country. We have examples of mass production at the Austin Rover plants and the small, but valuable, production of Jaguar cars at the other end of the market.
  manufacturers—firms such as Luca, GKN, Tube Investments and Triplex — which are almost household names, not only in Britain but throughout the world. Indeed, seven of the country's top ten component makers are based in the midlands; the importance of the industry to that area is shown by that fact alone. About 40 per cent. of manufacturing jobs in the industry involve people employed in Birmingham, and in the midlands as a whole, more than 50,000 jobs are involved with car production.
  Considering the importance of the industry, one would hope that it would receive absolute priority in all forms of industrial planning and that Governments of all political persuasions would do their best to ensure its expansion and development. However, in many respects Government acted in an unhelpful way. In the 1950s, when production was substantial and we were number two in the world after America, the need to expand caused Governments of the time to dictate to the industry to where it should expand, and developments took place in the north-west of Scotland and South Wales, where plants for the production of components, cars and commercial vehicles were established.
  It is clear in retrospect that that was a bad move, but at the time there was the problem of providing jobs for those areas. The rate of unemployment in the west midlands was so low that finding people to man the production lines involved taking the jobs outside the midlands area. Although the motor industry objected strongly at the time, because it felt that concentrating capacity in or near its home base was conducive to improved productivity, It had to accept the Government dictates of the day if it wanted to achieve the greater production that it needed.

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  The results were seen in the late 1960s and early 1970s, with lengthy production lines, sometimes as long as 300 miles between plants, and that only helped to hinder the development of the industry as it strove to compete against foreign domination. The incursion into western Europe by Japanese motor manufacturers began to take place in the early 1970s. They found an opening principally because the quality and design of many of our cars in production here left much to be desired.
  We have always had the expertise to design cars which are technologically adventurous, and throughout the history of the industry we have produced many innovations. Possibly the most substantial was the advent of the Austin and Morris mini cars in 1959, when the introduction of front wheel drive in tiny mass-produced vehicles was something of an innovation. The design of those cars was highly innovative and set the trend; the vast majority of cars of under two litres are now produced with front wheel drive.
  The trouble was that, while the design was good, its detailed execution was not, and the problems involved in producing vehicles to a quality and price to enable a profitable return to be made somehow did not occur in the way that the then British Motor Corporation hoped.
  Many other United Kingdom motor manufacturers tried to emulate that design process. The old Rootes Group produced a rival to the mini that was called the Hillman Imp, which turned the Issigonis theory on its face and put the engine in the back of the car. The car was well received by the motoring press and the public initially, but flaws in quality control virtually condemned the car to languish until its demise 10 years later as an also-ran. That was the reaction of the motoring public.
  The problem of providing cars for the purchaser that he could use with the utmost reliability was one that the Japanese were able to overcome. Their cars were not adventurous—they had no technological advantages over our indigenous products—but they had quality and reliability. Once the Japanese industry gained a foothold in Britain and a reputation, and in Europe generally, they were able to retain it. The Japanese are now foremost in design innovation and it cannot be said that they are merely copying the West. They are playing their part in pushing back the frontiers of technology in car design.
  Nowadays we tend to refer to the European car market and not the United Kingdom market. The
  result of joining the European Community is that we must look to a wider area of car production, and in western Europe the capacity of car factories exceeds the number of sales that are likely to be gained during a 12-month period by about 2·5 million vehicles. This over-capacity is not helped by the number of vehicles that are imported into western Europe, some from the Comecon countries and many from Japan.
  Jobs in industry depend upon our industry providing products that will enjoy design acceptance—in other words, products that the public will want — and a recognition of quality. Much has changed over the past 10 years or so as the industry has realised that to get the employment and the profits that it requires, it must meet the competition head on and produce the vehicles that the public want to buy. In the west midlands, that realisation is translated into jobs and prosperity for the region.
  The Longbridge car plant in my constituency has experienced improvements in productivity and rationalisation over the past five or six years. The plant had struggled on for many years with a large work force—at one time
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  there were about 21,000 employees. It produced cars of questionable quality, design and market acceptance. I used to work there, so I can vouch for what I have said. The advent of the BL corporate plan and the leadership of Michael Edwardes, as he then was, caused the management drastically to rethink. That was borne of necessity because technically BLMC, as it then was, was bankrupt as a result of it being unable to sell cars in the numbers that would enable it to embark on an investment programme to produce new models. We faced the challenge of bringing the industry into the latter part of the 20th century.
  The corporate plan set out the development of a new range of cars and Longbridge has seen the development of the Metro over the past four years. It is an outstanding example of what the British car industry can achieve. That is true of design and production capabilities and the capability of the work force. The number of cars turned out per man per year has risen substantially. At Austin Rover the number has increased from five in 1979 to 14 in 1984. Taking just the Metro line at the Longbridge plant, the number has increased to 50 per man per year, and the aim is to achieve 60 per man per year.
  Much of this improvement has resulted from automation. This is an outstanding example of how awork force has come to terms with the challenge of modern production facilities as the company has sought to meet the challenge, from not only Britain but overseas in producing cars for the world market.
  The position of the other manufacturers is more complex. The other major manufacturers are owned by multinational companies. Vauxhall is owned by General Motors and Ford is a company in its own right. They have sought to develop the "world car" concept, which has meant that design and development have to a large extent taken place outside Britain. Much of the production capacity of those companies has been taken over in producing cars from kit form and certain components. Other components are imported from European factories.
  The manufacture of components in Britain has decreased. The overall United Kingdom content of cars has fallen considerably, and this is certainly the case with Vauxhall. Some observers say that only 22 per cent. of Vauxhall can genuinely be said to be United Kingdom sourced. Of course, this is not exactly helping the British motor industry, especially the component industry. We must ask the multinationals whether this trend will continue or whether they will encourage more home production. This is a timely reminder, as Vauxhall is not a dwindling force on the United Kingdom Market. It is a formidable company which, over the past three years, has increased market penetration to 15 or 16 per cent., and at times to even higher levels. Its Cavalier model has been in the top three places since it was first produced. Most of the components of that car are imported.
  Will this policy continue? Do the Government believe that they should discourage the element of multinational content and encourage British manufacturers to provide many of the necessary components? Why does the glass for cars have to come from overseas? Glass is extremely heavy and difficult to transport. There are British glass manufacturers. Given the volume of imports, I should have thought that it was in order for British manufacturers to produce the glass needed for Vauxhall cars.
  There may well be cost and production reasons for importing glass from the continent. For how long will we

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  put up with this non-commitment to United Kingdom component suppliers while Vauxhall occupies such a prominent place on the market?
  Job opportunities in the motor industry have dwindled over the years, although I am happy to report that in Longbridge extra jobs have been created as a result of automation, better products and a step-up in production and sales. During the past 18 months, about 2,000 people have been taken on, 1,400 of whom are in new jobs and 600 of whom have replaced those who have left. The present labour force in that complex now numbers about 10,500, and about 20 per cent. of it was not employed by the company two years ago. Therefore, substantial job opportunities are available in the motor industry, which we wish to encourage.
  The main problems facing the industry are a lack of customer demand, or too many manufacturers trying to satisfy that customer demand. The many ways in which demand for cars could be increased have been trotted out before, but I make no apology for mentioning them again.
  The motor car is the only product to attract a special rate of tax. Both VAT and the 10 per cent. car tax, which was introduced as a temporary measure over 10 years ago and remained ever since, are added to the price. One cannot understand why the car has remained the one recipient of that special tax. Neither Japanese videos, Taiwanese radios nor any other product is taxed in that way. The British motor industry cannot understand why that extra tax should be levied, which artificially increases the price of a car.
  The industry has made in clear that if that tax were removed, it could make up the revenue of the Chancellor of the Exchequer by increased sales and production. It has been argued that if the 10 per cent. car tax were removed, importers would take up the possible extra sale of 100,000 cars a year. Certainly that may have been true some years ago, but that is no longer the case with the resuscitation of Austin Rover as a formidable member of the manufacturing clientele that provide bread and butter cars. Austin Rover could well take the lion's share of the extra sales. It is up to the Chancellor to accept the challenge put to him by the motor industry that over three years the equivalent of that 10 per cent. special car tax will flow back into his coffers as a result of increased sales. Furthermore, the increased sales will bring an improvement in employment prospects and therefore a net gain from the unemployed seeking employment in the car industry.
  The Chancellor could consider other aspects, such as VAT on company cars, which affects only a modest number of purchasers. In many cases the company car is a business tool. One must distinguish between company cars provided as a perk and not used for company business, and those which are a business tool, and which a sales or engineering representative, for example, may use in his job visiting customers and getting orders. It is as much a tool of his business as a desk top computer, a telephone or a desk. Yet the business can reclaim the VAT on all those items except the genuine company car. It seems to be grossly unfair that the car should be singled out for this special treatment, and one hopes that the Chancellor will look benevolently upon the genuine company car.
  There is no difficulty in sorting out a genuine company car and a company perk. We already do that in regard to
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  the cut-off point for tax on the size of car that a company provides to an employee. For example, on a car that is more than 1800 cc, one's personal tax liability is greater than it is under 1800 cc. That cut-off point seems to have been decided arbitrarily by someone. However, if a person travels 18,000 miles on company business, he qualifies for a reduction in personal tax liability because he is a genuine company car user. If a person does more than 18,000 miles on company business, the car might well be eligible for a VAT reduction, as it is obviously being used in a genuine company way.
  I look to the Chancellor to cut VAT and to have a look at the personal cut-off point. I am not ashamed to admit that Austin Rover is disadvantaged by the 1800 cc limit. It does not have an engine that comes into that bracket. In that area, its engine sizes are 1·6 litres and just under 2 litres. Many European manufacturers and the other so-called United Kingdom manufacturers—General Motors and Ford—have produced engines that fit just under the 1·8 litre level, and they are brought in from many continental factories.
  If, for once, we could be patriotic, wave the flag and stimulate the British element of our industry, at a stroke the Chancellor could raise the cut-off point for personal tax liability from 1800 cc to 2 litres. That would hurt no one. It would not hurt Ford or GM, who would continue to make 1·8-litre cars quite satisfactorily. But it would help Austin Rover to find an extra market for its 2-litre cars, which on a company basis is at present not so attractive as the 1·8-litre competitor cars. One hopes that the Chancellor will try to stimulate interest and business in the motor industry by adopting some of these modest measures.
  The Government are a substantial purchaser of cars. It appears that over the last few years much of their purchasing has been of continentally derived vehicles. For example, the policy of the Ministry of Defence has been to buy Vauxhall Cavaliers in very large numbers —2,000 to 3,000 over the last 18 months alone. Do not the Government have a buying policy which, in addition to seeking the right product at competitive prices, asks manufacturers about the United Kingdom content of the product that they wish to supply? I hope that tender documents in future will request the United Kingdom content of the product being offered to Ministries.
  Some observers would say that the Cavalier languishes at around 22 per cent. United Kingdom content, but it is no more than 50 per cent. even on the most optimistic assertion. The Montego has a 92 per cent. United Kingdom content, but at present is not purchased by any Ministry. Fortunately, the cars that we see in New Palace Yard are totally British in content. In addition to the Chancellor's bringing about some fiscal encouragement for the industry, one would hope that the Government generally would continue to back it with hard cash by buying the products that are made largely in this country, and insisting that manufacturers tell them how much of the product is made in this country.
  One of the challenges that faces western Europe is the desire of member states to clean up car exhaust systems, and the extra cost that that is likely to mean to the European and British motor industry. With the very substantial vehicle population moving about Europe, the degree of pollution varies according to the state of the car engine and how well it has been maintained.

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  The determination by the environmentalists to clean up the car exhaust systems is in many people's eyes an encouraging step forward. I will not say that car exhausts should not be cleaned up, because I think that much work can be done. The Germans in particular seem to have taken a number of panic measures in order to protect their forests, which they believe their motor industry and cars are destroying.
  Of course, none of that can be proved beyond all shadow of doubt, but the very substantial presence of the environmentalists in Germany—the so-called Greens—has ensured the instigation of legislation on a European bais on the quality of car exhaust emissions. The result has been the EC arriving at stringent plans. This will mean a substantial extra cost to motor manufacturers throughout Europe.
  Not many motor manufacturers in Europe are operating profitably at present, certainly none in France. Some motor conpanies will get Government assistance. The French Government will bail out Renault, giving it interest-free loans. It will no doubt eventually provide cars that will meet the standards. In our own country the challenge facing Austin Rover is to produce cars using money borrowed from the market place, albeit underwritten by the Government but paying substantial interest rates as well.
  Many of the requirements laid down by the EEC are hard to meet with presently available technology. Austin Rover has set its heart on the development of a lean burn engine, an engine that uses more air per element of petrol than is used currently, and a cleaner exhaust is the result. But since the EEC directives set down slightly stricter standards, the alternative method of cleaning up exhaust emissions, the exhaust catalyst, will have to be used. That will add substantially to the price of a car, as well as to the running costs. It has been estimated that about a 10 per cent. power loss will be involved, so that an extra 10 per cent. consumption of fuel can be expected if bread and butter saloons use a catalyst.
  When BL laid down its corporate plan envisaging £1·8 billion expansion over five years, it included an element for improving its vehicle exhaust emission to a standard acceptable under the EEC directive arrived at on 20 March this year. Since then a much more stringent directive has been introduced, and one wonders how much extra cost will be involved, principally by Austin Rover, to meet the standards laid down in that directive. That cost was not actually included in the corporate plan. I have heard mention of sums as high as £200 million as the extra cost of cleaning up exhaust emissions.
  More to the point is the fact that the directive on which the Chancellor of the Exchequer lifted his reserve and which we assumed to be the directive involved is actually subject to a number of technical alterations. I would welcome a reply from my hon. Friend the Minister on this point. What element of technical alteration is allowed under that directive? I know that much of it is confidential negotiating, but a set of rules is laid down by the directive. We have lifted our reserve on them. Does that mean that we have accepted that requirement and those regulations, or does it mean that we have sort of accepted them but are able to negotiate large elements? The British motor industry, certainly Austin Rover, would like to know, because time rolls on and commitments have to be made
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  in terms of money and engineering time. To delay for long means that the industry will find it ever more difficult to meet the time scales laid down by the EEC.
  One element that is discouraging the British motor industry is the level of Spanish competition. That is an old issue, which has been debated many times in the House, but it is still extremely relevant. Indeed, it is more relevant now than it has been over the past few years. Spanish ears are coming into the country as a result of the dispersal of motor manufacturers to Spain, where labour costs are sometimes 10 per cent. or 15 per cent. below ours. As the industry has developed—it is now exceeding ours in the total number of cars produced—much of that production has been exported throughout Europe, principally to this country. Every Vauxall Nova that is sold in this country is Spanish-built and an increasing number of Ford Fiestas are similarly assembled in and brought into this country from Spain.
  In addition, Spain has its indigenous car manufacturer, SEAT, which is now busily about to launch its product range into the United Kingdom market, commencing in October this year. A dealer network is already being set up and cars have been tested and developed and found to be extremely competitive. In fact the engine was designed by Porsche, which is a household name for quality of engine design. Therefore, it is not like a cheap east European car, but is an extremely competitive product in price, quality and design innovation.
  The problem with Spain is that she has set up import tariffs to prevent us from sending our products over there in any quantity, and we have virtually no import tariffs against Spanish products coming into this country—the legacy of the 1970–71 agreement with the then EEC, when Spain was largely an agricultural country. She had no industry. The EEC felt that her industry should be encouraged. The result is that, as that industry has been encouraged and is developing into a formidable motor industry, we have the one-sided arrangement whereby I and most motor forecasters predict that about 130,000 Spanish-derived cars will come into the country in 1986 compared with about 3,000 British cars going back to Spain. That is deplorable, because many of those Spanish cars are competing with our home-produced products.
  Those who buy a SEAT in this country and who handle SEAT cars will be acting unpatriotically. There is no need for the company to have a presence in this market place. The only way that we should like SEAT to come into this country is if we could send one of our cars to Spain in exchange for one SEAT coming to this country. Those who buy SEAT cars from October onwards had better be aware that when they do so, they are buying people in this country out of a job. That is what it amounts to. They need to think carefully, however attractive the product might appear, that it represents a one-sided trading system and a hammer blow to the British motor industry. I hope that every dealer will be boycotted and that nobody will buy SEAT cars until Spain voluntarily allows us a fighting chance to sell our cars in the Spanish market.
  The motor industry has to get over many little obstacles. One is the registration suffix or prefix. It is happening again this year with the C registration. Factories work overtime so that there is an enormous park of cars of all colours and specifications and then the market dives steeply after 1 August to the dead month of September. No other European country presents its motor industry with such a Becher's brook of an obstacle. It was introduced at

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  the request of the motor industry which felt that it would be better to have two peaks, the other being at the end of the year.
  United Kingdom manufacturers met between 70 and 75 per cent. of home demand then and were able to cope with that hiccough in sales. They now meet about 42 per cent. of home demand. Importers simply ask foreign factories to turn production away from their home markets when everyone is on holiday and not in a car-buying mood to the United Kingdom market, where everyone is on holiday but in a car-buying mood. Importers are encouraged to dump in Britain at a time most convenient to them as European sales are in a trough. Our manufacturers have to gear up production every year for the peak and then face terrible problems afterwards.
  Who will seize the opportunity to do away with the registration suffix or prefix? The Department of Trade and Industry? The Department of Transport? There is no reason why we could not be issued with a permanent number plate. Regular sales throughout the year would help our motor industry enormously. The troughs also cause havoc for the myriad component manufacturers. We need a Lord Beaverbrook of the motor industry. We must encourage the industry to produce and to expand the market for its products. Trading opportunities with other countries must be fair. Legislation affecting the industry should not cause it delay and expense. The industry is a major source of employment and prosperity. It must be clear that if we do not ensure that what we buy is made in the United Kingdom, we cannot be blamed for job losses. "Buy British" is a hack cliché, but never has it meant so much as it means in the motor industry.
  7.25 am
  Mr. Tam DalyellAfter a long day and a long night I am grateful for this opportunity to raise the problems that face British Leyland at Bathgate, but before doing so I should like to refer to the speech of the hon. Member for Birmingham, Northfield (Mr. King), who has performed a service to the house, and to raise three matters.
  First, I echo his question about public purchasing. Are we sure that every Government Department asks about the United Kingdom content not only of cars but of other vehicles? Of one thing we can be quite certain that in France it is inconceivable that any public authority would buy other than French. The same is true of West Germany and of every other country in the world. The British tend to be ultra-silly about this. If everybody else follows such a policy, it is about time that we began to look after our own interests. From now on, therefore, everybody should ask about the United Kingdom content of vehicles.
  I also echo the hon. Gentleman's question about exhaust emissions and exhaust regulations. My hon. Friend the Member for Livingston (Mr. Cook) and I went to Uxbridge a fortnight ago to see Mr. David Andrews and Mr. Les Wharton, the managing director of Leyland vehicles, in relation to Bathgate. It would serve no purpose to deal in detail with what they said about engines, but they told us that the emission regulations, for which the House of Commons is indirectly responsible, made their problems infinitely more difficult. We may have to develop new technology, but, as the hon. Member for Northfield said, what do the Government think about the
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  time scale within which this country is supposed to operate in terms of the European Community regulations? And what is the Government's policy on emissions? Do we think that we are being fairly treated? In particular, has the Minister anything to say about the particular problem for British Leyland of the emission regulations as they will effect the good engine that is still made at Bathgate?
  Thirdly, may I follow up the hon. Gentleman's question about Spain. He referred to the dealer network. I am reluctant to call anybody unpatriotic, but there will be extremely sad consequences for well established dealers. I shall mention just two Tennants and Carmichael Baxter. Do the Government have a policy in relation to Spanish entry laws, which will alter the position, and also in relation to our entry into the Spanish market? These are highly relevant questions.
  The House will excuse me for returning to the problem at Bathgate. It is still the largest machine shop in Europe. Ministers, and certainly the Scottish Office, acknowledge the very responsible leadership of Jim Swan and the joint shop stewards committee. It is also acknowledged that the engine is a good product and that other good products are made at Bathgate, However, it is faced with a very considerable problem and the Minister knows what it is.
  My hon. Friend the Member for Livingston and I were most courteously received by David Andrews and Les Wharton, and we have an invitation to return any time we wish. This is part of a dialogue in what I hope will be a rescue operation.
  My specific questions this morning are as follows. Is the Department of Trade and Industry prepared to take part in the rejuvenated working party, which involves the Scottish Office, the Bathgate area support enterprises group—under the leadership of Michael Fass and Bob Mears—and West Lothian district council? The Scottish Office, especially Mr. Gavin McCrone, is working very hard on this. Do the schemes put forward by BASE interest the Department of Trade and Industry?
  An especially difficult problem in relation to the British Leyland corporate plan for the future is whether British Leyland, should some phoenix arise, will be prepared to grant manufacturing rights on regional terms to anyone who can retain a manufacturing capacity at the Bathgate site. After all, this is the heart of industry in central Scotland. I am not one for going over history. but I should tell the Minister with responsibility for the west midlands that, in the late 1950s and early 1960s, a decision of a Tory Cabinet—it was the Macmillan Government—against the wishes of Sir George Harriman, to whom I have talked, and other leaders of the motor industry, brought tractor manufacture and vehicle manufacture to Bathgate. It is not right, after so much money has been raised locally through the district council and the community, for the Government to wash their hands of the matter. When Mr. Les Wharton says, "We are in the business of truck manufacture, and others must look after the community," I understand what he means; but there are governmental responsibilities in this. Although Leyland may say, "We are in the business of truck manufacture", nevertheless, morally and otherwise, there are overwhelming reasons why the Government should be deeply involved.
  Will the Minister say this morning that his Department will support the working party and the schemes put forward by the shop stewards and by BASE? He will discover that there is much good will among his ministerial colleagues and officials at the Scottish Office.

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  I have constantly raised with the Minister for Overseas Development the question of trucks for the Sudan and Ethiopia. On his return from Ethiopia, the Minister told me that one problem is that, in east Africa, they are so committed to Mercedes and Fiat that it is doubtful whether the Ethiopian authorities want Leyland trucks. There are £40 million worth of good trucks sitting in the car park at Bathgate, many of which would be highly suitable for east Africa. Could there be proper discussions with Leyland and with the aid authorities to discover whether, if problems arise with the supply of spare parts, Britain could do something to alleviate the immediate problem?
  I understand what the Minister for Overseas Development told me, but it is not beyond human wit and governmental will to overcome that problem. The British commercial vehicle industry has a considerable potential contribution to make to the desperate need for transport in the developing countries of Sahel Africa.
  I would like the Minister's comments on all those points, if possible, by letter or by meeting. I would ask especially that senior officials of the Department of Trade and Industry should be available in August to take part in the ongoing discussions in and around Bathgate.
  7.34 am
  Mr. Alan WilliamsI congratulate the hon. Member for Birmingham, Northfield (Mr. King) on giving us the opportunity to have this debate. I congratulate my hon. Friend the Member for Linlithgow (Mr. Dalyell) on pursuing, as he always does, the campaign to ensure that Ministers are fully aware of the problems facing Bathgate and the opportunities available through the truck capacity that is standing idle.
  There is a growing consensus on the essential need for us to sustain a British-controlled capability in the car industry. In the late 1960s the Labour Government undertook the saving of the collapsing British Leyland. We were berated by the right hon. Member for Leeds, North-East (Sir K. Joseph) for daring to intervene with public funds to save the company. That was despite the fact that so many other firms and jobs depended on the survival of the company. One can welcome the conversion, and say that we are glad that at last the Conservative party has recognised what we were advocating in the 1970s. We had to put up with several years of diatribe for doing something that nearly everybody would now recognise as an essential service. That is particularly true with regard to the number of jobs. The industry has over 180,000 jobs, and over 500,000 dependent jobs. As the hon. Member for Northfield said, it sustains many other jobs in the glass, rubber, steel and other sectors.
  The industry is critically important to the technological future because we need its demands for, for example, plastics and electronics if we are to stay in the forefront of those industries. It is astonishing that there was ever any doubt in the mind of the Conservative party about the desirability of saving British Leyland.
  The collapse of BL was the ultimate saga in the collapse of private enterprise in the car industry. British Leyland became the dustbin of the car industry. Every time a private firm ran into difficulties, the automatic idea was, "Add it on to British Leyland." As a result, an unplanned managerial nightmare, which we had to unravel, arose
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  from this unplanned conglomerate and the residue of the collapsing private sector industry in the car sector in the United Kingdom.
  Our industry has not been helped by the somewhat erratic and eccentric policies pursued by the Government in relation to the pound and interest rates. It is anomalous that we have high interest rates to keep up the value of sterling, thereby putting our industry at the maximum disadvantage, while the Japanese are using all their efforts to keep the yen low to keep their industry at an advantage in world trade.
  It is hardly surprising that our industry has lost so substantially, particularly when it is then crippled by the interest rates that are being used to create the prejudicial atmosphere for sterling in which our industry has to export and fight import penetration. It is hardly surprising that while exports are £4 billion, they are less than half the level at which they stood 10 years ago.
  The hon. Member for Northfield is right to emphasise, as we all are, that all the import penetration since 1974 has not been the failure of our indigenous car industry to compete. Nearly all the import penetration has been as a result of the deliberate self-interested managerial decisions of Ford and General Motors. We should not apologise for rubbing the noses of these companies every possible time into the fact that here investment policy has been having a damaging effect on the pattern and structure of the industry. That has added to a great many of the uncertainties we face.
  In the early 1970s, Henry Ford said there would never again be any investment in the United Kingdom. I was lucky enough to be involved in the negotiations to get the Bridgend engine operation. That was at the end of the 1970s and the first break from the personal policy decision of one man who had dominated the investment patterns of Ford for most of that decade. It is also useful to emphasise, as the hon. Gentleman did, that models such as the Nova and the Fiesta are providing substantial numbers of jobs for overseas workers rather than for British workers.
  The hon. Gentleman and my hon. Friend the Member for Linlithgow correctly highlighted the ridiculous situation which is allowed to continue in relation to Spain. One of the great scandals of the car industry is that Spain, with well developed and sophisticated high technology, has been able to impose penal tariffs on imports from Britain and the rest of the Common Market, while Spain has free access to those markets. As the hon. Gentleman said, Spanish penetration into this country next year will be over 100,000 units. When one relates that to the total production of British Leyland, one sees what is happening to sabotage our own car industry.
  In 1979 at a TUC seminar in Wales on microtechnology, one of the senior trade unionists talked about the new technology and described how we would have to encompass it. He made the point that he and a deputation of trade unionists had just been to Spain, and he said at that time:
  "Let us be honest. There are Valencia people straight out of the lemon fields who are producing a better quality car using the latest technology than we can produce anywhere in the United Kingdom."
  That high technology Spanish industry has been allowed to pirate the trade desperately needed by our own industry. For General Motors to be operating with a 22 per cent. UK content is a scandal. That company has had major Government assistance over the years and expects a high

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  proportion of the British market and wants free access to it. On the other hand, we do not have free access to its productive plans and capability. It is strange to think that General Motors would be the first to howl if this or any Government were to suggest they were going to allow a Japanese company to establish an operation in this country with an as low a British content as GM by its policies takes as its right to insult us with. It has actually removed its design and research and development base from this country.
  The points made by hon. Members about public purchasing are valid. I know the difficulties and I do not pretend it is all that easy. We tend to play a straight and honest game when it comes to public purchasing. I remember an occasion when I tried to get the Home Office to intervene with police forces which were buying BMWs. "Oh no," said the Home Office, "It is absolutely imperative that each police force has complete discretion to decide which model of motor cycle or motor car is suitable for its own area. They know their areas best and must be given freedom of choice." No such freedom of choice is allowed to police forces anywhere else in the world.
  I was disturbed as, I am sure, was the Minister, when the managing director of BL Technology, British Leyland's research and development unit, told the press earlier this year that because of lack of investment, inadequate Government support and a dearth of designers, engineers and other technologists, we were falling so far behind in R and D capability that we may already be "below the critical level." I am sure that the Minister agrees that if that is true, we need to remedy the situation. The managing director suggested that there were already few designers left in the United Kingdom who were capable of producing an automatic gearbox and that there would be no engine design capability left in Britain within a decade. I hope that the recent announcements about BL will help to avoid that possibility. Perhaps the Minister will tell us what effect they will have on sustaining our capability.
  We welcome the Ford engine project. I am sure that it is particularly welcomed in Dagenham. Can the Minister tell us whether that will have any R and D benefits?
  It was disturbing to learn that Jaguar, one of our prestige companies, still has difficulty in recruiting engineers at salaries of up to £20,000 to carry out expansion of output and work on the new model. I suppose that that is hardly surprising when we realise that we produce half as many engineers—as a percentage of the relevant age group—as do the Japanese. When I became a Minister and inherited the problems of the British motorcycle industry I found that the Japanese had more graduate engineers employed in R and D than we had workers employed in the production of motorcycles. Private enterprise lived on the seed corn and put nothing back into the industry. That industry no longer exists in this country.
  There is a shortage not only of engineers but of funding, certainly compared with other countries. The managing director of BL Technology said:
  "It is likely now that total output in research and development spending in the UK motor industry has fallen to below £200 million".
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  But about 95 per cent. of that is new model work. In other words, only about 5 per cent.—£10 million—is going into truly original research.
  Our record of Government support is worrying. The United States Government are putting £1 billion of support into R and D in their motor industry, but the figure in the United Kingdom falls short of £3 million. Small wonder that we are way behind the Japanese, the West Germans and the Americans in R and D spending.
  Even if the Government decide to increase the funding of R and D work in the motor industry, we shall remain at the whim of decisions taken overseas. It is significant that the only British controlled unit, BL, has a 92 per cent. domestic content, whereas the American controlled General Motors has a derisory 22 per cent. We are unique in the extent to which we have allowed ourselves to become dependent on overseas decision-makers in the industry. Virtually 60 per cent. of British car production is controlled by the Americans or elsewhere overseas. This compares with only 30 per cent. in Germany, less than 5 per cent. in France and the United States and nil in Japan and Italy. It is small wonder that our components manufacturers feel that they are particularly vulnerable when they are dependent on the vagaries and uncertainties of tactical decisions taken by men still lingering in the shadow of the now dead world car concept in Detroit and other overseas centres.
  With regard to sustaining the British control capability, at least the new technology has made this easier. It has invalidated the world car approach, and means that a medium-sized firm such as BL has now an excellent chance of competing successfully.
  However, I accept completely, as I think the industry does, that R and D is an area in which the economies of scale are still a significant factor, and it is difficult for a medium-sized firm to sustain within itself the full R and D capability that is needed.
  The trend towards a technical relationship with a strong overseas partner such as Honda therefore makes sense, but in terms of R and D only. We do not want to see a closer integration, with BL slipping along the same path that was taken by Ford and General Motors, or decisions being taken overseas, which, although no doubt very sensible and in the interests of the overseas board of directors, are not in the interests of British industry, and the British car industry in particular.
  7.51 am
  The Parliamentary Under-Secretary of State for Trade and Industry (Mr. John Butcher): I join Labour Members in thanking my hon. Friend the Member for Birmingham, Northfield (Mr. King) for providing the House with an opportunity to debate again, and perhaps at a significant moment, the future of the British motor industry.
  Before I deal with the major themes that have run through the debate, may I say that I will of course take up each of the points and queries that right hon. and hon. Members have raised. I shall also refer the repeated but relevant recommendations of my hon. Friend the Member for Northfield on company car tax, reclaimable VAT on company cars, the tax break point and whether there should be an 1800 cc or a 2000 cc cut-off point for higher level of personal tax liability and, indeed, the

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  Government's purchasing policy, to the attention of my right hon. Friends not only in the Treasury but, in one particular case, in the Ministry of Defence.
  The right hon. Member for Swansea, West (Mr. Williams) made a thoughtful and considered speech, and identified a number of areas on which there is agreement in the House. In one area, he may inadvertently have introduced a little controversy. He asserted that BL and the British motor industry generally may be denying itself, or may be being denied, the resources to involve itself in the leading edge technologies and the development of them as they apply to the motor industry.
  It may be a little presumptous for me to offer an invitation to the right hon. Gentleman on sombody else's behalf, but a Mr. Roy Axe, in Canley, Coventry, who heads the BL design team, has a formidable group of young designers working round him using the best hardware and software, some of it developed by BL systems. I know that they would be delighted to host the right hon. Gentleman. While he was there, I would be delighted to take him to Warwick university to meet Professor Bhattacharyya who has implemented some very good work in manufacturing systems engineering, not just for BL but for others. If the right hon. Gentleman tells me that he has just met him, I shall withdraw the invitation.
  Mr. Alan WilliamsI have had invitations, but I am grateful to the Minister. It is interesting that the very points that I made about capability were made by the managing director of BL's research arm, Mr. Harry Sheron. That was reported in the Financial Times on 6 March.
  Mr. ButcherThat gentleman may have had his own reasons for making those comments, but I think that they would be challenged by people both outside and inside the industry. There are people within BL who would demonstrate that the company is making very big strides, especially in manufacturing systems engineering and in bringing forward the very latest design techniques.
  On the shortage of engineers, perhaps aptly, later today my Department will be issuing the final report on skills shortages as they affect particularly the areas of high added value engineering. There are also shortages in the information technology industry. Of course there are shortages and, of course, the Government must do their bit to help resolve that, which is why my right hon. Friend the Secretary of State for Education and Science has announced an additional £43 million of expenditure in that area.
  I am sure that the House will remember that when Jaguar wanted to take on a number of apprentices greater than its immediate requirements, it was the local trade unions who said that they would not look well on that because the additional apprentices would be paid at below the historic rate, although the rates of pay would have been equivalent to those paid to German apprentices. Therefore, we each have our responsibilities to face when we try to remedy the problems of skills shortages and especially when we try to obtain more, relevant and high value work experience for our young people—the future engineers in the automotive industry.
  The hon. Member for Linlithgow (Mr. Dalyell), in a helpful and courteous speech, asked for a number of assurances and for attention to two or three areas. He joined my hon. Friend the Member for Northfield in requesting the Government to ensure that our public
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  purchasing is enlightened, and whereas it might have to be GATT and EEC-proof, we should at least recognise enlightened purchasing which would involve implementing policies on purchasing that make it more likely that one is buying British because those British products have become the best.
  There is a happy alliance between the needs of the customer to obtain value for money. By using proper and close relationships with buyer and supplier, we can ensure that suppliers can improve their performance over the medium and long term and, therefore, on merit justify the decision to buy British.
  The hon. Gentleman mentioned the Bathgate area support enterprise group—BASE. He will recall that we have said that in the first instance it would be a matter for my hon. Friends the Ministers in the Scottish Office. There is an industry Minister in that office. In the first instance —not because we wish to be negative or unhelpful—we say that it is their responsibility to build those bridges, and any Minister welcomes efforts at self-help and developments which involve co-operation between the public and private sectors to try to produce jobs in areas such as Bathgate where structural change has taken place. That is the biggest machine shop in the United Kingdom and there are undoubted skills on that site which everybody wishes to see deployed to the fullest possible extent.
  I visited the Sudan three and a half years ago and at that time there were many British trucks on the roads, although they were not BL trucks. I shall communicate to the Minister for Overseas Development, who will be participating in a later debate, the comments of the hon. Member for Linlithgow.
  We have been discussing what is a job creation programme. On many occasions in the House we discuss job creation. But the job creation programme that could have the most dramatic impact on our economy and on the unemployment queues is that programme which results in an increase in Britain's share of world trade in manufactures. Hon. Members may be familiar with the figures. In 1964, the United Kingdom had about 14 per cent. of the world's share of trade. By 1979 it had gone down to 8 per cent. The CBI tells us that each 1 per cent. represents 250,000 jobs. Thus, in one way or another, our economy was so weakened during that period that, in effect, we exported 1·5 million British jobs. To get back a significant proportion of those exported jobs would indeed make major inroads into the numbers unemployed.
  In the British motor industry we have BL employing 81,000 people; Ford, 57,300; Vauxhall, 20,053; and Talbot, 7,109. They together account for over 90 per cent. of car and commercial vehicle manufacture in the UK. We have a number of independent and specialist manufacturers in both sectors, including Jaguar, Rolls-Royce, Lotus, TVR, and Reliant. The components industry, to which hon. Members have referred, includes large multinational companies such as Lucas and GKN and numerous small specialist companies, in all employing about 200,000 people. In the main, the motor industry provides the bulk of its employment in the west midlands and south-east regions.
  The good health of the industry, with an increase in its share of the domestic market and an improvement in exports, could bring about a healthy increase in the number of jobs available in manufacturing industry generally. When we discuss job creation, we should ask ourselves what a certain Government measure or request

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  to the Government would do for our competitiveness in our endevour to increase our share of world trade and, therefore, increase the number of jobs in the economy.
  We are coming up to the peak buying period for cars. At this time somebody in the House usually appeals to the nation's consumers to buy British. This time there is more reason than ever for British consumers to note the rapid improvement in the quality of Britsh cars and in the level of productivity of our car plants—there has been a truly dramatic increase, particularly at Longbridge — to examine the changes that have taken place on the shop floor and in the style and professionalism of management. It is surely correct for us to say that those who are really concerned about job creation, which includes the vast majority of the public, should think hard, if they are exercising a buying decision, about which car to buy with a new registration plate attached to it. I know that by saying that there will be a few people who will put pen to paper immediately to tell me, "I bought British, but the car that I bought was of poor quality, it did not perform and it was a rogue. I shall never buy British again." I know the contents of such letters almost by heart. I shall not report the name of my most famous correspondent, but there is a solicitor in Bristol who seems to enjoy responding to any exhortation to buy British. I take the opportunity of advising him that I have noted his past letters. I hope that he no longer has reason to complain about the quality of his car.
  There has been a dramatic improvement in the quality of British produced cars. It is time for consumers to look again at British products in the interests of consumer satisfaction and in the broader issues of the British economy. In so many respects, we have a good story to tell.
  The level of import penetration in our markets is uncomfortably high. That is in part a consequence of our recent industrial history. For a number of reasons, the industry failed to meet the needs of the consumer. This has been the not unexpected consequence of a more general industrial malaise. There has been too much capacity across Europe and the industry has been chasing too few customers, which has resulted in disorderly and unprofitable levels of pricing. Our component suppliers and assemblers are starting to perform again. They have re-entered the competitive race and they are matching our competitors on quality and price.
  I know that the House will not wish me to delay it for too long. However, I shall respond to the comments made about multinationals. It is common ground between the Government and the multinational vehicle producers that it is necessary for a better balance to be struck between what these companies sell in the United Kingdom and what they manufacture or source here. This applies as much to components and materials as to complete vehicles. In order to encourage an improved balance, we have had and are continuing to have meetings with senior management at Ford, Vauxhall and Talbot to get across our message of concern and I hope that the companies are now aware of the seriousness of our intent.
  I shall take the three companies in turn. A quiet revolution has taken place at Talbot. It has declared its intention to manufacture a significant proportion of its new mid-range model, the C28. at its Ryton plant,
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  commencing at the end of the year. I welcome that. We welcome the continuation of the contract with Iran, which is still extremely significant.
  Ford is committed to raising the British-built share of its car sales in the United Kingdom although much depends on how successful it is in improving the performance of its car plants in Britain. In the past three years, the contribution from Ford's British assembly plants has increased from 51·6 per cent. to 57·3 per cent., but if Ford could achieve full utilisation of its installed capacity in Britain, the percentage would rise significantly. At present, the United Kingdom content of Ford cars built in Britain averages 80 per cent. and the overall EEC content of its cars averages 92 per cent. Ford also makes in Britain all its trucks, tractors and Escort vans for the whole of Europe and exports large volumes of engines and other major components to Continental plants. Recently announced plans for the manufacture of new engines at Dagenham and transmissions at Halewood are important in this context and I applaud them.
  I am encouraged by Vauxhall's recent concern with respect to broad balance and in particular by the fact that it has set up a high level task force covering General Motors' operations in Europe as well as in the United Kingdom. The function of this task force is to investigate ways of improving GM's performance with regard to United Kingdom sourcing. The Government expect that the task force will arrive at positive recommendations for improving the current state of affairs by which Vauxhall produces here less than half the cars that it sells in the United Kingdom. Even in those cars, the average United Kingdom content does no more than hover around 50 per cent. The Government look to Vauxhall to support its declarations of intent with positive demonstrations of its determination to move in the right direction. I hope very much that these demonstrations will be forthcoming. I know that the. fleet buyers in particular will follow these developments with great interest.
  The message is clear. The companies, wherever they have not done so, need to attain international levels of competitiveness. Once that is achieved, the United Kingdom will look for the same contribution in terms of investment and jobs as has been diverted in the past, to locations abroad. The contribution of the multinationals must be commensurate with the gains that they derive from our markets.
  Of course, the Government seek to take a lead in our public purchasing policies by encouraging all major public purchasers to think carefully about the local content of vehicles before buying them. Individual consumers can also contribute to the future of the vehicle industry.
  Within Europe, I know that our trading terms with Spain, especially the imbalance in the vehicle sector, has been a deep grievance throughout the industry. As hon. Members are aware, this problem originated in the agreement between Spain and the Community which was signed in 1970, before we were even Community members. We have now addressed this problem under the terms of accession of Spain to the Community.
  There are three principal measures that should be helpful. First, all the Spanish import duties against our cars will be phased out over seven years, and one half of that cut will be in the first three years. Secondly, Spain will be required to impose VAT, rather than her present tax regime for imported cars, from 1 January 1986. This will lessen discrimination against imports——
  In accordance with Mr. Speaker's Ruling—(Official Report, 31 January 1983; Vol. 36, c. 19)—the debate was concluded.

  Agriculture (scotland)
  8.12 am
  Mr. James Wallace: I am sure that hon. Members welcome the opportunity to debate this important topic, albeit at this early hour. People realise that this is a critical time for Scottish agriculture. Agriculture in Scotland and throughout the Community can be said to be at a crossroads. Those of us who have regular contact with the industry are well aware of people's concern.
  For most of the past 40 years, the industry has been urged on by Governments, whatever their political hue, to increase home food production. The industry has responded, in terms of efficiency and productivity, when contributing to domestic food production. Such production made an important contribution during those years when we did not have the benefit of North sea oil to prop up our balance of payments.
  The message to the industry is now different. Agriculture is clearly in transition. Governments and the public recognise the need to contain expenditure on the common agricultural policy. There has been control of production in commodities in the case of structural surpluses. Last year, the dairy industry had to go through a traumatic period of transition to accommodate the new quota system. Now cereal growers are uncertain about future moves to cut cereal production.
  There are ever-increasing pressures on modern agriculture to take account of modern environmental interests. Those interests are quite proper, provided that those who push them remember that our rural areas are living regions. They are places in which people have been brought up and work and are not simply those parts of the countryside to which the urban dwellers retreat at weekends.
  Generally, the National Farmers Union of Scotland has been responsive to these changes. It is clear from regular reading of press releases and the proceedings of the meetings of Scottish members with their officers that these new factors are in people's minds. If the industry is in a state of transition, we hope that the Government will be more responsive to its problems and more supportive of it. Last month when the Secretary of State attended the Royal Highland Show at Ingliston he said that the Government were the friend of the farmer, but many farmers to whom I have spoken say, "With friends like that, who needs enemies?"
  All hon. Members will have received representations from the National Farmers Union nationally and locally about the anxiety of the dairy industry at the rumours that quotas may be transferred from Scotland to Northern Ireland. Scotland's full allocation of almost 30 million litres under the outgoers scheme has been taken up. There is considerable anxiety that a further sum will be made available to fund outgoers, but that the quotas so released will not be retained in Scotland, but transferred to Ulster.
  The Minister will be well aware of the opposition that that has generated. It is feared that such a scheme will represent the loss of what may rightly be described as a Scottish asset, and will generally undermine those still engaged in dairying in Scotland. Above all, it is feared that if we lose any more milk production, the viability of many local creameries will be threatened. While that is the general case for Scotland, I am not ashamed to say that it

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  is particularly true for the islands. Given the Under-Secretary's constituency, knowledge and background, he must share similar anxieties.
  One must pay tribute where tribute is due, and the Government have acknowledged the particular problems faced by the islands. There was a lower percentage cut when the quota regime was introduced, and in the regulations laid before the House in March a specific provision was made for the allocation of outgoers quota in remote and island areas.
  In some parts, such as Orkney where the creamery is highly dependent on sustaining a particular level of throughput, there is anxiety that, if there is further loss of production by individuals, that quota should remain within the islands. Certainly, if the Government are considering transferring quota to Northern Ireland, the entire Scottish industry will find it a bitter disappointment and will oppose it. Indeed, it has already voiced its opposition. It would be particularly grievous to the island economies if they lost any quota.
  There has also been considerable consternation throughout the industry about the cut in capital grants. Initially a £5 million cut was announced last December, which was compounded by the announcement earlier this month of the new capital grant regulations. I am sure that the House does not need to be reminded that 87 per cent. of Scottish farms lie within less favoured areas. We use the term "less favoured areas" so often that we may forget what it means. They are less favoured because of the land, and for geographical and climatic reasons. The point of designating those areas as naturally less favoured is that they need more favour from Community and national agricultural support. Despite the high percentage of Scottish farms in less favoured areas, they have had to bear an equal, and some may argue a disproportionate, proportion of the cuts in agricultural spending. Field drainage grant support has been reduced within 12 months from 70 to 30 per cent. Farmers in those areas, especially hill farmers and livestock producers, are not contributing to structural surpluses and over-production. The grants which they seek were previously available at higher rates, for example for reseeding, field drainage and fencing, and are for works of necessary and routine maintenance. There is a great fear that, because of the cut in grant support, these very necessary investments will also be cut. That in the long term must spell danger, and it will be unsatisfactory in the context of future long-term prospects for agriculture.
  These cuts come at a time when there is little buoyancy among the livestock producers in the less favoured areas. The annual review of agriculture published earlier this year examined income developments by farm type, and concluded that on hill and upland less-favoured area farms, there was a general fall in income in 1983–84 following a more pronounced drop in the previous year. That report added:
  "In 1984–85 incomes in these farms are expected to show some recovery, except in Scotland where a further fall is forecast".
  Even though their own White Paper says that there is an expected fall in incomes, the Government nevertheless go ahead and cut the grants that were previously available.
  I wish to make two detailed points, to which I hope the Minister will respond. As I understand the new provisions,
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  a farmer can no longer apply for ad hoc grants for such measures as reseeding, field drainage or fencing as was previously possible under the agriculture and horticulture grant scheme.
  I further understand that, having regard to the monetary limits under the new scheme — the agriculture improvement regulations — a farmer could make applications for assistance up to a limit of two in six years. But that would require the submission of an investment plan.
  Given that in the last week the Government have been trumpeting about lifting the burden on small businesses, how can they justify this additional bureaucratic imposition on those who are seeking to do routine maintenance that previously they were able to do more easily because of the ad hoc grant system?
  Secondly, I wish to know the extent to which the reduced rates of grant might lead to reduced take-up. Investment plans will not now go ahead, because the money is not available to finance them. How does the level of take-up in April to June this year compare with the same period last year, when the grants were at the higher rate? Will the Minister look again at the rates of grant if it appears that during this financial year the savings to the Exchequer because of the cuts will exceed those that were budgeted for because of the lower rate of take-up? In the light of that, will he review the rate of grant?
  Scottish agriculture is also concerned about the reduction in expenditure on the advisory services and research and development. That is a totally insensitive and illogical move at a time when agriculture is in transition. There are ever-increasing needs of the market to improve quality, as well as the need to reconcile farming interests with environmental concerns.
  Much time has been spent in the House debating whether the rate of cutback in Scotland was the same as in England and Wales. The advisory services in Scotland do not always perform the same functions as those in England and Wales. But even if they are identical and we are comparing like services with like, that seems to ignore the fact that such a vast cut—41 per cent.—in one go must have a greater impact in Scotland, because of the greater area of Scottish agriculture that is part of less favoured areas, than in England and Wales.
  Greater distances must be covered in parts of Scotland, and there is a need for advisory services in less favoured areas where agriculture faces difficulties caused by climate, geography and quality of the land. The great fear in constituencies such as mine is that, if funds are withdrawn or reduced, the type of services that will be cut —particularly for transport cost reasons—will be those to the outlying parts. As a result, the very necessary advice to those areas will be diminished. It was clear to my hon. Friends and me when we saw the Minister of State, the noble Lord Gray, that the sum of 41 per cent. referred to was not negotiable. Now we are debating where the cuts should fall. It is clear that there will have to be considerable rationalisation of the colleges of agriculture and the functions they perform.
  Mr. Malcolm BruceI think my hon. Friend will recognise that, having half of the north of Scotland college of agriculture in my constituency, the point he has just raised is of considerable concern to me. That college is talking about the redundancy of 350 experienced specialist advisers who are needed and who will almost

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  certainly have to be re-recruited as and when the reorganisation has taken place. This decision seems to be wasteful of individuals as well as of a natural resource. Will my hon. Friend press on the Minister that, if he will not negotiate the 41 per cent., he must negotiate the timing —the speed with which the change is introduced—to avoid the redundancy and waste of time involved?
  Mr. Wallace: My hon. Friend has made a valid point and has stressed the point clearly himself; the Minister will have noted it. He underlines the point, in saying that this will lead to 350 redundancies, that the cuts do not make sense. Indeed, no matter how these cuts are made, clearly parts of Scottish agricultural research and development and our advisory and investigative services — all of which in their own way are vital—will be unacceptably cut. We have already had an Adjournment debate on the valuable work done by the Scottish Institute of Agricultural Engineering, and the fears that it has about a cut in expenditure on research and development.
  From the point of view of my constituents, I am greatly concerned about the possible impact of the cuts on the veterinary investigation service, in particular the laboratory at Thurso, which does very valuable work. The veterinary surgeons in my constituency were full of praise for the work done and the service provided to the agricultural community in Caithness, Sutherland, Orkney and Shetland. When the Rayner review looked into this matter in England — Scotland was excluded from its deliberations—it concluded that
  "the absence of a sophisticated diagnostic and investigational service would represent a serious loss to the industry as a whole. A laboratory based diagnostic service is necessary to support statutory disease eradication schemes and for the identification of new and emergency disease conditions. The private sector would not find it worthwhile to offer the full range of diagnostic and investigational services currently available from the Veterinary Investigation Service."
  I can see no reason at all why a similar conclusion should not be applied to Scotland. We will create long-term problems for animal health and welfare if the future of institutions such as the Thurso laboratory and similar laboratories in Scotland is not safeguarded.
  The cumulative effect of the cuts will be less assistance in areas where incomes are accepted by the Government to be falling. If investment help is down, that will force the farmers concerned more and more to increase their debt and to have to service debts. In addition, some funding will inevitably be required from the industry to support advisory services, funding from incomes that will be smaller anyway, and in some cases just not there.
  How do the Government see the future of Scottish agriculture, when the cumulative effect of their policies are considered? I have no doubt that in his response the Minister will tell us how much the Government is spending on agricultural support in Scotland. One could ask how much would have been spent had these cuts not been made. It sounds almost like a great achievement by the Government that they have not actually cut out agricultural support altogether.
  The Minister will also tell us of the increase in amounts payable for hill livestock compensatory allowances, increases which I acknowledge, in particular the supplement in the Highlands and Islands area. I have gone through the figures with NFU representatives in my
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  constituency. It is clear that, if one considers the interrelationship of the increases with the decreases in grants, there is no net benefit at all to the industry. In fact, it is worse off.
  I should like to make a constituency point. The grades of land that are used for the payment of allowances in the Highlands and Islands area were based on classifications for winter keep and bear no relation to the problems caused through additional transport and fuel costs or the problems in the remoter parts of Scotland. I think that my hon. Friend the Member for Ross, Cromarty and Skye (Mr. Kennedy) will accept that grade A land in Easter Ross is a slightly better proposition when it comes to things such as transport costs and accessibility to markets than grade A land in Orkney. We wish the Minister to reconsider the classifications to see whether they are fair and to ensure that the support is properly going where it is needed.
  It is clear that agriculture in Scotland is important not only on its own terms but for the part that it plays in the whole rural economy. If one cuts grants, it is not just the farmer who suffers, but the small contractors who have been undertaking his fencing and drainage work. That has a pervasive effect throughout the rural community. It could put in jeopardy the rural school and other services.
  We wish to see a total tun-1round in Government policy. Support should not be withdrawn. We should be looking forward to such things as an agriculture development programme for the Highlands and Islands, which seek to regenerate the rural economy. There have been signs in the past few weeks that the European Commission is anxious to talk to the Government about the matter. I hope that the Minister will say that the Government will take a more positive approach than in the past. That would be welcome news, because the news over the past 12 months has not been of encouragement and support for Scottish agriculture.
  8.31 am
  Mr. John Home RobertsonI congratulate the hon. Member for Orkney and Shetland (Mr. Wallace) on his good fortune in raising this important subject. I am grateful for this opportunity to register the strong feelings of the Labour party about the decay of rural Scotland in recent years and indeed about the Government's abject failure to give a proper lead in assisting the Scottish rural economy to come through this time of drastic change and great uncertainty, which everyone acknowledges to be the case.
  Apart from agriculture, we have seen the impact of other aspects of Government policy on housing and transport, to name but two, in rural Scotland. the Government must stand condemned for that. As the hon. Member for Orkney and Shetland said, we need a proper rural development policy not only for the Highlands and Islands but for other rural parts of Scotland. That must include an agriculture policy.
  I think that there is general agreement about the urgent need for a drastic review of the European common agricultural policy. However, the Minister of Agriculture, Fisheries and Food is clearly hopelessly out of his depth in addressing himself to the problems. In Scotland, we have the additional problem of having a Minister whom one can only describe as the invisible man responsible for the agriculture industry. In this instance, I am talking not only about the Secretary of State for Scotland himself, but about someone who is even more invisible—Lord Gray

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  of Contin. Perhaps the hon. Member for Ross, Cromarty and Skye (Mr. Kennedy) can tell us something about him because I have not seen him since he lost his seat at the last general election.
  The Government have conveniently identified a case for cutting expenditure, which they are always keen on doing, and they are turning both their blind eyes to areas of Scottish agriculture and the Scottish rural economy that require extra incentives. Let me give a couple of examples. I start with one mentioned by the hon. Member for Orkney and Shetland. There is a massive attack on the budgets of the Scottish agricultural colleges—a 41 per cent. cut over less than two years. That approach to the research and advisory organisations under present circumstances seems to us to be little short of criminal.
  Those organisations can help the industry to adjust itself to the new climate of reduced production, increased emphasis on environmental issues and the general need for diversification and change. If anything, one might think that those colleges needed more resources, but the Government are hell-bent on cutting expenditure regardless of the consequences. We know what is happening to those colleges at present. It has been suggested that money to sustain research and advisory services could be raised from the industry. On the principle of he who pays the piper calls the tune, I suspect that the bigger farmers would be able to benefit from advisory services' research while smaller enterprises, which have the greatest need of it, might not.
  Capital grants to agriculture in Scotland, as elsewhere, have been halved in three successive years. For redrainage of land on low ground, capital grant is now 15 per cent. That is not an adequate incentive, even under present circumstances, for vital capital improvement work. Quite apart from the impact that the cuts may have on agriculture, there is cause for acute concern about their disastrous effect on agricultural contractors, who are an important source of employment in rural areas.
  We should pay special attention to the most fragile parts of the agricultural economy in Scotland—the hills and uplands. It is essential to sustain employment in those remoter areas. We should consider additional means of protecting existing enterprises in the remoter areas and of creating more smaller farms when possible. To give credit where credit is due, I must add that the Government have responded to pressure to maintain the hill livestock compensatory allowances and the beef and sheep variable premium. That general level of support must continue to guarantee the long-term future of hill livestock farming. I hope that all parties acknowledge that need.
  As for the pig industry, we deplore the fact that the Government have refused to accept the recommendation of the Select Committee on Agriculture on the funding of the scheme to eradicate Aujeszky's disease. The Government's failure to underwrite the eradication scheme will make it much more difficult to institute voluntary eradication schemes for animal diseases in future.
  The dairy industry will not forgive the Government for the shambolic manner in which production quotas were introduced last year and I do not understand why the Republic of Ireland is getting additional quota of 58,000 tonnes when there is a serious threat of badly needed
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  Scottish milk quota being transferred to Northern Ireland. We must press the Minister for a specific reply and an assurance that Scotland's milk quota will be protected.
  We know that there are massive and costly surpluses of cereals in the European Community. We have the grotesque embarrassment of having huge carry-over stocks from last year's harvest still in intervention stores as we begin the 1985 harvest. That is a direct consequence of the distorting effects of the intervention buying system and the common agricultural policy in its present form. We require a massive overhaul of the CAP, not the timid tinkerings that we have had with cereals.
  Savings must be made, and there is a need for urgent steps to reduce production and encourage alternative use for land. I suggest that the 1·8 per cent. reduction in prices being imposed by the Commission as a means of circumventing the veto put in by the Germans on the original agreement, will probably be worse than useless. Such a marginal cut in cereal prices is likely to be interpreted as an incentive to increase production, which must be the last thing that we should do.
  If the Minister pursues his policy of cutting prices as the means of reducing the production of cereals, he will have to make much bigger cuts, and such substantial cuts could well lead to bankruptcies among smaller producers. That policy is unlikely to succeed. We need a combination of incentives to change patterns of production by the introduction of alternative crops. Price restraint is needed. We must also consider the introduction of quotas. I do not like the idea, but rather than being stampeded into the imposition of quotas, as happened over milk quotas, there should at least be contingency plans for a quota system for cereals.
  I have referred to the need for incentives to change production patterns in the rural areas of Scotland. We must encourage people to stop producing commodities that are in surplus. The new agricultural improvement grants that were debated last week in Standing Committee included a new provision for grants and incentives to plant broadleaved shelter belts. During the debate in Committee I raised this point with the Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food. She reiterated the Government's refusal to implement article 20 of the European Community's structures directive which would have provided a very substantial incentive to plant broadleaved trees.
  Yesterday the Secretary of State for Scotland said in a written reply that through the Forestry Commission he intended to institute a new planting grant scheme. At first sight this appears to be at least as attractive as the article 20 incentives proposal of the European Community. At least that will be the case for areas of up to three hectares. After that the article 20 incentives would be more generous. Why not implement article 20 in full? European Community cash could then be used to encourage the substantial planting of trees not only in the Highlands but on low ground. The extra planting of trees would not only improve the landscape; it could lead to a significant reduction in the production of cereals and other surplus crops and it would lead to an increase in the production of much needed timber.
  There is an urgent need to restrain the production of surplus crops in the European Community. The hamfisted cuts in research and in general support for the industry are typical of this Government's approach, but they are wrong. We should redirect this budget towards

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  restructuring the industry. If savings can thereby be achieved, so much the better. However, our top priority should be the revitalisation of the Scottish rural economy. Scotland contains a high proportion of remote rural areas. Its special case demands special attention in the review of agricultural and rural policy. I fear that that may be too much to expect from this discredited and unrepresentative Government.
  8.43 am
  Mr. Charles Kennedy: Conscious though I am of the time, I want to place just a one-minute contribution on the record before the Minister replies to the debate. I echo the congratulations to my hon. Friend the Member for Orkney and Shetland (Mr. Wallace) on having been fortunate enough to introduce this debate and for the manner in which he did so. I fully endorse the thrust of his argument.
  There is great concern in the Ross, Cromarty and Skye constituency and in the Highlands and Islands generally about the envisaged level of cuts in the capital grant scheme and in the agricultural, scientific, research and general support services. My hon. Friend said that it will have a severe impact upon those who farm in the less-favoured areas of the Highlands.
  Secondly, an application has been sent from the Highland Regional Council to Lord Gray of Contin requesting 100 per cent. Scottish Office support for the necessary funding of the work that has to be done after the flooding of the River Conon just over a year ago. I hope the Government will seriously consider that request.
  Thirdly, may I back up my hon. Friend's plea that there should be a full agricultural development programme for the Highlands of Scotland. Optimistic signals are coming from Europe. There is a clear indication that the European Commission wants to talk to the Scottish Office. I hope that it will respond constructively. It would go a long way towards reversing some of the indebtedness and general difficulty which the agricultural community in the Highlands is experiencing.
  8.44 am
  The Parliamentary Under-Secretary of State for Scotland (Mr. John MacKay): I congratulate the hon. Member for Orkney and Shetland (Mr. Wallace) on his first appearance as the Liberal party spokesman on agriculture in Scotland. In the time available to me, I doubt whether I can cover every point made, but I hope to cover the main ones.
  At this early hour—it is almost mid-morning for a farmer—I am pleased that the hon. Gentleman managed to slip his debate into the last of the 12 hours available. It gives me the opportunity to put on record the state and future of Scottish agriculture, and to re-emphasise the Government's excellent record of support to agriculture in Scotland. The industry is in reasonably good shape. Last year, net farm incomes increased by about 32 per cent. to £141 million. Although I am delighted with that improvement, we were careful to say when the figures were published that one should not read too much into single year-on-year comparisons. Many variable factors in agriculture, not least the weather, have a bearing on farm incomes. This year, the weather has been less than kind in many parts of the country.
  Since we took office in 1979, the upward trend has become clear. We halted the decline in net farm incomes
  1278
  which we inherited, and then reversed the trend to enable the industry's financial position to recover. The Government can legitimately take the credit for helping the industry to pull itself out of the trough, because we continue to inject large sums of public money into its support. In 1985–86, about £106 million will be paid in direct financial assistance to Scottish farmers. The 1978–79 equivalent was only £73 million. When one considers that, one realises that the remarks this morning of the Lib-Lab alliance were not well-founded.
  I suspect that many farmers forget —perhaps some hon. Members have forgotten it, too — that Scotland benefits substantially from the £1·2 billion that is likely to be spent this year in supporting United Kingdom farm prices under the common agricultural policy. Scotland's share of the sum is difficult to quantify but, on the basis of a special exercise carried out in 1983–84, we can place it at about £135 million. Agriculture tends to forget that those sums are part and parcel of the Government's support for the industry. In addition, we spend about £50 million on research and development and education, which benefit agriculture, although less directly.
  I am glad that the hon. Member for East Lothian (Mr. Home Robertson) mentioned forestry. The Forestry Commission estimates that about £27 million will be spent in Scotland in 1985–86. As my noble Friend Lord Gray noted at the annual general meeting of the Scottish NFU in March, Scottish agriculture now receives about £300 million a year in support. By any yardstick, that is considerable support from the Government and, ultimately, from the taxpayer.
  Despite the difficult and protracted price-fixing negotiations this year, the outcome was good for farmers, as the Scottish NFU publicly acknowledged. It is never easy to secure all that we want in those negotiations, and this year was no exception. The continuation of the beef variable premium scheme was especially important to us, and that was certainly recognised by the NFU. The sheepmeat provisions are largely unchanged from previous years, thanks to significant negotiating achievements by the Government. We have resisted attempts to tinker with these schemes. I know that the producers were relieved at the splendid Government achievement in the negotiations.
  The real disappointment this year was the failure of the Community to take the right course on cereals. As the House knows, the Germans blocked a proposal to cut cereal prices by 1·8 per cent., and even that proposal had to be seen as a rather weak compromise when related to the 5 per cent. cut due in the light of the Council's sensible 1984 decision on guarantee thresholds.
  It is interesting that the hon. Member for East Lothian seemed to be more realistic in facing up to the problems that agriculture will face, and is facing from the problem of surpluses than the hon. Member for Orkney and Shetland. He rather skidded over the problem of surplus production in the Community. not just on cereals but other products.
  It might be interesting for the hon. Member for Orkney and Shetland if I read out to him what one one of his leaders said in a debate in January. The hon. Member for Inverness, Nairn and Lochaber (Sir R. Johnston) said—[Interruption.] I am glad that lion. Gentlemen are cheering the hon. Member. Perhaps it is the selection of leader that brings a cheer. He said:
  "It has been clear for the past five years that a continued open-ended system of agricultural support was bound to lead to

  1279
  trouble, compounded by the seldom mentioned fact that the problem is not just open-ended production with the need for subsidy capping, as it were, but the rapid and expensive result of advances in agricultural technology, as the support system was devised without the expectation of full production or production in balance with demand."—[Official Report, 25 January 1985; Vol. 71, c. 911.]
  That simple truth does not seem to have penetrated to the hon. Member for Orkney and Shetland, although the hon. Member for East Lothian has got the message, which is particularly relevant to cereals. In a report published by Agra Europe, published on 12 July 1985, it was said:
  "Budgetary costs could be trebled by what is a conservative forecast of cereals production of 154 million tonnes by 1990 if present trends in support prices and productivity improvements are permitted to continue. The Commission's own forecast is of a 163 million tonne harvest in 1990, which would mean over a 40 million tonne surplus. Even taking the more conservative figure of 154 million tonnes this would result in EEC support of at least £5,000 million in 1990, roughly 50 per cent. greater than the level which in the milk sector forced farm Ministers into the dairy quota scheme."
  The surplus in cereals is a serious problem that we must face up to, and there was more recognition of that in the contribution from the hon. Member for East Lothian than in that from the hon. Member for Orkney and Shetland.
  The Scottish NFU was clear in all its representations to Ministers about milk quotas. They saw milk quotas as the way ahead. They have got that, and I pay tribute to them and to the Milk Marketing Board for the way we have managed to introduce milk quotas in Scotland, with the minimum trouble, although there are real problems with some milk quotas.
  The hon. Member for Orkney and Shetland asked about milk quotas in Northern Ireland. I believe that he is to see my noble Friend later today, as is the president of the Scottish NFU. This matter is under discussion and I am not able to pre-empt the outcome of these discussions.
  As the hon. Member for Orkney and Shetland recognised, the Government are anxious about the future of the small island communities, whose dairy base is dependent on the local creamery. We have looked after the dairy farmers on Islay, Bute, and Kintyre, South of Tarbert, which, for the purposes of the debate, is considered an island. Added on to that is Orkney and Shetland. The hon. Member will know that in Shetland the quotas were not cut last year and will be exempt from the 1 per cent. cut this year.
  In Orkney, as in the islands of my constituency, my noble Friend has certainly given an assurance that the quota removed from the islands by the outgoers scheme will be returned this year. We are mindful not just of the needs of individual producers in these areas, but for the need for the cumulative amount of milk in the area to be able to sustain a viable creamery. We have certainly done that and I was pleased to hear the hon. Member acknowledge that fact.
  Capital grants have been mentioned and the new grants scheme which was announced by my right hon. Friend the Minister of Agriculture on 8 July. The hon. Member expressed concern about the proposed rates of support and asked for them to be increased. It is extraordinarily easy for the hon. Gentleman to say that his party can promise more money here, there and everywhere, safe in the knowledge that it will never have to keep the promise which, if kept, would in any case mean higher taxes.
  1280
  Of course the hon. Gentleman wants more help for his constituents, as we all do, but we also have to recognise that it is those same constituents who have to pay the extra tax, and they will not be too keen to do that. At a time of great pressure on public expenditure, we all have to cut our cloth accordingly, and the farming community understands that. The hon. Member has failed to look at some of the positive features of the new scheme. I stress that these are schemes which not only reflect the decisions of the Government, but stem from our obligations to implement community regulation 797/85.
  Among the positive features, I include the proposal to introduce the new schemes on the basis of a clean slate. In other words, farmers will be allowed to spend up to the permitted ceiling regardless of the substantial support which many have received under the AHGS and AHDS schemes. From the representations made by many farmers in my constituency, I know this will be welcomed. Eligibility under the principal new scheme will be extended to small and part time farmers. Aid will be provided for craft and tourism projects in the less favoured areas, and this will permit farmers to augment and diversify their income.
  Additional support will be provided for young farmers entering the industry. In addition, we are taking the opportunity to increase standard costs. These provide the basis on which grant is calculated where farmers undertake eligible projects using their own labour. These various measures coupled with general rates of grant of 30 per cent. and 15 per cent. demonstrate not only our continuing commitment to the farming industry, but, with the higher rates of grant — double that in the lowlands — the continuing priority which we are according to the less-favoured areas.
  The hon. Member for Orkney and Shetland mentioned plans. Compared with the previous FHDS scheme, the redevelopment plans will be much simpler and less onerous on farmers. I do not consider it unreasonable that farmers applying for grants paid for by the taxpayers should be required to place their applications in the context of a plan, and we are satisfied that two plans in six years will adequately accommodate all the worthwhile developments.
  Hon. Members expressed concern about research and development and about the advisory services. As I said the other night, considerable changes are taking place in agriculture. I have mentioned some of them, and there will be more in future as we face the problem of surpluses. There is concern not only about surpluses, but about the environment and its interface with agriculture. There is also pressure to improve the welfare of farm animals, and considerable interest in the relationship between diet and health.
  Against that background, it is essential that we review our strategy for research and development, assess the priorities, and see to it that the taxpayer is getting value for money. It is not unreasonable to expect the prime beneficiaries from the fruits of agricultural research and development to make a contribution towards its cost. My Department recently issued a consultation paper in relation to all this which was widely distributed and comments are now being considered.
  We recognise the important work carried out by the college advisory service, but we take the view that farmers should make a contribution towards the cost of a service from which they benefit. Even after the reductions are

  1281
  made, the majority of the money, the lion's share, will still come from the public purse. The colleges and the Department are consulting various interests, not least individual farmers. The Department will produce a consultation paper in the early autumn seeking reactions to proposals for implementing the changes which flow not simply from the decision to reduce public funding, but also from the reviews which go along with that.
  Of course, I agree that less-favoured areas have particular needs and problems to which we must continue to have special regard. We shall certainly be doing that in all our consultations and considerations.
  It being Nine o'clock, the motion for the Adjournment of the House lapsed, without Question put.

  Patient Referrals (Cumbernauld)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Peter Lloyd.]
  9 am
  Mr. Norman Hogg: This has been a long day, though for Parliament it is still Wednesday — a Westminster eccentricity which must bewilder the outside world. Those of us who have kept the watches of the night, including my hon. Friends the Members for East Lothian (Mr. Home Robertson) and for Jarrow (Mr. Dixon), will be relieved that we are at last reaching the end of the sitting.
  It would be appropriate for me to place on record on behalf of hon. Members our appreciation of the staff of the House who, with diligence, patience and characteristic courtesy, have seen us through the past eighteen and a half hours.
  I shall not detain the House for long, but I have to raise an important constituency matter that is worthy of the rime that remains. For a number of years, general practitioners in Cumbernauld new town have been concerned about patient referrals from the new town to hospitals administered by the eastern district of the Greater Glasgow health board and by the Lanarkshire health board.
  The principle has always been that doctors used their clinical judgment to determine the best hospital for their patients' needs. That principle has come under increasing pressure because of the growth of the new town arid a reluctance by the Glasgow royal infirmary readily to accept emergency admissions. The important requirement for the GPs is that there should be clear and adequate provision both in Glasgow and at Monklands district general hospital. Other hospitals in Lanarkshire, such as Law and Hairmyers hospitals, are not well placed for access from the new town by public or private transport.
  The matter came to a head in July 1982, when a Cumbernauld GP received a letter from the eastern district of the Greater Glasgow health board informing him that the substantially open-door policy would continue at the receiving physician's discretion until 5 pm and that at 5 pm or earlier, if there were eight beds or fewer vacant in the medical division, the receiving team would inform the district medical officer or his deputy of the position.
  Such was the concern of the GPs that they called a meeting in February 1983 to discuss the future hospital care of Cumbernauld people in view of the reduction in the number of beds at Glasgow. Consultants at Glasgow felt that there would soon come a time when they would be unable to provide a hospital service for Cumbernauld if there were further reductions in the number of beds. Their colleagues from Monklands general hospital said that they could barely cope with the work load from Cumbernauld that they were receiving at that time and would be unable to cope with increased numbers.
  The problem is that Monklands general hospital was not built large enough to cope with Cumbernauld's increasing population and cannot cope with more than the numbers that it takes now. If Glasgow stops taking patients, they will have to go to Law and Hairmyers hospitals with increasing frequency.
  Doctors asked the chief medical officer for Scotland to their meeting because either Glasgow would have to change its policy of reducing the number of beds, and would have to be given money to provide a service for two

  1283
  thirds of Cumbernauld's population or Monklands general hospital would be trying to cope with a demand which it was not large enough to satisfy.
  The chairman of the Lanarkshire health board and the chief area medical officer were asked how they proposed to care for Cumbernauld's population. They replied that they hoped the situation would remain as it had been in the past. However, the Greater Glasgow health board was not prepared to let patients continue to have freedom of choice, and its cut in finances will affect Cumbernauld patients, who will find it increasingly difficult to get into Glasgow hospitals.
  There are only two options for Lanarkshire health board in these circumstances. It either extends the Monklands district general hospital or zones Monklands not to accept patients from certain parts of Lanarkshire so that it can have more beds for Cumbernauld patients. As an alternative, Cumbernauld asks that it should be put into the Greater Glasgow health board area, which would mean that the responsibility for taking patients would be that of Glasgow. This would result in its getting more money, and not having to cut the number of beds that it is being forced to cut at present.
  These questions were put to the chairmen of both boards, but it appears that the two chairmen failed to agree. Lanarkshire wrote on 19 September that any action that it took would be simply to take up the same stand that it had taken two years previously.
  In theory, a complicated administrative procedure has been devised to keep the Monklands hospital doctor receiving the case informed where the patient may be accommodated. In practice, it never works out. In approximately 50 per cent. of medical cases, admission to Monklands hospital is simply refused. That is perhaps fortunate for the people of Cumbernauld, for the scheme as devised might mean admission to Hairmyers hospital or Law hospital. I stress that I am not criticising those hospitals. It is simply that it is not convenient for the people of Cumbernauld to go there. Only when all beds in Lanarkshire are full does the scheme envisage asking Glasgow royal infirmary for help.
  Throughout the conduct of this issue, I have had meetings with the doctors. Their representatives and I have met the chairmen and officers of the two health boards. Although these meetings were useful in exploring the difficulties and determining the provisions which exist for my constituents, they did not successfully resolve the central question. In the event, I arranged a meeting with the Minister in an endeavour to obtain ministerial advice to the boards, on which it was hoped they would act so as to resolve the problem.
  However, in the last letter which the Minister addressed to me, he merely reiterated that the problem of emergency referrals of Cumbernauld patients was essentially an operational matter for Lanarkshire health board to resolve, in discussion with the Greater Glasgow health board. The Minister stated that Dr. Thomson's letter of 19 September 1984 resolved the uncertainty which had prevailed to that date. He further claimed that the two boards concerned had now clarified the procedure to be followed.
  The procedure is, of course, important, but it is not the central issue. The central issue is the capacity of Lanarkshire health board at Monklands general hospital to cope with Cumbernauld referrals, and the willingness and
  1284
  ability of Glasgow royal infirmary to accept unselected referrals from the new town. This has been underlined by a case referred to the royal infirmary by a doctor from Cumbernauld, which was the subject of correspondence between him and that hospital in May this year. It is clear that, if additional cuts continue in Glasgow royal infirmary then, while it will be willing to accept normal gynaecological complaints, patients requiring termination will not be considered.
  It is essential that the Minister resolve the matter between the two boards. I hope that he will feel able to say that funding will be such that patients have a choice of which hospital they wish to attend. I hope that he understands that, if the choice is not given, there will shortly come a time when there are insufficient beds for the care of patients from Cumbernauld.
  9.9 am
  The Parliamentary Under-Secretary of State for Scotland (Mr John MacKay): I am grateful to the hon. Member for Cumbernauld and Kilsyth (Mr. Hogg), despite the unusual hour, for giving me this opportunity to discuss the particular problem about which he has spoken and to place on record the Government's position on some of the aspects of this issue which are of more general interest and application.
  Perhaps it has also given the hon. Gentleman, depending on the decisions of the electorate for the Labour party, a chance to have a say in this House before he takes a vow of silence. But that is something over which Ministers have no control; it is in the hands of the electorate of the Labour party. I shall not say anything about the hon. Gentleman either for or against him in case it damages or even enhances his chances in that election.
  However, I will say that the hon. Gentleman has certainly pursued this matter with me both by meetings and by writing and now in this debate.
  I think that it is first of all important to establish clearly in a case such as this what are the respective roles of, on the one hand, the Scottish Home and Health Department and, on the other hand, the Health Boards, the Lanarkshire health board and the Greater Glasgow health board. As hon. Members know, the responsibilities of health boards are many and varied, but perhaps the principal reason for their existence is to plan for and provide patient services within the resources which the Government make available to them and in the light of their local requirements and priorities. That latter point is an important one for, provided that there are no national implications, it surely makes sense for the local provision of services to be under the management of a locally-based administrative organisation.
  Responsibility for the day-to-day operation and provision of health care services rests with the health boards. In fulfilling that responsibility each health board must, of course, have regard to the requirements of the national policy as laid down by my right hon. Friend the Secretary of State, who is ultimately responsible for securing the effective provision of health services, as well as to the constraints necessarily imposed by the availability of resources, whether finance, manpower or indeed fixed assets such as buildings and equipment. In effect, the Secretary of State fulfils his overall responsibility for the provision of health services through the individual health boards in respect of their designated areas.

  1285
  The fact that each health board is primarily responsible for providing health services to residents within its own area does not, however, mean that boards can afford to operate entirely independently of each other. While it may be a perfectly reasonable objective in terms of long-term planning for a board to devise its services with the needs of its resident population in mind, the pattern of existing services is to a great extent set by the sizes and locations of the hospital buildings actually available, and, as the hon. Gentleman said, by the travel network in the area. That can impose a very real constraint on the day-to-day provision of services. Where one board may have a deficiency of hospital beds, a neighbouring one may have a relative excess, and the logical solution in terms of achieving the best patient care within existing resources is for patients from the former area to cross the boundary into the second area for hospital treatment.
  That is recognised in the operation of the Scottish health authorities revenue equalisation mechanism, and this cross-boundary flow is compensated for in the financial allocations we make to the boards. It does not absolve the board from taking primary responsibility for all its residents, nor from devising a strategy for developing its existing services to cater for that resident population. But it does allow a practical solution to be reached where there are imbalances of supply and demand. In each case such a solution depends crucially, however, on the respective boards working together in close co-operation to achieve the best and most practicable service to meet the needs of their residents. Such co-operation is extremely important to the co-ordinated planning and provision of hospital services and I know that nearly all who work in the boards fully appreciate that.
  The boundaries of a health hoard are therefore purely administrative in the sense that, subject to the availability of hospital resources, a patient in one area can be treated in another. It has long been held to be an essential freedom for the general practitioner to be able to decide as he thinks appropriate the best hospital to which to refer his patient. Health boards do their utmost to accommodate that, but the constraints of availability of hospital resources inevitably mean that that freedom cannot be entirely uninhibited. That is not to say that cross-boundary flow is undesirable, but that health boards, for reasons of practicality, may not in all cases be able to provide the full choice of options of hospital care which a general practitioner might ideally wish. Instead, and I am sure that the vast majority of them accept this, the options may be restricted. But the overriding principle of greatest importance is that wherever possible hospital care should be available somewhere with the minimum of delay and with the interests of the patient in mind. That must be the goal to which health boards must strive, and, although we will never be rid of waiting lists entirely. I am sure that boards are continuing to make important progress in that direction.
  I turn from that general principle, which is important, on cross-boundary flow and the relationship between adjacent health boards to the particular case of Cumbernauld raised by the hon. Gentleman.
  There has been a tradition for patients from Cumbernauld to be referred to Glasgow hospitals and, in particular, to the Glasgow Royal infirmary. Cumbernauld is, of course, in the area of the Lanarkshire health board and it was because of the needs of the Cumbernauld area,
  1286
  as well as those of the Airdrie-Coatbridge area, that a new district general hospital in Airdrie, the Monklands DGH, was built.
  Whereas previously there had been substantial cross-boundary flow from Cumbernauld to greater Glasgow, the position has changed somewhat. In 1976, some 88 per cent. of non-emergency, and 73 per cent. of emergency, acute patients from Cumbernauld were treated in Glasgow hospitals mostly at Glasgow Royal infirmary. Following the opening of Monklands DGH, however. these percentages have gradually fallen. The figures for 1982 were down to 72 per cent. for non-emergency cases and only 41 per cent. for emergency cases.
  Part of the reason for the trend being gradual is that it takes time for GPs and patients to adjust their referral preferences and practices in the light of new hospital developments. It is inevitable that, for a time, people will continue to rely on the older hospitals. But it appears from the figures that the reputation of Monklands DGH among the people of Cumbernauld is growing. I am glad of that, for Monklands is an extremely efficient and well- run hospital, as I found when I visited it.
  The hon. Member approached me about potential problems in the referral of Cumbernauld patients to Monklands in 1983 as he mentioned. We had a useful meeting at the beginning of 1984, when he explained to me that there were fears among the general practitioners in Cumbernauld that the capacity of Monklands to absorb more patients from Cumbernauld was now very limited but that there were signs from Greater Glasgow that they might not be in a position to continue to provide the existing level of service to Cumbernauld.
  There was an even more pressing problem, as the hon. Member explained, namely, that Greater Glasgow was now unable to take emergency referrals from Cumbernauld, reversing previous practice, whereas Monklands, it was claimed. could not cope with the additional demand.
  As I said at the time when we met, real as these problems were, they were essentially operational matters for the two health boards involved. I remain of that view. As I said, the responsibility for the operation and provision of health services locally lies with the health boards arid, provided that they are prepared to work together over common problems in providing those services, this is the best way to overcome them.
  I placed emphasis earlier on the importance of cooperation and planning between health boards, and this case illustrates a good example of that. Following my meeting in January 1984 with the hon. Member, I arranged for the Lanarkshire and Greater Glasgow health boards to get together and address the two problem areas outlined, the one being the general admission of acute but non-emergency cases, the other being the specific issue of emergency cases where the situation was more difficult. I am glad to say that after the necessary discussions arid consultations, a solution was found by the boards to these problems.
  Before I describe those solutions, I will comment on the question of the accident and emergency department at Monklands, which the hon. Gentleman raised in passing. This department has been under some pressure because of unforeseen demand, and the Lanarkshire health board is in the advanced stages of planning the building of an extension to the outpatients' department. The problem of the capacity of the department to deal with those who

  1287
  attend it, largely instead of going to their general practitioners in the first instance, does not bear on the Cumbernauld problem, which is not one of self-referrals. The solution to the general question whether Greater Glasgow will be able to continue its present level of service to residents of Cumbernauld is bound up with Greater Glasgow's plans for future developments in its acute hospital services.
  The Greater Glasgow health board is well aware of the financial pressures that it is likely to be under if it does not take steps to reduce its total provision of acute beds to match the rapid decline in the population of its area in recent years and the emergence of hospitals like Monklands outside the area of the Greater Glasgow health board. These hospitals are now taking up patients which traditionally went into Glasgow for their hospital care. These matters are under discussion between the board and my Department but the present assumption is that Glasgow will continue to accept and treat Cumbernauld residents.
  In the discussions which followed my meeting with the hon. Member, the Greater Glasgow health board confirmed that despite the speculation to the contrary, it expected to be able to provide the present level of service to Cumbernauld for the foreseeable future. I am glad that the boards were able to clarify the situation in this way and to their mutual satisfaction.
  The issue of emergency referrals was more difficult because the Greater Glasgow health board was unable to offer a return to the situation before 1980 when it accepted responsibility for emergency patients from Cumbernauld. Instead, however, Lanarkshire health board was able both to state that it now accepted this responsibility in the first instance itself and to reiterate established procedures which were designed to fulfil that responsibility. These procedures provide for Cumbernauld patients to be referred initially to Monklands DGH. Should there not be accommodation there for them, arrangements are immediately set in hand to find alternative accommodation elsewhere in Lanarkshire, which is primarily at the two large hospitals at Law and Hairmyres. Only in the unlikely event of no suitable bed being available in these main Lanarkshire hospitals is the Glasgow Royal infirmary approached when, with the full agreement of the chairman of the Greater Glasgow health board, maximum help will be given. If the procedures are properly followed, the doctor who is looking for the bed should be doing a lot of
  1288
  telephoning. The procedure should be undertaken by the Monklands DGH by keeping a note of the availability of emergency beds — that is something that every large hospital has to do in any event—whether or not it is receiving from Cumbernauld.
  Once again, I should point out that these were operational solutions to an operational problem and were sorted out by the two health boards together. I wrote to the hon. Gentleman in October 1984 to explain these solutions and, so far as I am aware, the procedures have operated to the satisfaction of both health boards and no problems have arisen.
  I am aware of what the hon. Gentleman has explained, namely, that the general practitioners in Cumbernauld may not be wholly convinced that this is the best service for their patients. It is not always possible to provide every GP with the facility to refer patients to whichever hospital he wishes. There are cases where, as here, the provision of an appropriate service depends on a clearly understood procedure to be followed.
  I appreciate that GPs in Cumbernauld and their patients have historically looked to Glasgow, and especially to the Glasgow Royal infirmary, for their health care. However, Cumbernauld is within the Lanarkshire health board area and with the opening of Monklands district general hospital in 1977 the situation changed. The bulk of the non-emergency admissions are still made in the Glasgow Royal, although the proportion has reduced from 88 per cent. in 1976 to 72 per cent. in 1982. For emergency admissions, the proportion has declined from 73 per cent. in 1976 to 41 per cent. in 1982. Lanarkshire health board and Greater Glasgow health board have agreed procedures for Cumbernauld and this must be matched by a willingness on the part of the doctors to follow these agreed procedures. I believe that if that is done there should be no problems for the patients in Cumbernauld, whether they are treated in Monklands district general hospital or in the Glasgow Royal infirmary.
  I am happy to reiterate that it has been made clear by the Greater Glasgow health board that despite some of the rumours, which the hon. Gentleman brought to my notice with the doctors he took to see me. it is prepared to say clearly that it is able to take patients from Cumbernauld for the foreseeable future as and when the need to do so arises.
  Question put and agreed to.
  Adjourned accordingly at twenty-four minutes past Nine o'clock am on Thursday.

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TRADE AND INDUSTRY
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THE ARTS
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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 Oxford.

The Lord Bishop of Winchester
Colin Clement Walter, Lord Bishop of Winchester—Was (in the usual manner) introduced between the Lord Bishop of Rochester and the Lord Bishop of Oxford.
The Lord Bishop of Sheffield
David Ramsay, Lord Bishop of Sheffield—Was (in the usual manner) introduced between the Lord Bishop of Rochester and the Lord Bishop of Oxford.

Natural Medicines: Safety and Efficacy
2.47 p.m.
Baroness Sharples: 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 it is necessary that safety tests carried out on natural medicines should also include an evaluation of their efficacy.
The Parliamentary Under-Secretary of State, Department of Health and Social Security (Baroness Trumpington): My Lords, where a product is put on the market as a licensed medicine, there should be adequate evidence not only that the product is safe but also that it can be of benefit. Licences issued under the Medicines Act give that assurance.
Baroness Sharples: My Lords, I thank my noble friend for that reply. Is my noble friend able to say what the Government's attitude is towards natural medicines; and can she also say whether, when there are new appointments made to the advisory boards on medicine, they will include people who are authorities on natural medicines?
Baroness Trumpington: My Lords, I thank my noble friend Lady Sharples for those supplementary questions. In answer to the first one, we wholeheartedly support the freedom of the individual to seek the benefits of alternative medicines and therapies. It is not our intention to use the Medicines Act to restrict the general availability of alternative medicines. In answer to my noble friend's second supplementary question, we do not consider it necessary now to alter the membership of the Medicines Act advisory bodies, but there are wide powers to add to the membership should the need arise.
Viscount Massereene and Ferrard: My Lords, would my noble friend not agree that in the 1960s, when the Medicines Act came about, there was in fact a representative of natural medicines on the committee to help decide whether or not any of these natural medicines should be phased out?
Baroness Trumpington: My Lords, I was not in fact in this seat in the 1960s, but I am sure that my noble friend is right.
Lord Ennals: My Lords, would the noble Baroness agree that there has been a refreshing change in medical opinion about alternative medicines? In relation to the particular Question asked by the noble Baroness, would the Minister not accept that, provided that the safety of medicines is assured, the question of efficacy is really one for the doctor and for the patient? Would the noble Baroness perhaps agree that it is a very subjective question? A natural medicine which may be very helpful for one patient may not do anything at all for another.
Baroness Trumpington: My Lords, surely it is right that practitioners and the public should have some reassurance through the licensing system that products are safe and that they work. That is why the Medicines Act was put on the statute book, and that is why, even though we support alternative medicines if people want to use them, we must be sure that no harm can ensue.
Lord Ennals: Yes, my Lords, that is quite right.

Training: Company Expenditure
2.53 p.m.
Lord Rochester: 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 expenditure on training by British companies is adequate in relation to that of our major international competitors.
The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Lucas of Chilworth): No, my Lords. We would welcome support for our campaign to persuade employers that training pays. This year the Government are themselves investing £1.2 billion through the Manpower Services Commission in improving our training performance.
Lord Rochester: My Lords, I am disappointed at that reply. Is the noble Lord the Minister aware that in the United States last year companies spent approximately 1 per cent. of turnover on training and that West German companies spent about 2 per cent. on it? Does the Minister not agree that the time has come for Government action rather than mere exhortation? Will the Government consider introducing a national training levy of, say, 1 per cent. of payroll which would be applicable to all companies, with remissions for companies attaining certain specified standards? How,

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otherwise, are we to ensure that once again economic recovery is not impeded by skills shortages and our international competitiveness endangered?
Lord Lucas of Chilworth: My Lords, I am aware of the figures which the noble Lord, Lord Rochester, gave when opening his supplementary question, but the noble Lord will probably recall that it was only three years ago that Parliament decided to replace 16 out of the 23 industrial training boards with voluntary arrangements. Our present view remains that a national training levy such as the noble Lord suggests is not necessarily the best way to achieve effective employer investment in training.
Lord Morris: My Lords, does my noble friend agree that the expenditure of £1.2 billion of taxpayers' money by Her Majesty's Government can hardly be described as mere exhortation?
Lord Lucas of Chilworth: My Lords, I thank my noble friend for his question. It certainly is not exhortation. It remains part of the campaign that we have started to raise the profile of the need for training which is to the benefit of the employer as well as the nation.
Baroness Seear: My Lords, even if the noble Lord does not go along with the levy that my noble friend suggested, if things stay as they are, does he agree that employers who undertake good and extremely expensive training are subsidising the large number of other employers who do nothing of the sort?
Lord Lucas of Chilworth: My Lords, I recall that the noble Baroness raised exactly that point some years ago when we discussed industrial training boards. What she said may be so to some extent; but British industry spends only £200 per employee on training, whereas our competitors both in Europe and America spend considerably more—three times as much, and sometimes seven times as much—to their benefit.
Lord Dean of Beswick: My Lords, without going into detailed figures too much, does the Minister agree that on the question of training and our competitors, we spend less than half of what West Germany spends and proportionately less than our other European competitors also? Can he say how far the recent training initiatives announced by the Government will go to make up the leeway or the deficit? Unless we do that, does he not agree that we are falling far short in providing the seed corn for our future?
Lord Lucas of Chilworth: My Lords, I accept the noble Lord's invitation not to go into specific figures. I agree that we spend considerably less than our competitors on training. For 1985–86 the Government have a planned spending programme of £1.2 billion. We expect to be able to help 220,000 people with training and retraining, which is double the number we helped in 1980–81. I think that that will go a good deal of the way towards helping to improve skills in certain industries.
Lord Kilmarnock: My Lords, the noble Lord referred to the voluntarist approach which has been the Government's line since the abolition of the industrial training boards, but do not the figures that he has given the House show that that has turned out to be inadequate in practice?
Lord Lucas of Chilworth: No, my Lords, they do not show that. We should like to step it up, and we have commissioned a report, Adult Training in Britain. Whichever way one looks at the figures, there is clear evidence that some employers have not taken on board the fact that training pays dividends to the companies.
Baroness Carnegy of Lour: My Lords, does my noble friend agree that the proportion spent on training in Germany and the United States is through arrangements by employers who want to keep the Government out of the system and not involve them in the system; and in Germany it works extremely well? Can he confirm that the adult training strategy now under way through the Manpower Services Commission is trying to get the benefit of that system rather than the levy system that was suggested in the original Question?
Lord Lucas of Chilworth: My Lords, I am grateful again to my noble friend; she is right. It is invidious to draw comparisons because they are not totally adequate. Our adult training programme offers grants to help employers with the cost of training. Some £14.3 million has been spent and 20,000 people have been helped this year through this scheme alone. There is to be a further expansion, and employers can utilise the services of the MSC to great advantage to themselves and to the nation.
Lord Cledwyn of Penrhos: My Lords, can the noble Lord explain why our performance is not as good as that of our major competitors? Will he say whether the Government are to embark on a campaign through the CBI and other agencies to persuade British industry to do better? In the event that the public sector's record on this is exemplary, can he reassure us that when industries are privatised their record will remain as good?
Lord Lucas of Chilworth: My Lords, the noble Lord asked me a number of questions. I can best answer him by again saying that we are drawing the attention of employers to the survey,Adult Training in Britain, and repeat that there is clear evidence from researches that training and retraining pay dividends. British industry has, I think, been slow to accept the necessity of retraining, particularly for adults, and some of our competitors have recognised the advantage rather more swiftly than ourselves. In so far as enjoining the CBI and other institutions is concerned, I am quite sure that they are as equally anxious as the Government to improve training. Regarding privatisation, the whole idea of returning public sector business to the private sector is to enable them to take full advantage of all that the private sector can offer outside the restrictions of Government.
Viscount Trenchard: My Lords, will my noble friend agree that the reason why our record on training is worse than that of other countries is that we had a period of the best part of two decades prior to 1979 when the atmosphere for private industry was so unfavourable and the profits were so low that research and development and training were both reduced below the level of our competitors abroad? Will he further agree that there is a danger that if the Government do too much in this now that conditions are different British industry will leave it to the Government rather than efficiently increase its training itself?
Lord Lucas of Chilworth: My Lords, my noble friend Lord Trenchard is probably quite right. I do not think that I can agree with him that the reasons he puts forward are the only reasons. I am grateful to him for his second supplementary question because I hope that this exchange of question and answer will be widely reported and that British industry will appreciate that the Government are giving considerable support but cannot do the whole job on their own, and that it is in the interests of British industry itself to invest perhaps something in the order of 3, 4 or 5 per cent. of payroll—not the 0.15 per cent. of turnover currently invested—which will return to them a dividend.
Lord Davies of Leek: My Lords, is the noble Lord aware that the implication that there is not enough training in industry does not apply to the British pottery industry, where undoubtedly training is some of the best in the world?
Lord Lucas of Chilworth: My Lords, I am quite sure that the noble Lord, Lord Davies of Leek, is right. There are some sectors of British industry where training is of a continuing high standard; there are other sectors where it lags behind.
Lord Jacques: My Lords, is the noble Lord aware that earlier this year the National Institute of Economic and Social Research published the results of some research on the differences between West German companies and British companies? They took companies of the same size, doing almost the same thing. In the case of Germany the productivity was 63 per cent. higher. Among the reasons which they found for that was a complete lack of training in the British; for example, in the case of foremen. Is the Minister aware that the results showed that not a single foreman in the British companies had a certificate for craft qualifications, whereas in the case of the German companies every one of the foremen had a craft certificate, and some of them had a master craftsman's certificate? There is the point, and the sooner we get down to it the better.
Lord Lucas of Chilworth: My Lords, I appreciate the great concern expressed by the rhetorical question of the noble Lord, Lord Jacques, and I take note of all that he said.

Blood: AIDS-Free Products
3.4 p.m.
Lord Ritchie of Dundee: 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 steps they are taking to ensure that all blood products provided to patients are free from contamination by AIDS.
Baroness Trumpington: My Lords, we are taking three complementary steps. First, we have mounted a campaign to dissuade people in AIDS high risk groups from donating blood. Secondly, we shall shortly introduce a screening test for all blood donations, once we have evaluated the test kits available. Thirdly, we are pressing ahead with heat treatment of blood products to inactivate AIDS virus where this is technically possible.
Lord Ritchie of Dundee: My Lords, I thank the noble Baroness the Minister for her encouraging reply to my Question. I should like to ask her whether she can give us any idea of what proportion of the cases of AIDS infection which have so far occurred in this country has been directly traceable to contamination from blood products.
Baroness Trumpington: No, my Lords.
Lord Ennals: My Lords, I wonder whether the noble Baroness can say to what extent Britain is now self-sufficient in blood products such as plasma and Factor 8, especially for haemophiliacs, who suffer from the double disadvantage of their own disease and the dangers that the blood which they need is not free from contamination. Does she agree that there seems to be a lower standard of blood collection in the United States, where of course payment is often made? May I ask what the Government are doing to make Britain independent of all but British blood?
Baroness Trumpington: My Lords, we are already self-sufficient as regards whole blood and blood components needed for ordinary transfusions. We are not yet self-sufficient in blood products such as Factor 8. At present, our blood products laboratory at Elstree makes about 40 per cent. of the Factor 8 required to treat haemophiliacs in England and Wales. The rest is supplied by commercial companies in the United States of America and Europe. The redevelopment at Elstree, costing over £35 million, is proceeding urgently and is on schedule. It is due to come into production in 1986, achieving full capacity by the end of 1986.
Baroness Masham of Ilton: My Lords, may I ask the Minister whether she is aware that Scotland has a much more efficient blood transfusion service and has been self-sufficient in blood products? Will she say which regional health authorities are lagging behind in their producing of plasma so that they can be self-sufficient in Factor 8?
Baroness Trumpington: My Lords, no, I cannot give a breakdown, but I was interested to hear what the noble Baroness said about Scotland.
Baroness Faithfull: My Lords, may I ask my noble friend the Minister whether she is aware of the very deep distress and concern felt by haemophiliac families? Is she aware that in certain areas centres of counselling have been set up but because of the lack of resources social services departments are unable to fund them?
Baroness Trumpington: My Lords, in answer to my noble friend Lady Faithfull, yes, I am aware of the situation. I have recently had talks with some of those splendid doctors who are caring for haemophiliacs. Urgent talks are about to start, which will include the matter of haemophiliacs together with other questions on AIDS.
Lord Ennals: My Lords, I am sorry to press the noble Baroness again but is it not deeply disturbing that we are only 40 per cent. independent for blood products in this country? Is there not something that the Government can do urgently now that AIDS has become really one of the most serious problems that the nation faces?
Baroness Trumpington: My Lords, I really think I have answered the noble Lord, Lord Ennals. As a past Minister for the DHSS, he should know that perhaps in his day more could have been done to bring up the amount of blood products.
Lord Ennals: My Lords, neither the noble Baroness nor I had heard of AIDS when I was Secretary of State.
Baroness Trumpington: My Lords, in answer to that, the amount of blood produced for transfusions has not altered since AIDS.
Baroness Dudley: My Lords, can my noble friend tell us whether there is yet any kind of cure or vaccine for AIDS?
Baroness Trumpington: My Lords, there is at the moment no cure, but considerable research into this disease is in progress both in this country and abroad. Research in the United Kingdom is being co-ordinated by the Medical Research Council and there are currently five projects under way.
Baroness Masham of Ilton: My Lords, may I ask the noble Baroness the Minister whether she will write to me, because her colleague said on television on Monday that he was very concerned about the regional health authorities which were lagging behind and I think he knows which ones they are?
Baroness Trumpington: Yes, my Lords.
Lord Ritchie of Dundee: My Lords, may I be permitted to ask the noble Baroness whether, in view of the urgency of the situation and the very costly enterprise that the giving of the forthcoming blood tests to any would-be donors will involve, any additional funding is to be available to the National Health Service and to the blood transfusion service?
Baroness Trumpington: My Lords, we wrote to regional health authorities on 20th February 1985
1202
asking them to set aside funds in 1985–86 for the introduction of the AIDS screening test in their blood transfusion centres. We would expect regional health authorities to find the money needed from within the £9,505 million made available for the hospital and community health services in 1985–86.
Lord Jenkins of Putney: My Lords, the noble Baroness has failed to answer a number of questions during the course of this period of questioning. Will she tell us whether she has not been briefed or whether she has failed to read the brief?

Female Circumcision: Minister's Comment
3.10 p.m.
Lord Kennet: 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 Baroness Trumpington was speaking for the Government when on Third Reading of the Prohibition of Female Circumcision Bill (col. 1142) she said, "It is not very difficult to make up one's mind, whether one is in the Chamber or not, as to whether one is in favour of female circumcision or against it", thereby implying that those Lords who voted for Amendment No. 1 on Report were in favour of female circumcision.
Baroness Trumpington: My Lords the Government remain of the view that the noble Lord, Lord Hatch's amendment, which the House decisively rejected, would have damaged the Bill irreparably. My remarks referred to noble Lords who voted against the amendment. It is not for me to comment on the motives of those who voted for it.
Lord Kennet: My Lords, would the noble Baroness agree that she has not retracted the absurd statement that there are 14 Members of this House in favour of the atrocious mutilation known as female circumcision? Is it her own personal opinion and is it the collective opinion of the Government that not to retract an absurd and unpleasant allegation of this sort is not in accordance with the best traditions of this House?
The Lord President of the Council (Viscount Whitelaw): My Lords, it is for me to answer collectively for the Government in this matter. I consider that my noble friend Lady Trumpington has acted perfectly properly in this case. I stand fully by what she has said.
Noble Lords: Hear, hear!
Lord Boyd-Carpenter: My Lords, will my noble friend the Leader of the House say whether it is in accordance with the normal practice of this House to seek to continue by way of Starred Question a debate on which the House spent a great deal of time not very long ago?
Viscount Whitelaw: My Lords, I do not think that it would be for me to comment off the cuff on a matter like that. I certainly note that it is not desirable to use the Order Paper when a great deal of correspondence has proceeded beforehand. I quite appreciate why the noble Lord, Lord Kennet, did it. I hope that I have given him an answer which, in all the circumstances, is a fair one.
Lord Brockway: My Lords, may I ask either the Leader of the House or the noble Baroness, Lady Trumpington, whether any implication will be withdrawn that those of us who supported this amendment were in favour of women's circumcision? Are they aware that 50 years ago, H. N. Brailsford and I exposed what was termed women's circumcision? Are they aware that when I went to Kenya in the 1950s to support the African demand for independence I was in a dilemma because they were supporting women's circumcision? I opposed it when I met Jomo Kenyatta and other leaders. I had discussions with the Christian Churches about it. It is easy 40 years later in this House to oppose it. It was not easy among the Kikuyu.
Baroness Trumpington: My Lords, it is not very easy for me to answer the noble Lord's questions. I would just point out that Ministers have made it abundantly clear that they would support effective legislation to prohibit female circumcision. Previous attempts failed because, unlike the present Prohibition of Female Circumcision Act of 1985, they would not have led to effective legislation.
Lord Thorneycroft: My Lords, does my noble friend recall that it was a jolly good speech that she made and that no one capable of recognising that they were actually in this Chamber and that this Chamber was a debating society could possibly take any exception to it?
Baroness Trumpington: My Lords, I am grateful to my noble friend.
Lord Morris: My Lords, does my noble friend not agree that it is not for her to withdraw an implication that does not lie in the words quoted in the Question but rather that it is for noble Lords opposite to withdraw the totally unfounded inference?
Viscount Whitelaw: My Lords, I sense that the House probably feels that there has been sufficient discussion of this matter and that it has been fully ventilated in all the circumstances. I hope that we can now move on.
Lord Hatch of Lusby: My Lords, may I appeal—
Noble Lords: No!
Lord Hatch of Lusby: My Lords, may I appeal to the noble Viscount the Leader of the House and urge that, as this Question concerns an action of mine, I should be allowed to put a question to his noble friend Lady Trumpington? The amendment was my amendment. Those who went into the Lobby with me were supporting me.
Viscount Whitelaw: My Lords, I did not perhaps fully appreciate that. I did feel that I was giving vent to the feelings of the House in saying that this Question has been fully discussed. I hope that in those circumstances and despite his involvement in it the noble Lord will feel that honour has been satisfied on all sides by the exchanges that have taken place. I hope that he will take that view. I can only interpret the wishes of the House—that is my task—but I do feel that this is what the House as a whole feels. I would ask the noble Lord to accept it.
Lord Melchett: My Lords, as one of the other noble Lords who voted for the amendment, may I say to the noble Viscount the Leader of the House that we spent seven minutes on each of the preceding three Questions and have spent about two minutes on the substantive point of this Question? While the feelings of the House as a whole have clearly to be respected, so, I would suggest, have those of a small minority who happen to be involved in this particular Question.
Viscount Whitelaw: Yes, my Lords. I have done my best to get the feelings of the House and of all those concerned. If I have made a mistake, I can only apologise to the noble Lord. I did feel, however, that I was doing my duty to the House. We have had some 28 minutes on Question Time—
Lord Melchett: My Lords, two minutes on this.
Viscount Whitelaw—and much of that time has been spent by noble Lords asking questions about which they feel equally as strongly as noble Lords feel about this one. That must be appreciated.

Business
3.17 p.m.
Viscount Long: My Lords, at a convenient moment after 3.30 p.m. my noble friend Lord Glenarthur will, with the leave of the House, repeat a Statement that is to be made in another place on the Popplewell Inquiry. This will be followed by my noble friend Lord Gray of Contin, who, again with the leave of the House, will repeat a Statement on the Chiswick Report.
It may be for the convenience of the House if I announce that the Committee stage of the Transport Bill will be adjourned at approximately 7 p.m. for about one hour, and that during this adjournment consideration of the Commons message on the Trustee Savings Banks Bill will be taken.

Foreign Affairs Council: 22nd-23rd July 1985
Viscount Long: My Lords, it has been agreed through the usual channels that the Statement that is to be made in another place on the Foreign Affairs Council should, by leave of the House, be printed in the Official Report.
Following is the Statement referred to:
"With permission, Mr. Speaker, I will make a statement on the Foreign Affairs Council held in

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Brussels on the 22nd and 23rd of July, at which my right honourable friend the Minister for Trade and I represented the United Kingdom.
"The Council discussed the arrangements for the Intergovernmental Conference called by the Milan European Council. A copy of its conclusions on that subject has been placed in the Library of the House. The conference will take place at the level of Foreign Ministers. The first meeting will be in Luxembourg on the 9th September. The Political Committee has been asked to draw up, by 15th October, a draft Treaty on Political Co-operation on the basis of our own and the Franco-German proposals. Proposals for treaty amendment will be looked at in a group which will meet at official level to prepare work for Foreign Ministers to consider.
"Agreement was reached on two directives providing for freedom of establishment for pharmacists and mutual recognition of their qualifications.
"The Council agreed a Community position on the future of the Multi-Fibre Arrangement for the GATT textiles committee meeting on 23rd July.
"The Commission reported to the Council on the negotiations between the Community and the United States on steel products not covered by the 1982 Carbon Steel Arrangement; and on the current trade dispute between the Community and the United States on citrus and pasta. The Council held a first discussion on the Commission proposals to increase the Community's tariff on video tape recorders and reduce the tariff on semi-conductors, and approved the eighth annual report on cooperation with the EFTA countries.
"The Council agreed a negotiating mandate for an EC/Central America co-operation agreement. It also reviewed progress in EC/Gulf Co-operation Council relations.
"The Council agreed arrangements for approving proposals brought forward under the Mediterranean financial protocols. It also agreed the terms to be applied to Spain's use of pre-accession aid to reduce excess fishing capacity.
"The Council formally adopted the Reference Framework for 1986 in accordance with the Council conclusions of December 1984 on controlling Community expenditure. This fixes the maximum level of permitted expenditure to finance Community policies in 1986. Following a meeting with the European Parliament, the Council also adopted the agreed regulation implementing integrated Mediterranean programmes.
"Meeting in political co-operation, the Foreign Ministers discussed the recent resurgence of terrorism and hijacking. They agreed to put urgent work in hand for joint action by the Ten to combat this problem. They also issued statements on Afghanistan and to make clear their concern at recent developments in South Africa. Texts of these statements have been placed in the Library of the House".

Business of the House
Viscount Whitelaw: My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That in the event of the Consolidated Fund (Appropriation) Bill being brought from the Commons, Standing Order 44 (No two stages of a Bill to be taken on one day) be dispensed with to enable all stages to be taken tomorrow.—(Viscount Whitelaw.)
On Question, Motion agreed to.

Weights and Measures Bill [H.L.]
Bill read a third time, and passed, and sent to the Commons.

Wildlife and Countryside (Service of Notices) Bill
Lord Melchett: My Lords, I understand that no amendments have been set down to this Bill and that no noble Lord has indicated a wish to move a manuscript amendment or to speak in Committee. Therefore, unless any noble Lord objects, I beg to move that the Order of Commitment be discharged.
Moved, That the Order of Commitment be discharged.—(Lord Melchett.)
On Question, Motion agreed to.

East Lothian District Council (Musselburgh Links, etc.) Order Confirmation Bill
Considered on Report.
Shetland Islands Council Order Confirmation Bill
Considered on Report.

Transport Bill
3.20 p.m.
The Minister of State, Ministry of Agriculture, Fisheries and Food (Lord Belstead): My Lords, I beg to move that the House do now again resolve itself into Committee on this Bill.
Moved, That the House do now again resolve itself into Committee.—(Lord Belstead.)
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD ABERDARE in the Chair.]
Clause 67 [Exemption for councils running small bus undertakings]:
Lord Sandford Lord Sandford moved Amendment No. 211D:
Page 69, line 8, leave out from ("exceed") to end of line 12 and insert ("fifty, that council shall be excluded from section 62(1)").
The noble Lord said: I beg to move Amendment No. 211D and at the same time I should like to speak to Amendment No. 211E.
Amendment No. 211E: Page 69, line 13, leave out subsection (2).
Perhaps I may remind the Committee that we now resume that part of the Bill which deals with the affairs of the municipal bus companies. We began to consider the dozen or so clauses dealing with those bus companies at a late stage on Thursday night. However, it is true to say that we did not do very well. We began our deliberations at 10.30 p.m. The Committee was getting bored; I was getting irritable—and for that I must apologise to my noble friends on the Front Bench—and the Chief Whip was getting impatient. So after a relatively short time we abandoned the struggle and we now resume it.
Perhaps I may also remind the Committee that the point at issue, certainly in the first of the clauses, is that one single structure has been proposed in the Bill for the municipal bus undertakings, which leaves a very great deal to be desired. The purpose of my amendments, which at this stage are only probing ones, is to try and find out what induced my right honourable friend the Secretary of State to take the decisions which he has taken, and what scope there is for persuading him to change his mind.
My own view—and I have already expressed it, but I shall express it again—is that it would have been much better if he had continued patiently the negotiations and consultations which he began with the Association of District Councils, 50 of whose members run these companies, so that we could examine together the possibilities for those companies to prepare themselves for the situation of deregulation which the Bill provides for them.
A number of possibilities were mentioned in the White Paper; however, all but one of them have been abandoned or at any rate are not addressed in the Bill. One possibility was privatisation. There are great advantages in privatisation. Privatisation, which also involved a buy-out by the employees, would in many cases probably be the best option of all, and I should have thought would be popular with the Secretary of State. Another option upon which I asked my noble friend to comment but upon which he did not do so, was that they should adopt for the purposes of this legislation the controls which are available and which are frequently applied to local authorities when one of their agencies has occasion to compete with the private sector. That is what these companies will be doing and I have received no satisfactory answer yet as to why it could not be done in this case.
One situation—and it will be a familiar one to many Members of the Committee—is where an agency or a part of the local authority competes with the private sector for, let us say, a contract to repair a council housing estate, or a contract to repair a sewer, or a contract to undertake some maintenance on a highway. In all those cases it is a requirement on the local authority, if it wants to give its direct labour organisation an opportunity to compete, to stick strictly to a number of conditions about the way in which it tenders, and so on and so forth, which puts it on a par with the private sector. That system was reviewed as recently as 1980 and it has been operated
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ever since so far as I know to the entire satisfaction of the private sector companies—the builders, etc.—on the one hand, and the local authorities on the other hand. I have had no satisfactory answer as to why that cannot be done in this case, at least for some of the local authorities.
The perverse situation is that the Department of the Environment is at this very moment extending this regime into matters like transport, maintenance, catering and so on. I cannot for the life of me understand why it was not considered as one of a number of options. It would have been much better—and we must return to this matter at the Report stage—if the Secretary of State had done in respect of the municipal bus companies what he has done with the National Bus Company—that is to say, to invite the National Bus Company to put up to him a scheme for the disposal of the enterprise. He has indicated in Clause 47 of the Bill that that is their duty. He has indicated in another clause the conditions which must be met in a programme of this kind. The National Bus Company knows his criteria and what it is that it has to do regarding disposing of its assets and breaking them up into a number of separate authorities. We could have done exactly the same. It would have been far better if we had done so because we would then have had a range of options which different authorities could have adopted according to their different circumstances.
The other issue which I raised on Thursday night—and I do not want to go into it at any great length now—was the question of pensions and superannuation. Earlier I had asked my noble friends on the Front Bench to deal with the pensions of the municipal bus companies separately from those of the PTEs and the National Bus Company because they are separate matters. The answer which I received last Thursday was more or less the same answer as had been given to the noble Lord, Lord Banks, on Clause 58 which dealt with the PTEs, and it did not address itself to any of the points which I was raising. Now I am glad to tell the Committee that I can thank my noble friend Lord Trefgarne for a very full, closely reasoned answer amounting to four pages of foolscap, which deals with the matters that I raised. However, the answers have not been given to the Committee. My noble friend and I shall have to put our heads together tomorrow or in the course of today and work out a means of putting that very full and helpful, but not entirely satisfactory, answer into the record so that we have a point from which to move forward when we reach the Report stage.
There will be a few more sets of amendments to deal with and I shall come to one of them in a moment. However, the main problem with which we are having to deal is the hybrid company which is prescribed for the municipal bus companies. It is a Company Act company at one end but controlled by the local authority at the other end, which is in turn controlled as to its capital expenditure by the Department of the Environment, which is in turn controlled by the Treasury. They are not circumstances in which a municipal bus company can operate as a piece of private enterprise in the private sector against full-blooded competition. That is the problem we have to solve.
3.30 p.m.
In these amendments, 211D and E, to Clause 67, I am probing with my noble friends on the Front Bench the question whether or not they see scope for excluding altogether from this Bill some of the smaller bus companies. The smallest bus companies of all in membership of the ADC each ran two buses only; they have decided that to do so is not worth the candle and have abandoned their operations altogether. But there are other bus companies—and my amendment suggests that they are those operating less than 50 buses—which might just as well be exempted from this Bill altogether.
I cannot believe that allowing them to operate will make any serious dent in the structure which the Secretary of State is trying to set up. A threshold of 50 buses would take 13 of the municipal undertakings out of this Bill, and would at any rate make life much easier and more straightforward for them, and do no great harm to the underlying philosophy of the Bill. Only 8 per cent . of all the revenue support from all the districts in England and Wales would be affected by that figure.
The Department of Transport say that a figure in Clause 67 might be something nearer half a dozen or 10. But I think we cannot leave it open to the Secretary of State to make up his mind where to draw the line after the legislation has been enacted. This is the moment to give this topic an airing, and the Report stage is the moment to take a decision so that we all know where we stand.
On Second Reading I indicated that there was a clear difference between the district councils, particularly those with small fleets of buses, and the large metropolitan county councils. If there is a problem of the overrunning of public expenditure, that is where it is occurring; it is certainly not occurring in these small authorities. I hope that this will produce a short debate in which my noble friend on the Front Bench will indicate his thinking and that of his right honourable friends about the scale and size of undertakings which could be excluded, and I hope that it will be nearer 50 than 10. I beg to move.
Lord Tordoff: I want to support the noble Lord, Lord Sandford, on the narrow point he made at the end of his speech in relation to those small municipal undertakings with a limited number of buses. From the information I have received, and from what I have seen in the period I have been touring around the country talking with small municipal undertakings, on the whole these are efficient undertakings. Generally speaking, they are not putting a charge on the ratepayer.
They are often sharing their overheads across a number of other municipal activities. They are providing the service for the customer. They are providing an efficient service which, on the whole, does not need any sort of subsidy. Would it be possible for the Government to find some way of excluding these smaller undertakings? I do not know where the cut-off should come. Fifty is a good round figure, but there are a number in the one to 40 area, and it would be up to the Government to say where the level should be.
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The principle enunciated by the noble Lord, Lord Sandford, is important. There ought to be a degree of flexibility in the area of those municipal undertakings which are quite small but are serving the public in a way in which I am sure the Government as well as the rest of us would wish to see.
Lord Shepherd: In regard to what the noble Lord, Lord Sandford, said of a broader nature, I hope that we shall have another opportunity to discuss the important points he raised. I share his view on what is called the hybrid approach which has been adopted by the Government in regard to these initial companies. It is a recipe for disaster. There is no clarity whatsoever because it is so involved in the normal work of a council and a municipality.
The noble Lord referred to the question—which we shall have to go into in detail—of capital expenditure. There is no way in which these initial companies will ever be able to build up their own reserves in order to purchase their own vehicles. There will have been no commercial judgment. As I see the Bill, all the profits on a yearly basis go into the coffers of the local authority, and when they want capital to replace some of their older vehicles they will have to go to the local authority and stand in the queue with all the other demands on public expenditure of the authority.
I would despair for the poor general manager—or whatever will be the name of the person responsible for operating those companies—in trying to keep those companies in a good state of performance and service to the community. However, I do not think that that is a subject which arises immediately or the amendment.
Initially, I had a good deal of sympathy for the noble Lord putting a figure into the Bill. At the moment it is merely by regulation. So much of this Bill is by regulation, and without any clarity in this Committee as to what the Secretary of State intends to do by regulation. Whether or not the Government accept the amendment of the noble Lord, Lord Sandford, I hope in this narrow issue we shall get from the Minister some indication of what the Secretary of State has in mind for exclusion from the general requirements of this Bill through this particular clause.
We had one company in Devon with some 50 vehicles. It was successful because we did not put on it all the great overheads which a typical commerical company would have. We had only one manager who was really a traffic manager. He purchased all his services including accountancy, engineering and advertising. All the knowledge and expertise available within the group he was able to purchase. But if these companies are set up as we suspect that they ought to be, then these services will have to be bought at market rates.
I suspect with a small company that the overheads per vehicle are more likely to be higher than in bigger companies. But in relation to the private sector, companies with 50 vehicles are fairly large companies. I know many of the small stage carriage private operators which have far fewer than 50 vehicles. If they are to enter into competition, and if the Government persist in their belief that size is important in terms of competition, and fair competition, then 50 would put them into serious advantage against the private independent.

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The only other difficulty I see in putting in a figure is that the Secretary of State would then lose any flexibility in this matter. One of the lessons I have had is that no one bus company, no one bus operation, is ever like another. Fifty vehcicles might be the right figure for exclusion in a particular municipality, township, in the country, yet it will be quite wrong in another.
Therefore my personal belief is that we should look for a statement from the Minister. I hope that he might say that there will not be inflexibility in the way in which orders are made because regard has to be taken of the traffic area in which the company will be operating.
My personal instincts are such that I do not like the figure 50. I think it is too rigid and I should tell the noble Lord, Lord Sandford, that in relation to the private independents it is possibly too big, but in some areas 50 may be right and in other areas a much smaller figure would be desirable.
The Parliamentary Under-Secretary of State for the Armed Forces (Lord Trefgarne): We have already debated the general principles behind the requirements to form companies, and I have put it to your Lordships that there are significant benefits to be had from it. It will give management clear, commercial objectives. It will also make clear that the local authority undertakings are run as free-standing trading bodies, not as a part of the local authority, where they can be readily subsidised.
We accept in principle that, for very small undertakings, the operating benefits of a clear, commercial structure might not be so great, and the arguments for establishing a clearly free-standing company on competition grounds might be less strong. But now that, as I understand it, Aberconwy's undertaking has ceased to trade, the smallest undertakings are, I believe, Islwyn and Taff Ely with 30 buses each. After that there is a steady progression of authorities with fleets of 30, 40, 50 and so on right up to Nottingham with 350 buses.
It is the Government's view that it would be wrong to exclude from the provisions of this part of the Bill undertakings of this size, with turnovers of over £1 million. I think their competitors are likely to agree with that view. I also believe it would be arbitrary to draw a line at a particular figure of, say, 50, when there are so many undertakings of roughly that size. If there is a clear distinction to be made between very small undertakings, which do not compare in size or in importance to the rest of the municipals, then this clause allows the Government to make it. But I have to be frank. We do not at this stage see any reason for an exemption for any of the existing undertakings; the Government feel that it would be wise to retain the power in this clause to make regulations on the matter should they become desirable. But I hope that your Lordships will agree with me that specifying a figure in statute would be too inflexible, and that a figure of 50 is in any event unreasonably high given the benefits which we expect to accrue from the company form.
I must also point out that the amendments would remove the Secretary of State's discretion over the period and the terms of any exemption which was granted would leave no control over the way in which
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the undertaking conducted its business and leave it quite open for the local authority to misuse the privileged position which an exemption would give to the undertaking to the real disadvantage of its competitors.
I hope that your Lordships will see the strength of these arguments and that the amendments would go a long way towards denying passengers in some areas the benefits of commercial management, and competition which the Bill is intended to promote.
I now address myself to the point raised by my noble friend about the desirability of using a direct labour organisation type of arrangement. My noble friend has referred to the fact that any undertaking exempted from the requirement to form a company in these circumstances could nonetheless adopt such a structure and thus compete in the tendering process with other operators. This was an argument which my noble friend put, if I remember rightly, during the course of our discussions on Clause 62. I do not think I may have given my noble friend as full an answer as I should have done on that occasion. The main point is that the undertakings, which we are proposing should be formed into companies, will be competing in open commercial markets with other operators who have the company structure. Unlike direct labour organisations which carry out road works or cleaning services for the council and whose activities consist almost wholly of providing services for their authority—they will be operating in the marketplace like other trading companies. They will, it is true, be providing some services under contract to the authority, and I can see why my noble friend says that it would be possible for them to tender for those in competition with other operators, if they were in the form of DLOs rather than companies. But I believe that their overall position is quite different from that of the direct labour organisations that we have been talking about.
I should also remind your Lordships that the DLO format requires fairly complex rules to be established about the organisations' accounts and rates of return. While I do not say that those do not work, I think that the company format is not only a better format here, but one which is more readily available to us. In short, while it would, I suppose, be possible to achieve financial separation for tendering purposes through a DLO structure, I do not believe that it is the most appropriate solution when the Companies Acts are available. I hope that, in the light of these considerations, my noble friend will not press his amendments.
3.45 p.m.
Lord Sandford: I am most grateful to those who have taken part in this short debate and to my noble friend on the Front Bench. It is helpful now to have on the record the remarks of the Government on what one might call the DLO option. It is true that the regimes which control direct labour organisations when they are competing and tendering in competition with the private sector are complex, but they are familiar to the local authorities and they have stood the test of time; whereas these hybrid companies are anything but familiar and they do not stand the test of close examination.

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I was grateful for the point made by the noble Lord, Lord Tordoff, about the fact that some of these 13 municipal bus companies below the threshhold of 50 manage without any subsidy and five are operating without any subsidy whatever, so the régime into which they are moving will not change from that point of view. I was grateful for what the noble Lord, Lord Shepherd, had to say about the difficulties which the hybrid municipal bus companies will face as regards the capital control to which they are subjected, but perhaps I can keep my powder dry on that until we reach Clause 72 which relates to that matter.
I am grateful to have all this on the record. Perhaps the right thing to aim for when it comes to the authorities which are to be excluded, if any are, and the criteria for judging the nature, size and their situation might best be left to a statement. A statement would be desirable rather than leaving the unfettered discretion of the Secretary of State in the Bill with no indication about how he is to exercise it. As I said at the beginning, these are probing amendments. They have achieved what I hoped they would achieve and I beg leave to withdraw Amendment No. 211D.
Amendment, by leave, withdrawn.
[Amendment No. 211E not moved.]
Clause 67 agreed to.
Clause 68 [The public transport companies and their controlling authorities]:
The Earl of Caithness The Earl of Caithness moved Amendment No. 215A:
Page 70, line 12, leave out ("councils to whom section 63(1) of this Act applies") and insert ("such councils as are referred to in subsection (2) above").
The noble Earl said: At the same time it would be convenient if I spoke also to Amendments Nos. 218B, 218C, 218D, 218E, 223A, 224A, 229B, 229D and 229F:
Amendment No. 218B, Clause 69: Page 71, line 6, at end insert ("or permit any body corporate which is its subsidiary to engage in any such activities").
Amendment No. 218C: Page 71, leave out lines 7 to 9 and insert—
("(b) does not—

(i) borrow money from any person other than the controlling authority; or

(ii) permit any body corporate which is its subsidiary to borrow money from any person other than the company, any other subsidiary of the company, or the controlling authority; with the exception in each case of borrowing by way of temporary loan or overdraft; and").

Amendment No. 218D: Page 71, line 10, after ("not") insert ("(i)").
Amendment No. 218E: Page 71, line 11, at end insert—
("; or
(ii) permit any body corporate which is its subsidiary to raise money by the issue of shares or stock to any person other than the company.").
Amendment No. 223A: Clause 71, page 74, leave out lines 12 and 13 and insert ("such shares or other securities").
Amendment No. 224A: Page 74, line 18, leave out from beginning to ("which") in line 20 and insert—

("(a) the disposal by that company of the whole of that company's undertaking;

(b) any disposal by that company of any shares in or other securities of a body corporate which is that company's subsidiary; or

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(c) any disposal by that company of any part of that company's undertaking, or of any assets of that company (other than shares or securities within paragraph (b) above)").

Amendment No. 229B: Clause 72, page 75, line 41, leave out ("wholly-owned").
Amendment No. 229D: Clause 73, page 76, line 21, leave out ("wholly-owned").
Amendment No. 229F: Clause 74, page 76, leave out line 27 and insert (", or with any subsidiary of an associated company, for the provision by that Executive or council for that company or (as the case may be) for that subsidiary").
These amendments bring the subsidiaries of public transport companies within the scope of Clauses 69, 71, 72, 73 and 74 and make related drafting amendments. It would clearly be illogical for these provisions to apply in relation to public transport companies and not apply to any subsidiaries of those companies. These amendments put right that inconsistency. I beg to move.
On Question, amendment agreed to.
Clause 68, as amended, agreed to.
Clause 69 [Control over constitution and activities of public transport companies]:
The Earl of Caithness The Earl of Caithness moved Amendments Nos. 217A and 217B:
[Printed 18/7/85; col. 978.]
The noble Earl said: I beg to move Amendment No. 217A and 217B together. I spoke to them at the last Sitting with Amendment No. 211CM. I beg to move.
On Question, amendments agreed to.
Following is the text of the amendments (Nos. 217A and 217B):
Page 70, leave out lines 33 to 35 and insert—
("(2) Following the transfer to a public transport company of its initial undertaking,")
Page 70, line 41, at end insert—
("The reference above in this subsection to the transfer to a public transport company of its initial undertaking is a reference, in relation to any such company, to the transfer or (if more than one) the first transfer of property, rights and liabilities to that company under section 58(7), 60(10), 64(7) or 66(2) of this Act.")
The Earl of Caithness The Earl of Caithness moved Amendment No. 217C:
Page 71, line 1, at beginning insert ("Subject to subsection (5) below").
The noble Earl said: I beg to move Amendment No. 217C and at the same time speak to Amendments Nos. 218A, 219A and 219B.
Amendment No. 218A: Page 71, line 4, leave out ("other than transferred activities").
Amendment No. 219A: Page 71, line 17, leave out ("other than transferred activities").
Amendment No. 219B: Page 71, line 22, leave out subsection (5) and insert—
("(5) Subsection (3)(a) above shall not apply—

(a) in the case of a public transport company whose controlling authority are the Passenger Transport Authority for any passenger transport area, in relation to activities within the powers of the Executive for that area or activities which were formerly within those powers but have ceased to be so by virtue of any order made under section 59 of this Act;

(b) in the case of a public transport company within section 68(1)(c) of this Act, in relation to activities which were

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formerly within the powers of the council who formed or of any council who participated in forming that company, but have ceased to be so by virtue of section 62(1) of this Act.")

This is a group of amendments which corrects a technical defect in Clause 69. I beg to move.
Lord Shepherd: I accept that it is a technical amendment but could the noble Earl explain in what way it is technical and what was at fault in the Bill originally?
The Earl of Caithness: I should be very happy to do so. One of the intentions behind Clause 69 is to require the controlling authority to exercise control over its public transport company so that the company does not engage in activities which the controlling authority had no powers to engage in before it set up the company. As drafted, however, a public transport company would not be able to engage in any activity which its parent authority had had powers to engage in but had not carried out. We believe that this would be unduly restrictive on the public transport companies, and the amendments put the situation correctly. I hope that that satisfies the noble Lord, Lord Shepherd, and I am grateful to him for giving me the opportunity to explain them.
On Question, amendment agreed to.
Lord Sandford Lord Sandford moved Amendment No. 218:
Page 71, line 4, leave out paragraph (a).
The noble Lord said: I beg to move Amendment No. 218 on behalf of my noble friend Lady Vickers and at the same time to speak to Amendment No. 219.
Amendment No. 219: Page 71, leave out lines 17 to 19.
It may be that, depending upon how the amendment goes, this will save me from speaking on Clause 69 stand part. This is a clause which, following the earlier ones that prescribed that the district council municipal bus company should form a Companies Act company which, generally speaking, then is free in the private sector to operate and to govern by its own memorandum and articles, having, as it were, given a municipal bus company freedom with that hand, it takes it all away again with Clause 69 where it lays down in great detail the way in which the new-found freedom of the municipal company is to be constrained, curbed and confined by the control of the local authority.
My noble friend's amendment has the limited effect of questioning—and this is only a probing amendment—why it is really necessary for the local authority to control its company and prevent it from diversifying its activities. It is surely one of the guiding principles of operating the private sector that the managers should all the time be ensuring that all their assets, capital and labour, are fully engaged and are being used to full effect. Therefore, if, for instance, one of these new municipal bus companies finds that in order to meet the peak demands of its operation, the early morning, the late evening, the rush hour, and so on, it has spare capacity in, say, its garages, why should it not engage or be free to engage in servicing other people's vehicles, lorries, other buses belonging to other companies, and so on?
I cannot see for the life of me—or, presumably, my noble friend cannot see for the life of her—why this should not be allowed. If in answering that particular point my noble friend on the Front Bench would like to try to justify the rather wider range of controls that are provided for in this clause, it may well be that we do not have to have a separate debate on Clause 69. I do not know whether that is a convenient way for the rest of the Committee to approach the matter, but I should like to have a short examination of why all these controls are necessary once a private company is set up under the Companies Act, presumably to give it the freedom that is implied by that and then all that freedom is taken away in the clauses and subsections in this part of the Bill. I beg to move.
The Chairman of Committees (Lord Aberdare): If this amendment is agreed to, I cannot call Amendments Nos. 218A or 218B.
Lord Teviot: There is one point that I should like to raise in support of this amendment. My noble friend mentioned the fact that the peak services may provide spare capacity for maintenance. I should like to mention to him that on occasions, especially in the resorts on the coast and other places, accommodation can very usefully be acquired by private coach excursions coming in, thus keeping the vehicles away from the major car parks. Those depots could perhaps be used for garaging the coaches before they return home in the evening. I should like to ask my noble friend whether this amendment could accommodate that? If so, it would give it very much more thrust.
Lord Sandford: My noble friend is quite right. The Great Yarmouth Bus Company, with a total of 50 buses exactly, requires 24 of those at peak periods in the winter and 32 in the summer; so, at various times and seasons, there is a very considerable amount of spare capacity and it surely makes sense to use it to the full. In fact, if you do not use it to the full I cannot see how you can possibly compete in full-blooded competition.
The Earl of Caithness: I have listened very carefully to the argument which has been so well advanced by my noble friend; but, if I may say so, I think he may have given the Committee the impression—and I certainly had the impression from what he said—that the limitation on a public transport company's powers would be tighter and more significant than is the case. First of all, let me say that I think it is entirely right that, as long as the company is controlled by the local authority, it should not be allowed to diversify into completely new activities which are beyond the authority's own powers. We could not have companies effectively used as a means of extending the authority's own activities into areas which are quite beyond the proper scope of the public sector.
If a local authority want a company to diversify into something quite unrelated to its main business and quite beyond the authority's own power, such as general engineering or, say, the sale of clothes, they are free, if they would like to do so, to privatise it by divesting themselves of control. Then the company

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would be able to diversify as much as it likes subject only to the directors being able to carry the shareholders with them.
I think the Committee will agree that we should not have unlimited extension of its trading while it is in the public sector. I do not think that we need be concerned that this restriction will prevent the company from operating commercially or using the assets in its business to the full. May I remind the Committee that the previous amendment, which was agreed to, specifically extended the powers in the Bill in order to permit the companies to do things which the local authority are empowered to do but have not taken up as yet.
By virtue of Section 111 of the Local Government Act 1972 and the equivalent provision in Scotland which is Section 69 of the Local Government (Scotland) Act 1973, a local authority has the power to do anything which is calculated to facilitate or is conducive to or incidental to the discharge of any of their functions; and many bus undertakings now engage in such activities. My noble friend Lord Sandford mentioned the case of a garage. This could apply to Strathclyde, as the noble Lord, Lord Carmichael, will appreciate, with their garage at Cathcart. If it is incidental to their business, of course, they can hire it out, which they do at the moment. This Bill in no way prevents that. I think on the point raised by my noble friend Lord Teviot that if it is incidental to their running of the business, such action is not forbidden.
Clause 63(1), which defines the purposes for which the companies may be formed, will not prevent them from taking full benefit from that. It means that the company will have the proper freedom to turn its assets to account as bus undertakings now have. Engineering capacity which was needed for the main activities could be used at the margin to maintain private vehicles. The company could even provide a catering service as part of its business. So I find it difficult to accept that the provisions of this subsection will be a significant commercial restraint on the company. It will have some effect but I do not believe it will prevent the company from competing perfectly well. I hope that reply satisfies my noble friend Lord Sandford. I believe his fears are misplaced. I think this is an unnecessary amendment and I hope that what I have said also deals with his general worries about Clause 69.
Lord Sandford: I am grateful for what my noble friend has said. I shall read his reply with interest and make sure that our lawyers look at it. However, it surprises me very much indeed to hear that the servicing of private sector vehicles—lorries belonging to private companies—has ever been or could ever be construed to be an activity in which a local district council is allowed to engage. In that case I really do not see by what authority it could do that, given Clause 69(3)(a). However, as I say, I will see that what my noble friend has just said is carefully studied, and if he is right it is the case that our anxieties have no justification. But I should be rather surprised if we find that to be so. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Skelmersdale: I think this is a convenient moment for us to take the first Statement. I therefore beg to move that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

The Popplewell Inquiry
4.2 p.m.
The Parliamentary Under-Secretary of State, Home Office (Lord Glenarthur): My Lords, with the leave of the House, I shall now repeat a Statement about the interim report of the Popplewell Inquiry which is now being made in another place by my right honourable friend the Home Secretary. The Statement is as follows:
"With permission, Mr. Speaker, I should like to make a Statement. The Government have today published the interim report of the inquiry into safety and control at sports grounds under the chairmanship of Mr. Justice Popplewell, established following the tragic fire at Bradford City football ground and the events at Birmingham City on 11th May. My right honurable friend the Secretary of State for Scotland and I are both deeply grateful for the speedy, clear and thorough way in which the chairman and his two assessors have tackled this difficult and important task.
"The inquiry concludes that the Bradford fire was probably caused by the accidental dropping of a lighted match or cigarette or tobacco on to accumulated rubbish below the stand; that had the Guide to Safety at Sports Grounds (the 'Green Guide') been complied with, the tragedy would not have occurred and that the not at Birmingham—which the police could not reasonably have foreseen—was caused by spectators bent from the outset on violence. No one reading the report, or who followed the public hearings in Bradford, can doubt that the inquiry has investigated these matters as thoroughly as possible.
"The inquiry makes 32 recommendations, eight of which are provisional. They fall into two groups: those concerned with safety and those concerned with control. I am making available separately a written Statement dealing with each of the recommendations.
"The safety recommendations include a number designed to improve arrangements at sports grounds by, for example, improving evacuation procedures, the training of stewards, the provision of fire-fighting equipment and increasing the scope of safety certificates. In all these cases the Government will be inviting the local authorities, the police and the sports authorities to respond immediately to the spirit of the recommendations. The Government will issue a fresh edition of the Guide to Safety at Sports Grounds, the 'Green Guide,' in the light of the inquiry's final report. But they will also ask certificating authorities and the police in exercising their powers to take full account of the recommendations for amending the 'Green Guide' before the issue of the new edition of the 'Green Guide'.

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"So far as crowd control is concerned, the inquiry has made a number of important recommendations concerning membership cards and closed circuit television, the creation of new criminal offences relating to smoke bombs and the throwing of missiles and the need for a more suitable police radio.
"On membership cards, the inquiry recommends that urgent consideration be given by football clubs in England and Wales to introducing a membership system so as to exclude visiting fans. Also recommended is that closed circuit television be introduced at league football grounds. The Government strongly support the television recommendation and have also already made clear their support for a scheme of membership cards to help exclude troublemakers. A Football League working party is looking at the options and I would urge both the league and the Football Association to take heed of the recommendations of the inquiry by seeking jointly to reach positive conclusions at the earliest practicable date.
"It is also proposed that new offences should be created, making criminal the possession of smoke bombs in football grounds and the throwing of missiles. This proposal will be carefully considered for possible inclusion in the public order legislation which the Government hope to bring forward next Session. The Directorate of Telecommunications at the Home Office will also consider, as a matter of urgency, how best to meet the concern expressed about the personal police radios used at Bradford.
"In its provisional conclusions the inquiry indicates that it is minded to recommend changes to the provisions of the Fire Precautions and Safety at Sports Grounds Acts; that the police be given additional powers of search and arrest; and that consideration be given to the creation of a specific offence of chanting obscene or racialist abuse at a sports ground. We shall of course consider with care any recommendations which the inquiry makes on these and other points in the final report.
"I hope it will also be convenient for me to bring the House up to date on matters relating to safety and control since my Statement on 13th May. First, under the Safety at Sports Grounds Act I have designated all the qualifying grounds of clubs in Divisions 3 and 4 in the Football League in England and Wales, as well as in Divisions 1 and 2 of the Rugby League. The necessary orders were laid on 19th July and come into force on 9th August. From the latter date clubs will be required to apply for safety certificates before admitting any spectators. I have made it clear to the certifying authorities that the expectation is that they will work swiftly, normally by means of issuing interim certificates. In some cases the best way of providing immediate protection—while also reducing the costs of implementation—may well be to restrict attendance ceilings in grounds or parts of grounds.
"My right honourable friend the Secretary of State for Scotland has decided for his part not to proceed at present by extending designation in Scotland beyond its existing limits. However, he has arranged for all non-designated clubs and all
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governing bodies in sport in Scotland to conduct an urgent review of ground safety in co-operation with their local fire authorities.
"Secondly, all uncertificated grounds of the Third and Fourth Divisions of the Football League, of the First and Second Divisions of the Scottish Football League and of the First and Second Divisions of the Rugby League have been inspected as a result of the request that I and my right honourable friend made to Chief Fire Officers and Firemasters. In addition, accommodation for spectators at the larger cricket grounds, rugby union grounds, race courses, motor racing tracks, greyhound tracks, tennis clubs and athletics grounds has been inspected.
"Chief Fire Officers and Firemasters have sent copies of their findings to the management of the sports grounds indicating what remedial measures have to be taken. In some cases this will involve the complete closure of a stand until rebuilding or remedial work has been completed: in other cases strict limits are being placed on the number of spectators allowed into the stand. My honourable friend the Minister of Sport will be looking further at the financial implications with the interests concerned in his working group on the financing of safety improvements.
"Managements have responded in a co-operative way and have either set necessary work in hand or are considering how to comply with the requirements. Local authorities and local fire authorities have sufficient statutory powers to ensure that essential fire safety requirements are complied with. These will in no way be affected by the separate proposals directed towards streamlining the present law on fire precautions published yesterday in a consultative document and which I am inviting the inquiry also to consider in the context of their work.
"My right honourable friend the Secretary of State for Scotland and I are grateful to Chief Fire Officers and Firemasters for the prompt, efficient and careful manner in which this survey has been carried out. A digest of the reports will be submitted to the inquiry.
"Thirdly, the House will of course be aware of the rapid passage through both Houses of the Sporting Events (Control of Alcohol etc.) Bill. It will be in force by the beginning of the football season.
"Fourthly, steps have also been taken to enhance police effectiveness next season. In England and Wales the Association of Chief Police Officers has introduced a new system for exchanging information about the conduct of fans which should assist in anticipating and preventing trouble. Three of the Home Office photographic vehicles will be available to be deployed at football matches, together with two experimental high-definition tripod-mounted cameras. This is in addition to the £500,000 worth of closed circuit television equipment purchased through funds provided by the Football Trust.
"Fifthly, my honourable friend the Minister for Sport has helped to promote and draw up a Council of Europe Convention on Spectator Violence which was adopted by the Council of Europe Committee of Ministers yesterday.

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"There is no single, simple method of making sports grounds safe and free from violence, but I believe that the steps taken in the last few months, coupled with the implementation of the important recommendations of Mr. Justice Popplewell's inquiry, have already made and will make a significant contribution towards preserving football as a major spectator sport."
My Lords, that concludes the Statement.
Lord Mishcon: My Lords, the House will, as usual, be grateful to the noble Lord, Lord Glenarthur, for repeating the Statement made by his right honourable friend the Secretary of State in another place.
Mr. Justice Popplewell was appointed to conduct this important inquiry on 13th May, and here is an interim report published today, just over two months later. We on these Benches would like to associate ourselves with the expression of gratitude to the learned judge, to the assessors and to those who assisted him generally in regard to this report, for the speed with which it is before us. Those who have been able to read it will, I think, want to add to those words of gratitude appreciation for the clarity and thoroughness of this interim report. Somewhat plaintively in the introduction Mr. Justice Popplewell says:
"Even for High Court Judges there are only 24 hours in a day".
In the course of this interim report Mr. Justice Popplewell pays tribute to the heroism among all sorts of people at the Bradford tragedy. My first question to the noble Lord the Minister is: has liability been admitted by anyone to compensate the victims, or the families of victims, for what occurred on this tragic day? And if liability has not been admitted, have the Government any plan to pay compensation to cover what may be the urgent needs of some of those involved in this tragedy?
4.15 p.m.
I was a little surprised that one important element of this report was not mentioned in the Statement, although there is an oblique reference to a provisional recommendation that there should be some criminal offence put on to our statute book where abuse and racial remarks and obscenities are uttered at a football match. There is a section on political activities. I ask for the patience of the House, because of the importance of this matter, if I read the two short paragraphs involved. They are paragraphs 5.5 and 5.6 on page 39 of the report:
"There is a good deal of evidence from responsible witnesses that political activists are involved in troubles at football grounds in England, although it seems not to be a problem in Scotland. To some extent grounds are used for recruiting for these political activists. There were found on the Birmingham ground a number of leaflets belonging to the National Front. One fan—who for obvious reasons shall be nameless—said: 'Quite early on in the game I heard a rumpus behind me in the seats and turned to see two policemen escorting a teenage Pakistani youth from the stand onto the back of the stand. As this was going on I could hear about 50 of the Leeds fans chanting "Sieg Heil, Sieg Heil". They were standing up with a Nazi salute aimed towards the police. I could see that several people near me were wearing Nazi armbands, mainly teenagers, there were a few skin-heads among them. The arm-bands were with a red background, white circle and a black swastika in the middle.'
A transit van returning to Leeds after the Birmingham incident was seen to be carrying Leeds supporters, sporting swastika armbands. Sociological research on the activities of the politically far
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right at football matches suggests that many young fans who espouse racist views, or who join in racist chants, have little real idea of the politics of groups like the National Front and the British Movement. I shall need to inquire more deeply in due course into this aspect."
That concludes the quotation which I thought I ought to make to your Lordships in view of the obvious importance of it. One hopes that when the final report comes out, and the final thoughts of Mr. Justice Popplewell and his recommendations on this matter, it will certainly have the attention of Parliament.
That brings me to the recommendation about missiles, which seems to go a little further than the definition of "container" with which we were dealing in the recent Bill that we passed through so swiftly to try to deal with these matters. Your Lordships will no doubt agree with me when I say that if these matters are to be dealt with in a public order Bill—and I should like the Minister, if he would, to confirm that this is the intention of the Government—one would hope that that public order Bill will have some legislative priority in the next Session of Parliament.
Your Lordships will be interested to know, because of the Bill that went through this House with great speed, that Mr. Justice Popplewell, in the course of his report, at page 39, paragraph 5.2, says that no doubt drink made a substantial contribution to the violence which took place. I know that your Lordships will hope that the Bill that we passed so rapidly through this House, and which went through another place and is now on the statute book, will help considerably in regard to these matters, although all of us knew that it would not by any means be a panacea.
One noted the reference to the membership scheme. I merely ask the noble Lord the Minister if, in replying, he will in his courtesy say whether he really thinks, from the discussions that have taken place with football clubs and their representatives, that this is a practical solution or even a practical scheme. Limited progress appears to have been made on the all-important matter of universal circuit television. There is no doubt that, from the point of view of detection, prevention and evidence hereafter of who was responsible for violence, this is one of the most important matters that is dealt with in this report and it ought to be carried out.
I have two points in conclusion. The Statement refers most importantly to the fact that,
"the Minister for Sport has helped to promote and draw up a Council of Europe Convention on Spectator Violence which was adopted by the Council of Europe Committee of Ministers yesterday."
Can the Minister tell us, in general terms, what that convention was all about, and what it covers? I am sure that we shall be very interested. Finally, all this is all very well. Safety on football grounds we want. Prevention of violence we want. Prohibitions against all sorts of things and construction of all sorts of things, as recommended, we want. But are the Government prepared to put money behind what is such an essential recommendation as this report makes in regard to safety on football grounds?
Lord Wigoder: My Lords, we too are grateful to the noble Lord, Lord Glenarthur, for repeating this Statement, and, of course, to Mr. Justice Popplewell for an extremely thorough interim report which has

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managed to be both rapid and not hasty. The Statement that we have heard today is lengthy. It is coupled with the Government's response to the recommendations on several other sheets of paper. Unusually for a ministerial Statement, we have also had the report itself available in full for some hours today. That means that there is an enormous amount that one might be tempted to cover this afternoon. It would be easy to exceed the acceptable limits of response to a ministerial Statement, and indeed it would be easy to exceed the unacceptable limits also.
The report is divided into two quite separate sections, because it deals with two quite separate matters. As to the Bradford fire disaster, the proposals that are made there are quite clearly constructive and will no doubt meet with rapid and ready acceptance. I say that subject only to the point just made by the noble Lord, Lord Mishcon. Are the Government aware that implementing those recommendations will be an immense financial burden on many clubs, particularly the smaller ones? It would perhaps be unrealistic to ask the Government to provide much in the way of the necessary funds, particularly when all their funds are at the moment obviously committed to implementing the report of the Top Salaries Review Body.
The real issue is this. Do the Government accept that funds will be required by the clubs, and therefore that it is crucially important that the Government should not take steps to diminish the revenue upon which clubs have come to rely, unless it is absolutely necessary? This is an issue which we dealt with many times in the last few days when we were dealing with the Sporting Events (Control of Alcohol etc.) Bill.
As to the Birmingham aspect of this report, there is one perhaps inadvertent omission which I know the noble Lord, Lord Glenarthur, can remedy without difficulty. It does not disclose the date on which the report was submitted to the Home Office. Perhaps the noble Lord could help us about that, because if by any chance it was before 17th July, last Thursday, when we were debating the Sporting Events (Control of Alcohol etc.) Bill, the information in this report would indeed have been of very great assistance to us in the course of those discussions. That is because, first, this report makes clear that those of us who were arguing that it is not the sale of alcohol at the ground which is the problem, would have found very considerable support; and, secondly, because it makes clear that those of us who were arguing—and the noble Lord, Lord Mishcon, has drawn attention to the passage—that there are many sober hooligans who are the real ringleaders of this violence, would also have found their argument much assisted had the report been available.
As to the public order Act which is promised, if that is the right word, or threatened for the new Session, can the noble Lord, Lord Glenarthur, indicate that it will be wide enough to consider and encompass within itself all the various proposals that Mr. Justice Popplewell makes for amendment of the criminal law, including the amendment that my noble friend Lord Harris of Greenwich urged upon us last week to deal with making criminal offence the invasion of any sporting ground?
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The last matter to which I wish to refer is perhaps in some ways the most complicated and the most controversial in this report; that is, the recommendation that there should be membership cards or identity cards issued to football supporters. The ministerial Statement says that the Government have,
"made clear their support for a scheme of membership cards to help exclude trouble makers".
That, I think, is not really the object of Mr. Justice Popplewell's proposal. The way Mr. Justice Popplewell puts it, as I understand it, is that the only way to eliminate violence at football matches is to limit the attendance to the home supporters only, and that the only way to limit the attendance to home supporters only is to issue home supporters with a membership card or an identity card, so that admission to the ground can be limited in that way.
Do the Government accept that this is a quite draconian proposal? It may be that we shall have to come to it, but it would be helpful if the Government would at least say that it would be the very last resort in their efforts to deal with the real problem. The noble Lord, Lord Glenarthur, finished the ministerial Statement with the words that the Government wanted to make,
"a significant contribution towards preserving football as a major spectator sport".
But I am sure he will agree that it would be an unattractive solution if we could do that only by eliminating the spectators.
Lord Glenarthur: My Lords, I am grateful to both noble Lords for their comments about the Statement, and I am certainly grateful to the noble Lord, Lord Mishcon, for his tribute to Mr. Justice Popplewell and to those who helped him produce the report in such good time. Also, I entirely share his views, which have been expressed before, about the heroism which was shown by so many at the time of the fire. May I just clear up one point that the noble Lord, Lord Wigoder, asked about early on, concerning the date when the report was received. It was received late on 19th July, which answers that point.
The noble Lord, Lord Mishcon, was concerned about liability and costs. Individuals wishing to claim compensation was the theme of his question. It is, as I think he will expect, a civil matter for individuals. Liability has not, so far as I have been able to ascertain, been admitted by anybody. Individuals could, of course, take it up with the courts, so far as ownership of the Bradford Football Club and general responsibility are concerned. But as regards Government assistance, because it is a matter for civil action there is not a lot that can necessarily be done. But I have to remind the noble Lord that the Government have already given £¼ million to the Lord Mayor's Fund, which I believe is now in excess of £2 million—I do not have the precise figure—and that has helped enormously.
4.30 p.m.
I note the noble Lord's concern about racial abuse. It is difficult to measure the effect of the presence of political extremists on the level of crowd violence but we do not rule out the possibility that this is a contributory factor. Certainly, anyone with any

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evidence of political extremists inciting or organising violence at football matches should draw it to the attention of the police. I understand that the Football League is taking action through its ground regulations to prevent the distribution or sale of literature. In his interim report Mr. Justice Popplewell raised the possibility that it might be made an offence to chant obscene or racialist abuse at sports grounds. The Government will certainly consider any recommendation which he makes in the final report, and of course will stand by to assist the inquiry in its further consideration of this aspect.
The noble Lord, Lord Mishcon, was also concerned with missiles. No one doubts the growing menace presented by hooligans hurling missiles, and we take very seriously any suggestion that there may be gaps in the law. To the extent that there are problems of proving intent, this should be remedied by the statutory redefinitions of the public order offences which are proposed in the Government's review of public order law. If there are still gaps in the law, naturally we shall consider further amendments to ensure that missile throwers do not escape prosecution. For the moment it seems more likely that this is primarily a problem of detection and enforcement rather than of any deficiency in the law. Of course throwing a missile anyway could to some extent be caught by existing legislation.
While I am on the subject of public order law it might be helpful if I tell both the noble Lord, Lord Wigoder, and the noble Lord, Lord Mishcon, that while in regard to intent to bring forward that legislation I cannot anticipate the Queen's Speech, we hope that it will come forward with the urgency which I know your Lordships desire.
Membership cards are, I know, a matter which concerns many. The Government regret that speedier progress has not been made on the introduction of a membership card system by the football authorities. I have to say that. The noble Lord, Lord Wigoder, is concerned about practicability, but the Football League has recently established a working party to consider the options and that working party will report early in September. The Government certainly welcome that development and urge the Football League and the Football Association to make rapid progress. We are content that this matter is being taken seriously.
The difficulties which the noble Lord, Lord Wigoder, put forward are of course all bound up with the very real difficulty that football is in if the violence which we have seen is allowed to continue. Obviously the matter must be looked at with very great care. I believe that it is best looked at within the forum to which I have referred. Mr. Justice Popplewell makes it clear in his report that the current conditions cannot continue. We must all be aware that it is a great shame that decent supporters should have to suffer as a result of the firm but necessary measures which have been introduced to tackle the problem. I do not see any way in which the serious suggestions which have been put forward with such care by Mr. Justice Popplewell should not be seriously considered.
On the matter of the Council of Europe Conventions, the noble Lord, Lord Mishcon, asked
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what they all contained. I can say that as soon as an authenticated text is available—I regret that there is not one at the moment—a copy will be placed in the Library of the House. The convention was formally adopted by the Committee of Ministers yesterday and will be open for signature on 19th August. The secretariat is confident that an authenticated text can be prepared by then.
Lord Mishcon: My Lords, will the noble Lord the Minister in his kindness give way? Let me make it very clear that I gave him no notice of that question, and I apologise for it. It occurred to me almost while I was on my feet. I wonder whether he can give the House just a general idea of what the convention provides. If he cannot, I shall accept it immediately. If he finds that that is not a possibility we shall obviously wait to see the authenticated version in the Library.
Lord Glenarthur: My Lords, what I can say is that my noble friend Lord Elton listed the features of the convention in a Written Answer to a Question from my noble friend Lord Campbell of Alloway on 5th July. It is in the Official Report at columns 1471 and 1472. It is quite long and I do not think I can easily read it out now.
Lord Mishcon: My Lords, I am much obliged.
Lord Glenarthur: My Lords, we turn now to the issue of expense, which seemed to be very much the theme of the understandable concern of the noble Lord, Lord Wigoder. The financial implications of safety improvement work are being considered by the working group which was set up by my right honourable friend the Prime Minister following the Bradford tragedy. This committee is chaired by my honourable friend the Minister for Sport. A preliminary estimate of work required at newly designated Third and Fourth Division football clubs has been produced by the Football Grounds Improvement Trust. The working group will now need to consider the implications arising out of Mr. Justice Popplewell's interim report and also the chief fire officer's inspections. Until those components have been taken fully into account, it is too early to consider how much and from what source funding might be available. But I am sure your Lordships will bear in mind that it is the responsibility of football clubs, or for that matter organisers of any event, to ensure proper spectator or audience arrangements within their grounds, within cinemas or whatever they may be. This is in common with so many different parts of our world of entertainment. To mitigate the effects, clubs can always accept a lower spectator ceiling based on average attendances, rather than the full or very full attendances which they might have on special occasions. That should help to a very large degree.
I may have missed out one concern of the noble Lord, Lord Mishcon, on the specific offence of throwing a missile at a sports ground. This matter will be looked at urgently in connection with the anticipated public order legislation. I think I mentioned it earlier, but it raises one or two difficulties because one is dealing with sports grounds on some occasions where people do throw missiles. I mean that in all seriousness, because if one attempts to define it

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too narrowly one finds all sorts of difficulties associated with, for example, the discus and even cricket balls.
Those are the answers to the main points that have been raised. I acknowledge the concern of the noble Lord, Lord Wigoder, about finance, but on the other hand, I think that the measures which exist in other forms of entertainment adequately meet many of those concerns. But naturally we shall have to look at the situation as time goes on.
Lord Harmar-Nicholls: My Lords, is my noble friend aware that everyone would commend both Mr. Justice Popplewell and the Government for the way in which they have reacted over recent months to the happenings which carry so much danger?
I was very relieved to hear the last part of the Statement, on the question of finance. We have to be a little careful in this respect. I rather interpreted the words of the noble Lord, Lord Mishcon, to hint, at any rate, that perhaps there should be Government money spent on dealing with the safety aspects of these important matters. I was relieved that my noble friend was aware that there are many other institutions—theatres, dance halls, hotels and restaurants—all of which are put to considerable expense as a result of the fire officer's recommendations, very properly given, but which add to the expense. If for some reason Government grant is given to football grounds and not to the others it would carry with it an element of unfairness, which would be resented and perhaps create a great deal of trouble.
With that in mind, I hope that my noble friend can look again at his answer to the noble Lord, Lord Wigoder, who referred to the Bill on the restriction of alcohol and to the orders which will be coming into operation in August. The noble Lord suggested that if by bringing in restrictions we are interfering with football clubs getting the money to look after their own safety needs, that would be wrong. Can my noble friend give an assurance that the Government will be flexible and, if they find that there is no need for rigidity, which we ought to start off with, they will relax it so that the clubs can look after themselves?
Lord Glenarthur: My Lords, I note my noble friend's concern. On the question of fire safety, there might well be an element of unfairness and I am grateful to him for pointing that out. On the question of alcohol at football grounds, we have been over this subject and we must give it time to work. As I said when the Bill was going through this House, we shall look at the effect it has on football clubs—and no doubt that effect will become apparent very quickly—when we come to consider public order legislation. I cannot go beyond that now.
Lord Denham: My Lords, I note that the noble Lord, Lord Dean, is trying to rise to his feet, but we have been 39 minutes on this Statement.
Lord Dean of Beswick: My Lords, I have to tell the Government Chief Whip that there has been only one Back Bencher to question the Minister and he was from the other side.
Lord Wigoder: My Lords, I think we were 32 minutes on the Statement and the responses from the Front Benches.
Lord Denham: My Lords, I must apologise; it shows the danger of coming in and, without having been here, then looking at the clock. Of course I am in the hands of the House. The feeling of the House is clearly that we have not quite finished on this Statement, so I apologise for my early intervention.
Lord Dean of Beswick: My Lords, first may I, too, express my appreciation to Mr. Justice Popplewell for the speed with which the report has come forward.
I hope the noble Lord will forgive me if I speak for a few minutes on Leeds United because a major part of this report relates to the incident at the match at Birmingham on 11th May. The report refers to Leeds fans travelling wearing swastikas. My noble friend Lord Mishcon also referred to this. The suggestion is that these were authorised bona fide fans of Leeds United Football Club.
I must tell your Lordships that Leeds United has a director, Mr. Maxwell Holmes, who is charged with trying to eliminate vandalism and thuggery from that club. In fact, Leeds United has spent over £200,000 in installing some of the very measures that the report calls for, such as television and various forms of crowd control. Whenever Leeds United travels away this gentleman goes to the home club a week beforehand to discuss with the club, and with the chief of police if necessary, what measures they wish the Leeds United Football Club to take in order to eliminate this awful vandalism and thuggery. Therefore, when one has reference to people wearing swastikas, one has to be a little careful as to who they really are.
We should question the Minister a little more on this problem and on the suggestion from Mr. Justice Popplewell about introducing membership cards. The report quite clearly states that:
"Urgent consideration should be given to introducing a membership system in England and Wales so as to exclude visiting fans."
That is quite clear. I should like to put a question in that respect. It is not a hypothesis; it could happen. I live in Leeds, but if I am a supporter of any football club, it is Manchester City. On Sunday a football match is taking place in Leeds between the veteran English team that won the World Cup and the old German team. It is a charity match in aid of the Bradford disaster. I have been invited. If the proposal in the report is followed through, would I be allowed to go to that match? That matter has not been thought through.
The report refers to racialist chanting. I must bring to the attention of noble Lords present that one of the worst features of the cricket season so far on certain grounds has been the racialist chanting and there has been much open comment about it. The Bill itself—which covers a part of what this report is about—states quite clearly that the measures can be extended to all other forms of sport. The report refers even to indoor sports and suggests that where there are 5,000 or more spectators that should eventually be embraced within the legislation.

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Are we as a nation going to accept such draconian proposals when it could mean, ultimately, that anyone in this country who wants to attend a spectator sport where more than 5,000 people are gathered will have to carry an identity card? I do not know of any way of killing a sport quicker than that. That is one idea in regard to which the practicalities are enormous, and it ought to be forgotten about.
Finally, I say this. Obviously there will be further legislation to deal with this problem. This is an interim report and we have had it for only a short time. There has not been sufficient time for us to digest it properly. Therefore I ask that, when the final report is completed, the Minister gives us an opportunity to debate it and to pass an opinion on it, because of what is involved for the people of this country.
4.45 p.m.
Lord Glenarthur: My Lords, I certainly note the noble Lord's concern. The question of a debate is a matter for the usual channels, not for me. The final report will come out in due course.
I realise that the noble Lord is concerned, and his is a concern which has been fairly widely expressed. The noble Lord will be aware that in the past certain clubs have attempted to introduce their own schemes to try to deal with the problems caused, in some cases, by away spectators. Certainly Mr. Justice Popplewell's suggestions go a long way, and perhaps rather further than some of the other suggestions which have been made. While being aware that we must take careful note of those considerations—and they are very much in the melting pot at the moment—and in view of the need to prevent this violence by excluding trouble makers, all I can say to the noble Lord is that the concerns which he expresses will be borne in mind.
Lord Harris of Greenwich: My Lords, may I ask one question directly on the point put by the noble Lord, Lord Dean of Beswick, relating to the membership card scheme? A moment ago, my noble friend Lord Wigoder said that, as we understood it, when this idea was propounded by the Government it was directed towards keeping out trouble makers. Is the noble Lord aware, as the noble Lord, Lord Dean, pointed out, that Mr. Justice Popplewell is going far further by excluding all visiting fans? Is he further aware that in the summary of recommendations which has been distributed by the Government this afternoon the Government say that this is a matter for the football authorities and clubs, but that the Government hope that they will be given serious consideration? Is that a neutral statement, or does it imply that the Government believe that such a scheme should be enforced? As my noble friend pointed out, it would have substantial consequences for English football, and in the view of many it would go much too far.
May I ask a second question relating to paragraph 6.60 of the report? There Mr. Justice Popplewell makes a statement which has far wider implications than the simple problem of violence on the terraces. He says:
"When people in responsible positions in public life fail to condemn violence against the police whenever it happens or worse
1230
still actually condone it, it does little to lead the young to believe that throwing pieces of concrete or other missiles at the police is other than a pretty harmless exercise".
Is he aware that many of us regard that as a wholly justified observation, which I hope will be borne in mind by all those who are involved in public life in the country?
Lord Glenarthur: My Lords, I certainly welcome the comments of the noble Lord on that paragraph. I am sure that that view is shared by many. It is certainly by me. So far as all visiting fans are concerned, I am aware that the report is far-reaching, and what is said in the Government's response to the recommendations is correct. It is essentially a matter for the football authorities to sort out and I hope, as we all hope, that at the end of the day we shall come up with a sensible and realistic solution to this problem.
Lord Mulley: My Lords, since I do not think that this should be the occasion for debate, may I just briefly say that I appreciate the tributes that have been made to Mr. Justice Popplewell and his associates for the care and speed with which he has given his report, also for the very many constructive and helpful suggestions. I shall mention and criticise only one of them, namely, the membership card proviso, and if in fact the football authorities are going to be left to devise what they deem to be practicable, then I do not think we would have any quarrel. I hope that the noble Lord can give us that assurance because Mr. Justice Popplewell's conclusion is the impeccable one, that the one way to get rid of all violence at football matches is to have no spectators there—and indeed that would be the end of football because it would not pay for the costs of running it. That is the logic. It would be immensely disappointing to all supporters of football if they could not see their own team play in key cup matches away from home.
What will happen to many friends of mine in Sheffield, for example, is that those who happen to have season tickets for both the grounds will have to opt to visit only one of the two grounds in their own city. It seems to me that this is a totally impracticable proposition propounded by Mr. Justice Popplewell, and I hope that the Government will stick to their advice—merely that the Football Association, as I know they will wish to do, will do what they can to eliminate problems by such identification processes as they deem practicable.
Lord Glenarthur: My Lords, one thing which is absolutely guaranteed to mean the end of football is the continuation of the violence that we have seen. Let there be no doubt at all about that. While the noble Lord suggests that the introduction of membership cards may be moving in that direction as well, all I can say to him is that it is a matter for the football authorities. I do not believe that it is impossible to work out some scheme, but one thing has to be balanced against another: the issue of violence on the one hand against practicability on the other hand. Those matters are being considered.
Lord Brougham and Vaux: My Lords, perhaps I may very briefly add to the tribute paid by my noble friend to Mr. Justice Popplewell for producing this

1231
report so quickly. Obviously, there is a lot in it which needs to be debated. There is one thing that I picked up on Chapter 7, concerning exits. My noble friend mentioned this when he spoke about cinemas. When we go to a cinema the gangways and exits are kept clear, and you can push a bar and open the door. This seems to me to be a highly desirable thing to have at football grounds so that people can get out. If this had been the case at Bradford, then that tragedy may not have happened.
Lord Glenarthur: My Lords, that is really a matter for the certificating authority to look at. As he does, I appreciate that locked turnstiles produce the sort of tragedy that we have seen. That is why it is important that these recommendations, particularly the ones relating to safety on egress from a stadium, are looked at carefully; but I believe that they are a matter for the certificating authorities to deal with rather more than me. But I note the noble Lord's point.

Transport Bill
4.54 p.m.
House again in Committee on Clause 69.
The Earl of Caithness The Earl of Caithness moved amendment No. 218A:
[Printed earlier.]
The noble Earl said: I beg to move this amendment. I spoke to this earlier, on Amendment No. 217C.
On Question, amendment agreed to.
Following is the text of the amendment (No. 218A):
Page 71, line 4, leave out ("other than transferred activities").
The Earl of Caithness The Earl of Caithness moved Amendment No. 218B:
[Printed earlier.]
The noble Lord said: With the leave of the Committee I should like to move Amendments Nos. 218B, 218C, 218D and 218E together. [Printed earlier.] I spoke to this amendment earlier, on Amendment No. 215A. I beg to move.
On Question, amendments agreed to.
Following is the text of the amendments (Nos. 218B, 218C, 218D and 218E):
Page 71, line 6, at end insert ("or permit any body corporate which is its subsidiary to engage in any such activities").
Page 71, leave out lines 7 to 9 and insert—
("(b) does not—

(i) borrow money from any person other than the controlling authority; or

(ii) permit any body corporate which is its subsidiary to borrow money from any person other than the company, any other subsidiary of the company, or the controlling authority;

with the exception in each case of borrowing by way of temporary loan or overdraft; and").
Page 71, line 10, after ("not") insert ("(i)").
Page 71, line 11, at end insert—
("; or
(ii) permit any body corporate which is its subsidiary to raise money by the issue of shares or stock to any person other than the company.").
[Amendment No. 219 not moved.]
The Earl of Caithness The Earl of Caithness moved Amendments Nos. 219A and 219B.
[Printed earlier.]
The noble Lord said: I beg to move Amendments Nos. 219A and 219B. I spoke to these amendments earlier, on Amendment No. 217C.
On Question, amendments agreed to.
Following is the text of the amendments (Nos. 219A and 219B):
Page 71, line 17, leave out ("other than transferred activities").
Page 71, line 22, leave out subsection (5) and insert—
("(5) Subsection (3)(a) above shall not apply—

(a) in the case of a public transport company whose controlling authority are the Passenger Transport Authority for any passenger transport area, in relation to activities within the powers of the Executive for that area or activities which were formerly within those powers but have ceased to be so by virtue of any order made under section 59 of this Act;

(b) in the case of a public transport company within section 68(1)(c) of this Act, in relation to activities which were formerly within the powers of the council who formed, or of any council who participated in forming that company, but have ceased to be so by virtue of section 62(1) of this Act.").

[Amendment No. 220 had been withdrawn from the Marshalled List.]
On Question, Whether Clause 69, as amended, shall stand part of the Bill?
Lord Sandford: The Marshalled List indicates that I had intended to speak to the effect that this clause should not stand part of the Bill, but in the course of speaking to Amendment No. 218 I was satisfied, for the time being, by my noble friend. However, I understand that there may be other noble Lords who may wish to speak on the Motion, that this clause stand part of the Bill.
Clause 69, as amended, agreed to.
[Amendment No. 220A not moved.]
Clause 70 [Disabilities of directors of public transport companies]:
The Earl of Caithness The Earl of Caithness moved Amendment No. 220B:
Page 71, line 39, leave out ("a paid employee of the company") and insert ("paid for acting as such or is an employee of the public transport company or a subsidiary of the public transport company").
The noble Earl said: I beg to move Amendment No. 220B and at the same time, with the leave of the Committee, I should like to speak to Amendments Nos. 220C, 220D, 220E, 220F, 220G and 220H.
Amendment No. 220C: Page 72, line 6, after ("council") insert ("(a)").
Amendment No. 220D: Page 72, line 7, leave out from ("with") to ("vote") in line 9 and insert—
(", or any other matter relating to the activities of, the public transport company or a subsidiary of that company; or (b)").
Amendment No. 220E: Page 72, line 36, leave out from beginning to ("was") in line 1 of page 73 and insert (", or any other matter relating to the activities of, the company concerned").
Amendment No. 220F: Page 73, line 11, leave out from ("with") to ("is") in line 12 and insert (", or any other matter relating to the activities of, the public transport company or a subsidiary of that company").
Amendment No. 220G: Page 73, line 35, leave out from ("with") to ("by") in line 36 and insert (", or in any other matter relating to the activities of, the public transport company or a subsidiary of that company").

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Amendment No. 220H: Page 73, line 37, at end insert ("or in a subsidiary of that company.
(12) The provisions of this section shall apply in relation to a director of a subsidiary of a public transport company as they apply in relation to a director of such a company.").
These amendments have two main purposes. First, they apply the provisions of the clause to directors of any subsidiary of a public transport company. Secondly, they clarify subsection (1) of the clause to apply to all directors of public transport companies or their subsidiaries who are either paid as directors or are employees of the public transport companies or their subsidiaries. As drafted, the clause does not apply to directors of subsidiaries of public transport companies and it is not apparent on the face of the clause that a director paid as a director as distinct from a director employed by the company would be disqualified from being a member of the controlling authority. These amendments put these deficiencies right. I beg to move.
On Question, amendment agreed to.
The Earl of Caithness The Earl of Caithness moved Amendments Nos. 220C to 220H.
[Printed above.]
The noble Earl said: I beg to move.
On Question, amendments agreed to.
Clause 70, as amended, agreed to.
[Amendment No. 221 had been withdrawn from the Marshalled List.]
Clause 71 [Powers of investment and disposal in relation to public transport companies]:
The Earl of Caithness The Earl of Caithness moved Amendment No. 221A.
[Printed 18/7/85; col. 978.]
The noble Earl said: I beg to move this amendment. I spoke to it earlier on Amendment No. 211CN.
On Question, amendment agreed to.
Following is the text of the amendment (No. 221A):
Page 74, line 3, leave out from ("company") to ("any") in line 4 and insert ("so formed by way of consideration for").
[Amendments Nos. 222 and 223 had been withdrawn from the Marshalled List.]
The Earl of Caithness The Earl of Caithness moved Amendments Nos. 223A and 224A:
[Printed earlier.]
The noble Earl said: I spoke to both these amendments with Amendment No. 215A. I beg to move.
On Question, amendments agreed to.
Following is the text of the amendments (Nos. 223A and 224A):
Page 74, leave out lines 12 and 13 and insert ("such shares or other securities").
Page 74, line 18, leave out from beginning to ("which") in line 20 and insert—

("(a) the disposal by that company of the whole of that company's undertaking;

1234

(b) any disposal by that company of any shares in or other securities of a body corporate which is that company's subsidiary; or

(c) any disposal by that company of any part of that company's undertaking, or of any assets of that company (other than shares or securities within paragraph (b) above)").

[Amendments Nos. 224 and 225 had been withdrawn from the Marshalled List.]
Clause 71, as amended, agreed to.
Clause 72 [Application of local authority financial controls to public transport companies]:
5 p.m.
Lord Sandford Lord Sandford moved Amendment No. 225A:
Page 74, line 33, leave out subsections (1) to (3).
The noble Lord said: I wish at the same time to speak to Amendment No. 229A and to try to include in my remarks the four amendments which would have been moved by my noble friend Lady Vickers, Amendments Nos. 226 to 229.
Amendment No. 226: Page 74, line 37, leave out ("any") and insert ("no").
Amendment No. 127: Page 74, line 40, leave out ("any" and insert ("no").
Amendment No. 228: Page 74, line 43, leave out ("any") and insert ("no").
Amendment No. 229: Page 75, line 1, leave out ("any") and insert ("no").
Amendment No. 229A: Page 75, line 40, leave out subsections (7) and (8).
This is the moment when we come to what one could probably regard as the worst feature of this very unsatisfactory arrangement which is proposed for the structure of the municipal bus companies in the situation created by the Bill. The bus operating body is given the status of a Companies Act company, and it might be expecting the freedom of such a company to operate according to its purposes and within the terms of its memorandum. But in fact for the purposes of capital expenditure it is still regarded as part of the local authority, and so we have a company which ends up in the worst of both worlds. While it ceases to be a department of the city council, its capital expenditure is treated as if it were.
The capital expenditure controls of a city council these days are so bizarre as to be hardly believable by people who are not familiar with the state that local government finance has got into. There was a time when one had to seek approval for the capital that one wished to borrow in order to finance the activities of a local authority. Those days are long past. Now even the capital one already has cannot be spent without the authority of the Department of the Environment, which is in turn controlled by the Treasury.
It is impossible to see how what is nominally a private company, designed to be free to enter the world of deregulation and full-blooded competition with the private sector, can possibly operate fairly and effectively in that new environment when it does not have access to any capital which it can call its own. The capital which is available in the local authority cannot be applied to it without the approval of the Secretary of State. It cannot go into the market to raise capital of it own because it is reliant on its parent local authority for that; and its local authority cannot

1235
provide capital for it, even when authorised to do so by the Secretary of State, without setting the needs of the bus company side by side with all the other needs of the local authority, of which probably the most important is housing. Everybody knows that all housing authorities these days have enormous priorities building up.
The municipal bus company is in an impossible situation. The amendment at this stage is not designed for pressing but just to elicit from whichever of my noble friends on the Front Bench is to answer some explanation of why the Government have landed these unfortunate municipal bus companies in this situation and how on earth they think they can operate effectively, as they obviously hope they will. I see no possibility of them being able to operate effectively in a state of deregulation and private enterprise. It may well be that this clause has been designed in order to oblige the local authorities to privatise their bus companies, but it would be much simpler to have said so on the face of the Bill and to have avoided all this complication. It simply will not work. I beg to move.
The Deputy Chairman of Committees (Lord Cullen of Ashbourne): If this amendment is agreed to, I shall not be able to call Amendments Nos. 226 to 229.
Baroness Carnegy of Lour: My noble friend said earlier that it would have been so much better to privatise the buses altogether. I do not know whether he was expressing a view held by the association which he chairs, but I do not think that the Scottish authorities which run buses—which, as it happens, are all regions—would agree to that at all. They argue that they do not want this arrangement; they want the status quo. I should have thought, though, that they would have preferred this arrangement to total privatisation. I have not consulted them about that because my noble friend's argument has been enunciated only today.
Therefore, I should have thought that this option has seriously to be explored. If one is to have a halfway house or a hybrid arrangement, where losses are covered by the ratepayer and the taxpayer, and if the bus company gets into difficulties it will be for the local authority to sort it out, one cannot give the hybrid company the freedom of an ordinary company. That simply is not possible.
I am not an expert on this at all. I am simply thinking back to my time as a councillor. The borrowing required for capital expenditure should be treated like the borrowing of a local authority and put into its capital plan forward just as any other local authority expenditure is. Losses should likewise be dealt with in the same way as any other local authority project which loses money. It seems to me that on behalf of local authorities my noble friend is trying to have his cake and eat it. I see why local authorities prefer the status quo. I am very surprised that they would want to see their bus undertakings separated completely. One cannot expect to have the advantages of a separate company in one direction and not in another.
Lord Shepherd: If I might use the jargon that has been developing in our debates on this Bill, I suspect that the noble Baroness has fallen into this trap. Some
1236
who use the term "privatisation" do not mean putting the service into the private sector. It is merely a changed relationship from a PTE or PTA municipal bus operation.
I support the amendment. I believe that it is necessary for the benefit of those who have to run commercial companies on a fair competitive basis. The Notes on Clauses state:
"Subsection (1) provides that payments, acquisitions, disposals, receipts, contracts, liabilities, termination of interests and repayments in relation to an undertaking or a public transport company shall be treated as if they were made by the controlling authority".
That is not what I expected when I read the White Paper regarding the setting up of these transport companies. The purpose of setting up these public transport companies was to put them at an arm's length from the authority which was the tendering authority, in other words divorcing those authorities who tendered and provided subsidy from the operational side of the business.
As I see these various clauses, I think an executive in a company will be in very great difficulties. All his revenue, his profit at the end of the year, will go direct to the authority, As a quid pro quo he will then have to look to the authority for moneys for the purchase of new vehicles and other forms of capital expenditure. Some companies may have some 50 or 60 vehicles, which seems to be about the average for the municipal authorities. These are fair assets, which not only will have to be serviced but will have to be replaced. I am quite clear that the basic principle in relation to capital expenditure is that so far as possible it should come from revenue, from profit and that the company should create profit in order to replace its assets. If it is not so, then of course there cannot be fair competition because those in the private sector will have to perform that way.
I am not sure whether the noble Lord should pursue these amendments to a division. Certainly we should like to hear from the Minister. I hope that between now and Report stage the Government, while perhaps allowing this hybrid situation to remain in the Bill, will look very carefully to see whether there are ways in which it can be made easier. Yes, maybe they can offer an inducement for local authorities to create what I call the PLC approach, which is the setting up of freestanding transport companies, as I understand them to be.
I believe that if that were done, there would be a far better performance and certainly a far better approach of management to the companies than there would be within this morass of administration. I was going to say "administrative nonsense"; however, I understand why the Government went for this hybrid approach. I think it is the least satisfactory. When the Minister replies to the noble Lord, Lord Sandford, I hope that he will at least be willing to undertake to see whether there are ways and means by which this free-standing PLC approach about which I have spoken can be achieved or, to go further, encouraged as a solution to the problem.
5.15 p.m.
Lord Trefgarne: I have listened very carefully to the arguments that my noble friend Lord Sandford,

1237
supported by the noble Lord, Lord Shepherd, has put forward for removing the public sector capital controls which the Bill proposes for the new public transport companies. The amendments are of course in keeping with those which were moved to Clause 69 and reflect the desire to ensure that new companies will be able to stand on their own feet and compete successfully without being hampered through capital or other controls.
I have to say that while I side with my noble friend in wanting these companies to stand on their own two feet, I do not think that we can possibly go so far as to disapply the important provisions of this clause. Nor, thankfully, do I think there is any reason for us to do so. I hope that I may be able to convince my noble friend on that.
First, I would ask the Committee to consider the status of these companies. They are, I think we will agree, in the public sector. In these circumstances, two facts must be taken into account. First, the companies will undoubtedly be regarded as contributors to public sector spending, which for reasons which we probably do not want to go into now the Government, as managers of the economy, have to see properly accounted for in the control system. Secondly, it would be quite open for the authorities effectively to have the best of both worlds if, as is proposed in the amendments of the noble Baroness, Lady Vickers, this company's profits increased the amount of prescribed expenditure which the local authority could make while the amount of capital expenditure by the company did not reduce their allocation, this would effectively allow authorities to augment their expenditure. I should not wish to precipitate a wider debate on that subject, but I hope the Committee will agree that that is not something we should want to do lightly in this Bill.
I should also like the Committee to consider the advantages for a public transport company in its relationship with the controlling authority which I mentioned on Clause 69 and which, if I may say so, I do not think we should forget. It has, for example, a ready and regular source of finance. It is also likely that its borrowing through the authority may well be at the normal rates which apply to local authority borrowing, which the Committee will know are not always available to other borrowers.
Against this, there is of course the overall limit on the local authority's capital expenditure, which the amendments we have before us seek to disapply from the companies; and I know that some people fear that the balance here may not lie in the company's favour, particularly if an irresponsible local authority seeks to deny the bus company its proper priority. I suppose we have to acknowledge that—in extreme cases—there is a possibility of this happening. But I have to say that nothing in this clause removes the control over the situation from the local authorities themselves. If they make capital resources available to their company—as they do effectively now, and as I have no doubt most will continue to do—there is no reason whatsoever why the provisions of this clause should pose any difficulty for the companies. They will have facilities which some other borrowers would dearly love to have available to them.
1238
Ultimately, I think we must also bear in mind again that the local authorities are always free to seek consent to dispose of their controlling shareholding and so place the company firmly outside these capital controls and into the private sector. This clause does not seek to force the local authority's hand in either direction. All it does is to say that, while the companies are in the public sector, it is inevitable that the capital controls which we have discussed should apply. I hope my noble friend will feel able to accept that. I have to tell my noble friend that I think there is a good deal between us on this matter and I do not feel that I can come towards him in any way.
Lord Sandford: No; that is certainly so. If the debate we have had for the past hour or so has achieved nothing else, it has certainly achieved that. It is because of that, coupled with the fact that the situation in which the municipal bus companies is so unsatisfactory and so different from that which they might have been led to expect by the White Paper, that inevitably—and I say this to my noble friend—it is not so much that it is their policy to privatise themselves but it is the only way in which they can extricate themselves or avoid becoming entangled in this unsatisfactory situation. It is my own, so to speak, private opinion at this stage that many of them will see this to be the case. Maybe in the long run it will be the best way for the municipal bus companies to go. However, if it is not what the Government intended, it is odd and ironic that that should be the effect.
The White Paper, if I may remind the Committee, said:
"The company will also be able to seek capital (whether equity or borrowing) from the market in the usual way".
They will not be able to do anything of the kind: and even if they got it, they would not be free to spend it. That is the situation that local government is in. You cannot spend the money you have got, and you cannot borrow what you need. To form a company in the private sector and to call it a Companies Act company and then expect it to operate effectively against full-blooded competition in that situation is absolutely absurd. We have established that there is a great gulf between us—and there certainly is. What will be the effect as municipal bus companies reflect on it during the Recess, I cannot say; but, clearly, one possibility is that set out in the White Paper. It would be open to councils to privatise the company if they wished. Of course, the Labour-controlled bus companies will not want to do any such thing. However, they may well be forced into that situation, which is an unwarranted intrusion into the independence of local government. I believe that we have exhausted the possibilities on this amendment. I beg leave to withdraw it.
Lord Trefgarne: Just before my noble friend does that, I imagine that he plans to reflect on what has been said and perhaps return to the matter at Report stage later in the year. I have to tell him in plain terms that I doubt that there will be any difference in the Government's position—in fact, I am certain there will be none—if we consider this matter at a later stage. I invite my noble friend to consider, therefore, whether he should really withdraw the amendment in those circumstances, or whether it would not be better if he sought the view of the Committee.
Lord Shepherd: I have been under some pressure from my noble friends. We have had one long Statement; we have made very little progress on the Bill; and we are now to have another statement. The noble Lord has certainly provoked me into a good deal of debate, but I had intended to restrain myself. The noble Lord wishes to withdraw the amendment. What the Minister has said is quite unsatisfactory. It will be a question for your Lordships' House at a later stage to decide whether it believes that the noble Lord, Lord Sandford, is right, or the noble Lord, Lord Trefgarne.
The threat that the noble Lord, Lord Trefgarne, puts to the Committee and to its Members is, if I may say so, a very dangerous way of going about a Committee stage. If he wishes to take that view, we shall do what occurred many years back in the past, when noble Lords were a great deal smaller in number. We divided on every amendment. If, as the noble Lord nearly suggested, we cannot withdraw amendments when we wish, we shall divide on all amendments. Were that to happen, I do not know where your Lordships' Committee would be.
Lord Sandford: I shall not respond to that, if my noble friend will forgive me. It is not the right tactics to press amendments at the Committee stage on a Bill that is so ill constructed. I do not despair at all, wide as the gulf is, of at least having some effect on the thinking of my noble friends between now and October.
Amendment, by leave, withdrawn.
[Amendments Nos. 226 to 229 not moved.]
Lord Brabazon of Tara: I beg to move that the House do now resume.
Moved accordingly, and on Question, Motion agreed to.
House resumed.

The Chiswick Report
5.25 p.m.
The Minister of State, Scottish Office (Lord Gray of Contin): My Lords, with the leave of the House, I shall now repeat a Statement being made in another place by my right honourable friend the Secretary of State for Scotland. The Statement is as follows:
"With permission, Mr. Speaker, I should like to make a Statement on the report of the Working Group of Suicide Precautions at Glenochil Young Offenders Institution and Detention Centre which is published today.
"Copies have been placed in the Vote Office and in the Libraries of both Houses. I have also laid copies of the determinations of the Sheriff Principal in the cases of Angus Boyd and Derek Harris.
"In November 1984, following a recommendation by the Sheriff Principal after a fatal accident inquiry, I set up an independent working group under the chairmanship of Dr. Derek Chiswick, consultant psychiatrist at the Royal Edinburgh Hospital, with the following remit:
`To review the precautionary procedures adopted at Glenochil Young Offenders Institution and Glenochil
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Detention Centre to identify and supervise inmates who might be regarded as suicide risks; and to make recommendations.'
"I asked Dr. Chiswick and his colleagues to expedite the report and I am most grateful to them for completing their work by the end of June.
"This is an important report on a subject which has generated a good deal of understandable public concern. It makes a considerable number of recommendations, the majority of which I am ready to accept, although some will require more detailed examination. There are, however, a number of recommendations which I cannot accept. As I cannot, in the time available today, give a detailed response to all the recommendations, I have laid with the report a paper which sets out my initial response to it.
"I would remind the House that procedures to identify and care for vulnerable and inadequate offenders, who may have genuinely suicidal tendencies, must be a vitally important feature of any penal institution. Nevertheless, these are a tiny minority of the inmates. We must not lose sight of the fact that the primary purpose of custody is the deprivation of liberty as a punishment. The inmates at Glenochil are there because they have offended against society and require custodial sentences and rehabilitation. They include many hard and brutal offenders. About half of those in the young offenders institution are serving sentences of between three years and life for particularly serious offences. The authorities at Glenochil have to manage their custody as well as that of a comparatively small number of vulnerable youths.
"I now wish to refer to some of the detailed points made in the report. The report's broad conclusions are—I am pleased to note—in accord with the recent finding by the Sheriff Principal, who conducted the fatal accident inquiry into the death in April of Derek Harris, that there is no evidence that the regimes operated at Glenochil or the actions of staff were responsible for any of the seven deaths which have taken place since 1981: only three of the seven deaths were determined as deliberate suicides. In submitting this report, Dr. Chiswick states that the working group had been impressed by the dedication of the governor and his staff and that the recommendations made in the report imply no criticism of the staff at Glenochil.
"The working group acknowledge that, no matter what steps may be taken to prevent suicides, there is no guarantee that these measures will be successful. They consider that the aim should be to achieve a proper balance between procedures that reduce risk to a minimum and yet are compatible with an acceptable way of life in a penal establishment.
"The report says that, in relation to the young offenders institution, where all but two of the deaths have occurred, the majority of inmates serve their sentences in a purposeful manner and that the problems are attributable largely to a few inmates who behave aggressively towards their fellows. Such aggression is impossible to prevent, without stopping all association among young offenders who mostly serve their sentences without difficulty and co-operate with staff.

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"The working group criticise the procedures whereby inmates thought to be suicide risks are kept in what is known as strict suicide observation for lengthy periods. I should remind the House that these procedures have been in use in penal establishments in Scotland for many years. These procedures involve observation being maintained on an inmate in a cell at 15 minute intervals, day and night. All clothing, bedding and furniture which could be used to cause self-injury may be replaced with clothing and bedding of canvas and with cardboard furniture. No one likes using these measures but in Glenochil they have been effective to the extent that no inmate at. Glenochil has committed suicide while under strict observation. Indeed, the two most recent deaths at Glenochil occurred after the inmates were removed from strict suicide observation, and in the case of Angus Boyd the Sheriff Principal commented that death might have been avoided, if he had not been removed from strict suicide observation. This illustrates how delicate and complex is the question of caring for these unfortunate individuals. Nonetheless I accept that the use of these precautions for any other than very short periods is undesirable in relation to young offenders.
"The working group offer advice on identifying possible suicide risks and make a number of recommendations as to how those inmates who are mentally disturbed or who are vulnerable in some other way might be managed. I wholeheartedly accept the important recommendation of using a team approach involving all the professionals and prison staff to counsel inmates and to minimise the risks of suicide. This is the general direction in which we intend to go in the follow-up to the report. Indeed, some of the recommendations in the report have already been met in whole or in part by measures taken since the death of Derek Harris in April. Work has now been completed on a secure hospital facility at Glenochil, consisting of a ward, and a single cell, so that strict medical observation can be provided in appropriate cases. In addition, immature and vulnerable inmates requiring a more closely supervised supportive regime are now housed in `D' Hall of the young offenders institution or transferred to Carrick House at Polmont Young Offenders Institution.
"A number of the recommendations have staffing and resource implications and will require careful consideration. There will also have to be consultation with the staff associations and other interested bodies. Others create problems of adapting existing structures. Recommendations of this longer-term kind will need to be examined very carefully so that the custody and care of inmates is not put at risk in the short-term.
"In a number of respects the working group have gone beyond their remit and discussed issues affecting the overall management of establishments and the prison service as a whole which as a small specifically qualified group, they were not constituted to comment on. A minority of the working group felt that, such was the aura of suicide permeating Glenochil, the only solution lay in its
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temporary closure. I concur with the view of the majority who rejected that idea.
"I trust that the working group's findings, taken together with the determinations of Sheriff Principal Taylor, will be accepted by honourable Members and by the general public as refuting any suggestion that the unfortunate deaths which have taken place at Glenochil are attributable to the regimes, particularly that of the detention centre, or the behaviour of staff. There is not a shred of evidence to support these allegations.
"My hope now is that the governor and staff of Glenochil will be left to get on with their difficult and demanding task and that the institution will be afforded an opportunity to settle down after recent events, and to make the useful changes which I have accepted from the recommendations in this report."
My Lords, that concludes the Statement.
Lord Ross of Marnock: My Lords, we are grateful to the Minister of State for repeating the Statement made by his right honourable friend the Secretary of State in another place. There is no doubt at all about the gravity of the events which caused the establishment of Dr. Chiswick's inquiry and the working party to be set up. When one considers seven deaths, 13 self-inflicted injury cases and about 171 people at risk and under strict suicide observation in three and a half years, the importance of the matter becomes very clear indeed.
The situation has improved and of that there is no doubt. Even before this inquiry took place, and as a result of previous inquiries, the Scottish Office acted. Therefore, improvements have been made at Glenochil. However, the Minister of State must realise the anxieties and tensions which have built up since the beginning of the year. Those anxieties and tensions have been growing in the institution and are affecting the staff and the offenders who are incarcerated there, and they are also affecting the parents of youngsters who are sent there. The anxieties and tensions are very great indeed.
I did not get the impression from the Statement which has been made by the Secretary of State—and admittedly it is curtailed because of the length of the inquiry—that he has given a clear picture of what the report sets out. The report says:
"there are no instant solutions… We have proposed completely new procedures for the identification and management of those at risk of suicide. The emphasis is on the application of modem principles of medical and nursing care as opposed to the predominately physical measures which currently operate",
and which are explained in the Statement. Indeed, to spell them out, to mention what presently takes place—something which has been criticised and condemned in the report—surprises me. What is taking place at present—and it is spelt out both in the Statement and in the report—has been taking place for a long time. That means that it is antiquated, out of date, and falls behind what takes place south of the border in respect of the treatment supplied. We should look at that matter.
I should like to know whether or not any of the suggestions which are put forward in the report have been accepted. Unfortunately, there is no doubt that resource and staffing questions will arise. Expenditure and money will be involved. It is no good the

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Government saying that only a small section of people are at risk. If there is only a small section involved and you apply yourself to that section, then when you look at the figures as regards the fatalities, self-inflicted wounds and all that arises from the regime, you will get the feeling that the Government are brushing it off and missing its importance.
Do the Government accept the fact that there should be personal officers with, I was about to say, a "back-up" team, but the team is already there; it is not just called in? There is the suggestion that there should be separate psychiatric youth consultants and that there should be forensic psychological consultants as well. None of this exists at present, and it will cost money. The Government may say that money aspects require further consideration. I point out that these matters are basic to the report and to the suggestions which are being made. There is too much about what the Government do not agree with; and there is too little about what the Government do agree with, much of which is important, so far as I can see from the skimming over which I have been able to do in the past 10 minutes. I point out that the Statement has only been in the Printed Paper Office for the past 10 minutes. There is too much lacking about what the Government say at present. Do they accept the suggestion that the units should be smaller, that they should be graded and that the units should be more functional? Or is that a matter which, because it will cost money, is out of the question?
There is also the question of early release. Admittedly the Government suggest that that is a matter not for the Secretary of State, but for the courts. We could work a system of sending the matter back to the courts. There are many youngsters who, because of incapacity, inadequacy and psychological problems, should not be there at all. Admittedly, the Government put forward the suggestion that the hospital is now available, but in my view that should only be an interim measure.
There are more alternatives available within the complex and there is also the use of Polmont as well which is quite a good thing. There should be alternatives to these people going there in the first place. We are too negative in our attitude to non-custodial sentences for people who really should not be in prison. When you consider that the deterrent effect is nil, when you look at the figures of those who offend again, we are not getting much out of our penal system for offenders under 21. The Government ought to look at this.
The noble Lord questioned the remit, and suggested that the committee had gone beyond its remit. There was a certain amount of confusion about this. I understand that they were given a certain amount of latitude in this respect. The fact that this committee felt that they had to go beyond their remit pinpoints the need of a more extensive inquiry into the penal system in Scotland for our under 21s.
I share the relief of the Minister of State that they said that there was no criticism in their suggestions of the present staff, and that they were impressed by the dedication of governor and staff. That is a great relief to us all. But it is not a question of letting them get on with the job, it is a question of giving them the proper resources and back-up staff to do a decent job.
Lord Wilson of Langside: My Lords, the House will be indebted to the Minister for repeating this quite detailed Statement on a matter which has understandably caused so much public concern. I begin by saying that I share the hope expressed in the conclusion of the Statement that the governor and staff of Glenochil will be left to get on with their difficult and demanding task, and that the institution will be afforded an opportunity to settle down after these unfortunate events.
It so happens that a week or two ago I, along with the Scottish All-Party Penal Affairs Group, visited the institution. We were all of the mind that the dedication of the governor and staff was outstanding and was encouraging. But as the noble Lord, Lord Ross of Marnock, has indicated there are a number of questions not for the governor and staff at Glenochil but for the Government. These are of considerable relevance and cannot be passed over, or allowed not to have the attention of the House and others.
I was a little concerned at the expression of view that the working group had gone beyond their remit. Was that intended to be critical of them? I was concerned too that while some of the most important recommendations of the committee's report are accepted, and some have already been put into effect, there are still a number which are not accepted.
I readily appreciate that this is one of those many fields where instant comment is better avoided; but having said that, one is curious as to which of the recommendations are not being accepted. From the quick look at the report which those of us who are concerned were able to give it during the past hour or two, I find it difficult to be critical of any of these recommendations. I should have thought, at first sight, that it would be difficult to justify passing over any of them.
5.45 p.m.
It occurs to me that there might be scope for involving in this matter the Scottish All-Party Penal Affairs Group. I wonder whether the Government would be prepared to give serious consideration to this possibility, which might produce some constructive thinking in this whole area. The Minister will correct me if I am wrong, but as I recall there has been no thoroughgoing review of the criminal justice system in Scotland so far as the under-21s are concerned for many years.
We introduced this short, sharp, shock treatment many years before it was introduced in England. I do not recall any significant or profound examination of the criminal justice system in Scotland having taken place so far as the under-21s are concerned with particular reference to the short, sharp, shock treatment and its impact. I should have thought that the time was ripe, if not overipe, for such a review. The House would be interested to know what comment the Minister has to make on that possibility.
Lord Gray of Contin: My Lords, I am most grateful to the noble Lord, Lord Ross of Marnock, and the noble and learned Lord, Lord Wilson of Langside, for their remarks in connection with this report and for the constructive attitude they have adopted. I can quite appreciate the first point which the noble Lord,

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Lord Ross of Marnock, made when he described the tension which has built up in Glenochil and the concern of parents who have children there. At the same time, I think that a great deal of reassurance will now be available to those parents as a result of this report. Probably one of the most important things revealed by the report is that there is no question of any doubt, or shadow, being cast over the regime at Glenochil, and there is no question of any blame for these dreadful deaths being attached to the staff who were engaged there.
The noble Lord, Lord Ross of Marnock, asked how we were going to follow this up. I would say to him that we are going to follow the recommendation in the report to make full use of all the professionals who are available to us by adopting the team approach of the professionals in carefully watching, studying, and monitoring those of the inmates in Glenochil who are considered to be at risk.
As I indicated in my Statement, the Secretary of State has laid a paper with the report which sets out his initial response. I shall not go over the individual points which the noble Lord, Lord Ross, and the noble and learned Lord, Lord Wilson, put to me as to which of the recommendations we accept or not, because they are dealt with individually in the paper lodged by the Secretary of State.
Both the noble Lord, Lord Ross, and the noble and learned Lord, Lord Wilson, asked me about alternatives. Since the new sentencing arrangements for young offenders were introduced in November 1983, the daily population of convicted young offenders has been reduced by about 20 per cent.; 1,230 in November 1983, and 970 at the latest count. This is a substantial improvement, but we are continuing to develop alternatives to custody such as community service orders, and enforcement officers for fines.
I think that also answers the question which the noble and learned Lord, Lord Wilson, posed to me. I do not think he was quite correct in suggesting that nothing was being done in investigating alternatives to custody and particularly for under-21s. There is a considerable amount of work being done all the time on this matter.
The noble and learned Lord, Lord Wilson, also suggested to me that there might be a case for the Scottish All-Party Penal Affairs Group to have a look at this matter. I should not care to comment on that without a little thought, but I shall certainly pass his suggestion on to the Secretary of State for Scotland. I do not think that I wish to comment further on what has been said, but I am grateful to noble Lords for their contributions.
Baroness Carnegy of Lour: My Lords, may I ask my noble friend one further question? Much of the discussion has been about the longer-term recommendations, and my noble friend has spoken about the increase in alternative ways of treating offenders. My anxiety is about the short-term in Glenochil and what my noble friend referred to as the "aura" that has been created and the strain—the effect on the most vulnerable that there is when these things happen in succession in a short period. It turns their minds to something that perhaps otherwise would not be in
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front of them. Is my noble friend convinced that enough change can happen very quickly for the inmates and their parents to feel that something else is now their experience rather than that which has been the cause of the trouble?
In other words, can there be enough change in the atmosphere, perhaps in quite small ways, in the way the regime is conducted, to ensure that everybody, even the most vulnerable, feels that there has been a break with the old and that something new is going on? I do not mean the big things, but I believe that is possible as it has certainly been the experience in borstals, under the previous system. If that can be done it helps the most vulnerable. Can my noble friend give us any reassurance on that?
Lord Gray of Contin: My Lords, I am grateful to my noble friend. I can give her that assurance. I can assure her that everybody connected with Glenochil is very much aware of what has happened. They are all relieved that the report is as it is, and that the staff, and those most directly concerned with looking after those young people, are completely exonerated from any blame for what has happened. That in itself is significant, and I am sure it will give confidence both to those who work there and those who have youngsters there.
On the small matters referred to by my noble friend, it is significant to realise that we are dealing with a very small number of people. The vast majority of people at Glenochil are not at risk, and for the small number who are there, as I explained in the Statement, significant improvements have already been made. They can be monitored carefully both through hospital and through the cell. I believe that the combination of what has already been done along with the recommendations which will be implemented should go a long way towards giving reassurance to those who have young people at Glenochil.

Transport Bill
5.54 p.m.
House again in Committee on Clause 72.
Baroness Stedman Baroness Stedman moved Amendment No. 229ZA:
Page 75, line 25, leave out from ("who") to end of line 29 and insert ("are qualified in accordance with subsection (4A) below.
(4A) A person shall not be qualified for appointment under this paragraph unless he is:—

(a) a member of a body of accountants established in the United Kingdom and recognised for the purposes of section 161(1)(a) of the Companies Act 1948; or

(b) a member of the Chartered Institute of Public Finance and Accountancy; and

(c) approved for appointment as auditor by the Audit Commission for Local Authorities in England and Wales;

but a firm may be so appointed if each of its members is qualified to be so appointed.").
The noble Baroness said: In moving Amendment No. 229ZA I should also like to speak to Amendments Nos. 229C and 229E:
Amendment No. 229C: Clause 73; page 76, line 10, leave out from ("company") to end of line 14 and insert ("appoints only auditors who are qualified in accordance with subsection (2A) below.

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(2A) A person shall not be qualified for appointment under this paragraph unless he is:—

(a) a member of a body of accountants established in the United Kingdom and recognised for the purposes of section 161(1)(a) of the Companies Act 1948; or

(b) a member of the Chartered Institute of Public Finance and Accountancy; and

(c) approved for appointment as auditor by the Commission for Local Authority Accounts in Scotland;

but a firm may be so appointed if each of its members is qualified to be so appointed.").
Amendment No. 229E: After Clause 73; insert the following new clause:
("Duties of Auditor.
.—(1) The auditor appointed under section 72 or 73 of this Act shall by examination of the accounts and otherwise satisfy himself that the public transport company whose accounts are being audited has made proper arrangements for securing economy, efficiency and effectiveness in its use of resources in carrying out its functions under Part V of this Act.
(2) The auditor shall comply with the code of audit practice applicable to local authorities as for the time being in force.
(3) The auditor shall consider whether, in the public interest, he should make a report on any matter coming to his notice in the course of the audit in order that it may be considered by the body concerned or brought to the attention of the public, and shall consider whether the public interest requires any such matter to be made the subject of an immediate report rather than of a report to be made at the conclusion of the audit.").
This is a group of amendments which, as we see it, raises three issues for our consideration. The first is, which group of accountants is most technically competent to conduct the audit of the new bus companies? If we cast our minds back to 1982, the Audit Commission was then created. It is now responsible for appointing the auditors to the local authorities and to similar bodies throughout England and Wales. What is happening is that some 70 per cent. of the total audit work load is carried out by the district auditors who are members of the Audit Commission's own staff. Some 30 per cent. of the total work load is being carried out by private auditors. As the Bill stands, the Audit Commission has the responsibility of appointing auditors to the new companies, but its own staff are not to be allowed to carry out this work. I cannot see the logic of that.
In Clause 73 the Bill stipulates that the appointed auditors have to be members of an accounting body which is recognised under the Companies Act 1948. This creates the anomaly because the Audit Commission staff are members of the Chartered Institute of Public Finance and Accountancy, or CIPFA as it is generally know in local authority circles. That body is not recognised under the Companies Act 1948. Yet it is the staff of the Audit Commission who are really most familiar with the work and the organisation of the municipal bus undertakings. The Water Act 1973 allowed for the audit of the water companies to be carried out by CIPFA accountants. It would seem that, because of their association with the municipal bus undertakings, they are the people most familiar with that sort of work. In the Water Act there is a legal precedent for their doing it for other bodies.
Therefore would it not be sensible to amend the Bill as we suggest, to enable the audit work to be carried out by an accounting body which is a member of the Consultative Committee of Accountancy Bodies or the CCAB? This would mean that the work was being
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carried out by properly qualified accountants and would enable the Audit Commission staff to continue to do that work which they are doing at present.
The second issue raised by this group of amendments is that of duplication. We see the possibility of duplication in audit effort and in costing the ratepayers more because both the local authority's auditor and the auditor to its bus company would need to satisfy themselves on some aspects of local authority systems or activities. On this CIPFA have done an exercise, and their estimate of the cost of duplication is that it could amount to anything between £25,000 and £50,000 per annum in audit fees.
Finally, we believe that it is right that the audit of the new bus companies should be broadly similar in content to the audit of the local authorities which own them. In local authorities the audit requirements cover the auditors' opinion as to whether the accounts give a true and fair view of the authority's financial position, and the auditors also have the job of monitoring the authority to see whether it is delivering value for money in terms of economy, efficiency and effectiveness in its services. Our amendments would ensure that the audit requirement covers the financial integrity and value for money in the new bus services. There should be this requirement to demonstrate that the bus undertakings provide value for money. Since the new companies will be subsidised to some extent by their local authorities then they will be spending local authority money or public money. Therefore they ought to be subject to the same degree of public scrutiny as other forms of public spending.
I hope that the Minister has given consideration to these amendments and that he might be prepared to accept them in the light of what I have said. But if not, I hope he will at least take them back and consider them before we reach the next stage of the Bill. I beg to move.
6 p.m.
Lord Tordoff: In rising to support this amendment so ably moved by my noble friend, an amendment to which I added my name, I should like to take this opportunity to make a slight diversion now that the noble Lord, Lord Belstead, is firmly in his place, for I know that he had many other things to do this afternoon. I wish just to go back to a matter which arose on Thursday evening under Amendment No. 211ZD. In column 962 of the Official Report of that day, 18th July last, talking about comprehensive competitive tendering, among a number of people that I referred to as being now in favour of this system I said, and I quote from that column in Hansard:
"The Association of County Councillors has now come round to the view that this is worth supporting".
That apparently is not true, and I wish to make it clear that I misinformed the Committee, and I regret that. I think that either I was misinformed or misinterpreted what had been said to me; but I have to say that I have a letter from the Association of County Councils which says:
"You may have seen our briefing note which on re-reading it I realise could be interpreted as expressing actual support for CCT. The intention of that note was to express the association's support for your diagnosis of the deficiencies in the Bill without committing us to the particular solution that you are advocating".

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I regret having misled your Lordships, but I think it is proper to say that I was slightly confused by the references from the ACC.
Let us come back to the matter before us, and let me repeat briefly some of the points my noble friend has made. As the Bill now stands, the Audit Commission is required to appoint auditors to the new companies but would not be allowed to allow its own staff to take part in that work. As my noble friend says, that seems to be illogical, and I hope that the Government on that ground alone would be prepared to make changes—not necessarily the change that we suggest, but perhaps they might like to come back with their own suggestions at the next stage.
As my noble friend said, there is a legal precedent for this under the Water Act 1973. Given that these people have familiarity with the work and that there is this precedent, we believe it would be foolish to allow the duplication of effort and the additional cost to the taxpayer which will accrue from the Bill as it now stands. The amendment has my full support.
The Earl of Caithness: I am grateful to the noble Baroness for so succinctly putting her case. While thanking the noble Lord, Lord Tordoff, for his apologies in getting it wrong the last time we were here, with due respect I think that he has got it wrong again, as I shall try to explain. We have heard it explained that, as the Bill stands, in many cases public transport companies will be audited by different auditors from the auditors of the parent authorities. I confirm that this will generally be the case because the CIPFA auditors, who are appointed by the Audit Commission to carry out the audit of most local authorities, would not be permitted to audit passenger transport companies under Clauses 72 and 73. The broad question of which accountancy qualifications are required for the audit of public companies is a matter for my right honourable friend the Secretary of State for Trade and Industry, and I hope that noble Lords will agree that we shall have to think very carefully before entering into changes to this Bill which effectively provided for exemptions to those qualifications, as these amendments would do.
Let me address myself to the arguments which have been put forward for allowing the same auditor to audit the accounts of both the authority and its public transport company. First, I do not believe we should agree that this would mean the audit being done any less effectively. There can be no doubt that both auditors must, and will be able to, satisfy themselves in carrying out their respective duties. Secondly, on the question of the cost of separate auditors, I think that we must make a distinction between the fact that an audit fee will fall on the company when it is separately established and the marginal increase in that fee which might be caused by appointing a separate auditor rather than the auditor appointed to audit the local authority accounts.
I believe that we are talking here in terms of an increase in the overall cost of the audit for the local authority's company of perhaps 20 per cent. to 30 per cent. of the existing figure for the local authority. That might be of the order of from £3,000 to £15,000 per bus company. Here I differ with the noble Baroness,
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Lady Stedman, who had a figure of from £25,000 to £50,000. Our calculations show it to be considerably cheaper than her estimation. I will re-check our figures to make sure that we are not wrong. I do not think that we should regard the Government's figures of £3,000 to £15,000 per company as an onerous burden, particularly when it is set alongside the cost savings which will result from competition.
I think it may also be worth pointing out in passing that some 17 of the 44 authorities with bus undertakings are already audited by firms appointed by the Audit Commission rather than by the district audit service. There would be no need to appoint separate auditors in those cases.
I should like to make more general points about the position of public transport companies formed under this Bill and the audit arrangements which are appropriate to them, for I think it is necessary to do so to respond to the arguments put forward, particularly in support of Amendment No. 229E, on the code of practice for the audits. I think the noble Baroness and the noble Lord, Lord Tordoff, in moving the amendment underrate the fundamental change in the nature of these former municipal undertakings. In the future the companies will be competing against other operators. They will not have access to the subsidy except through the tendering mechanism. In our view, that is very important. It will move the undertakings on to a quite different footing from local government or other monopolies, such as the regional water authorities mentioned by the noble Baroness. They are monopoly bodies, they are not subject to competition; so that the analogy that I think she gave is not quite right. The new companies will be operating in a competitive environment, and the competition itself will be the new means by which value for money will be achieved.
I would ask noble Lords whether they really think that the requirements for the auditor to report on economy, efficiency and effectiveness in the public interest as envisaged in the third of these amendments is necessary for a PTC and not for its competitors —that is, the other companies who are not in the local authority's ownership. I would suggest that it is not. Like all the other bus companies, the PTCs will receive payment of public money to support their services only if they win contracts for service subsidy in open competition. They will no longer be an integral part of the local authority for which direct support can be made available through the rates.
In the current circumstances where that is the case, we have the same audit machine for the municipal bus undertakings as we do for the local authorities themselves. But that would not be appropriate once the provisions of this Bill on company formations have taken effect. I would also suggest that this Bill should not be used to make changes for public transport companies alone. There are other local authority companies which have been formed, for example, to run theatre businesses. I must tell the Committee that they have always been audited as companies under the Companies Act, as we propose in this Bill, and not under the régime proposed in these amendments. It would be open to the directors of a public transport company or the local authority's controlling shareholder to commission a value for money audit if

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they felt that this was in the interests of the company. But I must ask the noble Baroness and the noble Lord, Lord Tordoff, to accept that we are requiring companies to be established under this Bill and the correct arrangements for their audit, as for their competitors, are provided for in the Companies Act without need for special provisions as proposed by the amendment.
On one particular point, if I can take up the noble Baroness, Lady Stedman, she is not quite right in saying that under the Bill as it stands the Audit Commission will appoint the PTC auditors. The position is that the controlling authority controls the appointment of the auditors. It must secure the appointment of qualified auditors, and these auditors must be approved by the commission. That is a small difference from what she said, but it is an important difference. In the light of what I have said, perhaps the noble Baroness will see fit to withdraw her amendment.
Baroness Stedman: I am grateful to the noble Earl for his full reply. I hope I was not implying that the audit would be any less effective if it were not done by CIPFA people. What we are arguing is that it would be a duplication of costs, and there is obviously a difference of opinion between us as to what that cost is—whether it is £3,000 to £15,000 per bus company of £25,000 to £50,000 per annum overall. That is something I should like to take back, as the noble Lord has offered to do, and check on those figures as well.
I do not see why it is less important not to have the same standards of value for money in the audit that is being done for the new bus companies as it is for local authorities as they stand today. I think it is just as important for the public and for the companies to know that they are getting value for money in these new services that are being set. While the noble Earl says they can have a report—pay for a report presumably for CIPFA to do a value-for-money report for them—it is not quite the same thing as having those kinds of auditors who will have those standards to work to and who are normally working to those standards. We were not suggesting that all the auditors who do the work would have to be CIPFA auditors and indeed I would remind the noble Earl that I said they do 70 per cent. of the audit work now while the other 30 per cent. they appoint outside auditors to do now. Presumably the same sort of proportions could very well apply with the new bus companies. But I think it is important that those auditors who are used to working with the local authority and used to working to those standards are the ones that are also available for choice, if wanted, even if they have to be approved by the Audit Commission and not appointed by them. There are some things here I should like to look at again, and that being so, with the leave of the Committee, I should like to withdraw the amendment tonight.
Amendment, by leave, withdrawn.
[Amendment No. 229A not moved.]
The Earl of Caithness The Earl of Caithness moved Amendment No. 229B:
[Printed earlier.]
The noble Earl said: I beg to move this amendment. I spoke to it with Amendment No. 215A.
On Question, amendment agreed to.
Following is the text of the amendment (No. 229B):
Page 75, line 41, leave out ("wholly-owned").
Clause 72, as amended, agreed to.
Clause 73 [Local authority financial controls in Scotland]:
[Amendment No. 229C not moved.]
The Earl of Caithness The Earl of Caithness moved Amendment No. 229D:
[Printed earlier.]
The noble Earl said: I beg to move this amendment. I spoke to it also with Amendment No. 215A.
On question, amendment agreed to.
Following is the text of the amendment (No. 229D):
Page 76, line 21, leave out ("wholly-owned").
Clause 73, as amended, agreed to.
[Amendment No. 229E not moved.]
Clause 74 [Provision of services for public transport companies]:
The Earl of Caithness The Earl of Caithness moved Amendment No. 229F:
[Printed earlier.]
The noble Earl said: I beg to move this amendment, which I spoke to in connection with Amendment No. 215A.
On Question, amendment agreed to.
Following is the text of the amendment (No. 229F):
Page 76, leave out line 27 and insert (", or with any subsidiary of an associated company, for the provision by that Executive or council for that company or (as the case may be) for that subsidiary").
[Amendment No. 230 had been withdrawn from the Marshalled List.]
Clause 74, as amended agreed to.
Clause 75 [Financial backing for establishment and operations of public transport companies]:
[Amendment No. 231 had been withdrawn from the Marshalled List.]
The Earl of Caithness The Earl of Caithness moved Amendments Nos. 231A and 234A:
[Printed 18/7/85; col. 978.]
The noble Earl said: I beg to move Amendments Nos. 231A and 234A together, with the leave of the Committee. I spoke to both these amendments in connection with Amendment No. 211CN.
On Question, amendments agreed to.
Following is the text of the amendments (Nos. 231A and 234A):
Page 76, line 42, leave out from ("in") to ("requires") in line 1 on page 77 and insert ("pursuance of any provision made by any scheme or order under this Part of this Act in connection with any transfer of property, rights and liabilities to the company in question for which that scheme or order provides").
Page 77, line 26, leave out ("and") and insert ("or").
[Amendments Nos. 232 to 234 had been withdrawn from the Marshalled list.]
Clause 75, as amended, agreed to,
Clause 76 [Duty of Passenger Transport Authority not to inhibit competition]:
[Amendment No. 239 not moved.]
The Earl of Caithness The Earl of Caithness moved Amendment No. 239A:
[Printed 18/7/85; col. 978.]
The noble Earl said: I beg to move this amendment. It was discussed with Amendment No. 211 CN.
On Question, amendment agreed to.
Following is the text of the amendment (No. 239A):
Page 78, line 25, leave out ("and") and insert ("or").
Clause 76, as amended, agreed to.
[Amendment No. 240 not moved.]
6.15 p.m.
Lord Carmichael of Kelvingrove Lord Carmichael of Kelvingrove moved Amendment No. 240A:
After Clause 76, insert the following new clause:
("Securing of public passenger transport services by local authorities and Passenger Transport Executives
.—(1) This section shall have effect for facilitating the carrying out by the following authorities (hereinafter referred to as "relevant authorities") of their duties to secure the provision of public passenger transport services (whether or not including railway services and ferry services) for their areas, that is to say—

(a) local authorities on whom duty is imposed under subsection (1)(a) or (2)(a) of section 61 of this Act, in respect of that duty; and

(b) Passenger Transport Executives, in respect of their duty under section 9A(1) of the 1968 Act.

(2) Each relevant authority shall prepare particulars of the services they consider it appropriate to secure to meet the public passenger transport requirements of their area, and shall from time to time, not later than every fifth year after the end of the transitional period (as defined in paragraph 1(1) of Schedule 5 to this Act), review such particulars.
(3) The preparation and review of the particulars of appropriate services under subsection (2) above shall be carried out by the relevant authority for any area in consultation with the relevant authorities for adjoining areas (and, in the case of a Passenger Transport Executive, in consultation with the Passenger Transport Authority for their area) in addition to the consultation required in pursuance of section 61(4) or any other enactment.
(4) As soon as may be after sections 6 to 9 of this Act have been brought into force, and on completion of each review of the particulars of appropriate services under subsection (2) above, each relevant authority shall publish, in one or more local newspapers circulating in their area, notice of the appropriate services within, to or from their area and, not later than the first such publication, send a copy of the notice to the traffic commissioner for their area and to all persons who have notified the relevant authority in writing that they wish to receive it.
(5) On receipt by the traffic commissioner of a copy of the particulars of appropriate services under subsection (4) above, the traffic commissioner shall, notwithstanding any limitation on his power to determine such conditions under section 7 of this Act, determine traffic regulation conditions which must be met in the provision of services in the area to which the particulars apply, being conditions regulating, as provided in section 7(6), the routes of such services, the stopping places for such services and the frequency of such services.
(6) Where a service is registered under section 6 of this Act or any such registration is varied, or cancelled, the traffic commissioner shall send notice of the registration, variation or (as the case may be) cancellation, together with particulars of the service, to every Passenger Transport Executive in whose area the service will or has run, as well as to local authorities in accordance with section 6(9) of this Act.
(7) On the receipt by a relevant authority of notice of the registration of a service, being a registration in pursuance of an application made to the traffic commissioner under section 6 within the period of 42 days beginning on the date of first publication of notice of the appropriate services under subsection(4)
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above, the relevant authority shall notify the person who has registered the service of any extension or modification of the service which they consider appropriate to meet public passenger transport requirements and may enter into agreement with him for the provision of such an extended or modified service on such terms as may be agreed.
(8) An agreement for extension or modification of a service under subsection (7) above shall not, for the purposes of this Act, be taken to be an agreement providing for service subsidies.
(9) The foregoing provisions of this section shall have effect, notwithstanding section 61(3) of this Act and section 9A(2) of the 1968 Act, and the powers of a relevant authority to enter into agreements providing for service subsidies in accordance with sections 83 to 86 of this Act shall be exercised subject to compliance with this section.").
The noble Lord said: The aim of this new clause following Clause 76 is to provide a mechanism by which services provided commercially and subsidised services secured after tendering can be drawn together by local authorities when considering the public transport requirements of the area of the local authority, looking at it as a whole. It also allows local authorities in the shires and the PTEs in the conurbations to take account of any local train or ferry service.
Perhaps I might give an idea of the philosophy behind the new clause. First, the local authority would state its views on the network required to meet the needs of its area in the judgment of the local authority. Secondly, the operators will respond by registering their commercial services, which may include services which the local authority may not have specified. It still leaves freedom to the private operator to decide whether he wishes to provide other services. Thirdly, the local authority and the operator could then negotiate on any minor amendments to the commercial network which would meet additional needs in a cost-effective manner. The authority would pay for its additional requirements at marginal cost in such areas. Fourthly, services to meet any requirements remaining unmet would be put out to competitive tender, as required in the Bill.
There are some services which are clearly commercial and others which are clearly non-commercial. However, there is another group of services in the middle which can be commercial at certain levels of frequency and at certain fares and the cost of providing them, but which at other levels would not be commercial. The commercial level of service may be adequate to meet the needs of the area, but this interface will be ever moving as the margin commercial services fluctuate. There is a grave risk of instability and of the travelling public not knowing who is going to be providing the service, what the service may be or what colour of bus they may expect to come along. Some kind of standardisation and some investigation of this from the centre is required.
Particulars of the services to be provided commercially or on a tendered-for basis would be published by the local authority as their stab at what they feel the service for the area should be. This could usefully be done in the form of a map and an accompanying schedule of frequency, and so on. In addition, this information would be sent to the appropriate traffic commissioner—or traffic commissioners, if more than one area were involved—to any existing or intending operator who required it. The publication of the map would be a

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signal to all potential operators of services in the area of the relevant authority's view of the overall requirements of the area as they saw them.
While that might influence the choice of some operators in the service registers, it has to be stressed—and I stress it again—that the idea of the clause is not in any way to inhibit the operators. They would not need to adhere to the map: they could register any service, whether or not the local authority had included it on the map. The map would also draw attention to other public transport services, such as railways or ferries, and the role which local authorities saw for them within their areas.
In effect, the new clause provides a mechanism for small variations in service: for example, to deviate from the main route to serve a hosptial or to extend a route from the town centre to a railway station, to be secured at marginal cost, rather than putting out to tender a full service specification which would be likely to be tendered for on the basis of fully-allocated costs. Any requirements of the area which were not met by commercial services or by negotiated variations on the main commercial services would then be secured through tendering under Part IV of the Bill. That is made clear in subsections (8) and (9) of the new clause.
I believe that the adoption of this procedure retains all the advantages of competitive tendering and of encouraging operators to exercise their own commercial judgments, while at the same time allowing local authorities to make clear at the outset the views they have on the sort of service they envisage for the area. I think that it would also considerably streamline the administration and the running in of the new type of service towards which the whole Bill tends to lean. I therefore hope that the Minister will give it very serious consideration at least in substance, even if some of the wording is perhaps not to his liking. I beg to move.
Earl De La Warr: I think the noble Lord, Lord Carmichael, does very well to point out the need for some mechanism, which does not appear to be in the Bill, in order to enable the commercial and the non-commercial services to mesh in with each other. I can see in this amendment nothing but a helpful suggestion. The local authority traffic departments have immense knowledge of the routes that are currently being run and I should have thought that operators and traffic commissioners would have benefited enormously from the early statements in detail of their views—the map, as the noble Lord, Lord Carmichael, says. Because it is an early statement, surely it means that difficulties which might otherwise arise, or gaps which might occur, will be pre-empted by the existence of this map and by the ability of local authorities—the traffic commissioner—to talk with operators about their plan so that as near as possible we get a smooth operation right from the start.
It seems to me, too, that although these may be on a small scale, if I may use the language of the noble Lord, Lord Carmichael, "many a mickle makes a muckle", and it may well be that this will add up to a considerable minimising of the routes which require to be subsidised, because the maximum use will be made of the commercial routes. It seems to me that this can
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be described as a mechanism that will do much—as I would call it—to ease the birth pains of this new arrangement.
The noble Lord, Lord Carmichael, said, too, that this would be entirely voluntary. As I see this amendment, it is important to emphasise that. I would say to my noble friend that I am somewhat doubtful about subsection (5) in this amendment because it mentions what the traffic commissioner shall do by way of determining regulation conditions. As I see the rest of the amendments it is essentially helpful and providing suggestions for voluntry implementation. I therefore commend this to the Government as being in every way something helpful in view of the fact that this is missing at the moment from the Bill.
Baroness Carnegy of Lour: I am not sure if I understood clearly what the noble Lord, Lord Carmichael, was saying. I may have misunderstood. It seems to me that this is at any rate in part, an attempt to return to the system which at the present time I think most noble Lords in the Committee agree is not working to the maximum benefit of the public. That is the system where the local authority and the existing operators can get together to make a deal; and then if some routes are left out other people come in.
The noble Lord, Lord Carmichael, said that some routes are clearly commercial and some are not. Looking at the existing system, I would agree that at one time that is how it looked. But, in the light of what the Bill is attempting to do—to provide that, where a route has very few travellers on it, it may be catered for by a minibus, a taxi or a bus operating in a quite different way with a much greater flexibility—I am not sure that the local authority is in a position to know what is commercial and what is not. The person who is in a position to know is the person who looks at it and says, "Can I do this in a way that will be attractive to the public and will leave me sufficient profit?" That is what the Bill is trying to bring about.
With the system which is being proposed now—if I understand it correctly—the local authority sits down at its transport committee and agrees a map. The map is not only the work of the director of public transport; it is also the work of the elected members. I am trying to think how the elected members will react to making that map. They will not want to be proposing a map which does not include routes which their constituents want. So there will be a political process. If I understand correctly—the noble Lord will put me right if I am wrong—there will be some political input into the drawing-up of the map for a start; and the official will be the one who is saying, "This is commercial and this is not," rather than the operators. Therefore the framework on which people come in and say they would like to operate has a political rather than a commercial basis.
Having done that, as I understand it, the operators come in by arrangement with the local authority. It is not simply a desire of those people to run a route because they think it will work. They are coming in to make an arrangement with the local authority to supply what they think they need. I should like to know whether the noble Lord thinks that that is the most cost-effective way of getting new, greatly-improved coverage of routes in the local authority and getting new operators, rather than simply the old

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discussion between the "big boys" and the local authority after the drawing up of the map. I may have misunderstood and, if so, I am sorry if I have wasted the time of the Committee. But this matter bothers me about the amendment.
Lord Tordoff: The noble Baroness is quite right. This is a complex amendment. It is perhaps not easy to see precisely what the meaning is, although the noble Lord, Lord Carmichael, has expressed it as clearly as anyone could. I wonder if I may be of some assistance to the noble Baroness, because it seems to me that what is being suggested here is a change from the rather black-and-white system which is included in the Bill at the moment and which says, "This is commercial, and this is not", to a process which is more iterative. In other words, there is a discussion period which goes on in the early stages of the formation of a new map—"map" is perhaps the wrong word—:but there is a new group of services, some of which will be commercial and some of which will be supported by the local authorities.
6.30 p.m.
The problem is that it may well be that commercial undertakings will decide that they wish to run a particular route; and one is perhaps thinking of a rural area. The local authority knows from its knowledge, and indeed from its political knowledge—I think that the word "political" is perhaps not the right one to use. But from its knowledge of its constituents, rather than from a political viewpoint in a party political sense, it knows that if a bus route were diverted through a certain village it might make it less commercial, but it might save the council from having to subsidise a much longer route from a totally subsidised service. In other words, a partial subsidy of part of a route might solve a lot of problems.
The object of this amendment, as I understand it, is to allow that negotiating process to take place at an early stage, before the whole network gets set in concrete. It is not an attempt in any way to inhibit commercial competition, but it is a way of integrating the subsidised services into the commercial services in a way which is meaningful. I do not know whether that helps the noble Baroness, but that is how I understand the purpose of this amendment.
Baroness Carnegy of Lour: Apart from publishing a map, what is different from the initial stages at the moment?
Lord Teviot: This is one of the most interesting parts of the afternoon. We are coming back to what one might call an argument. I agree with the noble Lord, Lord Tordoff, but I must turn to my noble friend Lady Carnegy. She will interrupt me if I am wrong, but I think she is saying that if we accept this amendment it will stop the new people coming in. She thinks that the new operator will not be able to look at a map or think up a new service and provide for a market which he thinks is there. On the other hand, she says that if we accept this amendment the members of a local authority will think of their constituents. She says that the new commercial man will think of what the public wants, but then the local authority will look at what
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the constituents want. I am not sure about that argument.
One point that my noble friend has made about the philosophy behind this Bill is that this is something which is entirely new, but is very speculative and high risk. I do not think anybody is in disagreement that this is a very high risk measure. But the Government have done many of these things in other areas and I absolutely applaud them. However, this amendment has the approval of other bodies which have gone along with the Government.
I can mention the Association of County Councils; and I am speaking on this amendment because my noble friend Lord Monk Bretton is away. The association feels that there is a very strong need for the provision to be inserted in this Bill. The present main statutory—I am sorry, but I am reading the wrong brief. However, I can say that the Association of County Councils is very much in favour of this Bill. Perhaps I can finish there and come back afterwards, because I notice that my noble friend on the Front Bench is raring to go and to tell us all.
Lord Tordoff: May I come back to the noble Baroness? She asked: what is different? As I read the Bill, the situation is that at the moment it is a two-stage process. The first stage is that competition is allowed to have its full play and then, when the local authorities see how the chips have fallen, they look at their area and say, "There are gaps here. There is a service that needs to be provided there, so we will put that out to tender on a supported basis". The danger with that is that you may have more local authority supported services than you need. This is a method by which, at an earlier stage, there can be some integration of the two types of service which will, in the end, save the taxpayer money.
Baroness Carnegy of Lour: If I may come back, my question was not, what is different about the Bill, but, what is different from the old system which does not work? That is what I was asking. It seems to me that this amendment is completely against the spirit of the Bill. Of course, the Association of County Councils would like to have it, because it is making all the decisions. I dare say that the big bus companies would like to have it, because they are making all the decisions. The truth of the matter is that when you start from that premise you do not get an improved service. That is my problem.
Lord Tordoff: The noble Baroness is surely wrong, because within the Bill there is deregulation, and this is not stopping deregulation. That is the difference between what is in the Bill and what went before and what is in the Bill with this amendment.
Earl De La Warr: I can see why my noble friend has some doubts, but may I put these two points to her? First, this is a guide prepared for all operators of the totality of services which the local authority thinks ought to be run and it is prepared, as I see it, without taking a view one way or the other as to what sort of operator is to run a service. As applications for registration come in, the map is, so to speak, marked up and the gaps emerge which can be the subject of fruitful conversations. But there is no compulsion nor,

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when the map is drawn up, does the local authority consider whether a service will be run non-commercially or commercially. That will emerge when the registrations are done.
So I think that my noble friend is seeing in the amendment something that does not exist. It is totally voluntary and the operator does not have to consult anybody, unless he wants to. If the local authority wants to consult an operator, it is all consultation. There is nothing in this clause which requires the operator even to take account of somebody else's views. It is purely mechanistic.
Lord Belstead: I think we ought to remember in looking at this amendment, which has been very persuasively moved by the noble Lord, Lord Carmichael, that this is a Bill which seeks to give passenger transport executives and local authorities very important functions. But the role of the local authorities is to supplement the market by using public money to secure only services which would not otherwise be available without public support. Authorities will also have powers to co-ordinate both commercial and non-commercial services, but this will be on the basis of free co-operation with operators, rather than on the basis of compulsion.
The exchanges which have been going on in the last five minutes or so have been all about whether behind this clause is the iron fist. If I may say so, it is there, for the purpose of this clause is to stand the main intention of the Bill on its head, by putting passenger transport executives and county councils in the dominant role in determining the pattern of services in their area.
Despite the arguments which the noble Lord put forward very persuasively about the desirability of having a planning map produced by the local authority, the effect of this new clause is that operators who wished to provide commercial services would be required to conform to the map published by the local authority. The authority would then secure the noncommercial services that it considered appropriate by negotiating extensions or modifications to the commercial services, without having to go out to tender at all. My conclusion, therefore, is that my noble friend Lady Carnegy is right to criticise this amendment as being a return to a planned system which has not succeeded.
My noble friend Lord Teviot said that we have come back to the meat of the Bill. Do not let us forget that we are talking about a system which, despite the devoted service of people in the bus industry all over the country, has brought us to the pass whereby the number of passengers has plummeted, the cost to the country has escalated and—my goodness me—fares over the country in the last 10 years or more have gone up by 30 per cent. above the rate of inflation. We are not talking about a system which has succeeded.
What does the amendment try to do? My noble friend Lord De La Warr says that its purpose is to provide a measure of co-ordination with the local authority at the helm, with nobody being forced to do anything and everything being done by agreement. If my noble friend cares to look at Clause 61(7) he will be reminded that there are adequate powers there for the local authority to co-ordinate services for the good of its area in the way that it thinks it ought to. If the
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proposition is that co-operation under this new clause is voluntary, all I can say is that the new clause is not adding very much to Clause 61(7).
With respect to my noble friend, this is not really the case. This new clause would give a very large measure of control to the local authority. At least under the present system an operator is free to apply for a road service licence, and the local authority can prevent the service only if it can demonstrate to the traffic commissioner that it would be against the interests of the public. That at least allows some scope for enterprise and initiative to operators to meet the needs of the customer.
Let us see what the new clause puts in the way of a man who simply wants to run a bus. First of all, if one looks at subsection (5) of the new clause one finds that this splended map, having been published, is then sent to the traffic commissioner. The traffic commissioner, presumably having regard to the map, will then,
"determine traffic regulation conditions which must be met in the provision of services in the area to which the particulars apply, being conditions regulating, as provided in section 7(6), the routes of such services, the stopping places for such services and the frequency of such services".
So the first hoop is that the poor old operator has to see the map which the local authority has produced going off to the traffic commissioner; and the traffic commissioner, having regard to the map and presumably only to the map and not to the desire of any of the operators whom we want to encourage under this Bill, would then be given a brand new power which is not to be found in Clause 7 of the Bill over which we spent hours earlier on. It is a brand new power. The traffic commissioner would hold up the map and say, "In the light of this splendid map which the local authority has produced, I shall now lay down where the stopping places are going to be, the frequency of the service, and, my goodness me!the routes of the service". So much for voluntary co-operation.
What about the second hoop through which the operator has to go?
Earl De La Warr: Will my noble friend give way?
Lord Belstead: No, not for a moment; not until I have gone through my second hoop.
Back comes the map. What happens then? Let us turn to subsection (7) of this little mouse of a new clause:
"On the receipt by a relevant authority of notice of the registration of a service, being a registration in pursuance of an application made to the traffic commissioner under section 6 within the period of 42 days beginning on the date of first publication of notice of the appropriate service under subsection (4) above, the relevant authority"—
that is the local authority—
"shall notify the person"—
that is the poor old operator—
"who has registered the service of any extension of modification of the service which they"—
that is the local authority—
"consider appropriate to meet public passenger transport requirements".
The local authority,
"may enter into agreement with him"—

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that is the operator—
"for the provision of such an extended or modified service on such terms as may be agreed".
It is absolutely clear that what is going to happen is that the local authority on the return of the map will turn to operators and say, "We are sorry, but some of the things which you want to do have slipped past the traffic commissioner and we are now going to come to you and say that there have to be further changes in the services that you wanted to run". If the operator stands up and says, "I don't agree with you", we are not told in this new clause what will happen. But presumably the local authority will go back to the traffic commissioner once again, will hold up the map for a second time and say, "Operator A refuses to agree with us and therefore will you now force him to agree with us by putting traffic regulation conditions on him which you failed to do the first time?" I do not like this clause and I hope I have given the reasons why not.
6.45 p.m.
Earl De La Warr: My noble friend wagged his finger at me as he referred to subsection (5), forgetting perhaps that I had referred him to it. I said right at the beginning that I have some doubts about subsection (5). My noble friend is quite right because in the final analysis that would happen. My commendation of this clause was clearly qualified by the fact that I did not find that acceptable, but I do find acceptable the pre-publishing of a map and all the voluntary mechanism that goes with it.
Lord Tordoff: I should like to pick up the point that the noble Lord the Minister made. The noble Lord raised a tremendous spectre in front of us, but when he was reading subsection (7) I noticed that in the last two and a half lines the word "may" appeared twice. I did not notice that the stress on the word "may" was quite so firm as the stress made on the other parts of the subsection that he was reading out.
As I see it, "may" subsumes the words "may not". There is no question but that that is permissive. It is not a great bureaucratic stick with which the poor owner, poor fellow, to whom the noble Lord keeps referring, will be beaten around the ears. It says "may", and it says "may" twice: He,
"may enter into agreement",
which presumably also means that if he so wishes, he may not enter into an agreement. The subsection also says,
"for the provision of such an extended or modified service on such terms as may be agreed".
The words "may be agreed" also in my view include "may not be agreed".
Lord Teviot: My noble friend will not be surprised if I do not let him get away entirely with his very impressive soliloquy in condemning this amendment. I want to say one or two quite minor things. My noble friend refers to the operator. I talked only this morning with the Bus and Coach Council which serves a large majority of operators. One of its largest groups happens to be the independent operators. Like my noble friend Lord De La Wan, they were a little happy about subsection (5), but only about that.
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They felt that if it was in the public interest and the service had to be provided, then that was absolutely fine.
Coming back to the local authority point, they are dealing with the needs of the public as they see them at the moment. They can only go so far with the spirit of the Bill. Now some splendid people are to come in. On the experiment so far, no splendid people have come in. They may come in. I am sure that if they last and are satisfactory then that will be splendid, but it is not going to be today or tomorrow. It might be in two years' time.
Lord Carmichael of Kelvingrove: I am most disappointed with the Minister. The noble Lord made the accusation that we were trying to introduce an iron fist. I had the feeling while he was speaking—and this is most unlike him—that he was using an iron fist on the amendment. He showed an aggressiveness which is most unlike him. I think that the aggressiveness clouded his thinking. Every local authority that is a traffic authority, whether it is a PTE or a county council, will need to produce a map, whether before or after. It is the only way to look at an area and get a picture of it, unless you have a particularly analytical mind and can read all these routes from a timetable. A map is needed.
What we are suggesting in the amendment—and I think that this is also an answer to the noble Baroness, Lady Carnegy of Lour—is that a network, or some sort of idea, would need to be in the local authority's mind. It will know roughly the sort of area it wants to have served. How it is served is a matter for the market. There is no question but that the market would decide it. The people who organise transport, the professionals in the transport business in every part of the country, know their jobs and they know that there are certain routes that must be followed.
I made it quite clear, and the amendment makes clear, that the map is in no way binding. At any time, right from the beginning, an operator can decide not to run a service in a certain way. He can say, "I have a better idea. I think I can serve this area in a different way." I believe that we are trying to be helpful. There is no need to adhere to the map. Anyone who has a private service operator's licence can use it on any route he likes.
The Minister made great play about the bogeyman of the traffic commissioner and the need to go back to the traffic commissioner. The noble Lord, Lord Tordoff, clearly explained that. He made it clear that we use the word "may" on every occasion—that the local authority "may" enter into agreements with an operator. Surely it is commonsense, if an operator is going within one or two miles of a village or hospital, that the local authority should be able to say to the operator, "Let us discuss this. We believe we need a service right to the hospital or right to the village." It is up to the operator whether or not he accepts it. However, the local authority—and this is perhaps where the importance of the power would come in—would then say that it still needs a service to the area concerned and some accommodation would need to be made. Either the operator would have to enter into negotiations or the local authority would need to find someone else to operate the service if it believed it to be necessary.

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I refer the Minister, as he referred me, to Clause 7(6) which contains all the powers that the Minister accused me of handing to the traffic commissioner. They are already in the Bill. Subsection (6) states:
"The purposes for which traffic regulation conditions may be determined are the regulation of—

(a) the routes of services;

(b) the stopping places for services;

(c) when vehicles used in providing services may stop at such stopping places and for how long they may do so; and

(d) such other matters as may be prescribed.".

I think that if the Minister looks again at the Association of County Councils he will see that subsection (7) provides a mechanism for local authorities to do precisely what Ministers have repeatedly argued they should do: that is, meeting social need wherever possible by cost effective augmentation of the commercial services but which, under the Bill as it stands, would be very difficult to achieve in practice. It would certainly be very difficult to achieve within the timescale that the Minister is suggesting. The new clause would streamline the procedure and when the time comes would perhaps get things moving much more smoothly than I fear will be possible if the Bill remains in its present form. I feel that we must test the Committee on this amendment.
6.54 p.m.
On Question, Whether the said amendment (No. 240A) shall be agreed to?
Their Lordships divided: Contents, 97; Not-Contents, 104.

DIVISION NO. 1

CONTENTS

Airedale, L.

Grey, E.

Ardwick, L.

Grimond, L.

Attlee, E.

Hampton, L.

Avebury, L.

Hanworth, V.

Aylestone, L.

Harris of Greenwich, L.

Bacon, B.

Hatch of Lusby, L.

Banks, L.

Hirschfield, L.

Barnett, L.

Hooson, L.

Beaumont of Whitley, L.

Houghton of Sowerby, L.

Birk, B.

Howie of Troon, L.

Blease, L.

Hughes, L.

Boston of Faversham, L.

Irving of Dartford, L.

Bottomley, L.

Jacobson, L.

Brooks of Tremorfa, L.

Jacques, L.

Caradon, L.

Jeger, B.

Carmichael of Kelvingrove, L.

John-Mackie, L.

Cledwyn of Penrhos, L.

Kilmarnock, L.

Collison, L.

Kirkhill, L.

Crawshaw of Aintree, L.

Kirkwood, L.

Darling of Hillsborough, L.

Kissin, L.

Darwen, L.

Llewelyn-Davies of Hastoe, B.

David, B.

Lloyd of Kilgerran, L.

Davies of Leek, L.

Lovell-Davis, L.

De La Warr, E.

McIntosh of Haringey, L.

Dean of Beswick, L.

Mackie of Benshie, L.

Denington, B.

McNair, L.

Diamond, L.

Mellish, L.

Elwyn-Jones, L.

Milner of Leeds, L.

Ennals, L.

Moyne, L.

Ewart-Biggs, B.

Murray of Epping Forest, L.

Falkender, B.

Nicol, B. [Teller.]

Falkland, V.

Ogmore, L.

Fisher of Rednal, B.

Ponsonby of Shulbrede, L.

Gallacher, L.

Prys-Davies, L.

Galpern, L.

Roberthall, L.

Gladwyn, L.

Robson of Kiddington, B.

Graham of Edmonton, L. [Teller.]

Rochester, L.

Ross of Marnock, L.

Gregson, L.

Seear, B.

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Shackleton, L.

Taylor of Mansfield, L.

Shepherd, L.

Teviot, L.

Silkin of Dulwich, L.

Tordoff, L.

Simon, V.

Turner of Camden, B.

Stedman, B.

Underhill, L.

Stewart of Fulham, L.

Wallace of Coslany, L.

Stoddart of Swindon, L.

Wedderburn of Charlton, L.

Strabolgi, L.

Whaddon, L.

Taylor of Blackburn, L.

Wise, L.

Taylor of Gryfe, L.

Young of Dartington, L.

NOT-CONTENTS

Alport, L.

Layton, L.

Ampthill, L.

Lindsey and Abingdon, E.

Arran, E.

Long, V.

Atholl, D.

Lucas of Chilworth, L.

Bauer, L.

McFadzean, L.

Beloff, L.

Macleod of Borve, B.

Belstead, L.

Mancroft, L.

Bessborough, E.

Margadale, L.

Bethell, L.

Marshall of Leeds, L.

Birdwood, L.

Massereene and Ferrard, V.

Brabazon of Tara, L.

Maude of Stratford-upon-Avon, L.

Brougham and Vaux, L.

Broxbourne, L.

Merrivale, L.

Bruce-Gardyne, L.

Mersey, V.

Caithness, E.

Mottistone, L.

Cameron of Lochbroom, L.

Murton of Lindisfarne, L.

Campbell of Alloway, L.

Napier and Ettrick, L.

Carnegy of Lour, B.

Newall, L.

Cathcart, E.

Norfolk, D.

Chelmer, L.

Nugent of Guildford, L.

Chelwood, L.

Orkney, E.

Coleraine, L.

Plummer of St. Marylebone, L.

Colwyn, L.

Constantine of Stanmore, L.

Poltimore, L.

Cork and Orrery, E.

Polwarth, L.

Cox, B.

Rankeillour, L.

Craigavon, V.

Reay, L.

Denham, L. [Teller.]

Rochdale, V.

Dilhorne, V.

Rodney, L.

Donegall, M.

Romney, E.

Drumalbyn, L.

Saltoun of Abernethy, Ly.

Eden of Winton, L.

Sanderson of Bowden, L.

Elliot of Harwood, B.

Sandford, L.

Elliott of Morpeth, L.

Sandys, L.

Ferrers, E.

Savile, L.

Fortescue, E.

Selkirk, E.

Fraser of Kilmorack, L.

Shannon, E.

Glanusk, L.

Skelmersdale, L.

Glenarthur, L.

Stockton, E.

Gowrie, E.

Suffield, L.

Gray of Contin, L.

Swinfen, L.

Greenway, L.

Swinton, E. [Teller.]

Gridley, L.

Torphichen, L.

Harmar-Nicholls, L.

Trefgarne, L.

Henley, L.

Trumpington, B.

Hives, L.

Tryon, L.

Hood, V.

Vaux of Harrowden, L.

Hooper, B.

Vivian, L.

Hylton-Foster, B.

Whitelaw, V.

Inglewood, L.

Wynford, L.

Killearn, L.

Young, B.

Kimball, L.

Young of Graffham, L.

Lane-Fox, B.

Zouche of Haryngworth, L.

Resolved in the negative, and amendment disagreed to accordingly.
The Earl of Caithness: I beg to move that the House do now resume. I also confirm that we shall not come back for further consideration of the Transport Bill until 8 o'clock.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

Trustee Savings Banks Bill
7.3 p.m.
The Chancellor of the Duchy of Lancaster and Minister for the Arts (The Earl of Gowrie): My Lords, I beg to move that the Commons amendments and Reason be now considered.
Moved, That the Commons amendments and Reason be now considered.—(The Earl of Gowrie.)
On Question, Motion agreed to.

Trustee Savings Banks Bill
  COMMONS AMENDMENTS AND REASON
  [References are to Bill (92) as first printed for the Lords. The Commons, amendments and Reason are printed in italics.]

  LORDS AMENDMENT
  1 Clause 1, page 1, line 9, after ("banks") insert ("other than Trustee Savings Bank Scotland Limited which is hereby excluded from this Act")
  The Commons disagreed to the above amendment but proposed the following amendments in lieu thereof
  2 Page 2, line 11, leave out from ("and") to end of line 13 and insert ("eligible to succeed them")
  3 Page 2, line 30, after ("business") insert ("and eligible to succeed it")
  4 Page 2, line 35, at end insert—
  ("( ) For a company to be "eligible to succeed" an existing hank it must have been, immediately before the vesting day, a subsidiary of the Central Board or the existing holding company and it must—

  (a) in the case of the company which is to succeed the existing bank for England and Wales, be registered (and accordingly have its registered office) in England and Wales;

  (b) in the case of the company which is to succeed the existing bank for Scotland, be registered (and accordingly have its registered office) in Scotland;

  (c) in the case of the company which is to succeed the existing bank for Northern Ireland, be registered (and accordingly have its registered office) in Northern Ireland; and

  (d) in the case of the company which is to succeed the existing bank for the Channel Islands, be incoroporated (and accordingly have its registered office) in any of the Channel Islands.")

  The Earl of Gowrie: My Lords, I apologise to the House. I am caught at a disadvantage. It was my understanding that I was to reply to an amendment moved by the noble Lord, Lord Banks. Am I wrong about that?
  Noble Lords: Yes!
  The Earl of Gowrie: I beg your Lordships' pardon. My Lords, after that not very auspicious beginning, may I now consider Commons Amendments Nos. 2 to 4 on Clause 1? I beg to move that this House do not insist on their Amendment No. 1 to which the Commons have disagreed, and do agree with the Commons in their Amendments Nos. 2 to 4 in lieu thereof.
  These amendments reflect the agreement reached between the noble Lord, Lord Taylor of Gryfe, and the chairman of the Trustee Savings Bank Central Board. This House discussed this agreement at some length at Third Reading, and the Government undertook to bring forward these amendments in another place as the rules of procedure in your Lordships' House prevented us from moving them on Third Reading here. My Lords, I beg to move.
  Moved, That this House do not insist on their Amendment No. 1 to which the Commons have disagreed and do agree to the Commons Amendments Nos. 2 to 4 in lieu thereof.—(The Earl of Gowrie.)
  Lord Stoddart of Swindon: My Lords, it seems to me that the Commons amendments in fact take care of the agreement which was set out in the Written Answer to the noble Lord, Lord Taylor of Gryfe, on the 4th July, and I think we can be satisfied that the assurances that were given have in fact been met. But I am wondering whether it would be in order for me to raise with the noble Lord a new factor which seems to have arisen since the matter was discussed in your Lordships' House, and indeed was referred to during the Commons debate on the Lords amendments. It arises from a letter which I have received and which no doubt other noble Lords have received from Mr. Mungo Bovey. Perhaps I may quote some passages from his letter. He writes:
  "I am writing to you as one of the counsel involved in the action in the Court of Session whereby a Depositor in the Trustee Savings Bank Scotland seeks a decision from the Court that the depositors are the owners of that Bank".
  He goes on to say:
  "In 1979 the Central Board of the Trustee Savings Bank took the opinion of Mr. John Murray, QC … Mr. Murray advised in unequivocal terms that in Scots Law the Bank was a voluntary unincorporated association owned by its depositors".
  At that time, apparently, the advice was accepted by the bank but subsequently the bank took a different decision.
  Noble Lords will recall that we had quite a debate on this issue during the Committee stage and many noble Lords took part. Indeed, many noble Lords, including the noble Lord, Lord Taylor of Gryfe, queried who it was who actually owned the bank, and the Minister seemed quite certain that the Bill was in order. This new element seems to raise other issues, and bearing in mind this letter and the contention that this Act could be a confiscatory Act, taking away from the depositors something which they own, I am wondering whether the noble Earl will give us the benefit of his opinion on the status of the Bill in the light of the action in the Scottish courts.
  The Earl of Gowrie: My Lords, the Government are satisfied that the legal position is as stated in the White Paper; namely, that neither depositors, staff, trustees, nor the Government themselves own the Trustee Savings Banks. The Government were aware at all material times that a Scottish QC, the Mr. John Murray who has been referred to, had given advice to the contrary in 1979, and perhaps we should note that this was prior to the legislation in 1981 which now applies. Both the Government and the TSBs have received further advice which has disagreed with Mr. Murray's opinion. In my judgment it would be quite wrong to hold up Parliament's consideration of legislation because a court was considering a case which might have some bearing on the subject before Parliament. The proposals now embodied in this Bill were announced three years ago. The House can draw its own conclusions from the fact that the attempt to test ownership in the courts was started at the very last moment and at the end of the parliamentary Session.
  If, contrary to the advice that the Government have received, the court finds against TSB Scotland, the

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  Government will consider their action in the light of the court's judgment. It would therefore be quite wrong for me to commit the Government to any particular course of action in circumstances which are wholly hypothetical.
  I understand that TSB Scotland has given an assurance that as the law stands it will not give its assets away. Clearly the trustees of TSB Scotland would not wish to do anything illegal and the Treasury would be the first to stop them doing so. The vesting operation when the time comes will involve a statutory transfer under this Bill.
  Lord Stoddart of Swindon: My Lords, may I ask one further question? I should like to thank the noble Earl for that explanation, which was most useful. I know nothing at all about Scottish law. I do not know how long courts take to make decisions. Presumably no action would be taken to issue shares in advance of the court's decision.
  The Earl of Gowrie: My Lords, I can only repeat that it is my view that it would be wrong to hold up Parliament's consideration of legislation or the consequences of that legislation.
  Lord Grimond: My Lords, let us be quite clear about this. I understood from the noble Earl's first statement that no action would be taken until the courts had given their decision—that is to say, that the Bill would not become law until after the courts had given their decision. Is that the case? If so, does that mean that it will not become law until not only has the court of first instance given a decision but any appeals have been disposed of?
  The Earl of Gowrie: My Lords, the Bill would of course become law, if it is passed, but my advice is that it would not be put into operation before the vesting day.
  Lord Grimond: My Lords, if the Court of Session were to decide that ownership rested with the present depositors, we should then be left with a Bill floating about in mid-air and with a clear court ruling that certain people owned the shares. Surely that would be wholly unsatisfactory and from a parliamentary point of view something that at all costs should be avoided.
  The Earl of Gowrie: My Lords, I think that I have answered the point about which the noble Lord is anxious. As this matter is a bit technical and I am not, alas, a Scottish lawyer, I shall repeat what I said. If, contrary to the advice that the Government have received—and I spelt out that advice earlier—the court finds against TSB Scotland, the Government will consider their action in the light of the court's judgment. I cannot commit the Government to any course of action in circumstances that are hypothetical and, based on all the advice that the Government have had, highly unlikely.
  I understand, however, that TSB Scotland has given an assurance that as the law stands it will not give its assets away. The trustees of TSB Scotland would not of course wish to do anything illegal and the Treasury would be the first to stop them doing so. The vesting operation when the time comes will involve a statutory transfer under this Bill.
  7.15 p.m.
  Lord Bruce-Gardyne: My Lords, I apologise for interrupting during this argument, though what I want to say is germane to the subject. My reason for intervening at this stage is that I feel obliged to set the record straight in one particular which referred to myself in view of what was said last week in another place.
  On Thursday last, I was rung up by the BBC and the Evening Standard, which asked for my comments on allegations which, they told me, had been carried in that morning's Guardian and Financial Times to the effect that I, as Economic Secretary to the Treasury between 1981 and 1983, had suppressed legal evidence that the Scottish TSBs belonged in whole or in part to Scottish depositors with the bank, and thus misled the House of Commons; furthermore, that my present position as a director of the Central TSB might have something to do with that suppression.
  Naturally I studied the two newspapers in question. Both reported that Mr. Gordon Wilson, the Member for Dundee, East, had on July 15th raised a Point of Order about the consideration of your Lordships' amendments to this Bill, scheduled for discussion in the Commons later that evening, precisely on this point of the advice which had apparently been received from Mr. James Murray, QC. The Guardian reported Mr. Wilson as complaining:
  "we have a situation where either the TSB senior trustees have sat on legal opinion and failed to inform the Government or the Government was informed of the legal opinion obtained in Scotland and chose to ignore the significance of it, and thus misled the House".
  Mr. Wilson, the Guardian reported, said that the affair was either a contempt of the House or a breach of privilege involving a conspiracy which might go even further than the 'Commons. I quote again from the Guardian:
  "He noted that Lord Bruce-Gardyne, who was Economic Secretary to the Treasury between 1981 and 1983, was now a director of the Central TSB. He was then the Minister originally responsible for the TSB Bill and the original assertion that there were no technical owners of the bank".
  The Financial Times of the same day quoted Mr. Wilson as saying that I had told the House of Commons in my capacity as Economic Secretary that there was a "lack of ownership" of the TSBs. It went on to say:
  "Mr. Wilson said that Lord Bruce-Gardyne was now a director of the Central TSB".
  I consulted Hansard. That showed that both newspaper reports, although mildly garbled, gave the gist of the intervention of the honourable Member of another place. I therefore wrote to Mr. Wilson to point out the highly defamatory, and, I hope That I need hardly add, wholly unfounded implication, of the juxtaposition of these two statements.
  I told him that, had he consulted me in advance of raising his Point of Order, I should have explained to him that, while I had of course been aware as Economic Secretary to the Treasury that the ownership of the "produce" of the TSBs was a matter of controversy, I had been advised very much along the lines that my noble friend has just been explaining to the House, that in the judgment of Treasury counsel there were no legal owners of the TSBs; I had therefore supervised the preparation of the legislation on that

  1269
  basis. I should also have told him that any suggestion that I had, whether at the behest of the TSBs or for any other reason, suppressed evidence to the contrary—let alone the implication that my present position as a director of the Central TSB was in some sense a reward for such suppression—was wholly without foundation. I therefore asked him to put the record straight.
  The honourable gentleman assures me that he accepts my assurance that the implication inescapably contained in the juxtaposition of his comments is wholly without foundation, but he declines to put the record straight, and so I wish to do so tonight.
  The fact is simply as my noble friend said, and I cannot emphasise that too strongly. Like my noble friend, I am not a lawyer. One is bound in these matters by the legal advice that one receives. But the legal advice that I received and on which I was bound to act was right the way through that in the opinion of the Government's legal advisers there were no legal owners of "produce" in the TSBs. It would have been totally impossible for me to have supervised the preparation of this legislation on any other basis.
  Personally I was always brought up to believe that one of the principles of the concept of parliamentary immunity was that it should be a deterrent to innuendo which could not be substantiated, and I believe that that rule should continue to be observed. It is for that reason that I felt that I should make the intervention at this point in the debate.
  Lord Galpern: My Lords, the noble Earl has acknowledged that this very important matter is before the Scottish courts at the present time. He says that the question of what will be the decision is hypothetical. I accept that. It may be in favour of Mr. Bovey's submissions or it may be against them. If the court is in his favour, the noble Earl explains to the House that certain steps will have to be taken by the Treasury and other departments. What is the urgency that prevents us saying that we should delay the whole business until we have an opinion from the courts? After all, as the matter has been dragging on for quite a number of years, why can we not delay it a little further until the courts rule on the submission?
  The Earl of Gowrie: My Lords, perhaps I may reply, with the leave of the House. It would be an astonishing action to delay parliamentary business because some matter was before the courts. Obviously, the Government have to take into account, to put it at its mildest, any findings of the courts. No legislation, or very little, would pass at any stage if it were simply to he delayed while court hearings, for which any citizen can apply, were taking place. However, what should give the noble Lord, and indeed the House, reassurance is that my advice is that any outcome, hypothetical as it is, in favour of the appeal would delay the consequences of vesting day. Therefore that is a separate issue. The assurances which have been given by the Trustee Savings Bank (Scotland) also bear that out.
  Lord Mackie of Benshie: My Lords, may I ask the noble Earl, because I think it would be helpful to know, if the advice given by the Treasury counsel is fully cognizant of Scots law? Is there a Scottish lawyer
  1270
  who gives advice to the Treasury counsel as well as an English one?
  The Earl of Gowrie: My Lords, remote and cut off as one sometimes suspects the Treasury may be, I do not think that they are wholly without recourse to Scottish law. I should point out to the noble Lord that my noble friend the former Economic Secretary to the Treasury, while he may not be a lawyer, is certainly a Scot, and it would not be beyond the wit of the Treasury to have access to Scots lawyers. There is a very distinguished Scots lawyer sitting beside me on the Front Bench at the moment.
  Lord Ross of Marnock: My Lords, but surely one of the points is this. We know that contrary advice was given in 1979 by Mr. Murray; that his opinion, which was sought by the TSB at that time, was to the effect that the bank was owned by the depositors or members. Since that time, of course, he has been asked to put forward a case, and as an advocate he has put forward a case for the TSB and suggested that, if anybody, it might possibly be the central board who owned the bank.
  However, it must strike the House as odd that, on the basis of not knowing whether there was any owner or who the owner was, the Government proceeded to allow this bank to be sold off. The Government are the agents here, whether they like it or not. May we he told who gave the contrary advice to Mr. Murray, and when? I think we are entitled to that piece of information.
  As to further progress, once the Bill becomes an Act it does not come into force for two months after its passing into law. But, as I understand it from information we received on yet another Scottish Act fairly recently, although the Act has not come into force the Government can produce orders. The important order here rel4tes to the fact that vesting day is decided by the Treasury and they produce an order telling us what vesting day is.
  Until that takes place there is no change in the status of the bank. Once it takes place one can argue as much as one likes about it: an Act of Parliament has made a change in the bank, which Parliament can do. But it does not end there because, as I understand it, those who are concerned that depositors are being deprived of a right can go to the European Court. If they do, bearing in mind that there will then be a new bank, who will be responsible for paying compensation if that comes about?—not the new bank, but the Government. So I think there is every reason why the Government should hesitate about this.
  Remember, we have already been told, I think it was in the letter that passed between the Treasury and Sir John Read, that no action will be taken in relation to vesting day until those concerned are satisfied that certain assurances that were given have been met. So there is to be a delay. Would it not be wise for the Government themselves to institute some action to find out who owns the bank, rather than that we get into a mess very much later? I should apologise for having said before that a certain important amendment was initiated by a Mr. James Craigen in another place; it was not, it was initiated by Mr. Gordon Wilson, the Member of Parliament mentioned by the noble Earl. By the way, Mr. Gordon Wilson is a lawyer, and a Scots lawyer.
  Lord Cameron of Lochbroom: My Lords, with the leave of the House, since there has been a suggestion that in this matter there is a peculiarity of Scots law, perhaps it would be only right at this stage to make quite clear that the existing banks are covered by legislation which applies throughout the United Kingdom. As my noble friend Lord Gowrie has already made clear, it is also an Act which was passed by Parliament in 1981. No doubt the force of that will not have escaped your Lordships—that the advice which is referred to by the Scots counsel, Mr. John Murray, was given in 1979.
  I should simply reinforce what my noble friend has already said—that the Government received legal advice on this matter following the passing of the 1981 Act. The preponderance of that advice was to the effect which my noble friend has already submitted to your Lordships. I hasten to add that it was given in the full knowledge that contrary opinion had been expressed by Mr. John Murray in an opinion in 1979. I hope that that at least clarifies the matter. There is no peculiarity so far as statutory interpretation is concerned as regards a Scots law as against the law which applies south of the border.
  Lord Ross of Marnock: My Lords, before the noble and learned Lord the Lord Advocate sits down, may I ask him this? He said "the preponderance" of the advice; so there was conflicting advice. Surely the only way to end the conflict was to ask the courts to decide. Why did not the Government proceed in that way, or invite the TSB to proceed in that way? All that we have heard about this preponderance of advice is that nobody owns the bank, which is an absurd position.
  Lord Cameron of Lochbroom: My Lords, I had hoped to make it quite clear in what I had already said that the reason why I used the phrase "preponderance of" legal advice was that it was known, at the time when advice was taken, that contrary opinion already existed in the opinion given by Mr. Murray in 1979.
  Lord Grimond: My Lords, I do not want to prolong this matter, but I understand it has been suggested that Mr. Murray withdrew his opinion on the grounds that the position had been altered by the 1981 Act. Do we understand that that is not so; that he maintained his opinion in spite of the 1981 Act, but the preponderance of the opinion of other lawyers was against him? Secondly, I should like to ask: is it alleged that the 1981 Act definitely altered the ownership of the savings bank?
  Lord Cameron of Lochbroom: My Lords, what I am saying to your Lordships is this. First, I am not aware just now that more than one opinion was given by Mr. Murray in 1979. I can only say that he appeared very recently, as one of your Lordships has remarked, on behalf of the Trustee Savings Bank in the present action. The 1981 Act deals with the question of the assets of the trustee savings banks. That is of course the issue which is raised in the current action before the Court of Session. It proceeds upon the terms of the 1981 Act. The Government have taken legal advice on that matter. They have formed a view, already expressed by my noble friend, in the full knowledge that a contrary opinion had been given in 1979 by Mr. Murray. That is why I used the expression, "the preponderance of legal advice".
  7.30 p.m.
  Lord Galpern: My Lords, is it possible that the court may decide differently on the effect of the 1981 Act, and that this is what is subject to consideration by the courts?
  The Earl of Gowrie: My Lords, with the leave of the House, I believe that we are getting very far from consideration of the Commons amendments. Because noble Lords are interested in this issue and because I am the last person to set myself up as an authority on the procedure of your Lordships, I have been listening as avidly as the rest of the House to the remarks and answers of my noble and learned friend the Lord Advocate. I think, however, that we should probably now complete this business in respect of the consideration of the Commons amendments.
  Lord Taylor of Gryfe: My Lords, I would not wish to enter into the discussion on the proceedings before the Court of Session. It would be a very interesting and somewhat extraordinary constitutional position if the Court of Session, in due course, was to rule that Parliament was acting illegally. That is a very interesting constitutional point. I await the judgment with interest. If of course the matter is taken to the European Court of Human Rights, we can expect a delay in the Bill of at least four or five years. That is the kind of time that is taken to deal with these matters before the European courts. I make no comment on that position. All that I would say to your Lordships—I am not blaming anyone—is that the matter is a major plank in the activities of the declining fortunes of the Scottish nationalists. I think that it is largely a political stunt initiated by them and supported by them in order to keep alive their political credibility in Scotland.
  My own interest in the matter is not derived from any particular Scottish nationalist affiliations. However, I should like to say a word or two about the amendments before the House. The amendments provide for the revision of the amendment carried by this House in my name. It is important to say that originally my amendment was moved in the House of Commons where it was defeated by 137 votes to 29. That was the House of Commons measure of support for my amendment. When it came to the Committee stage in the House of Lords, my amendment was defeated by 113 votes to 76. At Third Reading, I reintroduced the amendment, and it was carried by 67 votes to 54. While I was pleased to carry the amendment, I am not pretending for a moment that the voice of democracy was very strongly expressed in that decision.
  It was for that reason and at the invitation of the Government that I entered into negotiations with Sir John Read to seek certain assurances knowing, at the same time, that in the last analysis—as has just been shown in the amendments before the House—the power of Parliament and the power of the House of Commons in the matter would be paramount. Therefore, I do not propose to re-introduce my amendment by moving rejection of the amendments before us. All that I would say to the Government is that the Trustee Savings Bank gave certain important assurances to the Chancellor. It has been said, in the much debated Scottish scene, that these assurances

  1273
  were negligible. Indeed, they were described, again by the Scottish nationalists and others, as being a spineless surrender. Just as the noble Lord, Lord Bruce-Gardyne, has to defend himself in this House tonight, I think that I should reiterate, for the sake of the record, one or two of the concessions that were made.
  I regret that the amendment before us deals simply with the constitutional position of the TSB (Scotland) and that it has not been possible to write in some of the assurances into the statute that were given. That would have strengthened the statute. It would be more reassuring. They are certainly reprinted in Hansard, and the articles of association of the new company, when they emerge, will incorporate these assurances. I welcome that, but articles of association can be changed. It would have been better if some of the assurances had been incorporated in the statute.
  There is a very interesting one. In regard to the TSB Charitable Foundations, Sir John Read, writing to the Chancellor, said:
  "I confirmed in my letter of 6th December 1984 that the TSB Group intended to proceed with the endowment of certain charitable foundations."
  Sir John went on to say:
  "We are pleased that, in the light of those debates, you have agreed that the Government will propose an amendment providing for the TSB Central Board to arrange the establishment of charitable foundations".
  That assurance was given, but I do not see the amendment in the Bill before us or in the statute at all. I would very much have welcomed that assurance in the Bill. The distribution of the charitable fund is being made not on turnover or on the number of shareholders but on the reserves contained in the separate banks. This means, in fact—since Scotland is a very healthy bank with substantial reserves—that the charitable foundation could be allocating probably 2 per cent. of its profits in a year to Scottish charitable purposes. That is substantial. It is important. While it is contained in the assurances that I have received, it would have been better if it had been incorporated in the statute.
  I should like to reiterate that the amendment provides for the separate registration of the TSB (Scotland). That is welcome. We support it. However, the assurances went further and said that each banking company shall have its own board of directors and that the directors, after the transition period will be appointed from that country and will have a special responsibility for looking after the interests of the country or territory in which the bank is established. That is important. It was at the root of my objection originally to the proposals that the Scottish TSB would be submerged in the central organisation.
  The arrangements for liaison between the separate banks and the central body must also be incorporated in the articles of association which provide for the chairman and managing director of each group to be on the central board and ensure that the interests of these separate countries will be fully expressed in the central board in its deliberations.
  Lord Ross of Marnock: My Lords, if I heard the noble Lord correctly, he said that the boards of the new banks would be elected by the new company. As
  1274
  I read it, each banking company shall have its own board of directors drawn substantially from trustees of the present banks but thereafter each board will appoint its own members. It is a self-perpetuating oligarchy, and will be subject to the approval of the parent board. They are not elected so far as I can see.
  Lord Taylor of Gryfe: My Lords, the noble Lord, Lord Ross of Marnock, is quite right. The board will not be elected. The Scottish TSB will be a separate registered bank and, like any other plc the board will be appointed by the directors but will be subject to the approval of the shareholders. It is company law. It does not require to be incorporated in the Bill, as I understand it, but I may be corrected. It will be like any other public limited company; it will be a bank like any other bank. I see that the noble Lord, Lord Polwarth, is in the Chamber. It will be like the Bank of Scotland, Clydesdale or whatever, and it will have exactly the same status.
  I should like to raise another matter, and I shall not dwell on it. In my view, the assurances which were given were the best which could be secured and they were helpful to Scotland's position. I do not regret the debate and the amendment which was carried because we established a respect for the Scottish position and we emphasised the Scottish dimension. We constantly made the TSB central board aware of the importance of TSB Scotland to the entire affair.
  Having said that, I am not opposing these amendments at all; indeed, I wish the TSB well. It is a bank which has had strong roots in the community in Scotland and elsewhere. It should be in a very strong position. It has £700 million of reserves in the TSB. and added to that we have a flotation which might attract an even larger sum. It ought to attract an even larger sum than £700 million because that is what is being offered in the kitty. Therefore, it will be a very considerable force in banking and it will have a great deal of money to indulge in competitive lending as regards the other banks in this field. I wish it well. I wish its management well. I am quite sure that. as a result of the debates in this House, the substantial contribution of the Scottish TSB will be recognised.
  Let me say that at the end of the day this House has performed its useful and sensible function. It received a bad Bill from the House of Commons. It looked at it; it examined it and sent it back. Through the process of negotiation we have reached some degree of consensus. I hope that the TSB will continue to enjoy esteem in the community and will prosper as a bank.
  Lord Galpern: My Lords, I have listened carefully to the noble Lord's explanation regarding the satisfactory promises which he has received as a result of his amendment being rejected. However, since he received the assurances a new situation has developed because the whole matter is now before the courts in Scotland. I should like to ask the noble Lord a simple question. Is he against delaying this Bill until such time as the courts have ruled on the submissions which are now being made to them?
  Lord Taylor of Gryfe: My Lords, that question has been asked on a number of more public occasions than this, including radio and television debates involving leading Scottish nationalists. I would not care to

  1275
  comment on the matter at all. I am content to await the judgment of the courts, and accept the assurances that, if the courts found that the Government or the TSB were disposing of assets to which they had no entitlement, then that would raise a very interesting constitutional situation.
  7.45 p.m.
  Lord Ross of Marnock: My Lords, I should like to say a few words on this matter. One of our mistakes in respect of the original amendment which was eventually passed was that we did not carry it through the Bill. As a result it made virtually nonsense of the Bill. The Government were not willing to go the whole way with us which would have meant dealing with the other aspects of the Bill which affected Scotland. They felt themselves tied by the fact that they had reached Third Reading and therefore the matter would probably have had to be recommitted, which of course they could have done in order to clear it up. However, they were not prepared to accept a completely independent Scottish bank. It would probably have meant that they would have done with this Bill what they did the other day with the Bill dealing with corporal punishment in schools—they would have forgotten about it and produced yet another one.
  I regret in many ways that the Scottish TSB is becoming part of the group and will be subject to the group. Let us face it, a measure of its independence has gone. We were told about the benefits which were contained in the letter. I was glad to hear the noble Lord, Lord Taylor of Gryfe—and I hope that my pronunciation of his name is a little better than that of the Chancellor of the Duchy—
  The Earl of Gowrie: My Lords, it was a Freudian slip.
  Lord Ross of Marnock: I am sorry my Lords?
  The Earl of Gowrie: My Lords, I inadvertently said "a Freudian slip".
  Lord Ross of Marnock: My Lords, as a matter of fact I thought that it was a Gowrie slip. It is as tangled a skein as the Bill itself to whom the grief referred, whether it was the Government or whether it was the noble Lord. However, the noble Lord, Lord Taylor, pointed out, as we have pointed out more than once and as was pointed out in another place by no less a person than a former Solicitor-General for Scotland, Mr. Nicholas Fairbairn, that unless assurances are actually in the Bill they do not mean a thing. There is no guarantee that they can be changed. Other people can come along with other ideas. Once the Bill has passed through this House, once it is a statute, it is the statute which matters. Therefore, there is no guarantee regarding the assurances in relation to the registered office of the company being in Scotland and the company holding its annual meeting there. Someone will probably suggest that it should be during the Edinburgh Festival when it would suit them all to be there.
  There are other pledges which are not worth very much from a long term point of view. I am not one who is easily satisfied with matters which are outside the statute. I regret the fact that we are not having an
  1276
  independent Scottish bank. We have improved the situation from the point of view of Scotland by what we have done here, but there might have been more interest shown in another place at an earlier stage. I do not think that it was altogether fair of the noble Lord, Lord Taylor of Gryfe, to say that this was a political stunt. He may remember the opposition to his amendment. The noble Baroness, Lady Carnegy, was one of those who said that his amendment was a political stunt. I do not think that it was a political stunt. In my view, it was an expression of the true feeling of Scotland in respect of the bank.
  Lord Taylor of Gryfe: My Lords, I was referring to the continuing legal process as being a political stunt. That is what has been taken over as a political stunt in Scotland.
  Lord Ross of Marnock: My Lords, if you know anything about the Scots you will know that there is no more litigious race than the Scots. That is why they are doing so well in the legal profession in Scotland. I have known matters to be prompted by individuals and to be carried on by individuals for years and years. I do not think that this can just be denigrated as a political stunt any more than the noble Lord's amendment should have been. The House did not accept it as a political stunt when that was suggested from the Front Bench opposite and elsewhere. However, we have improved the Bill. It will be interesting to see what kind of mess the Government get themselves into if the matter goes for decision by Scottish law.
  I feel that they should have done it themselves before they started. Tell people that nobody owns the bank. A bank which has reserves of £710 million; assets of £637 million; a bank which has no debts. It has not been giving money away to South America, or buying banks in Chicago. It has been behaving itself. If this is to be sold off, it is an Aladdin's cave. I hope that noble Lords are listening. They can get a chance to buy themselves into this. Is it Aladdin who is going to get into this cave, or the wicked uncle? That is what matters.
  On Question, Motion agreed to.

  LORDS AMENDMENT
  5 After Clause 1, insert the following new clause:
  ("Share holdings for deposit holders and employees.
  . From the vesting day 25 per cent. of the shares in the TSB Group shall be held in trust for holders of deposits in the TSB Group and employees of the TSB Group, the trustees being elected annually in equal numbers by appropriate Associations of both groups.").
  The Commons disagreed to the above amendment for the following Reason:
  6 Because the amendment is contrary to a major element of the policy behind the Bill, which is to enable the TSB Group to achieve as wide a distribution of direct shareholding as possible among depositors and other small investors.

  MOTION TO BE MOVED ON CONSIDERATION OF COMMONS REASON
  6A Lord Banks rose to move, That this House do insist on their Amendment 5 to which the Commons have disagreed for the Reason numbered 6.
  The noble Lord said: My Lords, I beg to move that this House do insist on their Amendment No. 5 to which the Commons have disagreed for the Reason numbered 6. As the House is well aware, the Trustee

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  Savings Banks have been built up over the years by the savings of their depositors. It has been widely understood—and how correct that understanding was has been the subject of discussion already this evening—that they belonged to the depositors, for whom the trustees acted.
  The future position of the Trustees Savings Banks was considered in the early 1970s by the Page Committee on National Savings. They found that the Trustee Savings Banks, as they were then, provided an outlet for small savings, supported by a Government guarantee and subject to tight Government control, affording a limited amount of tax relief and offering limited banking facilities. In those days there were no overdrafts or personal loans available; the majority of the depositors, the committee found, were in the lower income groups, and the banks were on the fringe of commercial banking.
  The Page Committee decided to recommend that the Trustee Savings Banks should become mutual banks freed from much Government restriction and offering full banking facilities for personal accounts only. The Government of the day accepted that, and the Bill which came before Parliament in 1975–76 facilitated development on these lines, and overdrafts, personal loans, credit cards and mortgages soon followed.
  The Page Committee said this:
  "A set of mutual Banks similar in organisational form to Building Societies seems to us an excellent way of promoting a competitive service for the financial needs of the small saver and depositor".
  There were in fact to be three types of bank. There were to be commercial banks; the state bank, the GIRO; and this new set of mutual banks developed from the Trustee Savings Banks.
  The Page Committee went on to say:
  "The suggestion has been made to us that the Trustee Savings Banks should be hived off to the private sector as commercial concerns. If by this is meant that they should have shareholders and operate from the point of view of ownership like commercial banks, we see such a solution as neither practicable nor desirable in principle."
  Yet that is exactly what is now proposed.
  The concept of mutuality has been abandoned. Shares in the Trustee Savings Banks, now reduced to four, and the Central Board are to be sold to the public. The new shareholders will thus acquire the existing assets of the banks and their own purchase price. The assets built up by generations of depositors are virtually to be given away.
  It is argued that the Trustee Savings Bank Board are anxious to encourage depositors and staff to buy shares. I am quite sure that they are, and I acknowledge the efforts which they are making in order to bring that about. But if I understand the position aright, they expect that only some 10 per cent. of depositors will feel able to do so. While they could possibly constitute 50 per cent. of the shareholders, they would constitute a very much smaller proportion of the shareholding. In any case, 90 per cent. of the depositors, if that figure is correct, would be left out.
  As we have already heard this evening, in Scotland, where the Trustee Savings Banks began and where they are strong, a depositors' association opposed to the flotation has been established. They have requisi-
  1278
  tioned a meeting of depositors of the Trustee Savings Bank (Scotland), and that is to take place on 28th August in Glasgow. The depositors, of course, were not consulted about what is now proposed.
  It has been argued this evening by the Government that the ownership is obscure, or that there is no ownership at all at the present time. But we have also heard that there is strong support in legal circles in Scotland and elsewhere for the view that the banks in fact belong to their depositors. We have heard a good deal about the opinion expressed by Mr. John Murray, QC, for the TSB in 1979, when he came to the conclusion that the banks were a voluntary, unincorporated association owned by their depositors.
  Other Scottish lawyers have written to me insisting that this is the case. Some have urged that the trustees are in fact in breach of trust. In answer to the question:
  "In the event of a solvent dissolution of a Trustee Savings Bank what are the rights of the depositors?",
  Mr. Murray wrote in his opinion of 1979—and I have seen the opinion—
  "The depositors will take the whole remaining assets. Each depositor is, in my opinion, entitled to the return not only of the sum deposited by him but all his pro rata share of the produce [the reserves] earned by the deposits accumulated in so far as not withdrawn by him".
  It is clear, whatever is the legal merit, whatever is in fact the final judgment on that, that not only many ordinary men and women but also experienced legal opinion have been under the impression in the past that the depositors owned the shares. It was with this in mind, and to retain some measure of mutuality, that an amendment was put forward at the Committee stage here proposing that 49 per cent. of the shares should be held in trust for the depositors and the staff.
  That amendment was moved by my noble friend Lord Taylor of Gryfe, and it was defeated. We therefore tabled an amendment at Report, which I moved, ensuring tht 25 per cent. of the shares should be held in trust for depositors and the staff. This amendment was approved by the House and was contained in the Bill when it returned to the other place.
  At the instigation of the Government that amendment was struck out in the other place, and it is that amendment on which I am asking your Lordships to insist. The amendment provides:
  "From the vesting day 25 per cent. of the shares in the TSB Group shall be held in trust for holders of deposits in the TSB Group and employees of the TSB Group, the trustees being elected annually in equal numbers by appropriate Associations of both groups"
  The 25 per cent. share would not be owned individually. It would be held in trust collectively for the whole body of depositors and staff.
  In another place Mr. Ian Stewart, the Economic Secretary to the Treasury, described that as a hybrid arrangement. He said that we must either have an arrangement which is a 100 per cent. mutual, or an arrangement which is on the Companies Act basis as proposed in the Bill originally. He maintained that a hybrid arrangement would not work. But hybrid arrangements have worked and have been successful. If you look at the case of Kalamazoo Ltd. in Birmingham you will find that in 1947 30 per cent. of the shares, as a result of a gift or several gifts, were put in trust for the staff there. That arrangement still persists today, all these years later, and has worked

  1279
  successfully in the meantime. In fact the trustees have used some of the proceeds from shares, some of the dividends on shares, to purchase further shares. So it is possible to have a successful hybrid organisation.
  It is argued also by the Government that with 5 per cent. of the shares held in trust for charity a block of 30 per cent. would dominate. There is no reason why those representing the 5 per cent. and those representing the 25 per cent. should necessarily agree with each other rather than with those representing the remainder of the shareholders. Even if they did, 30 per cent. would scarcely dominate 70 per cent.
  It is argued that to have this arrangement would cut across the intention of the TSB to obtain a large number of the depositors as shareholders and other small shareholders. I see no reason why that should be the case. I am sure that that can still be done for the 70 per cent.
  In conclusion, here we have a set of banks built up by their depositors. The trustees, as their name implies, are the trustees for the depositors. The depositors were thought to be the legal owners, and it may be that they are. No one knows for certain. We know only what various opinions about that are. At least let us ensure that all the depositors and not just a minority who can afford to buy shares will have a stake in the future control and prosperity of the Trustee Savings Bank along with the staff. We wish the Trustee Savings Bank well. We want to see it prosper, but we want to ensure that its depositors, who provide and have provided the sinews, are not elbowed out of the way and entirely deprived of the assets built up on their behalf and which may well be theirs. I beg to move.
  Moved, That this House do insist on their Amendment 5 to which the Commons have disagreed for the Reason numbered 6.—(Lord Banks.)
  8 p.m.
  Lord Grimond: My Lords, I rise to support my noble friend Lord Banks. I hope to do so extremely briefly. I do not intend to repeat what he has said so well nor indeed to repeat what I have said so well on previous occasions! I find that the Commons Reason is wholly unconvincing. To begin with, as my noble friend Lord Banks has said, trusts for this kind of purpose are quite common and work very well. Secondly, I do not see that the setting up of such a trust would interfere with the wide distribution of direct shareholding as suggested by the Commons. I believe that the depositors should have some special recognition in this Bill. Above all I am interested in the employees, and however good the terms offered to them, this would give them a definite and long-term stake in the bank. Therefore I think that the Commons objections are unconvincing and that we should insist upon our amendment.
  Lord Mackie of Benshie: My Lords, I also should like to support my noble friend. The arguments which we heard earlier make it all the more necessary for the House carefully to consider insisting on this amendment. We have heard as I understand it—and if I am wrong perhaps the Lord Advocate can correct me—that the opinion on who owns the bank which the Government obtained after 1981 was founded on the
  1280
  Bill which reassessed the position of the TSB banks in 1981. I noticed that he did not try to contradict the opinion of 1979 and that he founded his assertion that good advice was taken on the fact that the 1981 Bill had altered the whole basis.
  If that is the case, it appears to me that the assets of the depositors in Scotland have been taken away from them by stealth. If there is anything in Mr. Murray's opinion that was altered by 1981 it does not appear to me to be a satisfactory situation. I need not enumerate again the arguments so cogently put forward by my noble friend. All I can say is that the whole thing does not look right.
  The Government could have brought forward a Bill in which they said that there was an enormous sum, £700 million or whatever it was, in the bank which would belong to the depositors. They would have shares to that, the Government would raise the additional money from the market, the depositors would have the £700 million and the investors another £700 million. That might have been a fair basis. But it must be wrong to allow the majority of the shares—and by far the majority, as I understand the opinion, is something like 90 per cent.—to pass into the hands of the new investors along with the original assets. This will only partially correct that position, but I think the House should support my noble friend's amendment.
  Lord Houghton of Sowerby: My Lords, this is very late in the day to stage a major disagreement with another place. I have no doubt that earlier when this amendment was before your Lordships' House I supported it. I supported it because at that time not only this amendment but others of importance were being put as an expression of the opinion of your Lordships' House on matters that needed more thought and attention. I was under the impression that, after having passed several amendments, and the board and the Government having had an opportunity to consider the matter further, a lot of water has gone under the bridge. I was under the impression that some kind of tolerable understanding had been reached between those who were sponsoring this and other amendments and representatives of the Treasury and the bank. I was not involved in any of those discussions.
  I hate to say that I am nearly always right, but I raised this major issue of who owned this bank right at the beginning. I made no bones about it. I said that the ownership rested where the money was and the money belonged to the depositors, therefore the ownership could not belong to anybody else. But what support did I have? I am a lone voice far too often in your Lordships' House. I did not have the support then that I thought that principle required.
  I see that as a major issue which might have had to go elsewhere so as to determine where the ownership should lie, but this has became far too complex for me to be able to suggest a way out. Now we have what I thought was the best that could be done in the circumstances. I am afraid that I shall not be able to support the Motion before your Lordships' House at the moment. I feel that all concerned, including the Trustee Savings Bank Holding Company and the chairman, have heard all the arguments and they

  1281
  know the sentiment that is widely held on this transaction. For my part, apart from the undertakings which have been given, which up to a point have satisfied certain of the earlier amendments, I am prepared to leave it to the bank now to decide what they can reasonably do, if anything at all, to meet the sentiment behind the case that the depositors have a claim to special consideration.
  At least we can be certain that this bank does not belong to a large number of people who will subscribe to the floating of the shares. They will come into it because they want to be on a good thing and they undoubtedly will, because the bank is sitting on bags of gold. When there are bags of gold around all sorts of people want to put their hands on them.
  The depositors are those who in the main have enabled the bank to reach its present position. I do not say that the depositors have actively contributed to the success of the bank. The success of the bank has been in the management of the affairs of the bank and in having a great deal of money at very competitive rates of interest. I am sorry to say that I cannot support the insistence of the Alliance on the earlier amendment, much as I had sympathy with it at the time. But now is the last hour on this Bill and we cannot keep it hanging about any longer. Otherwise, I think, it will seriously damage the prospects of the bank in making a successful launch and that, in turn, will probably depreciate the value of the investment that the depositors among others will surely wish to make.
  I hope that we can rely on the bank, and Sir John Read as chairman, to do the best that they can having regard to the fact that they want to make a successful launch in the interests of the bank and its future—and therein lies the interests of the depositors as well as others—and see what can be done to give preferential treatment to the depositors to enable them to feel that they have a fairer deal. What a pity it is that the Scottish depositors woke up too late and the English depositors never woke up at all!
  Those of us who have tried to wake them up and put their case here received little or no support. I do not think I had a single letter from any depositor supporting the stand that I took on their behalf. There are limits to how far you can go on fighting a case when you do not get the support of those who are directly concerned. There it is, I have done my bit and I have no more to say.
  Lord Stoddart of Swindon: My Lords, I have left my contribution until rather late to hear what other people had to say, particularly my noble friend Lord Houghton of Sowerby. I am somewhat surprised that he is taking the line that he is. If he will recall, when he correctly stated that the bank belonged to its depositors, he received a great deal of support. He had support from me—that is certain—and from other quarters of the House as well, certainly on this side. To say that because he has not had representation from the depositors and perhaps the staff of the Trustee Savings Bank does not necessarily mean that they are not particularly interested in what happens to them.
  We are here, I should have thought, to safeguard the interests of people whose interests we think might be being undermined, irrespective of whether the people
  1282
  come to us or understand exactly what is being done in this place in Parliament on their behalf. It is our duty to try to see that they are safeguarded. On Second Reading, and since, I have argued that the correct way forward was mutualisation. That was still possible and would have been the best safeguard for the depositors and the staff of the Trustee Savings Bank. That is still my view.
  If we had proceeded in that direction, which is supported by the noble Lord, Lord Banks, and other noble Lords, then we would not be having actions before the Scottish courts. There would be no problem at all because it would have been established that the depositors were the owners in law and that the bank would be run for their benefit.
  The amendment, I would remind your Lordships, was passed in this House without Division. It was accepted by the Government; or, at least, if they did not accept it, they did not vote against it.
  The Earl of Gowrie: My Lords, with respect, that is not the same thing at all.
  Lord Stoddart of Swindon: My Lords, they did not seek to oppose it. It may well have been that they thought they would lose; but that is another matter. The fact is that there was not a Division. The amendment sought—I think quite rightly—to give depositors and staff an interest, a real interest, in the new organisation. I believe that was correct, and indeed I have a particular interest in this amendment because, as a result of its passing, I did not move my Amendment No. 8 at Report stage, which would have sought to have given representation to the workers on the central board and on each individual board of the Trustee Savings Bank.
  As the result of the passing of this amendment, I withdrew it because I thought it was unnecessary. I thought that if the workers and the depositors had 25 per cent. they had enough interest without needing to elect additional workers to the board. Therefore, I feel affronted by the Commons decision to remove this amendment because I have now lost the opportunity of moving my amendment to put workers on the boards. Naturally, I shall certainly support the amendment of the noble Lord, Lord Banks, tonight. I hope that my noble friend Lord Houghton will reconsider his position, and I ask my other noble friends to follow me into the Lobby to support the amendment.
  8.15 p.m.
  The Earl of Gowrie: My Lords, I, for one, am not surprised that the noble Lord, Lord Houghton of Sowerby, has taken the line that we have all had a good go at the issues raised by this Motion to insist on the Lords Amendment No. 5 to the Bill. No less than three Liberal Front Bench speakers have made the case of insisting; but it is the same case that the noble Lord, Lord Banks, and some of his noble friends put forward in your Lordships' House on no less than three occasions during the passage of the Bill. I am therefore simply going to summarise very briefly the arguments that we feel there are against the case, and then we shall have to come to a view upon it.
  I think we are all agreed that the TSBs cannot sensibly continue on their present, very strange

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  constitutonal basis. There are two options: to convert the TSBs into mutual organisations or to convert them into a Companies Act structure with direct shareholding. There are two key reasons why the TSBs themselves and the Government have adopted the Companies Act approach. The first is that in today's conditions it really is essential that a bank with general banking powers—and I would remind your Lordships that TSBs enjoy general banking powers at present—should have access to the capital markets if it is to prosper and if it is to survive and thrive alongside its competitors. The second is that the Companies Act solution provides for effective accountability to the bank's owners. A mutual solution, as is sought, satisfies neither of these tests.
  I accept that there are successful mutual financial institutions. It is one thing for long-established mutuals to continue in business and quite another to launch a new type of mutual organisation. Also, I think the successful mutual institutions to which some critics of the Bill refer—for example, building societies and mutual insurance companies—are much more specialised and much more closely regulated than banks. I would remind the House in this context that when the Page Committee recommended that TSBs should become mutual banks it envisaged that they would engage in a rather narrower range of business than they do now.
  The amendment on which the noble Lord, Lord Banks, wishes to insist seeks a middle course between the Companies Act approach to the Bill and the mutual bank approach, which he would prefer to see, by providing that 25 per cent. of shares should be held in trust for depositors and staff. While I appreciate that others may take a different view on the balance of advantage between mutual banks and Companies Act banks, I would ask your Lordships to accept that company status or mutual status are alternatives. It is not practical to blend the two. The amendment falls between two stools. It deprives the TSBs of most of the advantages of the Companies Act solution but bestows few, if any, of the compensating advantages of the other solution.
  As the noble Lord, Lord Houghton said—no lone voice, as so often, where I am concerned—we have had a good run over this case. The noble Lord, Lord Banks, has made his position very clear, but I hope that at this stage of the Bill, after the other place has made its views known on this amendment, the noble Lord really will reconsider his intention, which appears to be to divide the House.
  Lord Banks: My Lords, I should like first to thank those noble Lords who have expressed their support for this Motion: my noble friends and also the noble Lord, Lord Stoddart. I much appreciate their support. The noble Lord, Lord Houghton, said that it was rather a late stage at which to have a disagreement with another place and that we must not keep the Bill hanging about; but I would have thought that the new information about the possible legal position which we have had this evening, and about which we had much discussion in our earlier debates, is in itself sufficient ground for keeping things hanging about for a little longer, so that we may make sure that this legislation is not confiscatory—because that is really the issue.
  1284
  There has been no understanding on this amendment. The noble Lord, Lord Houghton, referred to discussions which had taken place. Discussions certainly did take place and I am most grateful to the noble Earl, Lord Gowrie, and to the Economic Secretary to the Treasury for the fact that they were prepared to discuss the matter with me. But we did not agree at any point and I have pressed this amendment throughout, so that I certainly do not feel like abandoning it at this stage.
  On the question of whether or not it is right for this House to return an amendment to the other place, of course we know that within the Standing Orders of the House it is certainly quite correct procedure. Whether we ought to do it at this particular juncture must be judged by the circumstances, and I think the circumstances are such that we are right, on this particular matter and in view of all that is now being said about the ownership of the deposits and the position of the depositors, to ask the other place to think again.
  The noble Earl, Lord Gowrie, said that the Trustee Savings Banks must have access to the capital market. But of course they would still have access to the capital market. They would be raising this 70 per cent. in that way. He gave arguments which were against mutuality at first but which do not necessarily apply to what he described as "the middle course". He asserted, though I do not really think he had any grounds for so doing, that one had to have one or the other: mutuality or a company structure. He said that one could not have a combination of the two. Yet, as I said myself earlier, and as my noble friend Lord Grimond also said earlier, there are hybrid examples. There are examples of a certain number of the shares being held in trust and the others being held in the ordinary way by shareholders working perfectly satisfactorily in industry. There cannot be any reason why it should not apply in the case of the Trustee Savings Banks.
  We are considering here the position of the depositors and whether these assets really belong to them, and whether they had good cause to think that they belonged to them even if in fact in law they do not belong to them. Surely the way to deal fairly with that matter is to give all depositors a stake in the control and the prosperity of the Trustee Savings Banks. That is what this amendment, which I am suggesting to the House that we should insist on, does. I feel that in all the circumstances it would right to take the opinion of the House on this matter.
  8.25 p.m.
  On Question, That this House do insist on their Amendment 5 to which the Commons have disagreed for the Reason numbered 6?
  Their Lordships divided: Contents, 47; Not-Contents, 80.

  DIVISION NO. 2

  CONTENTS

  Airedale, L.

  Cledwyn of Penrhos, L.

  Banks, L.

  Collison, L.

  Barnett, L.

  Crawshaw of Aintree, L.

  Beaumont of Whitley, L.

  Darwen, L.

  Blease, L.

  Dean of Beswick, L.

  Carmichael of Kelvingrove, L.

  Diamond, L.

  1285

  Elwyn-Jones, L.

  McNair, L.

  Ennals, L.

  Mellish, L.

  Ewart-Biggs, B.

  Murray of Epping Forest, L.

  Falkland, V.

  Nicol, B.

  Gallacher, L.

  Ogmore, L.

  Galpern, L.

  Ponsonby of Shulbrede, L.

  Graham of Edmonton, L. [Teller.]

  Robson of Kiddington, B.

  Rochester, L.

  Grey, E.

  Seear, B.

  Grimond, L.

  Shepherd, L.

  Hampton, L.

  Simon, V.

  Hanworth, V.

  Stedman, B.

  Harris of Greenwich, L.

  Stewart of Fulham, L.

  Hooson, L.

  Stoddart of Swindon, L.

  Kilmarnock, L.

  Strauss, L.

  Lloyd of Kilgerran, L.

  Taylor of Blackburn, L.

  McIntosh of Haringey, L.

  Taylor of Gryfe, L.

  Mackie of Benshie, L. [Teller.]

  Turner of Camden, B.

  NOT-CONTENTS

  Airey of Abingdon, B.

  Cameron of Lochbroom, L

  Arran, E.

  Carnegy of Lour, B.

  Belstead, L.

  Carnock, L.

  Bessborough, E.

  Coleraine, L.

  Boardman, L.

  Colwyn, L.

  Boyd-Carpenter, L.

  Cork and Orrery, E.

  Brabazon of Tara, L.

  Cox, B.

  Brougham and Vaux, L.

  Craigavon, V.

  Bruce-Gardyne, L.

  Craigmyle, L.

  Caithness, E.

  Cullen of Ashbourne, L.

  1286

  De La Warr, E.

  Mottistone, L.

  Denham, L. [Teller.]

  Murton of Lindisfarne, L

  Donegall, M.

  Napier and Ettrick, L.

  Eden of Winton, L.

  Newall, L.

  Elliot of Harwood, B.

  Norfolk, D.

  Elliott of Morpeth, L.

  Poltimore, L.

  Elton, L.

  Polwarth, L.

  Glanusk, L.

  Rankeillour, L.

  Glenarthur, L.

  Reay, L.

  Gowrie, E.

  Renwick, L.

  Gray of Contin, L.

  Rochdale, V.

  Harmar-Nicholls, L.

  Sanderson of Bowden, L.

  Henley, L.

  Sandford, L.

  Hives, L.

  Selkirk, E.

  Hood, V.

  Shannon, E.

  Hooper, B.

  Skelmersdale, L.

  Hylton-Foster, B.

  Stockton, E.

  Inglewood, L.

  Strathcarron, L.

  Killearn, L.

  Suffield, L.

  Kimball, L.

  Swinton, E. [Teller.]

  Kindersley, L.

  Teviot, L.

  Lane-Fox, B.

  Torphichen, L.

  Layton, L.

  Trefgarne, L.

  Long, V.

  Trumpington, B.

  Lucas of Chilworth, L.

  Vaux of Harrowden, L.

  McFadzean, L.

  Vinson, L.

  Macleod of Borve, B.

  Vivian, L.

  Margadale, L.

  Whitelaw, V.

  Massereene and Ferrard, V.

  Wise, L.

  Mersey, V.

  Wynford, L.

  Resolved in the negative, and Motion disagreed to accordingly.

Transport Bill
8.32 p.m.
House again in Committee.
Lord McIntosh of Haringey Lord McIntosh of Haringey moved Amendment No. 240B:
[Printed 18/7/85; col. 953.]
The noble Lord said: I rise to move the amendment standing in the names of the noble Lord, Lord Sandford, the noble Lord, Lord Teviot, and myself. I listened very carefully to the answers of the Minister to the preceding amendment and it seemed to me that it was at least worth setting out the arguments here for what is, after all, a very much more modest solution—or an attempt at a solution—to a major problem with this Bill.
The Bill as drafted posits a dual system for public transport in this country. On the one side there will be the commercially viable network of buses which will be privatised and which will no longer be under public control. On the other side there will be that part of the bus network which all concerned recognise cannot be profitable and must be subsidised through a tendering system.
The major problem which this Bill faces is how these two parts of the bus network now divided are to be made to work effectively together, so that passengers and operators may achieve a system which works profitably for those who are to make profits from it, efficiently for those who are to subsidise it, and effectively for those who are to ride on the buses. This amendment does not propose that there should be any delay in the implementation of the Bill, nor that there should be any new obligations of any significant character on operators, but simply that the operators of the private buses should be required to give information to the local traffic authorities who will be responsible for the other part of the network and who will have other public transport responsibilities.
Let us immediately recognise that there is a problem of the commercial confidentiality of information. Let us recognise that there are bound to be fears. Transport operators will feel if they are obliged to give certain kinds of information—not just about the timing and frequency of their services, but also about stopping places they U ill use, the scheduling of vehicles and so on—they are giving information which may be valuable to the traffic authorities and which may be used for those parts of the bus network which will still be influenced by the public sector.
The amendment makes adequate provision, in my submission, for those fears. It says that apart from those items of information which have to become public anyway, such as the timetables—because timetables are no use unless they are made public—the information shall not be dislosed to third parties without the agreement of the operators concerned. I am summarising that. But the need for somebody somewhere to know everything that is happening about the bus network, the bus services, the way in which they will work, cannot be denied.
Let me refer back to our discussion on Amendment No. 208, the amendment of the noble Lord, Lord
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Mottistone. In cols. 946 and 947 of the Official Report he expressed concern about the position of the Isle of Wight and the co-ordination of the public transport services of the Isle of Wight with the ferries. He was answered from the Front Bench opposite by the noble Lord, Lord Brabazon, who said that there was no problem because the ferries could be treated in the same way as cross-boundary services between different traffic areas. He said that that was covered adequately by Clause 61 of the Bill. That was not and is not the case. Clause 61 refers only to the subsidised services. What we must have is some degree of liaison—I shall not even call it co-ordination, let alone planning—between different operators who are concerned not only with the subsidised services but also with the commercial, privatised services.
I am sure that the noble Lord, Lord Mottistone, will agree that the situation about which he was afraid so far as the Isle of Wight was concerned already appears to be happening: that British Rail appear to be concentrating their services more on the Southampton-Cowes route and that the other ferry routes appear to be getting less attention. If I am wrong, I shall gladly give way. But my understanding is that already there are changes happening in the British Rail routes which will affect the subsidised services as well as the privatised bus services on the Isle of Wight.
Lord Mottistone: I have no knowledge of what the noble Lord is saying. I do not think it is very likely without going into a little geography. I think perhaps the noble Lord does not have quite the right message there. I take his point notwithstanding. But I do not think that that particular case is relevant.
Lord McIntosh of Haringey: I am glad to yield to the greater knowledge of the noble Lord, particularly since, for my sins, I have never even been to the Isle of Wight. Let me give another example of where changes have certainly happened: the example of the Irish Sea crossings and the privatisation of Sealink away from British Rail. Here there have been arrangements for sharing routes between Sealink and B. and I. Ferries on the routes to Ireland and the Isle of Man. The result of these arrangements has been that Sealink is no longer operating the route from Liverpool to the Isle of Man. That may be a perfectly proper commercial position, but the Isle of Man tourism depended very considerably on the Liverpool trade and it must be a very wrong decision which, as it takes effect, will do a great deal of damage to the Isle of Man.
Continuing with the example of Sealink—I am talking about things which have happened and not about things which may happen in the future—it is a fact that through ticketing systems between British Rail and Sealink are less effective than they were before, and that passengers are having to buy ferry tickets separately from the rail tickets which they used to buy together. It is a fact that concessionary fares, which were available on British Rail and which used to be available on Sealink as well, will no longer be available after 31st December 1985.

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So we are already seeing in practice the kind of failure of co-ordination between different operators, between the private sector and the public sector, which all of us who have expressed concern about this Bill have always been worried about. We are not talking about the future. We are talking about what we know to be the case now.
Let me give more general examples about the bus system itself. Let us suppose that we have a housing estate or a hospital which is three-quarters of a mile away from what would otherwise be a profitable route. The commercial interests of an operator are that he will pay attention to the largest number of his passengers and will run past on the main road without serving the housing estate or the hospital, as it may be, because that is the way in which he will get his passengers most directly to their destination, and that will mean that it will be left to the tendering process to provide for the housing estate or the hospital. If we take that literally, and there is no co-ordination between the subsidised services and the commercial services, what that means is that we shall have a grossly inefficient system.
We shall have buses running over the same route between the housing estate and the shire town destination, duplicating each other, rather than having a mutually agreeable arrangement, whereby some or all of the buses also serve the housing estate or the hospital. That cannot be the right way to run our bus services. Information on the timing and frequency of bus services, on stopping places, on the way in which a time-table is to be constructed and publicised—all of these are items of information which ought to be available to a democratically elected authority and to the general public. The sad fact is that if it is left to voluntary agreement between the operators and the authorities, it will not take place to the degree that it ought to take place.
The requirement for operators to give information to local authorities is surely not a very onerous requirement. There is protection for commercial confidentiality in the amendment. There is here a possibility for some co-operation to succeed in bringing together the two parts of the bus system, as the Government are proposing to establish them. I listened very carefully to the noble Lord, Lord Belstead, in his objections to the preceding amendment. It seems to me that none of the objections which he made would apply to the present amendment, and that the Government therefore ought to see this as a way, without any need for objection on anybody's part, to easing the way to the privatisation and deregulation which they require. I beg to move.
8.45 p.m.
Earl De La Warr: I have listened with great care to what the noble Lord, Lord McIntosh, said. It seems to me that this amendment achieves, in practice, a good deal of what the last amendment sought to achieve, and as he gave us its purpose with great lucidity I shall not repeat it. I really think that there can be no complaint here on the score of the complaint which was made from this side of the Committee about a
1290
form of backdoor opposition. As for the information getting out, the fact of the matter is that it will get out within a few months, anyhow—it has to. It probably will not go to the authorities until February or March, or even April or May, but by then we are only three months away from deregulation day.
In any case, I should have thought that the matter of confidentiality in this case had to be put in second place to what we are all seeking, which is better service for the public. So I would completely discount the dangers of that. Confidentiality in business is something which, in my experience, is the British disease. You do not get Americans refusing to tell you something. They are only too ready to tell you. But I shall not depart into a wider field.
I like this amendment because it will help, and what it will really do is allow the traffic authorities that much quicker—and it is all a matter of months—to set about identifying the routes which they will have to put out to tender. As we shall see in a later debate, this question of finding out as quickly as possible is absolutely crucial with a D-day which is dangerously close to us from the point of view of getting efficient tendering. So for those reasons I like this amendment and I support it.
Lord Brabazon of Tara: Of course we accept that co-operation between local authorities and operators can be highly desirable, and as we have explained to the Committee on earlier clauses, we have given authorities considerable powers both to subsidise public transport and to take more general measures to promote the use of public transport and the convenience of the public. There are further important provisions on tendering and concessionary fares. We have no doubt that many authorities will make extensive use of those powers and we expect that they will have a wide measure of co-operation of operators in doing so. That will often be to the mutual benefit of both sides and for the good of the general public as passengers and as ratepayers.
But this new clause would require operators to cooperate with local authorities by providing information. That, in our view, is both unnecessary and indeed potentially damaging. It will be unnecessary because authorities, in carrying out their tendering and concessionary fares functions, will have available to them very considerable amounts of information. They will certainly have no difficulty in obtaining the information that they need to carry out those particular functions. I would remind your Lordships that all particulars of registered routes which the traffic commissioner will have received will have to be passed on to the local authorities; and these include route stopping places, timetables, etc. My noble friend Lord Belstead, earlier in Committee, gave an undertaking that we would make sure that this was done as speedily as possible.
I turn to the dangers which we see in this new clause. Where there is a one-sided duty of this sort, it would be open to authorities to seek to use it to make operators complete endless forms and provide excessive and onerous amounts of information.
Lord Shepherd: Really!
Lord Brabazon of Tara: Noble Lords, will be aware of the Government's recent White Paper stressing the need to keep burdens of this kind to a minimum.
Under the powers in Clauses 57 and 61 the authorities can take measures to promote the availability of services and the convenience of the public. Incidentally, Clause 61(7) would indeed apply to the commercial services, including the ferries which serve the Isle of Wight. It is reasonable to assume that operators will wish to co-operate in many cases, and it will be in their best interests to do so. But on some occasions they may not. It is the essence of our policy that operators should make the final decisions about how to go about providing the services that they judge the travelling public want.
The noble Lord, Lord McIntosh, raised a point about co-operation between Sealink and British Rail on the Isle of Wight service. I have not noticed this matter at all. The train still meets the boat, and vice versa. There has certainly been no change in the emphasis that British Rail have put on their services. The noble Lord brought up the case of the Liverpool to the Isle of Man service. I understand that Sealink have not in recent years operated from Liverpool to the Isle of Man. They have operated from Heysham, in Lancashire. The Isle of Man Steam Packet Company, which operates from Liverpool to the Isle of Man, is to be merged with Sealink's Heysham service. I cannot believe in my own mind that if the need for the service from Liverpool to the Isle of Man was that great this company would have decided to move it from Liverpool to a nearby port.
Therefore, I would submit to the noble Lord that this clause has its dangers; but more important than that, I think it is unnecessary. I say that because the information which the local authorities require will in any case be very readily available to them.
Lord Shepherd: In some respects this amendment could be a watershed as to the way in which we proceed on this Committee stage. This amendment is not in any way a radical approach. It is not in any way seeking to undermine what the Government have in mind in terms of this legislation. The noble Lord said that if the amendment were passed one of the dangers would be that certain local authorities could well use it to ask for this information or that information, perhaps with the objective of causing difficulties for the operator. I do not know whether the noble Lord has read the amendment. The amendment says:
"such information as the authority may reasonably require for the purpose of carrying out its duties".
Those words are well known in other forms of legislation. If it were necessary for a court to decide what they mean, the noble Lord knows how the courts would judge these words. The word "reasonable" is now a very accepted word in the judgments of courts.
What are my noble friends asking for in this amendment? They are asking that the operator should provide information which the authority—the authority at the end will be politically responsible for services—may require for carrying out its duties. The noble Lord said that in his view it is solely a matter for
1292
the operator to decide what services are to be made available. In the end, politically, it will be for the authority to decide. All I see in this amendment is that there should be a sufficient provision of information on which the authority can make its own judgment, and in regard to tendering I should have thought that that was a crucial part of it.
If the noble Lord could say, "I accept the amendment in principle but I should like to see it drafted differently", some of us would be willing to respond. But if the noble Lord's attitude on this amendment is going to be consistent throughout the Bill, I think that some of us are going to be in a very difficult position. Most of us have been seeking to find ways and means to avoid some of the difficulties that we perceive in this Bill, but we have not had many logical or sensible responses to these amendments. I have to say to the noble Lord that I thought that his response to the speech of my noble friend on this amendment did not do well for the Government and their basic approach to this Bill.
Lord Teviot: It might surprise the noble Lord, Lord Shepherd, but I thought that on this occasion my noble friend made a clear and moderate speech. One has not heard him as much on this Bill as one should have liked. My noble friend gave the Government's view. He did not fall into the trap of going back to the old arguments. He did mention bureaucracy, and paper. Although I have my name down to this amendment I think that we have to look back to Clause 61. Perhaps the noble Lord, Lord McIntosh, has looked at it and has an excellent argument to throw back at my noble friend. In that case one can come in again. I thought that my noble friend presented his argument moderately and very well.
Lord McIntosh of Haringey: I am grateful to noble Lords who have taken part in the discussion on this amendment. I say that even to the noble Lord, Lord Teviot. I must say that to call it "moderate" when the noble Lord, Lord Brabazon, refers to endless forms and excessive and unreasonable information, when, as my noble friend points out, the amendment refers to,
"such information as the authority may reasonably require",
—the interpretation of "reasonable" has been well established in the courts—seemed to be somewhat immoderate. I also noticed that, although I am perfectly ready to be shot down on particular issues such as routes to the Isle of Wight or routes to the Isle of Man, the Minister made no attempt to answer my more important points. The privatisation of Sealink has resulted in a reduction in through-ticketing, and will result at the end of this year in the abolition of concessionary fares for the elderly and disabled on Sealink vessels. All those points were made but were not answered by the Government.
Above all, the fundamental issue was not answered by the Government. There is no clear and simple dividing line between the commercial and the subsidised services. One cannot say, "Here is one route which is entirely commercial and here is one route which is entirely subsidised". I gave an example of the extent to which, on a perfectly commercial route, there might have to be subsidised elements. Indeed, in another place the Secretary of State himself agreed

1293
that that might be the case. I am afraid that I do not have the reference in front of me, but I recall reading that he said that there might be a case where a commercial operator would refuse to operate concessionary fares and in those circumstances the local authority would be justified in using the subsidy and tender procedure in order to secure that those concessionary fares were obtained on that route as they were on other routes.
The fact of the matter is that our bus services are going to be intertwined as between commercial and subsidised services. The Bill is based on the supposition that they are going to be operated separately. We are trying to provide a link between the two to provide the possibility of co-ordination which will be to the benefit of both parts of the bus system. I believe that the noble Earl, Lord De La Warr, had the key to it when he said that the major issue here was timing.
I am sorry that the Government are so intransigent on this issue. I am sorry that our approach, in this respect at least and in most other respects, which has been entirely constructive, has not found any response from the Government.
Lord Mottistone: There is one small point. I do not understand why the noble Lord does not take my noble friend's point that Clause 61(7) meets his requirements. The more I read that the more it seems to answer everything that the noble Lord said.
9 p.m.
Lord McIntosh of Haringey: The answer to that was given by the noble Earl, Lord De La Wan. The fact is that one must have the information at the time when it can be used. It ought, in the Bill, to be an obligation on the operators to provide that information and not be a matter for the local authority to demand it afterwards. It is timing that is of the essence, and that is the extent to which—although the noble Lord, Lord Mottistone, is undoubtedly right about Clause 61(7), and its extent—this amendment is still necessary.
As I said, I am sorry that the Government are so intransigent on what appears to me to be a helpful amendment. It is certainly helpful in its intention. We shall need to find some other way of helping the Government on Report. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
On Question, Whether Clause 77 shall stand part of the Bill?
Lord Belstead: I have already spoken to this on Clause 32 stand part. I also spoke to the subsequent Amendments Nos. 24OC, 24OD and 24OE.
Clause 77 disagreed to.
Lord Belstead Lord Belstead moved Amendment No. 24OC:
[Printed 16/7/85; col. 698.]
On Question, amendment agreed to.
Following is the text of the amendment (No. 240C):
After Clause 77, insert the following new clause:
("Provision, maintenance and operation of bus stations.
.—(1) A Passenger Transport Executive for any passenger transport area shall have power—

(a) to provide bus stations and associated facilities at any place in or in the vicinity of their area; and

(b) to maintain, repair and operate bus stations and associated facilities provided under paragraph (a) above or under their former powers.

(2) A council operating a bus undertaking who have ceased by virtue of section 62(1) of this Act to have power to provide a service for the carriage of passengers by road which requires a PSV operator's licence shall have power to maintain, repair and operate bus stations and associated facilities provided by that authority under their former powers.
(3) Any charges for the use of accommodation for public service vehicles at any bus station provided by the Passenger Transport Executive for any passenger transport area or provided by any other person under any agreement entered into by any such Executive under section 10(1)(xv) of the 1968 Act (contracting-out powers) shall be reasonable.
(4) Subsection (3) above only applies where the charges are made by the Executive in question under section 10(1)(xiii) of that Act or by a person who is operating the bus station under any such agreement otherwise than as agent for the Executive.
(5) Any such council as is mentioned in subsection (2) above shall have power—

(a) to make reasonable charges for the use of accommodation for public service vehicles at any bus station provided under their former powers; and

(b) to make reasonable charges for the use of, or let on hire to any person, any associated facilities provided by them in connection with any bus station so provided.

(6) If any person who is the holder of a PSV operator's licence in respect of any vehicles using accommodation for public service vehicles at any such bus station as is mentioned in subsection (3) or (5) above considers that charges for the use of that accommodation are unreasonable, that person may apply to the traffic commissioner for the traffic area in which the bus station is situated (or where it is situated partly in one area and partly in another, to the traffic commissioner for such of those areas as may be agreed between the traffic commissioners concerned or, in default of agreement, determined by the Secretary of State).
(7) On any application under subsection (6) above the traffic commissioner may determine the charges to be made in respect of the applicant's vehicles for such period and on such terms as he thinks fit.").
Lord Belstead Lord Belstead moved Amendment No. 240D.
[Printed 16/7/85; col. 699.]
On Question, amendment agreed to.
Following is the text of the amendment (No. 240D):
After Clause 77, insert the following new clause:
("Bus stations: restrictions on discriminatory practices, etc.
.—(1) Neither a Passenger Transport Executive nor a local authority shall, in the exercise of any of their powers—

(a) in relation to the provision or operation of bus stations or any associated facilities; or

(b) (without prejudice to paragraph (a) above) in relation in particular to the charges to be made for the use of any accommodation at a bus station or of any associated facilities;

act in such a way as to discriminate (whether directly or indirectly) against any holder, or class of holder, of a PSV operator's licence.
(2) In relation to a local authority, the powers in question under subsection (1) above include in particular (without prejudice to the generality of that subsection) their powers under section 38 of the Road Traffic Regulation Act 1984 (appointment of parking places provided under section 32 of that Act as stations for public service vehicles and provision of accommodation in connection with places so appointed).
(3) Where under any agreement (other than an agency agreement) entered into by a Passenger Transport Executive under section 10(1)(xv) of the 1968 Act (contracting-out powers) a person is operating a bus station or any associated facilities

1295
provided by that Executive or provided by that or any other person under any such agreement, that person shall not—

(a) in relation to the operation of that bus station or (as the case may be) of those facilities; or

(b) (without prejudice to paragraph (a) above) in relation in particular to the charges to be made for the use of any accommodation at that station or (as the case may be) for the use of those facilities;

act in such a way as to discriminate (whether directly or indirectly) against any holder, or class of holder, of a PSV operator's licence.
(4) The reservation of the whole or any part of the accommodation for public service vehicles at any bus station for such vehicles used in providing local services or (as the case may be) for such vehicles used in providing services other than local services shall not be taken to be discrimination prohibited by subsection (1) or (3) above.
(5) Notwithstanding anything in section 8 of the Transport Act 1983 (obligation to accept tenders for carrying on activities of Executives in certain circumstances) a Passenger Transport Executive may not in exercise of their powers under section 10(1)(xv) of the 1968 Act enter into an agreement (other than an agency agreement) for—

(a) the provision of any bus station or associated facilities the Executive have power under section (Provision, maintenance and operation of bus stations) of this Act to provide; or

(b) the operation of any bus station or associated facilities provided by the Executive under that section or under their former powers or provided by any other person under any agreement entered into by the Executive under section 10(1)(xv);

(6) In this section "agency agreement" means, in relation to any agreement under section 10(1)(xv), an agreement with any person for the carrying on of activities by that person as agent for the Executive concerned.
(7) Any such agreement as is mentioned in subsection (5)(b) above entered into after this subsection comes into force shall include provision for ensuring that it will come to an end if the person who under the agreement is to operate the bus station or associated facilities to which it applies becomes the operator of any public passenger transport services or a person connected with any such operator.
(8) On and after the date on which this section comes into force, subsection (5) above shall apply in relation to any such agreement as is there mentioned entered into by the Passenger Transport Executive for any passenger transport area before that date as if this section had come into force on 11th July 1985.").
Lord Belstead Lord Belstead moved Amendment No. 240E:
[Printed 16/7/85; col. 700.]
Lord Shepherd: I am sorry that I was not in the Chamber earlier. On page 13 of the Marshalled List the amendment is referred to as No. 240E, but on page 14 it is referred to as No. 240D. Perhaps there has been a printing problem.
I should like to ask the noble Lord about subsection (5)(b), which states:
"'associated facilities' means, in relation to a bus station, any amenities or facilities provided for use in connection with that station."
This is in terms of fair competition. I can understand what is meant by "amenities". That can refer to toilets, cloakrooms and so on. However, as regards other facilities there can be, and I know that there are, in bus stations owned by authorities—certainly for the National Bus Company—booking facilities for its own stage carriage, or for National Express and others. My difficulty is this. Does the amendment as it now stands mean that if the National Bus Company, or a future offspring of it, already has established facilities for the sale of tickets and the distribution of information, and if the authority is not able to provide similar facilities to a competitor, or to an independent coming in, that
1296
that would be seen as discrimination as between one and another?
There may be a simple answer to this but it appears to me that where there are existing facilities for an existing operator, and if they cannot be provided for another operator who may claim the facility, it may then appear that the authority is acting in a discriminatory way in regard to the other operator. If there is not a simple answer the noble Lord may prefer to write to me, but there appears to be a potential problem.
Lord Belstead: "Associated facilities" is, I know, meant to be a catch-all phrase and helpful to that extent. However, before I offer to write to the noble Lord—because that is what I think I must do—I am not quite sure whether the noble Lord is aware that this particular amendment, on which he is querying subsection (5)(b), does not apply to the National Bus Company bus stations. It is confined to the local authority and passenger transport executive bus stations.
Lord Shepherd: These are, in fact, the bus stations that I had in mind from which various existing operators are running. Facilities have been developed over a period of time, perhaps to meet the needs of the biggest operator in the district. My only anxiety is whether that subsection would create difficulties in the future for the continuation of those facilities.
Lord Belstead: As I said, this expression was used in order to try to be helpful. It refers back to subsection (1) of Amendment No. 240C. That subsection makes it clear that,
"A Passenger Transport Executive … shall have power to provide bus stations (and) … to maintain, repair and operate bus stations and associated .facilities".
The wording is in order to ensure that the power given to the PTEs and local authorities is not drawn too tight.
Perhaps I may write to the noble Lord, having said that, because there are probably aspects of the matter that I should answer.
On Question, amendment agreed to.
Following is the text of the amendment (No. 240E):
After Clause 77, insert the following new clause:
("Supplementary provisions.
.—(1) References in section (Provisions, maintenance and operation of bus stations) of this Act to the former powers of a council operating a bus undertaking are references to any powers which have ceased to be exercisable by that council by virtue of the application to that council of section 62(1) of this Act; and references in that section and in section (Bus stations.. restrictions on discriminatory practices, etc.) of this Act to the former powers of a Passenger Transport Executive are references to any powers which have ceased to be exercisable by that Executive by virtue of any order under section 59(5) of this Act.
(2) For the purposes of section (Bus stations: restrictions on discriminatory practices, etc.) of this Act a person is a person connected with the operator of any public passenger transport services if that person is a member of a group of interconnected bodies corporate any one or more of which is such an operator.
(3) For the purposes of subsection (2) above, any two bodies corporate are to be treated as interconnected if one of them is a body corporate of which the other is a subsidiary or if both of them are subsidiaries of the same body corporate; and in that subsection "group of interconnected bodies corporate" means a group consisting of two or more bodies corporate all of which are interconnected with each other in the sense given above.
(4) In section (Bus stations: restrictions on discriminatory practices, etc.) of this Act "local authority" means—

(a) in relation to England and Wales, the council of a county, London borough or district, the Greater London Council or the Common Council of the City of London; and

(b) in relation to Scotland, a regional or islands council.

(5) In sections (Provision, maintenance and operation of bus stations) and (Bus stations: restrictions on discriminatory practices, etc.) of this Act and this section—

(a) "bus station" means a parking place which may be used by public service vehicles (including any such parking place which forms part of any interchange facilities for enabling passengers travelling by one means of transport to continue their journey by another); and

(b) "associated facilities" means, in relation to a bus station, any amenities or facilites provided for use in connection with that station.").

[Amendment No. 240F not moved.]
Clause 78 [Compensation for loss of employment, etc.]
[Amendment No. 241 had been withdrawn from the Marshalled List]
The Earl of Caithness The Earl of Caithness moved Amendment No. 241ZA.
[Printed 18/7/85; col. 978.]
The noble Earl said: I beg to move this amendment.
I spoke to it with Amendment No. 211CN.
On Question, amendment agreed to.
Following is the text of the amendment (No. 241ZA):
Page 79, line 17, leave out ("or") and insert ("and")
The Earl of Caithness The Earl of Caithness moved Amendment No. 241A:
Page 80, line 2, after ("of") insert ("or, in Scotland, sequestration of the estate of, or granting of a trust deed for creditors by,").
The noble Earl said: This is a minor technical amendment. The noble Lord, Lord Carmichael, will fully appreciate this, but for the rest of the Committee may I say that it is a necessary amendment because bankruptcy does not have a legal meaning in Scotland. The terms "sequestration of the estate" and "granting of a trust deed for creditors" are used to cover both cases where a court has judged someone bankrupt and cases where a trustee has been appointed voluntarily on behalf of creditors. I beg to move.
On Question, amendment agreed to.
On Question, Whether Clause 78, as amended, shall stand part of the Bill?
Lord Sandford: At the beginning of today's proceedings I had occasion to thank my noble friend Lord Trefgarne for a long letter which he wrote to me in answer to the debate that we had on Thursday about pension arrangements for members of the municipal bus companies, but he and I were at something of a loss at that stage to know how to make that information availiable to the rest of the Committee.
May I take this opportunity of saying what we have done is this. I have put to him a Question requesting him to publish the letter that he wrote to me on 24th July, and he has answered that Parliamentary Question by agreeing to publish it. It will appear in tomorrow's Hansard, and that will deal with that problem for us.
Clause 78, as amended, agreed to.
Clause 79 [Incorporation of Passenger Transport Executives in Authorities for their area]:
The Earl of Caithness The Earl of Caithness moved Amendment No. 241B:
[Printed 18/7/85; col. 978.]
The noble Earl said: With the leave of the Committee, we could perhaps take Amendments Nos. 241 B and 241C together. I spoke to them on Amendment No. 211CN. I beg to move.
[Amendment No. 241C.: Printed 18/7/85; col. 978.]
On Question, amendments agreed to.
Following is the text of the amendments (Nos. 241B and 241C):
Page 80, line 44, leave out ("subsection (6) below") and insert ("the following provisions of this section").
Page 81, line 10, at end insert—
("(6A) Any order under this section may make modifications in Schedule 4 for the purposes of its application to a transfer effected by that order.").
Clause 79, as amended, agreed to.
Clause 80 agreed to.
[Amendment No. 242 not moved.]
Clause 81 [Interpretation of Part IV]:
The Earl of Caithness The Earl of Caithness moved Amendment No. 242A:
Page 82, line 7, leave out ("(3) and").
The noble Earl said: I beg to move this amendment. I spoke to it with Amendment No. 211ZE.
On Question, amendment agreed to.
Clause 81, as amended, agreed to.
[Amendments Nos. 243 to 245 had been withdrawn from the Marshalled List.]
Clause 82 agreed to.
Clause 83 [Obligation to invite tenders for subsidised services]:
Lord Carmichael of Kelvingrove Lord Carmichael of Kelvingrove moved Amendment No. 245A:
Page 83, line 37, after ("sections") insert—
("(Phased Introduction of Tendering),")
The noble Lord said: Perhaps it would be for the convenience of the Committee to take Amendment No. 249A with Amendment No. 245A.
Amendment No. 249A: After Clause 83, insert the following new clause:
("Phased Introduction of Tendering.
.—(1) The Secretary of State shall, on application from an authority responsible for expenditure on public passenger transport services, make an order suspending the provisions of Schedule 5 in respect of the introduction of tendering and substituting a scheme drawn up by the authority for the phased introduction of tendering over a period to be agreed between the authority and the Secretary of State.
(2) In drawing up a scheme for the phased introduction of tendering the authority shall have regard to the following factors:—

(a) the number of services for which tenders have to be invited;

(b) the period for which each tender shall be let when tendering is introduced in full;

(c) variation of the initial period for which each tender is let in order to avoid excessive peaks in workload;

(d) the need to take urgent action in respect of any service that may cease to operate; and

(e) the number of staff available to perform the tendering function.

(3) The scheme shall specify—

(a) a programme showing the numbers of tenders to be let in each three monthly period until the complete introduction of tendering;

(b) the date at which tendering will be fully introduced within the authority's area; and

(c) arrangements to continue the payment of service subsidies by agreement for those services the authority wishes to secure but which are not yet subject to tendering arrangements.

(4) The scheme shall not confer unfair advantage on any particular operators within the area.")
Amendment No. 245A is merely to enable the introduction of tendering to be phased over a long enough period so that local authority staff will be able to cope satisfactorily with this work. It would also be to the benefit of bus services by enabling local authorities to control the introduction of new arrangements in an orderly fashion, and so avoid many of the problems that may arise from a total and simultaneous change everywhere, tempered only to the limited extent that the transitional arrangements in Schedule 5 will secure, and the more substantial amendment, No. 249A. The reason for this is to enable regulation to be deferred in certain circumstances because of the pressure under which local authorities will find themselves. It will be most severe in major urban areas which have the densest, the most complex and the most integrated networks.
The proportion of these networks which will need to be put out to tender is largely an unknown quantity, like so much else in the Bill, and it will not be known for sure until the registration period is over and the opportunity for variation and withdrawal is ended somewhere in mid-1986. The Government have not changed their mind and have not reduced their determination to adhere to deregulation day by October 1986. The revisions tabled in Schedule 5 make 20th September 1986 the operative day—D-day I suppose you could call it. The timing is still such that there is little hope of completing tendering in the time available. In the metropolitan areas the new joint boards will not be fully effective until after 1st April 1986, and so there is little hope of having more than four effective working months in which to implement the new, untested and unfamiliar process of tendering.
9.15 p.m.
The joint boards will be trying to cope with all that is entailed in administrative reorganisation—new personnel, new policies and other such matters. The period will also coincide with the summer holidays, during which even local authority and PTA staff have the right to be away. At that period the resources on all sides are always stretched by annual leave commitments, and operators are also most heavily committed to the seasonal services, such as tours, that crop up, especially at the seaside and in the conurbations near the seaside.
On the basis of limited experience of tendering in London after the 1984 Act, one PTE estimates that if only half its services are required to go to tender—that could be a low or a high estimate; it is thought by the authority to be low—in order to complete the task in the time proposed, up to 90 additional staff would be required. Another PTE calculates its requirements at about half that number. In any event the total requirement for staff qualified in this field—and these staff do
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not grow on trees; they are highly specialised—for all PTEs will run to hundreds, with all the complications of attempting to recruit professional staff on a part-time basis. In the consultative paper on tendering issued by the Department of Transport, the Government acknowledged that longer time-scales might be needed in certain areas, and that the problems would be most severe in the metropolitan areas.
The amendment merely seeks to allow for those problems, uncertainties and differences in various parts of the country. It aims to minimise the practical difficulties and the undoubted administrative problems to smooth the transitional process and thereby ensure that the quality of the end product is as high as possible. I hope that the Minister will respond to the amendment in the spirit in which it is moved—that is, in an attempt to be helpful. I beg to move.
Earl De La Warr: I should like to support the amendment. We do not want to get too far into Schedule 5 debates, but a couple of dates are perhaps worth adding to show how acute the time factor is. As the noble Lord, Lord Carmichael, said, D-day will be September 28th. Perhaps a high proportion of applications for registration will be in the early part of the year, but throughout the spring and summer they will be coming in. Indeed, the last date is to be October 16th. Perhaps noble Lords will bear that in mind when they think of the final D-day being September 28th.
It might be useful to remind the Committee of the measure of the task that lies in front of the local authorities which have to prepare these tenders. First of all, when the registrations are done they have to analyse all the commercial routes to see where the gaps lie. At the same time they have to take big and important decisions on the priorities at which they must look. We must remember that money will not be unlimited. At least in the shire counties and probably in the metropolitan areas they have to make decisions which they cannot make without referring to the political body on the priorities as between concessionary fares and subsidised routes. They have, on a more mechanistic base, to draw up the specifications. They have to issue all the documents. Then, when the applications come in, they have to evaluate each one and see what the whole amounts to in terms of money. It really is an enormous job. When one bears in mind that in each metropolitan county anything between 500 and a thousand services are to come within the non-commercial, the tendering, orbit, I think one will see what an enormous task this is. I repeat that in the final analysis they have only six weeks to do it and up to August 16th it will be like people sitting down to do a jigsaw when they have not all the pieces, because the pieces will not all be there until the middle of August.
I suggest to Members of the Committee that they should believe the advice which is coming to me and to other noble Lords, from those people who are actually going to do the tendering, that they will not succeed in getting through in time. Whether the Government choose to say, "We do not believe you: they will succeed—they must succeed", or whether they make provision for what must be a possibility, and in my opinion is a near certainty, that there will be

1301
enormous overspill after D-Day of services that have not yet found a contracted operator, is for them to decide. In my opinion it is pure folly to take a rigid attitude and say, "This will be done because I say it will be done", because it cannot be done.
I should very much like to hear the Government's attitude to this situation, bearing in mind, as I am sure they will, that if hard-worked men fail to get all the routes, the would-be tendered routes, buttoned up, registered and contracted, then on D-Day plus one there will be people waiting at bus stops for buses which will not turn up.
I want my noble friend Lord Belstead to take this very seriously. I know him well enough to know that he most certainly will, because, in the final analysis, it is a human question. It is a human question and has nothing at all to do with the Minister's resolve.
Lord Teviot: My Lords, I should not normally have come in now, having listened to the noble Lord, Lord Carmichael, introduce this amendment so effectively, and to my noble friend. However, I do so only to support this amendment. I think my noble friend must think quite seriously of the restrictions of the timetable. There are only two points that I should like to make to pre-empt his remarks.
We had a similar amendment on phased deregulation on Part I. However, we are now dealing with Part V. By and large, we have progressed fairly well. I think one must be sympathetic. If this Bill is to work, I think all of us, including even those who are against the Bill, agree that we do not want it to be a botched job. At the moment, with the programme offered, it will, unless something is done, be a botched job.
Lord Belstead: I should perhaps say first, in reply to the amendment, that the consultative document put out by the Department of Transport on tendering did indeed speak of a rather longer period for tendering than is provided for now. However, it was in response to what people said during the consultation process that the Government were persuaded that tendering should be carried out fully before deregulation. I have to say that although I absolutely understand why the arguments have been put forward on the new clause—and I respect the motives for the putting forward of the amendment—I am really dismayed at what would be the effect of the amendment compared to the arrangements that are being made, particularly in Schedule 5 to the Bill.
I should like to turn to a little more of the detail. First, why do we put a firm date for deregulation in Schedule 5 and make it the same for the country as a whole? It is because it is in the nature of things that if individual authorities could choose the timescale then reasons would be found for extending it, even if we were talking about a long period of some years. I think it is probably human nature that we would find a rush towards the end. At some point, one has to have certainty. In specifying a fixed date, that has been the principle which has guided us so that local authorities and operators can start working to a common goal.
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I do not want to suggest for one minute, having listened to your Lordships, that the move to deregulation and competitive tendering will be easy. I know that it is going to mean a lot of hard work for the professionals in the bus industry. But we believe that the timescale in Schedule 5 is a realistic one. Noble Lords have said that they do not want to go into detail on Schedule 5. I would prefer not to do so either. However, as a general proposition I would say that I like to think that the amendments that we have put down to Schedule 5 will give authorities some six to seven months to complete the tendering exercise starting from the date of registration in February 1986. Many authorities will be well advanced with their preparations long before that. Indeed, some counties are already initiating the change to tendering, and in some areas, particularly the metropolitan areas, the timescale, although it will be demanding, will nonetheless be achievable.
The effect of the new clause would be to remove the link between the abolition of road service licensing and the introduction of tendering. It would mean that in many areas network subsidy would continue well beyond deregulation day. I put it to your Lordships that this would, or certainly could, have a number of serious effects. It would mean that the incumbent, largely public sector operators, would be in a very different competitive position from the independent operators seeking to start in the market. It would distort competition and the benefits which the new patterns of services and the new operators coming into the market will, we hope, bring.
Secondly, the new clause presumes that operators can readily register a network of commercial services unaffected by the continuation of network subsidy. Operators, in deciding which services to register during the transitional period, will not only have to assess what services they believe they can operate without subsidy in the open market but will also have to take into account, under the amendment, the fact that some operators would be continuing to receive network subsidy after deregulation day as well. At that stage operators would not even know how long this uncomfortable state of affairs would continue. It could be for months, but it could be for years.
The result would be that the services registered during the transitional period would, I suggest, be closer to the existing pattern of services than the sort of services that will emerge when the market is free of network subsidy. That would probably mean that authorities would be involved in extensive re-tendering over the first year or so following deregulation as the pattern of services adjusted to a market oriented one. Is this really what noble Lords who have put their names to the amendment would want—to almost certainly require or force operators to go in for a whole lot of re-tendering once the transitional year had finished? I should have thought that that was something which we should all want to avoid.
9.30 p.m.
Paradoxically, a further side effect of the new clause could well be to introduce greater pressure on local authorities during that part of the transitional period falling after deregulation, and by that I mean the initial

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period between October and December next year. Network operators would feel under commercial pressures and would very likely seek to use their dominant position to demand higher subsidy payments. Authorities would be faced with the beginnings of the effects of cross-subsidy withdrawal without the benefit of lower costs which tendering will bring about.
If I may be forgiven for saying so, I really think that with that paradox we would be getting the worst of all worlds. I am therefore suggesting to your Lordships that, although I respect the reasons for which this amendment is put forward and the care with which Amendment No. 249A has been drafted, it would lead to a great deal of uncertainty. I would go so far as to say that it would lead even to confusion.
Finally, I ask your Lordships to contrast that with the approach in the Bill which aims to make the transition a controlled one so that on deregulation day when the new pattern of services starts, the local authorities will have had an opportunity to make sure that the service subsidy contracts for the noncommercial services have been organised and everybody knows where they stand.
Earl De La Warr: I should like to ask my noble friend one particular question. In the middle of his excellent exposition he said that this might go on for years. I wondered why he said that because if he looks at the last three lines of subection (1) of the amendment he will find reference to the substitution of:
"a scheme drawn up by the authority for the phased introduction of tendering over a period to be agreed between the authority and the Secretary of State".
Therefore, it is ultimately under the control of the Secretary of State to say how long the period will be. I do not wish to be personal about the present Secretary of State, but I do not think that we need fear, under those circumstances, that it would go on for years. I should have thought that "months" was a more reasonable interpretation of the amendment. I wonder whether my noble friend would care to comment on that either now or later in the debate?
Lord Belstead: Perhaps I may reply to my noble friend on that particular point. As I understand it, my right honourable friend would be required to make an order regardless of the merits of the case. The only discretion which would be allowed to my right honourable friend would be to agree with the authority the period over which the tendering is to be phased. A refusal by my right honourable friend to agree to the authority's proposals would not necessarily lead to my right honourable friend prevailing; it would simply lead to disagreement, and in the background there would be the requirement for my right honourable friend to make an order regardless of the merits of the case.
Earl De La Wan: Would my noble friend at least agree that the Secretary of State does not have removed from him the right to say "No" to a period which he regards as unreasonably long?
Lord Belstead: My noble friend and I must not keep on having exchanges on'this matter even though this is the Committee stage, because both of us can read what is in subsection (1) of the amendment. Whereas it is for debate as to how disagreement between the authority and my right honourable friend would turn out, what is for sure is that:
"The Secretary of State shall, on application from an authority responsible for expenditure on public passenger transport services, make an order suspending the provisions of Schedule 5".
Lord Shepherd: I do not know what my noble friend has in mind in regard to this amendment. He has certainly sought to deal in—I will not say an ingenious way—a pragmatic way with what is a genuine concern throughout the bus business and the local authorities. Perhaps by Report stage there will be a great deal more information available as to what existing operators have in mind as a consequence of the passage of this Bill.
I am with the Government in that I do not want to see phasing in of deregulation. From the beginning I have taken the view that if there was to be fair competion there has to be one date applicable throughout the country. To that extent I am with Her Majesty's Government and Ministers. However, I believe that the timescale provided in this Bill is far too short.
I do not know whether the noble Lord has seen an estimate that in Merseyside there could well be over 1,000 specifications that will have to be considered. When we are talking about tendering we are not just thinking about tendering for routes, but it could be for tendering on a route between particular times of the day, and also days in the week. It is not clear-cut that one is tendering for a service. One may be tendering for portions of time on a particular route.
With the figure I have that in Merseyside there will be a thousand specifications which will have to go out for tendering and will have to be considered, even with the best will in the world I do not see how the authority will be able to deal with it correctly and adequately. There ought to be one date for deregulation, so in principle I am against phasing in as it is proposed.
However, I do not believe that the timescale in Schedule 5 is a date that, even with the best will in the world and with all the work, ingenuity and dedication, can be achieved. If the Government insist upon the timescale here you are going to have holes in the system where there will not be operators willing to come in. We ought to come back to this on Report when we have greater knowledge as to how the operators view the procedures.
It is not just the operators. The operators' task in a sense is relatively simple compared with that of the authorities who have to make their judgment as to the services they want, and the failure, shall we say, from the commercial side for the provision of services for which they will have to tender and provide subsidy. This is something to which we ought to come back with perhaps greater knowledge on Report.
Lord Carmichael of Kelvingrove: The Committee will be grateful to the Minister for the persuasive way he put his case, and also for the fact that he emphasised the difficulties if there was phasing. I agree with my

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noble friend Lord Shepherd that if we are to have this change we do not want phasing, we would rather have it all done at once.
I am a little surprised and amazed at the incredible confidence that the Minister has that it is all going to be done. No one expert in the field of running buses and operating complicated systems really believes that it is all going to be done. We may be greatly surprised by things happening much more quickly, and they may prove to be even simpler than we had originally believed. But I should have thought that the Minister would have jumped at this amendment just to give that slight fallback. If he had been in as many Scottish Committees as I have he would realise that is not unknown in Parliament. In the new clause he has used the words "the Secretary of State shall". I have spent up to two-and-a-half hours listening to Scottish honourable Members discussing "shall" and "may". Why could not the Minister have just slipped in "may" and solved the whole problem by giving the Secretary of State a possibility to meet the slight chance that this huge complicated reshuffle might not go as smoothly as he had hoped?
This amendment would give him that opportunity. In so doing, I hope the Minister will take it away and consider it. No harm is done by the amendment as it stands, I do not believe, or I would not have agreed with the alteration from "shall" to "may"; but in the meantime I wish to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Sandford Lord Sandford moved Amendment No. 246:
Page 84, line 2, at end insert—
("(2A) An invitation to tender under this section may, without prejudice to the generality of subsection (2) above, include conditions requiring the tenderers to participate in a travel concession scheme provided under section 87 of this Act.").
The noble Lord said: In moving Amendment No. 246 on behalf of my noble friend Lady Vickers, I should like also to speak to Amendments Nos. 247, 248 and 249:
Amendment No 247: Page 84, line 18, at end insert—
("(4A) An authority may refuse to issue an invitation to any person who has not given to the authority a written notice indicating that they undertake not to compete on any route, or section of route subsidised under Part V of this Act.").
Amendment No. 248: Page 84, line 37, leave out subsection (7) and insert—
("(7) The authority issuing the invitation to tender under this section shall—

(a) have regard to regulations made under section 86(2) of this Act; and

(b) determine—

(i) whether to accept a tender submitted in response to the invitation; or

(ii) which (if any) of the several tenders to accept: solely by reference to what in their view is the most effective and economic application of the funds at their disposal for the payment of service subsidies.").

Amendment No. 249: Page 85, leave out lines 21 and 22 and insert—

("(i) be efficiently operated by the person proposing to provide it; and

(ii) not have an adverse effect upon existing or proposed tendered subsidised services.").

At this stage these are only probing amendments. I do not want to ask my noble friend to go into any of them in great detail. We shall return to them when we come
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to Report stage, when the noble Baroness will he here to consider the matter herself.
The broad intention, I surmise, is that the amendments together would enable authorities, when they are dealing with tenders for subsidised services, to secure some measure of protection for the services that they are proposing for tender. That is done by Amendment No. 246 adding to the end of subsection (2), Amendment No. 247 adding to the end of subsection (4), Amendment No. 248 substituting a new version of subsection (7) and Amendment No. 249 introducing some changes at the end of subsection (8).
It would be tedious to try to explain in any more detail to the Committee exactly how these amendments would work. All I should like to do at this stage is to ask my noble friend on the Front Bench to comment on their general thrust. They would operate in broadly the same way as Hereford and Worcester County Council has tried to operate its trial area in Hereford, using the power of contract with local operators to restrain them from acting to the prejudice of and in competition with other subsidised services. That is the broad intention.
Although these amendments would not impose limitations on this power of protection in the way that some other amendments have done, I suggest to the Committee that they have the great virtue of simplicity. Though at first sight one would not think that, I believe that is a claim one can make for them. May I invite other noble Lords interested in this aspect to contribute to this debate and my noble friend to comment on the general concept. I beg to move.
9.45 p.m.
The Deputy Chairman of Committees (Viscount Simon): As the noble Lord spoke to Amendment No. 248 as well as to Nos. 246 and 247, I ought to call attention to the fact that if No. 248 were to be agreed, I could not call Amendment No. 248A.
Lord Belstead: My noble friend Lord Sandford has moved three different sets of amendments on behalf of the noble Baroness, Lady Vickers. But I think that my noble friend made it clear in his remarks that what he is after is to find the Government response to the main thrust of these amendments, which is to endeavour to give, for instance, in Amendments Nos. 247 and 249 (which go together) more protection to subsidised services. I hear my noble friend say, "That's right". I feel that Amendments Nos. 246 and 248 go a little wider than that; but if that is what my noble friend is really after, may I simply say this.
I think that really the essential point about the difficult question about the protection for subsidised services is that it is terribly difficult to give some form of artificial protection to a service simply because it is subsidised without running the risk of endangering the position of passengers on commercial sectors of routes. By protecting the subsidised services, other operators on the commercial parts of the routes—and indeed adjoining routes—would be prevented from stopping up gaps in the market and seeking out ways of providing the customer with a better service or a choice of service.

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We feel that the local authorities should see what the market is going to provide and then have the right and the power to fill the gaps. The truth of the matter is that these amendments go quite a long way to standing that intention on its head. May I say at the risk of having said it many times before that we believe that competition is the key to better services for the passenger but that it is also the key to greater efficiency and lower costs. One simply cannot look at subsidised services in isolation and say, "If we can give them protection, then it is going to cost the local authority a great deal less". One has to look at the whole market and recognise that there are a number of offsetting factors at play. If I may be forgiven for saying it yet again, we take the view that the combination of various effects of competition should not change the level of local authority expenditure required for the same level of services over the country as a whole; and, of course, for passengers there will be a large net benefit in the form of lower fares and more flexible services.
If I may speak finally and particularly to Amendments Nos. 247 and 249, I realise that in looking particularly at those central amendments they do not go as far as that major amendment, Amendment No. 107, which my noble friend Lord Monk Bretton moved and which we debated about 10 days ago. These amendments would prevent only those operators with service subsidy contracts from the local authority from competing against the subsidised services. But in other respects these amendments would be far more damaging to the working of the free market (which is what the Bill is trying to bring about) than my noble friend Lord Monk Bretton's amendments tried to do some 10 days ago.
Lord Monk Bretton's amendments were very tightly drawn in the protection that they tried to give to the subsidised services and they gave a right of appeal. These amendments would provide no such limitations. In effect, they would allow a local authority to use its purchasing power in the market to inhibit the right of operators to go about their legitimate activities and it would be a kind of Hobson's choice for operators. Either they would have to forgo the possibility of a local authority subsidy or they would be stymied in serving the passengers to the best of their abilities on their commercial routes. I therefore suggest that whichever option an operator chose, it would be the public who would lose out.
I shall not go on about this. I know there is a difference of opinion in the Committee about the position of subsidised services. I would simply say that although I know the evidence is not great, what evidence there is shows that if one allows for greater competition, in the end it is the passenger who will benefit from lower fares, from more flexible services and a greater number of them. I think it is incontrovertible that the evidence that there is all tends in that direction. Certainly there is enough evidence to show that the artificial protection of subsidised services which these amendments would tend to achieve would not only go against what the Bill is trying to do but, if I may say so to my noble friend, would not be necessary.
Lord Sandford: It is of course the difficulty that we find ourselves in that we are planning and legislating very much in the dark. The extent to which the loss of cross-subsidy will be made up by increased efficiency and by competition is not something which has been studied, researched and measured. That is the whole difficulty. But when my noble friend says that such evidence as we have points in the right direction—from his point of view—I beg to differ because it was by operating just these sorts of powers that the county of Hereford and Worcester were able to achieve such success—although it was pretty limited—as they had at Hereford.
If I may say so, I think that the Government and Parliament will look rather silly if the assumptions on which this legislation is based are not fulfilled in practice and there is no power to do anything at all along the lines of these amendments. However, I am encouraged by what my noble friend said, particularly when he was referring to Amendments Nos. 247 and 249 because although he said they were defective in some respects he also said they were superior to those which had been moved earlier. He also said that although the earlier amendments were defective in other respects, they had virtues which these amendments had not; and so perhaps between us we can find a formula which will combine the virtues of these amendments and of the earlier ones which may enable us to get something into the Bill which will provide a means out of this difficulty if the Government's rather optimistic expectations are not fulfilled. With that, I beg leave to withdraw this amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 247 and 248 not moved.]
Lord Ennals Lord Ennals moved Amendment No. 248A:
Page 84, line 42, leave out ("solely") and insert ("by reference to both the manner in which and the extent to which the needs of elderly and disabled people are to be met and".").
The noble Lord said: It would be churlish of me to say that I am glad that the Government did not accept Amendment No. 248, because it was ruled that that would have made it impossible for me to move Amendment No. 248A, and I am going to do so because I think it raises an important question of principle which I should like the Minister to think about.
Earlier in the Bill, much to my pleasure and that of other Members of your Lordships' Committee, the needs of disabled people were recognised in amendments which were introduced by the noble Lord, Lord Belstead. The point here really follows on logically from what this Committee had already done. As the Bill is drafted, an authority issuing an invitation to tender has to accept that tender which in their view—and here I will quote from the bottom of page 84—
"is the most effective and economic application of the funds at their disposal …".
That means that they must be satisfied that the firm is competent and that the bid is low; if possible the lowest. I believe that that would be wrong. It does not allow them to give consideration to the facilities that an operator might offer to elderly and disabled people.
As I said, on earlier amendments the Minister accepted the need for PTEs to have regard to the needs of disabled and elderly people. I think that it would be in accordance with that principle that in determining the question of tendering and the acceptance of tenders the needs of elderly and disabled people should be a factor. The amendment therefore would ensure that authorities considered tenders by reference to the extent to which the needs of elderly and disabled people are to be met, as well as an effective and economic application of the funds available.
I think that that is a simple and logical argument, one which I hope the Minister will accept, even if he may say that the amendment could perhaps be worded in a better way. But I hope that he will want to accept the principle that I have just mentioned.
Lord Belstead: I fully appreciate the intention behind the amendment of the noble Lord, Lord Ennals. I must say that I am less certain as to the effect that it would have. It gives me the opportunity to make quite clear how the tendering system will apply to the needs of elderly and disabled people. The point to stress in reply to the noble Lord is that local authorities will, under the tendering provisions, have full discretion to specify the sort of services they require to meet the needs of elderly and disabled people. Under Clauses 57 and 61, as amended, authorities will have a duty to have regard to the needs of elderly and disabled people in securing the services that they consider appropriate. In inviting tenders for subsidised services, authorities will therefore be able to specify particular vehicle features or to specify specialised services designed for the disabled.
The noble Lord said that we had a basis to the Bill on which he would now like to build. I agree with the noble Lord so far as the basis is concerned. There are two important stages at which authorities will be considering the needs of elderly and disabled people: first, in determining their public transport policies under Clauses 57 and 61; and, secondly, in drawing up their invitations to tender under Clause 83(2) which will flow from those policies. When an authority invites tenders they must, in the words of that subsection, be tenders
"for the provision of that service for such period and on such basis as may be specified in the invitation to tender".
So the fruits of the authority's consideration of the needs of elderly and disabled people should emerge in those tender invitations.
Clause 83(7)—which the amendment of the noble Lord seeks to alter—deals with the stage at which authorities are choosing which tender to accept; and subsection (8) elaborates on that. The subsection is not primarily concerned with policy choices but with comparisons between offers to provide what an authority has already asked for. It is an essential feature of any tendering process that all those who put in offers do so on a fair and equitable basis—that is, that each has the opportunity to say at what price and at what time of day he can supply what it is that the authority wants.
That is not to say that policy choices are impossible at tender stage. An authority might decide that it will invite tenders which specify a price for, say, using a
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low-step vehicle and another price for vehicles adapted to carry wheelchairs. It might be only when the authority could see the cost of each of those options that it felt able to take its decision. But subsection (7) simply directs the authority to choose the offer which provides the best use of funds in the context of the policy that it has chosen. With respect to the noble Lord, I think that that is as far as the Bill ought to go in this respect.
10 p.m.
After all, subsection (7) does not mean that authorities must accept the lowest tender—it really does not. Nor does it mean that if they want buses with low steps they must accept a low tender from an operator whose buses do not have low steps. Nor does it mean that a local authority cannot take account of some helpful feature that an operator is able to provide over and above the specification issued and assess its value, provided all operators had the same opportunity to offer additional features. All those considerations are for the authority to address when they draw up their policies and to carry through when they issue their tender invitations. I really do not think that an amendment to subsection (7), which covers the moment when they are finally looking to see which of the tenders they will choose, is either necessary or relevant.
So this is not a difference of principle between the Government and the noble Lord, but a difference of emphasis and a difference over the construction of the Bill, for may I repeat that local authorities will have a duty to have regard to the needs of the elderly and disabled; the tendering provisions will allow them to specify services to meet those needs, and there will be full discretion for authorities to take those needs into account in inviting tenders. On that understanding, I hope that the noble Lord will feel that the amendment is not necessary.
Lord Ennals: I wish that I could be a little more impressed by the arguments put forward by the noble Lord the Minister. I should have thought that the final moment that we are now talking about, which is accepting and taking a decision on a tender that has been put forward, is precisely the moment at which the principle which is already written into the Bill should be not uppermost, but borne in mind.
I understand the Minister's argument, that of course there has already been stated to be an obligation upon the licensing authorities to "have regard to"; but they are much more likely to "have regard to" if the wording is not at least giving the impression that it is the lowest bid that has been looked for. If the Minister looks again at the words,
"the most effective and economic application of the funds",
there is no implication whatsoever that the specific needs of disabled people will be borne in mind. I think that the wording as it is now gives the impression that it is the efficiency of the service and the cheapest bid which would be uppermost, unless something were put in at this stage.
I assure the Minister that I shall not press the amendment to a Division, but I should like him to look at it again. As I have said, we have looked at them

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at other stages in the process and it is at the final stage, also, that the needs of the disabled should be brought to the attention of those who have to reach this final decision. I beg leave to withdraw the amendment.
Lord Belstead: Of course, if the noble Lord asks me to do so, I shall be only too ready to look at this amendment and, no doubt, there will be an opportunity for the noble Lord and myself to consult together between the two stages of the Bill. But I would simply repeat that in drawing up their invitations to tender under Clause 83(2) the needs of the elderly and disabled will be taken into account. If that is the case—and it is the case, because we have amended the Bill in that way—then, when one gets to the point at which this amendment is directed, when the tenders come back in, the needs of the elderly and disabled have already been taken into account in going out to the tenderers. It is at that moment, I am suggesting to the noble Lord, that the authority needs to look at the results of those tenders, without having it said again that the authority must have regard to the needs of elderly and disabled people.
Lord Ennals: I accept the logic of what the noble Lord said, but in that case why is it emphasised that there must be,
"the most economic and efficient application of the funds"?
That seems to point in a certain direction. Is it necessary to point in that direction, if all the other considerations which have already been written into the Bill are specified?
Baroness Carnegy of Lour: Before this discussion comes to an end, perhaps I may say this. When you are in a local authority looking at the tenders you have to look at them in relation to everything that they have been asked to tender for. You have to look at all the other requirements. Although I appreciate that, as ever, the noble Lord is watching to try to make sure that the legislation does the very best it can for the elderly and disabled, I think that in judging a tender you would always look at the criteria against which people tender, because otherwise it is not fair to decide which is the right one to take. You must apply all the criteria that were set out when the tender papers were issued. I think the noble Lord, Lord Ennals, will agree that that is always a condition of tendering.
I personally am not too worried about it at that stage. I accept that the other point the noble Lord is making about their being efficient is a different one; but I do not think that the elderly and disabled not being mentioned again could conceivably matter, because you always look at all the criteria.
Lord Ennals: I understand the logic of the argument presented by the noble Baroness. If there were to be written in a phrase which did not necessarily specify the elderly or the disabled but which added to this phrase "effective and economic application" and referred to all the other obligations at which an authority is obliged to look, the subsection would be clearer than it is at present. The emphasis is on efficiency and economic application. There is really something missing. It may be that my words are too
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specific, but perhaps the Minister could look at them in the context of all the other obligations. In the light of what has been said and with the assurance that the Minister will look at it again, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 249 not moved.]
Clause 83 agreed to.
[Amendment No. 249A not moved.]
Clauses 84 and 85 agreed to.
Clause 86 [General provisions with respect to the exercise of functions under sections 83 to 85]:
Lord Sandford Lord Sandford moved Amendment No. 250:
Page 87, line 43, at end insert—
(" (1A) Arrangements made in pursuance of a scheme to which section 87(4A) of this Act applies shall be deemed not to inhibit competition.")
The noble Lord said: I move this amendment on behalf of my noble friend Lady Vickers. At the same time I should like to speak to Amendments Nos. 251 and 252, as probing amendments.
Amendment No. 251: Page 88, line 1, leave out subsection (2) and insert—
(" (2) Any authority responsible for expenditure on providing public transport may, in selecting a tender have regard to—

(a) the vehicle type to be used;

(b) the ease of access to and egress from the vehicle;

(c) the arrangements to have vehicles and drivers available at short notice to replace a vehicle which is delayed in operating its service, has failed or is damaged or to replace an incapacitated driver,

(d) the fare levels and structure to be used; and

(e) the minimum run and recovery times to be operated.")

Amendment No. 252: Clause 87, page 89, line 18, at end insert—
(" (4A) Where the sole operator of a service on a section of road does not wish to participate in the scheme, the local authority may invite tenders for a subsidised service on condition that the tenderer does not enter the scheme.")
As your Lordships will see, these are fairly precisely worded amendments. Amendment No. 250 adds to subsection (1) of Clause 86; Amendment No. 251 substitutes another version of subsection (2) of Clause 86; Amendment No. 252 adds to subsection (4) of Clause 87—that is, Clause 87 as at present printed in the Bill and not the Clause 87 my noble friend Lord Belstead proposes to substitute.
I do not want to invite the Committee to look at those amendments in detail now with a view to moving them into the Bill, but I ask my noble friend once again to comment on their general thrust, which is to provide a wider scope for the local authorities to take a range of relevant factors into account when assessing the tenders rather than a narrow view concentrated exclusively on the tender price and not enough on the real value to the public of the services which that price is going to buy.
I hope that that brief explanation of the general idea behind these amendments is sufficient for my noble friend to give me, and in due course my noble friend Lady Vickers, an indication of how he regards this attempt at improving the Bill. I beg to move.
Lord Belstead: I am a little worried that I shall not be replying very effectively to my noble friend. He is dealing with Amendments Nos. 250 and 252 together.
Lord Sandford: And Amendment No. 251.
Lord Belstead: That is right; but leaving aside Amendment No. 251 for the moment, Amendments Nos. 250 and 252 bring us to a pair of amendments which, with great respect to my noble friend, do not make sense. There is one negative too many in Amendment No. 252. I think that all I wish to say to my noble friend—and I hope he will not think that I am being discourteous in replying briefly—is that it is our intention in the Bill that local authorities should, if they wish, have the power to compel operators of registered local services to take part in concessionary fare schemes. This, for the first time, is where we put our toes into concessionary fare schemes, with Amendments Nos. 250 and 252, and I do not think that these two amendments get it quite right. We shall be coming back to this in a moment.
Amendment No. 251 is completely different. It falls within the scope of what my noble friend said to me a moment ago: that he wanted to know a little more about what the Government think of the setting out of criteria when the whole question of selecting a tender is being decided by the authority. Again, to reply reasonably briefly, I think that the best value for money is a reasonable objective. It is reasonable for the same reasons as I gave to the noble Lord, Lord Ennals. As regards elderly and disabled people we have, of course, written an explicit amendment into the Bill saying that their interests shall be taken into account when deciding on subsidised services.
Talking more generally in answer to my noble friend, it is for each authority to decide what it wishes to subsidise in order to fulfil its more general duties under Clauses 57 and 61. If an authority considers it wants to subsidise services with vehicles which are, for example, particularly easy for elderly or disabled people, it is free to do so.
I should like to stress to my noble friend that when inviting tenders, authorities should, as far as possible, make clear to operators the features that they would like to see in the services offered. On the other hand, authorities will wish to bear in mind the disadvantages of specifying services so tightly that operators have no scope to use their expertise to provide the most effective service and thus achieve the most effective and economic use of the subsidy. If they are to make the best use of the advantages of tendering, authorities will want to leave themselves free to judge the relative costs and benefits of, for example, different vehicle types where these are matters on which the authorities have not chosen a clear policy line.
I am trying to show to my noble friend that I know that tendering is a skilled and specialised business and for that very reason we have deliberately drafted provisions in the Bill which allow authorities considerable flexibility. We shall be consulting authorities with a view to issuing a non-statutory code of practice once the Bill has been approved by both Houses of Parliament. We hope, if possible, to rely on the good sense of authorities, together with the code of practice, but a regulation-making power has been
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included in Clause 86(2) should it prove necessary for the Government to lay down any tighter controls; although that is not our current intention.
The thrust of my reply to my noble friend is that we believe authorities should have as much flexibility as possible in order to carry the tendering process through in the way that they wish.
10.15 p.m.
Lord Sandford: I am grateful to my noble friend for that reply. First, am I right in interpreting it to mean that the authorities are not barred by the terms of Clause 86 as at present drafted from taking into consideration the kind of things which are included in Amendment No. 251? Secondly, am I right in understanding him to say that a code of guidance which will give local authorities further indications of what they can and cannot do in this field is in course of preparation and that we shall be in a position to hear more about that from my noble friend when we come back to this clause at the Report stage?
Lord Belstead: Broadly speaking, my noble friend is absolutely right in both his questions. Looking at Amendment No. 251, I am not quite sure about paragraph (c) and I should like to think about that particular provision and perhaps have a word with my noble friend about it. Basically, however, provided that the paragraphs set out in Amendment No. 251 leave it open for all operators to be able to tender and do not exclude any particular operator, then the answer to my noble friend's first question is "yes" and the answer to his second question about the code of practice is also "yes".
Lord Sandford: I am grateful to my noble friend for that reply. I apologise to him and to the Committee if Amendments Nos. 250 and 252 are not drafted so as to make much sense, but I think the debate has achieved what my noble friend would have wanted it to achieve, and I beg leave to withdraw Amendment No. 250.
Amendment, by leave, withdrawn.
[Amendment No. 251 not moved.]
Clause 86 agreed to.
Clause 87 [Travel concession schemes]:
Baroness Stedman Baroness Stedman moved Amendment No. 251ZA:
Page 88, line 19, leave out from first ("on") to ("services") in line 20 and insert ("public passenger transport.")
The noble Baroness said: This is a very small amendment but we think it is a necessary one. At the present time many local authorities, in addition to having concessionary fares for the buses also offer concessionary fare schemes for the railways, and in many cases for the ferries, which are perhaps even more vital. We are not satisfied that the present wording of the Bill will still enable the authorities to ensure that they can obtain these concessionary fares for transport other than on buses. What we are trying to do is to safeguard the concessions that are already available to people in the area, and we hope that the Minister will either give us an assurance that this is covered in some part of the Bill although we have not been able to find it, or that he will have a look at it and

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ensure that the authorities will be legally able to extend their concessions, as they do at the moment, to the railways and to the ferries, where they deem it to be necessary.
Lord Ennals: I should like to give my full support to the amendment that has been moved by the noble Baroness, Lady Stedman. I think the section that we seek to remove, which is referring to relevant services, is really not adequate. I think it is outdated and unnecessary. I agree with the noble Baroness that we need something that quite clearly includes rail services. An area that I can easily think of—Derbyshire, for instance, and the village of Edale, which I know well—does not have a local bus service at all, but it has a local railway service. For the people of Edale concessionary fares on the railways are just as important.
The noble Baroness said that this issue may be dealt with in some other way. But the Under-Secretary of State, Mr. David Mitchell, in another place said:
"It is not the intention of the Government to extend the system of concessionary fares which applies to buses to the generality of British Rail services".
The Minister may say that it will not be extended to the generality of services but to particular places where there are no bus services, and so that deals with rail. I think that it has to be written in somewhere.
If one lives on the Isle of Wight the ferry is important, and in many other parts of the country the ferry service is absolutely essential. Also, unless some change is made, whether in this form or another, Dial-a-Ride schemes for the disabled (which we have so often discussed in this House on various Bills), if such schemes happen to lie outside a metropolitan area or the Strathclyde region, would be excluded. Therefore we must have a much broader definition.
Obviously the Minister has had these points brought to his attention. The anomaly referred to by the noble Baroness and myself has been brought to his attention by the National Advisory Council for Community Transport, British Rail, Rural Voice and the local authority associations. I hope that he will accept the amendment in the way that we have set it out, but, if not, the point certainly has to be met somewhere in the Bill. Otherwise it will discriminate against and deprive a considerable number of our elderly, disabled and other categories of the concessions that go with bus services.
Lord Mottistone: I, too, support the amendment, but I have to declare an interest. At my great age I have a concessionary fare on the boats from the Isle of Wight to the mainland, and I should hate to see that withdrawn.
With the noble Baroness, I hope that my noble friend can reassure us, but the point that I wish to make is this. On the mainland if one wants to go from one county to another one can catch a bus which is covered by the legislation as it stands; but if one wants to go to an adjacent county from the Isle of Wight, or, I would suggest, from Orkney, which is similar and the distance is not all that much more, one has to go by ferry. If it is to be fair for the people in one county it must be fair for the people in another. Those of us on
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islands find that in this respect our ferries are like bus services.
I am not arguing for the railways because the position is the same for everybody, and perhaps the Government have a policy about railways. Of course it would be nice to have the concessions on the railways, but I wish to make the point about the importance of ferries in counties cut off from the mainland.
Lord Henderson of Brompton: I am delighted that this matter has attracted the support of the noble Lord, Lord Mottistone, even though it is only a special interest that has caught his attention.
I should like at this stage to say to the Minister that I do not intend to move the unnumbered and rather garbled amendments to his amendment. I apologise for the fact that they are both garbled and unnumbered. I think that I can make the points necessary before he comes to move his amendment to insert a new clause in place of the existing clause.
At the moment I think that local authority concessionary fares apply on any public passenger transport service, whereas they appear to be restricted both under the present Clause 87 and, I believe, under the new Clause 87 which the noble Lord intends to move. We have heard about ferries, and they are important to particular people; even tramcars may be important.
My main concern has already been mentioned by the noble Lord, Lord Ennals; that is, that the clause as drafted and as proposed excludes Dial-a-Ride services for the disabled where they are set up under mini-bus permits. We have agreed under Clause 19 that permits should be available for Dial-a-Ride in respect of the use of buses by educational and other bodies, and it would be inconsistent if, having agreed that on Clause 19, it was now excluded under Clause 87. Thus, I think there is a very serious point which ought to be rectified, either in the terms of the amendment of the noble Baroness, Lady Stedman, or by the Minister being good enough to bring in a corrective amendment on Report. One or the other will do, but I think enough has been said from all sides of the Committee to, I hope, convince the Minister that there is something here which clearly ought to be put right.
Lord Belstead: I hope I shall not appear to be ungracious when I say that your Lordships are asking, and the noble Baroness in moving the amendment is asking, for something which is not in the law at the present time. At the moment we have the situation where the passenger transport authorities have the power, covering all bus services and also commuter rail services, to give concessionary fares. In the metropolitan areas the PTAs have, and will continue to have, specific responsibilities for the provision of local commuter rail services under Section 20 of the 1968 Act. It is therefore necessary that they should have the power to provide concessions on those services, and the Bill gives them that.
This Bill then took a step forward in another place in that my right honourable friends and honourable friends there thought it right that the Scottish island authorities should have the power to provide concessions on internal ferry and air services for

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precisely the reasons which my noble friend Lord Mottistone put forward and so they are included in the definition of "public passenger transport services" and therefore able to attract concessionary fares.
But the non-metropolitan authorities do not have the kind of direct responsibility for rail services that the PTAs have. The Government believe therefore that we ought to maintain the position as it stands under Section 20 of the 1968 Act, under which the metropolitan county councils have powers to fund concessions on rail services in their areas. But there is no corresponding power outside those areas.
It is for that reason that I do not agree with the main thrust of the amendment which the noble Baroness, Lady Stedman, has put forward, even though it has been put forward in a persuasive way and I shall not deny that the noble Baroness has something of a case—but only something of a case, for the reasons that I have given.
I must confess to the Committee that I had not really considered the question of mini-buses, the Dial-a-Ride point which the noble Lord, Lord Ennals, and the noble Lord, Lord Henderson of Brompton, have raised. I should like to think about that. Although the noble Lords feel that there is a difficulty here, it occurs to me that the actual fare structure of special mini-bus services for elderly or disabled people, run under permits, means that one does not have to give concessionary fares in the way that is envisaged under the Bill. The noble Lord may tell me that he does not agreee with that. If the noble Lord will allow me to do so, I should like to think about it, but I am afraid that at the moment I am not in the position to accept the point.
Lord Mottistone: My noble friend said that in another place our right honourable friend gave special concessions for the Scottish islands. Will my noble friend agree to consider that, in all fairness, the same kind of approach should be given to the English islands?
Lord Belstead: My Lords, I have been over this ground already. The difficulty here is that the shire authorities do not have the specific powers to provide concessions under the 1968 Act. Maybe I missed what the noble Baroness, Lady Stedman, was saying, but I did not hear her saying that what she had in mind, which is what I assume she had in mind, is that we would be talking about the use of the twopenny rate power in providing concessions on rail services within the area of a shire authority. If that is what the noble Baroness had in mind, that is what my noble friend Lord Mottistone would have to have in mind in talking about giving concessions from shire authorities for ferry services which are not actually run by the shire authority itself. It is a different matter when you are talking about the PTA or, indeed, the authorities in Scotland, where they are responsible.
10.30 p.m.
Baroness Stedman: The noble Lord has me quite worried as to whether my authority will end up in jail or something. My district authority in a shire county allows people to get a British Rail senior citizens' ticket
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from the town hall at a reduced rate. It had done so for some time, I gather, although I have not yet availed myself of the facility. The ratepayers, presumably under the twopenny rate, make up the difference to the railway and buy the tickets from it. Presumably, this is acting illegally, judging from what the noble Lord has said.
On the other hand, if the metropolitan areas are allowed to make these kinds of arrangements for commuters, we consider ourselves now as a commuter area for London. We have many London people, old and young, living in the new town of Peterborough. The city council, rightly or wrongly, took the view that it would help those people to keep in touch with their friends in London if they could have concessionary fares at a reduced rate. I am sorry if I am letting the cat out of the bag. I may be getting my authority into trouble. But it seems to me that it is quite a sensible attitude to make it possible for those who have moved from a nearby conurbation to be able to get back again.
Lord Belstead: With all friendliness to the noble Baroness, when she talks about British Rail services to Peterborough, the noble Baroness is stretching the principle of this amendment like a piece of elastic.
Lord McIntosh of Haringey: If any part of the noble Lord's resistance to the concern of the noble Lord, Lord Mottistone, concerning ferries to the Isle of Wight, is that an amendment might be hybrid, may I beg him on behalf of the noble Baroness to consider ferries to the Isle of Ely and for myself ferries to the Isle of Dogs?
Lord Ennals: Before the Minister responds to that dramatic intervention, an amendment that might have originally been called the Stedman amendment is now clearly the Mottistone amendment. Your Lordships have to ensure that the noble Lord is able to come to the House. Otherwise, he is isolated on his island. I was delighted that the Minister said he would look at the matter, including Dial-a-Ride and ferries, a little more widely than in relation to the Scottish islands.
When the Minister said that it was not good enough because these powers did not exist at the present time, it was one of the poorest arguments that could be used. Everything else that he has said has been very good. If, in 1985—the last Act that touched upon this was that of 1968—we cannot begin to look at one or two advantages, for elderly and disabled people in many cases, then we really are in a bad state, are we not? I am not asking the Minister to agree that we are in a bad state. But the argument that we must not do the right thing because we have not done the right thing before is one that does not stand up very well.
Lord Henderson of Brompton: I wish to support what the noble Lord, Lord Ennals, has said, but I also wish to thank the Minister for taking on board the special position of Dial-a-Ride in relation to mini-bus permits. I am grateful to him for that. I wish, too, to support the point, dramatically made by the noble Lord, Lord Mottistone, that it is odd that schemes for concessionary fares should be available in one part of the country but not in another. Whatever the law is at the moment, could it not, please, be put right?
Baroness Stedman: I am grateful to the Minister for his reply and for the fact that he is going to look at Dial-a-Ride and things like that. Perhaps at this stage the less I say about other concessionary fares the better. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 251ZB not moved.]
Baroness Stedman Baroness Stedman moved Amendment No. 251A:
Page 89, line 15, after ("shall") insert ("subject to subsection (4B) below").
The noble Baroness said: I began as one of the sponsors of this amendment, but I seem to have missed the bus en route to the various reprintings of the Marshalled List. However, I should like also to speak to Amendment No. 251B.
Amendment No. 251B: Page 89, line 18, at end insert—
(" (4B) Subsection (4) above does not apply to where an operator of a registered local service is unable to satisfy the authorities responsible for administration of the scheme that he will only use in operating the service vehicles which by virtue of their design, construction and fittings are suitable for the carriage of persons to whom the travel concession scheme applies.")
Amendments Nos. 251A and 251B seek to limit the automatic right of the operators of the registered services participating in concessionary fare schemes to those operators who are able to satisfy the authorities which have to administer the scheme that they will always use vehicles which are suitable for the carriage of the holders of concessionary fare passes. Most of the concessionary fare schemes which are operated today concentrate on providing a cheaper or a free form of travel for pensioners. Many authorities have also extended those schemes to other people with various mobility problems.
These amendments will not alter, limit or extend either the scope of those schemes which already exist or the categories of persons who are at present eligible for benefit. However, the Bill as it now stands means that new operators would be able to claim income from concessionary fare schemes without any obligation to provide vehicles which the holders of those passes could use with reasonable facility.
The concessionary fares have not only been very attractive politically while they have been in being, but they have also been very much appreciated by a substantial section of the public who are totally or mainly dependent upon public transport. Some 18 per cent. of our population qualify on age grounds alone, and that 18 per cent. comprise some 10 million people. There are another 6·5 million people who have some form of mobility handicap and of those it is estimated that something over 4 million could still use public transport if it were available. Therefore, that means that there is a real customer market, an assured customer market, of around 14 million people as against the rest of the population who tend to make increasing use of private transport rather than public transport.
However, it is no use having concessionary passes if the vehicles, and particularly the older vehicles, are not usable by the intended pass holders. What we are
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trying to ensure by these two amendments is that the income from those schemes cannot be claimed unless the vehicles are such that the intended beneficiaries from the scheme are able to use them. In other words, public expenditure should not be misdirected on concessionary schemes which the public are then not able to use. All the schemes at present operated are some charge on the rates paid for, of course, by the intended beneficiaries and other ratepayers alike. Indeed, until one becomes eligible for a concessionary fare, one will have contributed towards providing that facility for others in the past.
Many of the schemes also require that the passholders shall pay something for their pass, in the same way as we pay £3·50 for our British Rail pass in Peterborough. If, as the Bill stands, vehicles can be in operation which beneficiaries cannot use with reasonable facility, then their own payments towards the scheme will have been made futile.
There is another aspect to this problem. If the passholders are excluded in these circumstances from normal bus services, then the alternative would be that other forms of transport, such as that provided for the more severely handicapped, would have to be provided. That would mean an increased cost on public use or, alternatively, possibly a reduced availability of transport for the much more severely handicapped people. The less mobile that people are, if they mainly depend on public transport, the greater will be the cost in terms of social and other services if we do not provide it.
I hope that the noble Lord and his colleagues will see the sense of ensuring the correct matching of the concessionary fare schemes with the vehicles used by operators who claim income from those concessionary fare schemes, because anything less will not be cost-effective. Therefore, I hope that our amendments will find acceptance in the eyes of the Government. I beg to move.
Viscount Ingleby: I should like to support the amendment which has been so ably moved by the noble Baroness, Lady Stedman. Without the amendment, public money designed to facilitate travel for the elderly and disabled would be going to operators who might frustrate the whole purpose of this service by using vehicles which many elderly or disabled people could not use. This surely must be wrong, and doubly wrong if those elderly and disabled have themselves contributed and provided money through the rates for services which they themselves cannot use.
Baroness Elliot of Harwood: I should like to support this amendment. It is important. What the noble Baroness has said about the numbers of people who could claim this is remarkable. I have a note here which says that 18 per cent. of the population are of an age to qualify for concessionary fare schemes; but according to the noble Baroness it is a far greater number than that.
It is something which everybody would want to support. All of us who are fortunate enough not to have to claim for disabilities are only too happy to be able to contribute to any scheme which helps with the

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disabilities of the less fortunate. It is something which the Government should take on as an asset to the Bill, and an asset to the community. It would be enormously helpful. I cannot see that it can in any way interfere with anything in connection with this Bill. I hope that the Government will see this as something which they must put into the Bill, and which will have the support of everybody.
Baroness Carnegy of Lour: Of course this is important; of course where there are concessionary schemes one wants everybody who qualifies to be able to get on the bus. However, realism has to come into it. If there are really 10 million people who are going to qualify for this I cannot believe that it is going to be possible in rural areas—probably elsewhere too, but certainly in rural areas—to persuade enough bus operators to produce the kind of facilities that they would have to if this amendment were accepted.
Concessionary fares are not a dripping roast for bus companies in rural areas. In areas like the Borders of Scotland where my noble friend Lady Elliot lives, and in Tayside where I live, it is very difficult indeed to get a bus at all to operate on routes, with or without concessionary fares. Although the argument is that using the ratepayers' and taxpayers' money to supply the concessionary fare means you can require things of the bus operators, I do not think it is sufficiently persuasive.
It is difficult to get buses to cover school transport services, which are an even more certain job for them. One would have to be careful about putting it like this, because one would find that most of the elderly people would not have a bus at all on which to have their concessionary fares because nobody would be prepared to run it. This is urban thinking from the point of view of the operators. I do not know what way there is to try to make as sure as possible that where concessionary fares operate the people with the disabilities in that area can use the bus.
A person in a wheelchair needs the bus that can take the wheelchair. A blind person needs the right facilities. But most of the 10 million people are able to get on an ordinary bus, as we said before when we were discussing the question of the disabled. This amendment would rule out most buses where concessionary fares operate, and that would be most rural areas in Scotland. It would be very difficult to get buses to do it. I do not think that it is completely realistic in the non-urban scene.
10.45 p.m.
Baroness Stedman: The noble Baroness referred to buses which one can get wheelchairs on. I perhaps did not make myself plain. I meant them for the people who were sufficiently mobile, even with their handicap, to be able to get on to a normal bus if the steps up to it were low enough for them to be able to get on to the first step and if there was a handrail to help them on. That is the sort of help that we should insist on so that more elderly and infirm people can be assisted. It is the infirm rather than the severely handicapped who are likely to be able to use the buses if they have the kind of fixtures that will give some help in getting on and off.
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We have to accept, with all the goodwill in the world, that we cannot expect special buses on every route—the kneeling buses, those with ramps or lifts that can take wheelchairs. We have to accept as a community that those are the things that have to be provided through the social services for the more severely handicapped. But there are thousands and millions of people in this country, elderly people who are infirm, who could use a bus if they were able to get on to the bus, if they had a handrail at the side and the bottom step was low enough for them to get on to. People with heavy shopping need that sort of help to get on the bus and people with young children.
It is important that we see that the buses used are not just any old crocks that might be put on to the market because this is a chance to get a business started. If someone starts a business he must use the kinds of coaches and buses that the ordinary infirm and slightly handicapped people are able to use. Otherwise we have this chicken and egg situation that we have had all the time with the bus operators saying that there is no demand for a route there and people not able to use the buses because they cannot get on to them, because they are elderly or because they have some minor physical handicap. If we can only marry the two together it would be a much more lucrative proposition for the bus people to be able to run buses that are really being used by the people and it would allow many people to be able to get out to see their relatives or do a bit of shopping for themselves and that kind of thing. I think we have to try to match the two together.
Lord Henderson of Brompton: I should like to follow the noble Baroness, Lady Stedman, and endorse what she said to the noble Baroness, Lady Carnegy of Lour, that it is the less agile of the public of whom we are thinking, and not the severely disabled. Those very steep steps on most buses are very difficult to negotiate for a large section of the public which is less agile. Some of the handgrips are not well placed. It is small things like that with which we are concerned.
We have heard the argument of the noble Baroness before in different guises and it boils down to the fact that if a provision of this kind were made, one would find it difficult to argue with the local people in the more sparsely populated districts in the country. When they ask, "Where are our buses?" we shall have to say, "You cannot have any buses because such impossible conditions have been imposed on the operators".
That is the gist of the argument which the noble Baroness has produced before and has dished up again today in a different guise. I have some sympathy with this. I think the noble Baroness has a point. Perhaps this kind of condition should be imposed on the larger operators and there should be exemption for smaller operators. I do not see that this de minimis argument of the noble Baroness should deny the greater part of the country who do not live in the sparser populated districts the kind of benefits which we are hoping that this Bill will provide.
I do not think that this amendment is necessary, apart from the general public frustration that will arise if these provisions are made and, having obtained a concessionary ticket, they find they cannot get on to the bus. That is not very good for public relations, but

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it is not just that. It may be that under the Bill as drafted schemes may be made and payments claimed by operators whereas the vehicles are such that the intended beneficiaries cannot use them. That is a highly undesirable situation which may come about unless some change is made on the lines that this amendment proposes. That very undesirable practice may occur and the public may feel, quite rationally, defrauded. But, having said that, I recognise that the noble Baroness has a point and I think there is a case for making an exemption from such conditions for smaller operators.
Baroness Carnegy of Lour: Perhaps I may follow what the noble Lord, Lord Henderson, has said with this argument which, he says, I keep bringing up in different guises—and I am sorry he sees it in that way. I do not see why people in rural areas should be totally deprived of buses with concessionary schemes because of a blanket amendment for the sake of urban areas. There will be buses running on which you cannot have concessionary fares because they will not be able to do it if this amendment is accepted. That is why I talk about the rural areas. Blanket legislation which suits one part will not suit another. I think it is an important argument. There must be an answer, as I have said, and it should be looked for because it is very important. I do not think a blanket amendment is the way to do it.
Lord Shepherd: It may be a question of drafting. The noble Baroness, Lady Carnegy, was saying that if this amendment were passed many of the rural services would not pass muster and would not—I was about to say "have the benefit of concessionary fares", but in truth there is no profit to an operator in running a concessionary fare scheme. The amendment uses the words
"suitable for the carriage of persons to whom the travel concession scheme applies".
My noble friend Lady Stedman (if I may call her my noble friend although she sits on Benches other than those of my party) made it very clear that what she was not seeking was that vehicles should be so designed that they could carry those who are in wheelchairs.
The disabled and the aged represent a very broad spectrum of disability. At an earlier stage of our considerations I referred to what has already been done, certainly within my old company, at very little cost—handrails, for example, so that when you came into the coach you had something that you could put your hand on. They could be either vertical or horizontal; or even handrails on the seats. You can do a great deal for those who have disabilities without a great deal of cost. Therefore, this amendment is not one (I would think) that would create major difficulties for an operator other than an operator who has taken his vehicles straight out of the auction, so to speak, and put them into service.
I have one anxiety—again, it is in the drafting—and that is the phrase which says,
"that he will only use in operating the service vehicles which by virtue of their design",
and so on. It may not be necessary to meet what I think is the major thrust of what the noble Baroness has in mind here; that is, that if there is a half-hourly service
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all the vehicles used are equipped in this way. As I say, the cost is relatively small, and the truth is that most stage-carriage vehicles, certainly within the public sector, are designed and equipped in a way which makes it possible for people who have disabilities to be able to move and to find seats, although in some particlar cases you can do more.
I personally do not see any difficulty in regard to this amendment, if we take it as being what the noble Baroness has in mind. She is not asking an operator to climb Mount Everest. What she is really asking (is she not?) is that if one has concessionary fares, which is very much something for the aged—an increasing part of our population, and with age we have our different disabilities—there should be some effort made by an operator to provide these services.
I would suggest that if the Government would be willing to concede that there is a point here—I am not saying that they should accept the words as now drafted—and if they would be willing to accept that there is a spirit, a purpose and an intention behind this amendment and are willing to come back at Report stage, then we have done a good evening's work.
I would only say again that the cost of doing these things is not all that high. It is a cost—I repeat, it is a cost. It is what an operator thinks he ought to do. I suspect that in a competitive scene one will need to have some legislation to require certain minimum standards, because in a competitive scene competition tends to depress the quality—not always: but I suspect that in this particular case it will.
I therefore suggest to the Government that they should accept the spirit of this amendment; and in that case those who have moved it could withdraw it. I would say again: the cost is not all that great. What we need is to ensure that all the various operators will at least be seeking a common standard.
Lord Teviot: First may I say that I welcome talking to an amendment of the noble Baroness, Lady Stedman. The last time one spoke to her on transport, one was sitting three Benches behind her and she was sitting on the Front Bench. That was a few years ago now. However, although I do not want to introduce a dissenting note on this amendment, I feel that at this time of night we are apt to become the faintest bit too cosy. One must remember that here we are really talking about disabled people travelling on buses. I am sure that my noble friend Lady Carnegy will not mind if I slightly chide her, because she has been telling us that it is hard enough to get buses in the country now, and she has been telling us before, on all sorts of other amendments, that with deregulation and the lid off the pot, people will find competition of all kinds coming along.
I am sorry, but I have to say something that I hope your Lordships will not find distasteful, but we have to realise the fact of relevance here. One hears the noble Lord, Lord Shepherd, saying that the cost is not too high, but I can remember the situation concerning buses when I was a conductor. I have never driven a "one-person operation", which I believe is the expression: but it is very important to have handrails. When I was a conductor on a bus, it was a Bristol low-decker and one stood on the platform. Also, that

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was in an area where there were a lot of aged people, in New Church Road, Hove. There were rather a lot of elderly ladies and one always greeted them with a smile. Luckily, in those days they wore a garment called "stays", and one pressed the bottom, turned them round and rang the bell at the same time, so that one achieved one's destination in the correct time. Seriously, we have to look at this amendment in the context of the whole Bill. The Government must look at it in that light.
11 p.m.
Lord Ennals: I only want to say, in positively one sentence, since it has been so much better said by the noble Baroness, Lady Stedman, and by my noble friend Lord Shepherd, that I want to associate myself totally with this amendment. I hope that the Minister will agree to take it away and think about the principle, even though he may come back with this, either in a different form of words, or in a different place in the Bill.
Baroness Darcy (de Knayth): May I also add 60 seconds in support of this amendment. I hope that the Minister will look encouragingly on the spirit of the amendment, even if he cannot accept it as it is.
As many noble Lords have now stressed, it is the less agile for whom we want to cater, not the almost totally immobile. It is cheap, small adaptations about which we are talking. I think that it is worth stressing, therefore, what the noble Baroness, Lady Stedman, said at the end of her speech in moving the amendment: that if these less agile intended beneficiaries cannot use the schemes operated by the normal bus services then they will be forced on to the forms of special transport; and then the more severely disabled who really need that sort of transport will be deprived of it.
Lord Belstead: I think that the problem with this pair of amendments is one which we have debated before—that is, that the kind of standard which authorities should be expected to adopt under the amendments is left open and given no criteria.
The noble Lord, Lord Shepherd, reminded us in this debate of a very wide range of modifications which can be made to buses in order to make them more convenient for people who have difficulty in moving into and out of vehicles; and while some of these modifications are certainly fairly modest in cost, others would be expensive and are only feasible on new vehicles. But, I repeat, the difficulty here is that these amendments would in effect give authorities the power to require modifications up to any standards within this range before admitting an operator to their concessionary scheme. We are, therefore, on to a difficulty here. Although I think that the Government have done their best to respond to a great deal of what has been said so far as elderly and disabled people are concerned, there has been one point of difficulty between the Government and those of your Lordships who have been speaking on this subject generally—that is, that we, on the Government side, have made it clear that we are worried about putting the direct
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responsibility—particularly an undefined responsibility—on to the operator himself. The reason is that given by my noble friend Lady Carnegy of Lour; namely, that there will be the danger that one will drive operators out of the market who would otherwise be carrying passengers.
May I just put the point to your Lordships that of course operators will not get concessionary patronage if they cannot carry concessionary passengers. If it is the case—as indeed I believe absolutely that it is the case put by the noble Baroness, Lady Stedman—that a very large percentage of the travelling population are either elderly or disabled people, then it must be in the interests of operators to make adaptations, particularly minor adaptations, in order to see that people travel by their vehicles.
May I make absolutely clear the point that operators will not get payment for journeys on which they do not carry concessionary fare passengers because they are using vehicles on which the concessionary fare passengers do not choose to travel, or indeed cannot get access. Your Lordships may say to me, "All right, what do the Government intend to do if this amendment is not acceptable?" My answer to that is that we believed earlier on that we were making a step forward by saying that we were producing a code of practice which was addressed precisely to this point; namely, the conversion of older vehicles in order to make them suitable to the travelling public who find it less easy to get on and off. We hoped that in that way we were being helpful.
I must confess that we also hoped that we were being equitable in putting into the Bill that all operators of registered local services should have the right to participate in a concessionary fares scheme, matched by the right of local authorities, if they wished, to require participation. That is a principle which I think it would be very dangerous to depart from, because it is through that principle that we are trying to make a success of concessionary fares under the Bill.
I am very ready, as I said earlier on this evening, to look at this amendment—of course I will. But I do not want to mislead the Committee. There is a very real difficulty, as we see it, in concessionary fares, which are what we are discussing now, as there has been in simply providing the right facilities, in putting the responsibility, particularly if it is an undefined responsibility, slap on to the shoulders of the operators themselves.
We tried to go at this by another route earlier on, by putting the responsibility on to the local authorities, and making sure through that method that local authorities—and the noble Lord, Lord Ennals, and I discussed this at some length earlier—can make quite detailed stipulations so far as their subsidised services are concerned, and by making sure that local authorities are able to take into account the needs of people who find it difficult to travel, particularly the elderly and disabled, in generally promoting the convenience of the travelling public and securing services in their area. That is what we tried to do earlier on.
In this case, I have said that we will be trying to achieve the same objective through a code of practice. Your Lordships may say that it is not quite the same

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thing. I agree that it is not, but this is where one has finally to look at where the balance of advantage lies. I beg your Lordships in deciding on that just to heed what my noble friend Lady Carnegy said. If you put the responsibility on the shoulders of the operator, you may find at the end of the day that you will have fewer buses for everyone.
Lord Ennals: May I ask one question of the Minister? He has very kindly said that he will be willing to look at this amendment again. Of course, he gave some warnings to those who moved it that he could not commit himself. Sometimes it happens in your Lordships' debates that between Committee stage and Report stage not only does the Minister do some thinking, but a little collective thinking can be done. I wondered whether the Minister would agree that some of those who have obviously thought a lot about this subject, as well as feeling strongly about it, could have an opportunity to discuss with the Minister to see whether we can find a basis for something that will satisfy us all.
Lord Belstead: Yes, certainly.
Baroness Stedman: I am most grateful to the Minister. I understand the difficulties that he is in. Having stood in his place and been chivvied by the noble Lord, Lord Teviot, some years ago, I know exactly the problems that he is facing in trying to please everyone and do what he thinks is right. I am happy that he is taking the amendment back to have a look at it.
But may I ask whether, when the draft code of practice is ready, it will be possible for us to see a copy of it and to see exactly how the Government propose in this draft code to recommend to authorities or to operators the type of buses that they ought to be using? Will there be any mention of that in it? It would be helpful if at some stage we could see the draft code, and I shall certainly be very happy, with the other Members who have their names to this amendment, to talk to the Minister between now and the next stage.
Lord Belstead: Perhaps that is a point that we can discuss when we talk about this matter. The discussion that we have may be quite soon.
Baroness Stedman: I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 251B and 252 not moved.]
Lord Belstead Lord Belstead moved Amendment No. 252ZA:
Leave out Clause 87 and insert the following new clause—
("Travel concession schemes
87.—(1) Any local authority, or any two or more local authorities acting jointly, may establish a travel concession scheme for the provision of travel concessions on journeys on relevant services—

(a) between places in the principal area covered by the scheme;

(b) between such places and places outside but in the vicinity of that area; or

(c) between places outside but in the vicinity of that area; by operators of such services participating in the scheme.

(2) For the purposes of this section, the principal area covered by a scheme under this section is—

(a) the area of the local authority concerned or, where two or more such authorities are concerned, the area comprising the areas of both or all those authorities; or

(b) if an area comprised within the area which would be the principal area under paragraph (a) above is specified in the scheme as being the principal area to which the scheme applies, the area so specified.

(3) In this section "relevant services" means, in relation to any scheme under this section—

(a) where the principal area covered by the scheme is or includes a passenger transport area or any part of a passenger transport area, or in Scotland the area of an islands council, any public passenger transport services; and

(b) in any other case—

(i) any local services registered under section 6 of this Act;

(ii) any other services for the carriage of passengers by road at separate fares which require a PSV operator's licence; and

(iii) any services provided by means of tramcars (within the meaning of the 1981 Act).

For the purposes of paragraph (b)(ii) above, a service for the carriage of passengers by road at separate fares is a service which requires a PSV operator's licence if vehicles used in providing the service are used in such circumstances that a PSV operator's licence is required in respect of that use.
(4) Any travel concession scheme established under this section shall define—

(a) the travel concessions which are for the time being to be provided by operators participating in the scheme;

(b) the description of persons eligible in accordance with subsection (8) below to receive travel concessions under any such scheme who are for the time being to qualify for travel concessions provided under the scheme; and

(c) the dates in any year currently adopted as the dates on which operators may be admitted to participate in the scheme under section(Rights of eligible service operators to participate in travel concession schemes) of this Act (referred to below in this section as the standard admission dates);

and may include particulars of any other arrangements for the time being adopted by the authority or authorities concerned in establishing the scheme with respect to the operation, scope and application of the scheme.
(5) Any such scheme may define the standard admission dates by specifying particular dates, or by referring to dates of any specified description or separated by intervals of any specified length; but those dates, however determined, must not be separated by intervals of a length exceeding such period as may be prescribed.
(6) Arrangements adopted by the authority or authorities concerned in establishing any such scheme with respect to the operation, scope and application of the scheme (including the matters specifically mentioned in paragraphs (a) to (c) to subsection (4) above) may differ for different descriptions of concessions or relevant services to which the scheme applies.
(7) Subject to section 88 of this Act, where an operator participating in any such scheme in respect of any services operated by him provides travel concessions in accordance with the scheme for persons travelling on those services, the authority responsible for administration of the scheme or (as the case may be) the authorities so responsible in such proportions respectively as they may agree among themselves shall reimburse that operator for providing those concessions.
(8) The persons eligible to receive travel concessions under any such scheme are—

(a) men over the age of sixty-five years and women over the age of sixty years;

(b) persons whose age does not exceed sixteen years;

(c) persons whose age exceeds sixteen years but does not exceed eighteen years and who are undergoing full-time education;

(d) blind persons, that is to say, persons so blind as to be unable to perform any work for which sight is essential; and

(e) persons suffering from any disability or injury which, in the opinion of the authority or any of the authorities responsible for administration of the scheme, seriously impairs their ability to walk.

(9) In this section "local authority" means the council of a county or district in England and Wales or a regional or islands council in Scotland (and accordingly includes the county or regional council which is the Passenger Transport Authority for any passenger transport area).
(10) Unless the context otherwise requires, references in this section and in the provisions of this Part of this Act relating to schemes under this section to the authority or authorities responsible for administration of a scheme under this section are references to the authority concerned in establishing the scheme or, where two or more authorities are so concerned, to both or all those authorities acting jointly, except where the authority or one of the authorities so concerned are a Passenger Transport Authority in England and Wales, in which case those references are references to the Passenger Transport Executive for that Authority's area or (as the case may require) to that Executive and the other authority or authorities so concerned acting jointly.
(11) Where a Passenger Transport Authority have established a scheme under this section, whether alone or jointly with any other authority or authorities, they shall notify the Passenger Transport Executive for their area of any proposal to vary the scheme, giving particulars of the proposed variations.")
The noble Lord said: I beg to move Amendment No. 252ZA and, with your Lordships' permission, will speak to Amendments Nos. 252AA, 252AB, 252AC, 252D, 253A, 253B, 253C, 253D and 253E.
Amendment No. 252AA: Leave out Clause 88 and insert the following new clause:—
("Reimbursement for travel concessions under schemes
88.—(1) Regulations under this section may make provisions with respect to any of the following matters—

(a) the factors to be taken into account by the authority or authorities responsible for administration of a travel concession scheme under section 87 of this Act in determining the aggregate amount that may be made available for the purpose of reimbursing operators participating in the scheme for providing travel concessions during any period;

(b) the determination by the authority or authorities so responsible of the amounts to be paid to individual operators participating in the scheme, or to any class of such operators, by way of reimbursement for providing such concessions;

(c) the manner of making any payments due to operators by way of such reimbursement; and

(d) the provisions or description of provisions that are to be or (as the case may be) may or may not be included in arrangements agreed with operators or adopted by the authority or authorities so responsible with respect to participation of operators in the scheme.

(2) Subject to any provision of regulations made by virtue of subsection (1)(d) above and to the following provisions of this section, the arrangements with respect to participation of operators in any such scheme shall be such as may be agreed between the authority or authorities responsible for administration of the scheme and individual operators on their admission to participation in the scheme.
(3) Subject to—

(a) any provision of regulations under subsection (1) above;

(b) any modifications that may by virtue of any provision of regulations made by virtue of paragraph (d) of that subsection or in accordance with section (Right of eligible service operators to participate in travel concession schemes) of this Act be agreed between the authority or authorities responsible for administration of any such scheme and any individual operator; and

(c) any modifications applied in the case of any individual operator by a direction given under section 90 of this Act;

the arrangements with respect to reimbursement and terms of withdrawal from participation in the scheme applicable to operators of eligible services participating in the scheme shall be such as the authority or authorities responsible for administration may from time to time adopt and must be the same in the case of all such operators.
(4) For the purposes of the provisions of this part of this Act relating to schemes under section 87 of this Act, a service is an eligible service if it is a service qualifying for fuel duty grant.
(5) The arrangements currently adopted by the authority or authorities responsible for administration of any such scheme with respect to reimbursement of operators of eligible services participating in the scheme are referred to below in this Part of this Act, in relation to that scheme, as the current reimbursement arrangements for eligible service operators participating in the scheme.
(6) In relation to operators in any such scheme, references in this section to arrangements with respect to reimbursement are references to conditions of entitlement of such operators to, and the method of determination and manner of payment of, reimbursement in respect of travel concessions provided under the scheme.")
Amendment No. 252AB: After Clause 88, insert the following new clause:
("Publicity requirements for schemes and reimbursement arrangements.
.—(1) On or before the date on which a scheme under section 87 of this Act comes into operation or, where it comes into operation on different dates with respect to different concessions to be provided under the scheme, on or before the first of those dates—

(a) the authority or authorities concerned in establishing it shall publish particulars of the scheme; and

(b) the authority or authorities responsible for administration of the scheme shall publish particulars of the current reimbursement arrangements for eligible service operators participating in the scheme as they are to apply on initial establishment of the scheme;

in such manner, in either case, as the authority or authorities concerned think fit.
(2) Particulars of any subsequent variations shall be published—

(a) in the case of variations of the scheme, by the authority or authorities concerned in establishing the scheme; and

(b) in the case of variations of the arrangements, by the authority or authorities responsible for administration of the scheme.

(3) Following publication under subsection (l)(a) or (as the case may be) under subsection (1)(b) above of particulars of any scheme or arrangements—

(a) copies of the scheme or (as the case may be) of the arrangements (with any subsequent variations) shall be made available at the principal office of the authority or (as the case may be) of each authority concerned; and

(b) a copy shall be supplied to any person on request (whether at that office or by post) either free of charge or at a charge representing the cost of providing the copy.

(4) Where the authority or any of the authorities concerned in establishing a scheme under section 87 of this Act are a Passenger Transport Authority, they shall notify the Passenger Transport Executive for their area of any proposal to publish particulars of the scheme in advance of its coming into operation, giving the proposed date of publication.")
Amendment No. 252AC: After Clause 88, insert the following new clause—
("Right of eligible service operators to participate in travel concession scheme.
.—(l) Subject to the following provisions of this section, where any operator or prospective operator of an eligible service which is a relevant service for the purposes of any scheme under section 87 of this Act applies to the authority or authorities responsible for administration of that scheme to be admitted to participate in it in respect of that service, the authority or authorities in question shall be obliged to admit that operator to participation in the scheme in respect of that service as from any standard admission date under the scheme not later than the one next following—

(a) the end of such period as may be prescribed beginning with the date of his application; or

(b) the date on which the service begins;

whichever last occurs.
(2) The Secretary of State may, on the application of the authority or authorities responsible for administration of any such scheme, exempt the authority or authorities in question from the

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obligation under subsection (1) above in relation to any service or description of services; and the Secretary of State may at any time withdraw or vary any exemption granted under this subsection.
(3) An exemption may not be granted under subsection (2) above on the application of a Passenger Transport Executive, or on the joint application of authorities who include such an Executive, unless the application is made with the consent of the Passenger Transport Authority for that Executive's area.
(4) Subject to any regulations under section 88(1)(d) of this Act, where it appears to the authority or authorities responsible for administration of any such scheme, in the case of any operator or prospective operator of an eligible service who applies to be admitted to participate in the scheme in respect of that service, that fares currently charged or proposed to be charged by that operator for relevant journeys on that service include a special amenity element, the authority or authorities in question shall not be required by subsection (1) above to admit that operator to participation in the scheme in respect of that service unless that operator agrees to appropriate modifications of the current reimbursement arrangements for eligible service operators participating in the scheme.
(5) Subject to any such regulations, where it appears to the authority or authorities responsible for administration of any such scheme, in the case of any operator of an eligible service participating in the scheme, that fares currently charged by that operator for relevant journeys on that service include a special amenity element, the authority or authorities in question may by notice of not less than such period as may be prescribed exclude that operator from participation in the scheme in respect of that service unless before the end of that period that operator agrees to appropriate modifications of the current reimbursement arrangements for eligible service operators participating in the scheme.
(6) For the purposes of subsections (4) and (5) above, fares for relevant journeys are to be regarded as including a special amenity element if they are significantly high in relation to the general level of fares for comparable journeys in the principal area covered by the scheme (within the meaning of section 87 of this Act).
(7) References in those subsections to appropriate modifications of the reimbursement arrangements there mentioned are references to such modifications of those arrangements as the authority or authorities concerned consider appropriate for providing reimbursement in respect of travel concessions provided for relevant journeys on the service in question by reference to the general level of fares mentioned in subsection (6) above instead of by reference to the actual fares charged (or proposed to be charged) for those journeys.
(8) For the purposes of this section "relevant journeys" are journeys on which travel concessions are to be provided under the scheme in question.
(9) For the purposes of this section and section 89 of this Act, references to a prospective operator of an eligible service are references to a person who has registered a local service under section 6 of this Act but is not yet operating that service.")
Amendment No. 252D: Leave out Clause 89 and insert the following new clause:—
Compulsory participation in travel concession schemes.
(" 89.—(1) Subject to subsection (8) below, where the arrangements currently adopted by the authority or authorities responsible for administration of a scheme under section 87 of this Act with respect to the terms on which operators of eligible services may withdraw from participation in the scheme require such an operator to give notice before withdrawing from the scheme in respect of any such service, any such operator shall be obliged to provide any travel concessions required by the scheme on journeys on any such service in respect of which he is participating in the scheme until he gives the required notice of withdrawal and the period of notice has expired.
(2) Subject to the following provisions of this section, the authority or authorities responsible for administration of any such scheme may at any time by notice in writing served on any operator or prospective operator of an eligible service (including an operator already participating in the scheme) impose on him an obligation to provide travel concessions in accordance with the scheme on journeys on any such service operated by that operator to which the notice applies.
A notice under this subsection is referred to below in this Part of this Act as a participation notice.
(3) The power under subsection (2) above to serve a participation notice shall not be exercisable in relation to any such scheme until after the date (or whichever last occurs of the respective dates) of first publication under section (Publicity requirements for schemes and reimbursement arrangements) of this Act of particulars of the scheme and of the current reimbursement arrangements for eligible service operators participating in the scheme as they are to apply on initial establishment of the scheme.
(4) An obligation imposed by a participation notice shall, subject to subsection (8) below and sections 90 and (Release from compulsory participation) of this Act, be effective in relation to any service to which the obligation applies as from the appropriate commencement date for that service until the end of such period beginning with that date as may be specified in the participation notice.
(5) Subject to subsection (9) below, for the purpose of subsection (4) above the appropriate commencement date for any service to which an obligation imposed by a participation notice applies is—

(a) the date immediately following the end of such period of notice as may be specified in the participation notice; or

(b) the date when the service begins;

whichever last occurs.
(6) Where it is proposed—

(a) to vary a scheme under section 87 of this Act; or

(b) to vary the current arrangements for reimbursement of eligible service operators participating in any such scheme;

the authority or authorities responsible for administration of the scheme may, not less than such period before the variation is to take effect as may be prescribed, by notice served on any operator of any such service who is under an obligation under this section to provide travel concessions in accordance with the scheme, require him to indicate, within such period and in such manner as may be prescribed, whether or not he is willing to continue to participate in the scheme after the variation takes effect.
(7) Any notice under subsection (6) above shall give particulars of the proposed variation.
(8) Where in pursuance of subsection (6) above an operator indicates that he is not willing to continue to participate in the scheme after the variation takes effect, any obligation of that operator under this section to provide travel concessions in accordance with the scheme on journeys on any service operated by him which was current at the date of the notice under that subsection and would still apart from this subsection be in force on the date when the variation takes effect shall cease on the latter date (without prejudice, however, to the service of a new participation notice).
(9) Where in the case of any operator, notwithstanding subsection (8) above, any obligation of that operator under subsection (2) above to provide travel concessions on journeys on any service operated by him which was current at the date of the notice under subsection (6) above is still in force on the date when any such variation takes effect, the preceding provisions of this section shall apply in relation to that obligation, on and after the date when the variation takes effect, as if that date were the appropriate commencement date for the purposes of subsection (4) above for each service to which the obligation applies.
(10) The exercise of the power to serve a participation notice under this section on any person—

(a) by a Passenger Transport Executive; or

(b) by authorities responsible for administration of a scheme under section 87 of this Act who include such an Executive;

shall require the consent of the Passenger Transport Authority for the Executive's area.")
Amendment No. 253A: Leave out Clause 90 and insert the following new clause—
(Further provisions with respect to participation notices.
"90.—(1) The authority or authorities by whom a participation notice is served on any person shall send to that person together with the notice, a copy of—

(a) such particulars of the scheme to which the notice relates and of any variations of that scheme; and

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(b) such particulars of the current reimbursement arrangements for eligible service operators participating in the scheme and of any variations of those arrangements;

as have been published under section (Publicity requirements for schemes and reimbursement arrangements) of this Act before the date of the notice.
(2) Subject to the following provisions of this section, a person on whom a participation notice has been served may apply to the Secretary of State for cancellation or variation of that notice on either or both of the following grounds, that is to say—

(a) that there are special reasons why his participation in the scheme in question in respect of the service or any of the services to which the notice applies would be inappropriate; and

(b) that any provision of the scheme or of any such arrangements as are mentioned in subsection (1)(b) above are inappropriate for application in relation to operators other than operators voluntarily participating in the scheme.

(3) Subject to subsection (4) below, an application under subsection (2) above may be made by notice in writing given to the Secretary of State before the end of the period of twenty-eight days beginning with the date of the participation notice.
(4) A person may not make such an application unless he has given notice in writing of his intention to do so to the authority or authorities by whom the participation notice was served—

(a) if a period allowed for that purpose is specified in the participation notice, before the end of that period; or

(b) in any other case, at any time before the date of the notice given to the Secretary of State under subsection (3) above.

(5) On any such application the Secretary of State may—

(a) cancel the participation notice or vary it by excluding from it any service operated by the applicant; or

(b) determine that the participation notice shall have effect without variation;

and in any case where the participation notice is cancelled on the ground mentioned in subsection (2)(b) above shall give to the authority or authorities by whom the notice was served a notice in writing indicating in what respects the scheme or arrangements there mentioned are inappropriate for application in relation to operators other than operators voluntarily participating in the scheme.
(6) Where on any such application the Secretary of State does not cancel the participation notice, he may direct that the current arrangements for reimbursement of eligible service operators participating in the scheme shall apply in the case of the applicant or (as the case may be) in the case of any service operated by the applicant to which the participation notice applies with such modifications as may be specified in the direction.
(7) Any obligation under section 89(2) of this Act which has come into effect before the determination of any application under this section with respect to the participation notice by which that obligation was imposed shall—

(a) cease to have effect, if the notice is cancelled; or

(b) have effect, if the notice is varied, subject to a corresponding variation;

on such date as may be specified by the Secretary of State in determining the application.").
Amendment No. 253B: After Clause 90, insert the following new clause—
("Release from compulsory participation.
(1) The authority or authorities responsible for administration of a scheme under section 87 of this Act may at any time by notice in writing served on any operator who is under an obligation under section 89(2) of this Act to provide travel concessions in accordance with the scheme on journeys on any eligible service operated by him release him from that obligation in respect of that service.
(2) Subject to the following provisions of this section, any such operator may at any time by notice in writing apply to the Secretary of State to be released from that obligation in respect of any such service on the ground that the authority or authorities responsible for administration of the scheme have failed to comply with their obligation under section 87(7) of this Act.
(3) An operator may not make such an application unless he has given notice in writing of his intention to do so to the authority or authorities responsible for administration of the scheme not less than twenty-eight days before the date of the application.
(4) A notice under subsection (2) or (3) above shall give particulars of any alleged failures of the authority or authorities in question to comply with their obligation under section 87(7) of which the operator complains.
(5) On any such application the Secretary of State may, if he finds the applicant's ground of complaint established, determine that the applicant's obligation under section 89(2) shall cease on such date as may be specified in the determination.")
Amendment No. 253C: Leave out Clause 91 and insert the following new clause—
("Supplementary provisions.
91.—(1) Regulations under this section may make provision as to—

(a) the maximum or (as the case may be) minimum period that may for the purposes of any provision of section 89 or 90 of this Act be specified in a participation notice:

(b) the form and contents of participation notices and other notices required for any purposes of sections 89 to (Release from compulsory participation) of this Act; and

(c) the manner in which any such notice is to be served.

(2) Where the Secretary of State cancels or varies a participation notice under section 90 of this Act after the obligation imposed by that notice has come into effect he may award compensation to the applicant under subsection (4) below if it appears to him that the applicant has suffered—

(a) in a case where the notice is cancelled, any loss attributable to his participation in the scheme in question: or

(b) in a case where the notice is varied by excluding from it any service operated by the applicant, any loss attributable to his participation in that scheme in respect of that service.

(3) Where the Secretary of State determines under section (Release from compulsory participation) of this Act that an obligation imposed by a participation notice shall cease he may award compensation to the applicant under subsection (4) below if it appears to him that the applicant has suffered any loss attributable to any failure on the part of the authority or authorities responsible for administration of the scheme in question to comply with their obligation under section 87(7) of this Act.
(4) In any case to which subsection (2) or (3) above applies the Secretary of State may by notice in writing require the authority responsible for administration of the scheme in question or (as the case may be) the authorities so responsible in such proportion as may be specified in the notice to pay to the applicant such an amount by way of compensation in respect of the loss there mentioned as may be specified in the notice.
(5) The Secretary of State may if he thinks fit appoint a person to determine an application under section 90 or (Release from compulsory participation) of this Act on his behalf; and references in those sections and in subsections (2) and (4) above to the Secretary of State shall be read as including references to a person so appointed.
(6) Regulations under this section may prescribe the procedure to be followed in connection with applications under sections 90 and (Release from compulsory participation) of this Act and may in particular (but without prejudice to the generality of that) include provision—

(a) as to the conduct of any proceedings held in connection with any such application; and

(b) enabling the Secretary of State to require either the applicant or the authority or authorities responsible for administration of the scheme in question, or both or all of them, to pay such sum as the Secretary of State may determine towards any expenses incurred by him in connection with the determinaion of the application.

(7) Where a requirement under subsection (4) above is imposed on more than one authority, the liability of the authorities concerned to the applicant shall be both joint and several.
(8) Any sums paid to the Secretary of State by virtue of subsection (6)(b) above shall be paid into the Consolidated Fund.")
Amendment No. 253D: Clause 92, page 95, line 28, at end insert—
("(2) Where an offence under this section committed by a body corporate is proved to have been committed with the consent or connivance of, or to have been attributable to any neglect on part of, any director, manager, secretary or other similar officer of the body corporate or a person who was purporting to act in any such capacity, he as well as the body corporate shall be guilty of that offence and shall be liable to be proceeded against and punished accordingly.
(3) Where the affairs of a body corporate are managed by its members, subsection (2) above shall apply in relation to the acts and defaults of a member in connection with his functions of management as if he were a director of the body corporate.
(4) Proceedings for an offence under this section shall not, in England and Wales, be instituted except by the authority, or any one of the authorities, responsible for administration of the scheme in question or by or with the consent of the Director of Public Prosecutions.")
Amendment No. 253E:
Clause 94
Leave out Clause 94 and insert the following new clause—
Travel concessions on services provided by Passenger Transport Executives.
("Travel concessions apart from schemes
94.—(1) The payments provided for under an agreement providing for service subsidies in respect of any service entered into by an authority responsible for expenditure on public passenger transport services may not include payments in respect of the provision of travel concessions on journeys on that service except as provided below in this section.
(2) Subject to subsection (3) below, provision may be included in any such agreement for the making of payments by the authority in question to the person providing the service to which the agreement relates in respect of the provision of travel concessions on journeys on that service or any part of it for any description of persons eligible in accordance with section 87(8) of this Act to receive travel concessions under a travel concession scheme under that section.
(3) Subsection (2) above only applies where the concessions in question are not available, or not available to that description of persons, under any such scheme administered by the authority concerned or by that authority acting jointly with any other authority or authorities.").
This is a whole list of amendments to the concessionary fares system.
When this Bill was being considered in another place, my right honourable friend undertook to provide a new discretionary power which will enable local authorities to require operators, who had declined to participate voluntarily, to provide such travel concessions. This was to ensure that the authorities could secure adequately comprehensive schemes to meet the needs of their areas. The Government acted swiftly to give effect to this undertaking and the Bill as presented to your Lordships was substantially amended in another place to make sure that there will be concessionary fare schemes and that operators, if local authorities wish, must take part in them. All that commitment remains unchanged; but I shall not conceal from the Committee that we have examined further the mechanisms of compulsion. We realise that the changed arrangements that this implies will require more sophisticated provisions in the legislation. This will allow authorities to make the system work smoothly, and to ensure that its misapplication by local authorities would not penalise operators. We have had to produce a very substantial number of technical changes. Instead of producing about 50 separate amendments, which it was decided
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the wording of Amendments Nos. 87 to 94 would have needed, I am bringing this group of new clauses before your Lordships.
Perhaps I may go straight to Clause 87 which is Amendment 252ZA. Clause 87 gives local authorities the basic power to establish concessionary fares schemes and reimburse operators for participating in them, defining the relevant services on which concessions may be offered. In restructuring this clause a new provision has been made for a concessionary fares scheme to cover only part of a county or district council's area. This could mean, for example that where an authority wishes to see a concession offered on an existing route covered by a commercial service—such as a half fare for children—but feels that a general scheme is unnecessary, it can set up a scheme solely for services on that route so that all operators can opt to participate in the scheme or be compelled to do so.
Clause 87 also defines the groups eligible to receive concessions and the Government have taken the opportunity of the general revision of this clause to provide a more precise definition of "children". Following representations from local authorities, it became clear that there was some uncertainty as to whether people up to their 19th birthday but still in full time secondary education could receive travel concessions. This provision in Clause 87 ensures that it will be possible.
Clause 87 also contains a new provision to allow authorities to limit the entry of operators to participation in a scheme to dates chosen by the authority. This is to allow local authorities to bring a degree of order into the way in which new operators will join their schemes and thus assist in budgeting and forward planning, However, these delays should not be such as to exclude an operator from serving this section of the market for any great length of time, since this would inhibit competition and give concessionary travellers a worse deal. Although the wording of Clause 88 has changed substantially, its purpose in providing for regulations on the reimbursement of operators and for the same treatment of all operators of eligible services remains unchanged.
Similarly, the two new clauses—Amendments Nos. 252AB and 252AC—on publicity requirements for schemes and reimbursement arrangements and the right of eligible service operators to participate in travel concessions schemes contain no new proposals other than the right of local authorities to require a period of notice from operators wishing to join the scheme. The appearance of these new clauses simply reflects the Government's wish to give a better structure to the legislation and the provisions they contain have all previously been contained in the old Clauses 87 and 88.
11.15 p.m.
The Government are intent that the terms for participation in a concessionary fares scheme should be fair and impose no burden on an operator, which might undermine his commercial position. We hope that operators will therefore feel able to participate in the provision of concessionary fares on a voluntary basis. Where operators remain reluctant to do this, there is the power of compulsion. New Clauses 89, 90

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and 91 and the new clause in Amendment No. 253B cover compulsory participation by operators. They provide for local authorities to serve a notice on operators requiring them to provide concessionary fares from a given date and provide that operators will receive the appropriate reimbursement. They also provide for an operator to apply to the Secretary of State for release from the obligation to participate on the ground that compulsion is not appropriate either in their own case or in general.
The other amendments will ensure that the exercise of compulsion is not too draconian and does not therefore inhibit operators from providing services. Clause 89(4) now provides that any single period of participation should be for a set duration, after which time the authority should review whether compulsion is still appropriate. If it wishes to renew the compulsion, the authority would then be able to issue a further notice to this effect. It may, however, find it possible to reach a satisfactory agreement with the operator on a voluntary basis.
Recognising a concern expressed in another place, the Government have taken the opportunity in all these clauses to provide for the compensation of an operator whose compulsory participation is found to be inappropriate. Local authorities may well wish to exercise compulsion on a particular service at an early date in order to provide for comprehensive coverage of their area. However, authorities must be willing to bear the full cost of this, and the amendments to Clause 91 provide that where an operator makes a successful application to the Secretary of State for cancellation of compulsion and can show that he has suffered a loss as a result of the compulsory participation prior to this decision the authority may be directed to pay compensation for this loss, as a civil liability.
Your Lordships will recognise from the amendments to which I have just referred that the Government are intent on securing a fair deal for both parties in the application of compulsory participation. However, as the Bill was introduced there remains a gap in the provisions for dealing with the case of an operator who does not receive proper reimbursement. The provisions did not cater for the situation where an operator finds that an initially fair level of payment becomes progressively less adequate as time goes by. This could happen if the patronage he carries grows but the sums paid by the authority do not because the authority is not monitoring as frequently as it should. The authority has a basic duty to reimburse in relation to journeys carried. The intention in proposing the new clause in Amendment No. 253B on release from compulsory participation is to allow such an operator to make a further application to the Secretary of State for release where the authority fails in this duty and compensation may, again, be awarded.
Finally—and I apologise for the length of these remarks—Amendment No. 253D concerns the enforcement of compulsory participation. Clause 92 provides for an operator who fails to comply with a participation notice to be the subject of a criminal prosecution. In the case of offences of this sort by corporate bodies it is normal practice in criminal law for the senior officers of the company or members of
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the board of a nationalised industry to be subject to those sanctions personally if their actions have contributed directly to the offence. Since criminal prosecutions are a serious matter and should not be undertaken lightly, the amendments to Clause 92 also restrict the power of prosecution to the authority affected by an operator's failure to provide concessions or to another person with the consent of the Director of Public Prosecutions.
I apologise for the length with which I have had to speak to these amendments. I am also sorry that we have had to bring forward this long string of amendments. I hope that in the end the Committee will feel that they have now put into reasonably clear form the basic principle of these amendments: that there shall be concessionary fares and that it will be possible for local authorities to enforce participation in such schemes. I beg to move.
The Deputy Chairman of Committees (Lord Ampthill): There are three unnumbered amendments to this amendment on page 23 of the Marshalled List. Would the noble Lord, Lord Henderson of Brompton, care to confirm to the Committee that it is not proposed to move these amendments?
Lord Henderson of Brompton: I confirm that they are not to be moved.
[Amendments to Amendment No. 252ZA not moved.]
Lord Ennals: I do not think that the noble Lord the Minister need apologise at all. He actually gave a very short speech covering a very large amount of material, and I think that the Committee is grateful to him. Perhaps I might both apologise and ask whether, in any debate that may take place on the new clauses that the noble Lord has moved, Amendment No. 252A standing in my name could be taken into consideration?
Amendment No. 252A: after Clause 87 insert the following new clause:—
Concessionary travel for handicapped persons
(" .—(1) Section 87 of this Act (travel concession schemes) shall apply in relation to handicapped persons as defined in subsection (2) below as it applies in relation to persons mentioned in subsection (7) of that section.
(2) In this section "handicapped persons" means persons who, not being eligible persons within the meaning of section 87(7)—

(a) suffer from mental disorder within the meaning, in England and Wales, of the Mental Health Act 1959 and, in Scotland, of the Mental Health (Scotland) Act 1960;

(b) are deaf or dumb; or

(c) are substantially and permanently handicapped by illness, injury, defective hearing, defective sight or congenital deformity or by such other disabilities as may be prescribed by the Secretary of State by regulations.

(3) The power to make regulations under subsection (2)(c) above shall be exercisable by statutory instrument, which shall be subject to annulment in pursuance of a resolution of either House of Parliament.
(4) In Scotland, a regional or islands council may contribute to any cost incurred by any other regional or islands council in granting travel concessions under this section.")
I owe your Lordships' Committee an apology in that this amendment was tabled before the noble Lord tabled the amendments that he has just moved. Of course, the amendment deals with the definitions of disabled people and I do not think that it would make

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sense to the Committee if it were to be debated quite separately. In fact, had I done my job properly—and I have not, which is why I am apologising to the Committee—I would have withdrawn this amendment and asked that the three categories set out in subsection (2) be added to subsection (8) of the new clause proposed in Amendment No. 252ZA.
Perhaps your Lordships would permit me to say a few words about that clause, which will bring it into conformity throughout the United Kingdom. It would extend the categories of disabled people who are eligible for travel concessions by adopting the definitions of the Travel Concessions for Handicapped Persons (Scotland) Act 1980 in addition to the categories already provided for in Clause 87. It means that there will be a larger number of disabilities, as any noble Lord will appreciate who looks in particular at Amendments Nos. 252A, 252B and 252C standing in my name—and I am thinking especially of the deaf and the dumb, those with defective hearing and defective sight, or with a congenital deformity, who are those who are already included in the Travel Concessions for Handicapped Persons (Scotland) Act, and whom I wish to include. It is a very simple amendment which would standardise the eligibility for concessions throughout Great Britain. It is discretionary of course and it would still be a matter for local authorities to decide which of the categories they wished to include in any scheme or schemes.
In the other place, a series of amendments seeking to clarify this matter was moved and rejected at the Committee stage. The Parliamentary Under-Secretary of State, Mr. Mitchell, maintained that in England and Wales there was a wider range of disabled persons who could be embraced in concessionary fare schemes under Section 29 of the National Assistance Act 1948, and that to amend this Bill would merely duplicate these powers. I see in the Notes on Clauses that that point is repeated. A further examination of the records shows that the Parliamentary Under-Secretary of State argued that these powers were exercised by the local authorities as social service authorities, and he claimed that they were in the best position professionally to judge in what circumstances it was appropriate to go beyond the definitions of disability already used in transport legislation. I would simply argue that it does not make much sense that one should have one definition for England and Wales and another definition for Scotland. I am certain that that is the view of disabled people.
I think that there would be sympathy in your Lordships' House for the fact that some disabled people resent the idea that there should be different patterns in different parts of the country. I am thinking of people with defective hearing who may also have defective speech, and those with defective sight who may not be able to read or speak for themselves. I hope that the Minister will feel that a definition which is already engraved in legislation could be brought into this Bill simply by adding subsection (2) to the end of his subsection (8) as paragraph (f). I hope that he feels that that is a perfectly reasonable proposition.
I apologise to the Committee for leaving my new clause on the Marshalled List and not withdrawing it to present it as an amendment to the Government's series of new clauses.
Lord Shepherd: I intervene briefly to come back to what my noble friend said in regard to subsection (8) in Amendment No. 252ZA. Is it necessary to draft paragraphs (d) and (e) so tightly? Paragraph (d) reads:
"blind persons, that is to say, persons so blind as to be unable to perform any work for which sight is essential".
I do not know whether a similar provision is in previous legislation, but it seems to me to be so very tight that persons who have a sight incapacity but who do not come within that category would not get concessionary fares.
Paragraph (e) reads:
"persons suffering from any disability or injury which, in the opinion of the authority or any of the authorities responsible for administration of the scheme, seriously impairs their ability to walk".
I suppose one could have many debates as to what the phrase, "seriously impairs", means. If one took it literally, in the eyes of certain administrations, I suspect that it could eliminate persons to whom others would give concessions.
I wonder why the two paragraphs have to be drafted so absolutely tightly. Without opening the provision too wide, could it not be opened wide enough to cover those who fall just within the two categories?
When I was with them the National Bus Company took great pride in providing concessionary fares to the unemployed, particularly the young unemployed. We did this with the Manpower Services Commission and local authorities. I do not know whether such a provision could be included in the Bill or whether a more general new paragraph could be drafted. Concessionary fares for young people seeking employment, particularly if they have no job, is worthy of consideration.
Lord Ennals: Is my noble friend aware that part of my amendment, Amendment No. 252A, is in existing legislation, though at the moment it applies only to Scotland? The definition was thought appropriate for concessions for handicapped persons in Scotland, and it seems suitable that the same should apply to England and Wales.
Lord Shepherd: I am pleased to be informed of that fact. I hope that the noble Baroness, Lady Carnegy, will be willing to support the proposition that what is available in Scotland should also be available to the less privileged who live south of the border. I am seeking a little movement within what is drafted here. Secondly, I am asking whether something could not be done about the unemployed, and particularly the unemployed youth, in that there should be concessionary fares to help them in the seeking of employment.
11.30 p.m.
Lord Henderson of Brompton: May I thank the Government for this massive rewriting of a large part of Part V of this Bill, on travel concessions, both for what they have done and for the way in which they have done it? I think the Notes on Clauses which have been made available by courtesy of the noble Lord the Minister are quite admirable, with their tables of new subsections, derivations and main changes. Thus none

1341
of us can complain about this, and we have only cause to congratulate the Government and to thank the Minister.
I should like briefly to support the noble Lord, Lord Ennals, on this Scottish/English divide, and hope that that can be, so to speak, bridged. I should also like to support what the noble Lord, Lord Shepherd, has said and to say that I hope the Minister will not take it amiss if amendments are tabled on Report to this massive rewriting of the travel concessions scheme. It will not be in any spirit of ingratitude that amendments are moved but merely because we have only recently had this rewriting to look at and clearly amendments will be required.
The first matter that occurs to anyone reading this, despite the extremely lucid way in which it is explained in the Notes on Clauses, is the massive complication of these provisions. I very much wonder whether it is possible between now and Report stage to simplify these concessionary fare clauses. One fears that the ease of operating the proposed concessionary fare arrangements presupposes a very high level of willingness on the part of operators to participate in local authority schemes. If it is possible during the long Recess for the whole of the concessionary fares clauses to be simplified, in the interests of operators and of everybody else, I am sure we should all be enormously grateful. With that, I should like to leave the subject but rehearse once again my thanks to the Government and in particular, to the Minister.
Lord Belstead: I am grateful to noble Lords for receiving this string of long amendments with comparative equanimity. The noble Lord, Lord Henderson of Brompton, put to me a question about looking at the drafting again. I know that the parliamentary draftsmen will of course always be ready to look at the drafting, although it has been a major labour to get these amendments into their present form.
The question I am really required to reply to is that of the noble Lord, Lord Ennals, when he pointed out that here is Amendment No. 252A and related amendments on special categories of handicap, and asked the Government's response. The noble Lord very fairly pointed out that these very groups of people are the same as those covered by Section 29 of the National Assistance Act 1948, which gives social services authorities in England and Wales the power to provide various services and facilities for them. Therefore, we are not talking about people who are not covered at all by the facility for concessionary fares. But the noble Lord, Lord Ennals, said that of course the situation is different each side of the English-Scottish Border. That is because in Scotland regional and islands councils are both transport and social services authorities.
Herein lies the difficulty that the Government have with this amendment. Yes, I can certainly see the attractions of the arguments that the noble Lord has put; and, indeed, he is quite right in drawing attention to the fact that social services authorities in England and Wales which have powers under the National Assistance Act will generally be different from the
1342
authorities responsible for the provision of concessionary fare schemes under the present Bill.
The noble Lord is quite right in saying that. The difficulty is that the argument, I think, does not give proper consideration to the nature and needs of the groups with whom the amendments are concerned. It is, I would suggest, a fortunate thing that it is by no means easy for a transport department to identify persons who are suffering, for instance, from mental disorder. Although noble Lords will be aware of the convention that for the purposes of legislation all Secretaries of State are the same, the reference to the Secretary of State in subsection (2)(c) of the new clause would appear to imply that my right honourable friend the Secretary of State for Transport should have the power to make regulations for an area falling much more properly within the scope of his right honourable friend the Secretary of State for Social Services. Once the categories had been prescribed, it would again be the social services department that would be likely to be in touch with the people concerned.
I suggest therefore that the social services authorities are likely to be far better qualified to identify and make proper provision for the needs of the different groups of people covered by the amendment and that it would be appropriate to leave the powers of the transport authorities as they are at present. I realise that in saying this I am disregarding what the noble Lord has said about Scotland. I have given the reason for the difference each side of the border. I really believe that to put this additional power on my right honourable friend the Secretary of State for Transport when the power already exists for the social services departments to consider the needs of these people, in thinking of concessionary fares, would be a step that would not be altogether wise.
On Question, amendment agreed to.
New Clause 87 agreed to.
Lord Ennalshad given notice of his intention to move Amendment No. 252A:
[Printed earlier.]
The noble Lord said: I am not going to move the amendment at the moment, I was not satisfied with the Minister's reply although I shall look at it very carefully in Hansard. I do not see the logic—although clearly he does—of having a different definition for Scotland from that for England and Wales. Noting that I may well return to it—with the support I hope of other noble Lords at Report stage—I shall at this stage withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 88 [Reimbursement for travel concessions under schemes]:
Lord Belstead Lord Belstead moved Amendment No. 252AA:
[Printed earlier]
On Question, amendment agreed to.
Following is the text of the amendment (No. 252AA):
Leave out Clause 88 and insert the following new clause:—
("Reimbursement for travel concessions under schemes.
88.—(1) Regulations under this section may make provision with respect to any of the following matters—

(a) the factors to be taken into account by the authority or authorities responsible for administration of a travel concession scheme under section 87 of this Act in determining the aggregate amount that may be made available for the purpose of reimbursing operators participating in the scheme for providing travel concessions during any period;

(b) the determination by the authority or authorities so responsible of the amounts to be paid to individual operators participating in the scheme, or to any class of such operators, by way of reimbursement for providing such concessions;

(c) the manner of making any payments due to operators by way of such reimbursement; and

(d) the provisions or description of provisions that are to be or (as the case may be) may or may not be included in arrangements agreed with operators or adopted by the authority or authorities so responsible with respect to participation of operators in the scheme.

(2) Subject to any provision of regulations made by virtue of subsection (1)(d) above and to the following provisions of this section, the arrangements with respect to participation of operators in any such scheme shall be such as may be agreed between the authority or authorities responsible for administration of the scheme and individual operators on their admission to participation in the scheme.
(3) Subject to—

(a) any provision of regulations under subsection (1) above;

(b) any modifications that may by virtue of any provision of regulations made by virtue of paragraph (d) of that subsection or in accordance with section (Right of eligible service operators to participate in travel concession schemes) of this Act be agreed between the authority or authorities responsible for administration of any such scheme and any individual operator, and

(c) any modifications applied in the case of any individual operator by a direction given under section 90 of this Act;

the arrangements with respect to reimbursement and terms of withdrawal from participation in the scheme applicable to operators of eligible services participating in the scheme shall be such as the authority or authorities responsible for administration may from time to time adopt and must be the same in the case of all such operators.
(4) For the purposes of the provisions of this Part of this Act relating to schemes under section 87 of this Act, a service is an eligible service if it is a service qualifying for fuel duty grant.
(5) The arrangements currently adopted by the authority or authorities responsible for administration of any such scheme with respect to reimbursement of operators of eligible services participating in the scheme are referred to below in this Part of this Act, in relation to that scheme, as the current reimbursement arrangements for eligible service operators participating in the scheme.
(6) In relation to operators participating in any such scheme, references in this section to arrangements with respect to reimbursement are references to conditions of entitlement of such operators to, and the method of determination and manner of payment of, reimbursement in respect of travel concessions provided under the scheme.")
New Clause 88 agreed to.
Lord Belstead Lord Belstead moved Amendment No. 252AB:
[Printed earlier.]
On Question, amendment agreed to.
Following is the text of the amendment (No. 252AB):
After Clause 88, insert the following new clause:—
("Publicity requirements for schemes and reimbursement arrangements.
.—(1) On or before the date on which a scheme under section 87 of this Act comes into operation or, where it comes into operation on different dates with respect to different concessions to be provided under the scheme, on or before the first of those dates.

(a) the authority or authorities concerned in establishing it shall publish particulars of the scheme; and

(b) the authority or authorities responsible for administration of the scheme shall publish particulars of the current reimbursement arrangements for eligible service operators participating in the scheme as they are to apply on initial establishment of the scheme;

in such manner, in either case, as the authority or authorities concerned think fit.
(2) Particulars of any subsequent variations shall be published—

(a) in the case of variations of the scheme, by the authority or authorities concerned in establishing the scheme; and

(b) in the case of variations of the arrangements, by the authority or authorities responsible for administration of the scheme.

(3) Following publication under subsection (1)(a) or (as the case may be) under subsection (1)(b) above of particulars of any scheme or arrangements—

(a) copies of the scheme or (as the case may be) of the arrangements (with any subsequent variations) shall be made available at the principal office of the authority or (as the case may be) of each authority concerned; and

(b) a copy shall be supplied to any person on request (whether at that office or by post) either free of charge or at a charge representing the cost of providing the copy.

(4) Where the authority or any of the authorities concerned in establishing a scheme under section 87 of this Act are a Passenger Transport Authority, they shall notify the Passenger Transport Executive for their area of any proposal to publish particulars of the scheme in advance of its coming into operation, giving the proposed date of publication.")
Lord Ennals Lord Ennals moved Amendment No. 252B:
After Clause 88, insert the following new clause:—
("Grants from the Secretary of State for Travel Concession Schemes.
.—(1) Where a travel concession scheme is established under section 87 of this Act the authority responsible for administering the scheme shall be entitled to receive a specific grant from the Secretary of State.
(2) The specific grant referred to in subsection (1) above shall be payable under section 8 of the Local Government Act 1974 and after subsection 8(2) of that Act there shall be inserted:—
"2A. For the year 1986–87 and each subsequent year the Secretary of State shall pay to each authority responsible for administering a travel concession scheme on bus, rail and ferry services a grant equal to 90 per cent. of the aggregate amount paid in that year by the authority—

(a) to public passenger transport operators for participating in the travel concessions scheme; and

(b) to public transport operators or holders of permits under section 19 of this Act for special services provided for the use of the elderly, the disabled or mobility handicapped.".")

The noble Lord said: This is a probing amendment. Its purpose is to—
Lord Henderson of Brompton: Should we not be considering Amendment No. 252 AC?
The Deputy Chairman of Committees (Lord Ampthill): I apologise to the Committee. There are so many pages. I turned over two at the same time. Amendment No. 252 AC.
Lord Belstead Lord Belstead moved Amendment No. 252AC:
[Printed earlier.]
On Question, amendment agreed to.
Following is the text of the amendment (252AC):
Insert the following new Clause—
("Right of eligible service operators to participate in travel concession schemes.
.—(1) Subject to the following provisions of this section where any operator or prospective operator of an eligible service which is a relevant service for the purposes of any scheme under section 87 of this Act applies to the authority or authorities responsible for administration of that scheme to be admitted to participate in it in respect of that service, the authority or authorities in question shall be obliged to admit that operator to participation in the scheme in respect of that service as from any standard admission date under the scheme not later than the one next following—

(a) the end of such period as may be prescribed beginning with the date of his application; or

(b) the date on which the service begins;

whichever last occurs.
(2) The Secretary of State may, on the application of the authority or authorities responsible for administration of any such scheme, exempt the authority or authorities in question from the obligation under subsection (1) above in relation to any service or description of services; and the Secretary of State may at any time withdraw or vary any exemption granted under this subsection.
(3) An exemption may not be granted under subsection (2) above on the application of a Passenger Transport Executive, or on the joint application of authorities who include such an Executive, unless the application is made with the consent of the Passenger Transport Authority for that Executive's area.
(4) Subject to any regulations under section 88(1)(d) of this Act, where it appears to the authority or authorities responsible for administration of any such scheme, in the case of any operator or prospective operator of an eligible service who applies to be admitted to participate in the scheme in respect of that service, that fares currently charged or proposed to be charged by that operator for relevant journeys on that service include a special amenity element, the authority or authorities in question shall not be required by subsection (1) above to admit that operator to participation in the scheme in respect of that service unless that operator agrees to appropriate modifications of the current reimbursement arrangements for eligible service operators participating in the scheme.
(5) Subject to any such regulations, where it appears to the authority or authorities responsible for administration of any such scheme, in the case of any operator of an eligible service participating in the scheme, that fares currently charged by that operator for relevant journeys on that service include a special amenity element, the authority or authorities in question may by notice of not less than such period as may be prescribed exclude that operator from participation in the scheme in respect of that service unless before the end of that period that operator agrees to appropriate modifications of the current reimbursement arrangements for eligible service operators participating in the scheme.
(6) For the purposes of subsections (4) and (5) above fares for relevant journeys are to be regarded as including a special amenity element if they are significantly high in relation to the general level of fares for comparable journeys in the principal area covered by the scheme (within the meaning of section 87 of this Act).
(7) References in those subsections to appropriate modifications of the reimbursement arrangements there mentioned are references to such modifications of those arrangements as the authority or authorities concerned consider appropriate for providing reimbursement in respect of travel concessions provided for relevant journeys on the service in question by reference to the general level of fares mentioned in subsection (6) above instead of by reference to the actual fares charged (or proposed to be charged) for those journeys.
(8) For the purposes of this section "relevant journeys" are journeys on which travel concessions are to be provided under the scheme in question.
(9) for the purposes of this section and section 89 of this Act, references to a prospective operator of an eligible service are references to a person who has registered a local service under section 6 of this Act but is not yet operating that service ")
Lord Ennals Lord Ennals moved Amendment No. 252B:
[Printed above.]
The noble Lord said: This is a probing amendment and its purpose is to suggest to the Government that there is a clear need to separate funding for concessionary travel schemes from general revenue support to uneconomic public transport services.
Concessionary travel schemes assist the mobility of those in our society who, for one reason or another—age, infirmity or the various handicaps about which we have been talking—are unable to pay the full economic cost of the transport facilities which they require. There is a great danger that the current practice of Government to support all local authority expenditure through a single grant, will lead, at a time of ever-increasing restraint on public expenditure, to squeezing the already limited resources for the elderly and the handicapped. If one takes, for example, the metropolitan areas, the Secretary of State has already said that the passenger transport joint board will be rate-capped for three years and given a single expenditure level which will include revenue support for subsidised bus services, contractual Section 20 payments for British Rail, inherited debt charges, administrative costs of the PTA and PTE, and concessionary travel. I submit to your Lordships and the Minister, that there would be a grave danger that these authorities will give priority to revenue support and, as a result, be less generous to concessionary travel schemes than would ideally be necessary.
To prove that this is a probing amendment, I flew a kite in suggesting a particular level of grant, which I think is an unreasonable one. It would have been better, and I might have received a better response—and I shall say it now, so that the Minister does not have to say it—if, instead of talking about 90 per cent., I talked about a grant at a percentage rate not less than that used nationally for the purposes of rate support grant, and that would have kept it in regular conformity.
However, the main point is to stress that the elderly and the disabled can only benefit from travel concession schemes if adequate funds are available. The purpose of this amendment is to say that these should cover both revenue expenditure, giving them access to services available generally, and also, ideally, capital funds to allow provision for specialised services and adaptation of vehicles used in general services. I should be most interested to hear the Minister's response.
Lord Belstead: The first of the new clauses—Amendment No. 252B—would introduce a novel concept, and that is 90 per cent., automatic direct grant from my right honourable friend towards the cost of any concessionary fare scheme which any local authority wishes to bring into operation under Clause 87 of the Bill. The Government fully share the importance which your Lordships attach to concessionary fare schemes for elderly and disabled people and, indeed, for children who are also covered

1347
by the powers conferred by Clause 87. However, we believe it is essential that local authorities, in deciding the priority to be given to concessionary fares, should be in a position to weigh the situation properly against other claims on their resources.
The second of the new clauses appears as Amendment No. 252C:
Amendment No. 252C: Insert the following new clause:—
("Continuance of Existing Travel Concession Schemes.
.—(1) Where arrangements have been made under section 138 of the 1968 Act for the provision of travel concessions in an area, those arrangements shall continue in force as if they had been made in pursuance of a scheme by the local authority or local authorities concerned in pursuance of section 87 of this Act.
(2) Where a scheme continues in force in accordance with subsection (1) above regulations made in pursuance of section 88 shall provide—

(a) that agreements already in force for the reimbursement of operators participating in the scheme and any further operators that may join it shall continue unless and until the authority or authorities concerned determine an alternative;

(b) that the factors taken into account by the authority or authorities in determining the amounts to be paid to individual operators and the aggregate amount payable under the scheme shall be those which were taken into account immediately before the coming into effect of this Act unless and until the authority or authorities shall determine otherwise.

(3) The Secretary of State shall make grants to the local authority or authorities concerned towards the costs incurred in providing those concessions and such grants shall be separate from any grants made by the Secretary of State towards the costs of service subsidies paid under section 83 of this Act.")
This would allow authorities which had established concessionary fare schemes under the 1968 Act to maintain them indefinitely in their present form. I fear that the Government would see that as undermining the whole basis of the new provision for reimbursement of concessionary fares and the way in which it will operate under deregulation. I am sorry that I cannot give a more gracious response to the noble Lord's two new clauses.
Lord Ennals: I said that it was a probing amendment. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendment No. 252C not moved.]
Clause 89 [Compulsory participation in travel concession schemes]:
Lord Belstead Lord Belstead moved Amendment No. 252D:
[Printed earlier.]
On Question, amendment agreed to.
Following is the text of the amendment (No. 252D):
Leave out Clause 89 and insert the following new Clause:—
("Compulsory participation in travel concession schemes.
89.—(1) Subject to subsection (8) below, where the arrangements currently adopted by the authority or authorities responsible for administration of a scheme under section 87 of this Act with respect to the terms on which operators of eligible services may withdraw from participation in the scheme require such an operator to give notice before withdrawing from the scheme in respect of any such service, any such operator shall be obliged to provide any travel concessions required by the scheme on journeys on any such service in respect of which he is participating in the scheme until he gives the required notice of withdrawal and the period of notice has expired.
(2) Subject to the following provisions of this section, the authority or authorities responsible for administration of any such
1348
scheme may at any time by notice in writing served on any operator or prospective operator of an eligible service (including an operator already participating in the scheme) impose on him an obligation to provide travel concessions in accordance with the scheme on journeys on any such service operated by that operator to which the notice applies.
A notice under this subsection is referred to below in this Part of this Act as a participation notice.
(3) The power under subsection (2) above to serve participation notice shall not be exercisable in relation to any such scheme until after the date (or whichever last occurs of the respective dates) of first publication under section (Publicity requirements for schemes and reimbursement arrangements) of this Act of particulars of the scheme and of the current reimbursement arrangements for eligible service operators participating in the scheme as they are to apply on initial establishment of the scheme.
(4) An obligation imposed by a participation notice shall, subject to subsection (8) below and sections 90 and (Release from compulsory participation) of this Act, be effective in relation to any service to which the obligation applies as from the appropriate commencement date for that service until the end of such period beginning with that date as may be specified in the participation notice.
(5) Subject to subsection (9) below, for the purposes of subsection (4) above the appropriate commencement date for any service to which an obligation imposed by a participation notice applies is—

(a) the date immediately following the end of such period of notice as may be specified in the participation notice; or

(b) the date when the service begins;

whichever last occurs.
(6) Where it is proposed—

(a) to vary a scheme under section 87 of this Act; or

(b) to vary the current arrangements for reimbursement of eligible service operators participating in any such scheme;

the authority or authorities responsible for administration of the scheme may, not less than such period before the variation is to take effect as may be prescribed, by notice served on any operator of any such service who is under an obligation under this section to provide travel concessions in accordance with the scheme, require him to indicate, within such period and in such manner as may be prescribed, whether or not he is willing to continue to participate in the scheme after the variation takes effect.
(7) Any notice under subsection (6) above shall give particulars of the proposed variation.
(8) Where in pursuance of subsection (6) above an operator indicates that he is not willing to continue to participate in the scheme after the variation takes effect, any obligation of that operator under this section to provide travel concessions in accordance with the scheme on journeys on any service operated by him which was current at the date of the notice under that subsection and would still apart from this subsection be in force on the date when the variation takes effect shall cease on the latter date (without prejudice, however, to the service of a new participation notice).
(9) Where in the case of any operator, notwithstanding subsection (8) above, any obligation of that operator under subsection (2) above to provide travel concessions on journeys on any service operated by him which was current at the date of the notice under subsection (6) above is still in force on the date when any such variation takes effect, the preceding provisions of this section shall apply in relation to that obligation, on and after the date when the variation takes effect, as if that date were the appropriate commencement date for the puposes of subsection (4) above for each service to which the obligation applies.
(10) The exercise of the power to serve a participation notice under this section on any person—

(a) by a Passenger Transport Executive; or

(b) by authorities responsible for administration of a scheme under section 87 of this Act who include such an Executive;

shall require the consent of the Passenger Transport Authority for the Executive's area.")
New Clause 89 agreed to.
11.45 p.m.
Clause 90 [Further provisions with respect to participation notices]:
[Amendment No. 253 not moved.]
Lord Belstead Lord Belstead moved Amendment No. 253A:
Leave out Clause 90 and insert the following new clause:
("Further provisions with respect to participation notices.
90.—(1) The authority or authorities by whom a participation notice is served on any person shall send to that person, together with the notice, a copy of—

(a) such particulars of the scheme to which the notice relates and of any vairations of that scheme; and

(b) such particulars of the current reimbursement arrangements for eligible service operators participating in the scheme and of any variations of those arrangements;

as have been published under section (Publicity requirements for schemes and reimbursement arrangements) of this Act before the date of the notice.
(2) Subject to the following provisions of this section, a person on whom a participation notice has been served may apply to the Secretary of State for cancellation or variation of that notice on either or both of the following grounds, that is to say—

(a) that there are special reasons why his participation in the scheme in question in respect of the service or any of the services to which the notice applies would be inappropriate; and

(b) that any provision of the scheme or of any such arrangements as are mentioned in subsection (1)(b) above are inappropriate for application in relation to operators other than operators voluntarily participating in the scheme.

(3) Subject to subsection (4) below, an application under subsection (2) above may be made by notice in writing given to the Secretary of State before the end of the period of twenty-eight days beginning with the date of the participation notice.
(4) A person may not make such an application unless he has given notice in writing of his intention to do so to the authority or authorities by whom the participation notice was served—

(a) if a period allowed for that purpose is specified in the participation notice, before the end of that period; or

(b) in any other case, at any time before the date of the notice given to the Secretary of State under subsection (3) above.

(5) On any such application the Secretary of State may—

(a) cancel the participation notice or vary it by excluding from it any service operated by the applicant; or

(b) determine that the participation notice shall have effect without variation;

and in any case where the participation notice is cancelled on the ground mentioned in subsection (2)(b) above shall give to the authority or authorities by whom the notice was served a notice in writing indicating in what respects the scheme or arrangements there mentioned are inappropriate for application in relation to operators other than operators voluntarily participating in the scheme.
(6) Where on any such application the Secretary of State does not cancel the participation notice, he may direct that the current arrangements for reimbursement of eligible service operators participating in the scheme shall apply in the case of the applicant or (as the case may be) in the case of any service operated by the applicant to which the participation notice applies with such modifications as may be specified in the direction.
(7) Any obligation under section 89(2) of this Act which has come into effect before the determination of any application under this section with respect to the participation notice by which that obligation was imposed shall—

(a) cease to have effect, if the notice is cancelled; or

(b) have effect, if the notice is varied, subject to a corresponding variation;

on such date as may be specified by the Secretary of State in determining the application.").
On Question, amendment agreed to.
New Clause 90 agreed to.
Lord Belstead Lord Belstead moved Amendment No. 253B:
[Printed earlier.]
On Question, amendment agreed to.
Following is the text of the amendment (No. 253B):
After Clause 90 insert the following new clause:
("Release from compulsory participation.
.—(1) The authority or authorities responsible for administration of a scheme under section 87 of this Act may at any time by notice in writing served on any operator who is under an obligation under section 89(2) of this Act to provide travel concessions in accordance with the scheme on journeys on any eligible service operated by him release him from that obligation in respect of that service.
(2) Subject to the following provisions of this section, any such operator may at any time by notice in writing apply to the Secretary of State to be released from that obligation in respect of any such service on that ground that the authority or authorities responsible for administration of the scheme have failed to comply with their obligation under section 87(7) of this Act.
(3) An operator may not make such an application unless he has given notice in writing of his intention to do so to the authority or authorities responsible for administration of the scheme not less than twenty-eight days before the date of the application.
(4) A notice under subsection (2) or (3) above shall give particulars of any alleged failures of the authority or authorities in question to comply with their obligation under section 87(7) of which the operator complains.
(5) On any such application the Secretary of State may, if he finds the applicant's ground of complaint established, determine that the applicant's obligation under section 89(2) shall cease on such a date as may be specified in the determination.")
Clause 91 [Provisions supplementary to sections 89 and 90]:
Lord Belstead Lord Belstead moved Amendment No. 253C:
[Printed earlier.]
On Question, amendment agreed to.
Following is the text of the amendment (No. 253C):
Leave out Clause 91 and insert the following new clause:
("Supplementary provisions.
91.—(1) Regulations under this section may make provisions as to—

(a) the maximum or (as the case may be) the minimum period that may for the purposes of any provision of section 89 or 90 of this Act be specified in a participation notice;

(b) the form and contents of participation notices and other notices required for any purposes of sections 89 to Release from compulsory participation) of this Act; and

(c) the manner in which any such notice is to be served.

(2) Where the Secretary of State cancels or varies a participation notice under section 90 of this Act after the obligation imposed by that notice has come into effect he may award compensation to the applicant under subsection (4) below if it appears to him that he applicant has suffered—

(a) in a case where the notice is cancelled, any loss attributable to his participation in the scheme in question; or

(b) in a case where the notice is varied by excluding from it any service operated by the applicant, any loss attributable to his participation in that scheme in respect of that service.

(3) Where he Secretary of State determines under section (Release from compulsory participation) of this Act that an obligation imposed by a participation notice shall cease he may award compensation to the applicant under subsection (4) below if it appears to him that he applicant has suffered any loss attributable to any failure on the part of the authority or

1351
authorities responsible for administration of the scheme in question to comply with their obligation under section 87(7) of this Act.
(4) In any case to which subsection (2) or (3) above applies the Secretary of State may by notice in writing require the authority responsible for administration of the scheme in question or (as the case may be) the authorities so responsible in such proportion as may be specified in the notice to pay to the applicant such an amount by way of compensation in respect of the loss there mentioned as may be specified in the notice.
(5) The Secretary of State may if he thinks fit appoint a person to determine an application under section 90 or (Release from compulsory participation) of this Act on his behalf; and references in those sections and in subsections (2) to (4) above to the Secretary of State shall be read as including references to a person so appointed
(6) Regulations under this section may prescribe the procedure to be followed in connection with applications under sections 90 and (Release from compulsory participation) of this Act and may in particular (but without prejudice to the generality of that) include provision—

(a) as to the conduct of any proceedings held in connection with any such application; and

(b) enabling the Secretary of State to require either the applicant or the authority or authorities responsible for administration of the scheme in question, or both or all of them, to pay such sum as the Secretary of State may determine towards any expenses incurred by him in connection with the determination of the application.

(7) Where a requirement under subsection (4) above is imposed in more than one authority, the liability of the authorities concerned to the applicants shall be both joint and several.
(8) Any sums paid to the Secretary of State by virtue of subsection (6)(b) above shall be paid into the Consolidated Fund.")
New Clause 91 agreed to.
Clause 92 [Enforcement of participation in travel concession schemes]:
Lord Belstead Lord Belstead moved Amendment No. 253D:
[Printed earlier.]
On Question, amendment agreed to.
[Following is the text of the amendment (No. 253D): page 95, line 28, at end insert—
(" (2) Where an offence under this section committed by a body corporate is proved to have been committed with the consent or connivance of, or to have been attributable to any neglect on the part of, any director, manager, secretary or other similar officer of the body corporate or a person who was purporting to act in any such capacity, he as well as the body corporate shall be guilty of that offence and shall be liable to be proceeded against and punished accordingly.
(3) Where the affairs of a body corporate are managed by its members, subsection (2) above shall apply in relation to the acts and defaults of a member in connection with his functions of management as if he were a director of the body corporate.
(4) Proceedings for an offence under this section shall not, in England and Wales, be instituted except by the authority, or any one of the authorities, responsible for administration of the scheme in question or by or with the consent of the Director of Public Prosecutions.")
Clause 92, as amended, agreed to.
Clause 93 agreed to.
Clause 94 [Subsidies for travel concessions]:
Lord Belstead Lord Belstead moved Amendment No. 253E:
[Printed earlier.]
On Question, amendment agreed to.
Following is the text of the amendment (No. 253E): Leave out Clause 94 and insert the following new clause:
Travel concessions on services provided by Passenger Transport Executives.
("Travel concessions apart from schemes
94.—(1) The payments provided for under an agreement providing for service subsidies in respect of any service entered into by an authority responsible for expenditure on public passenger transport services may not include payments in respect of the provision of travel concessions on journeys on that service except as provided below in this section.
(2) Subject to subsection (3) below, provision may be included in any such agreement for the making of payments by the authority in question to the person providing the service to which the agreement relates in respect of the provision of travel concessions on journeys on that service or any part of it for any description of persons eligible in accordance with section 87(8) of this Act to receive travel concessions under a travel concession scheme under that section.
(3) Subsection (2) above only applies where the concessions in question are not available, or not available to that description of persons, under any such scheme administered by the authority concerned or by that authority acting jointly with any other authority or authorities.").
New Clause 94 agreed to.
Lord Belstead Lord Belstead moved Amendment No. 253F:
After Clause 94, insert the following new clause:
("Subsidies for travel concessions.
.—(1) A Passenger Transport Executive may not in exercise of their powers under section 10(1)(xiii) of the 1968 Act (power of Passenger Transport Executive to charge for services and waive their charges, etc.) provide travel concessions for persons travelling on any public passenger transport service provided by the Executive other than persons of any description eligible in accordance with section 87(8) of this Act to receive travel concessions under a travel concession scheme established under that section, except where those concessions are provided under any agreement or arrangements under which the whole of the cost of providing those concessions is to be met by a person other than that Executive or the Passenger Transport Authority for that Executive's area.
(2) The approval of the Passenger Transport Authority for a passenger transport area under section 15(2) of the 1968 Act (approval of Passenger Transport Authority required for alterations by Executive in general level of charges and for reduction or waiver of charges by Executive) shall not be required for travel concessions granted by the Passenger Transport Executive for that area for persons travelling on any public passenger transport service provided by the Executive if those concessions are granted—

(a) in accordance with any scheme established under section 87 of this Act by any authority other than the Passenger Transport Authority for that Executive's area or (as the case may be) by authorities who do not include that Passenger Transport Authority; or

(b) where that Executive's area is in England and Wales, in pursuance of arrangements made with that Executive by any local authority within the meaning of the National Assistance Act 1948 in exercise of their powers under section 29 of that Act (welfare arrangements for handicapped persons);

or correspond to travel concessions under any scheme established under section 87 of this Act by the Passenger Transport Authority for that Executive's area.
(3) For the purposes of subsection (2) above, travel concessions granted by the Executive for a passenger transport area on any such service correspond to travel concessions under any such scheme if they are—

(a) of the same value;

(b) available subject to the same terms, limitations or conditions; and

(c) available to persons of the same description;

as the travel concessions provided under that scheme.")
The noble Lord said: I beg to move Amendment No. 253F and to speak also to Nos. 253G, 269ZB and 269ZC.
Amendment No. 253G: After Clause 94, insert the following new clause:
("Travel concessions on servicss provided by local authorities.
.—(1) Where the council of any county or district in England and Wales or of any region or islands area in Scotland are operating any public passenger transport service, they shall have power to provide travel concessions for persons travelling on that service of any description eligible in accordance with section 87(8) of this Act to receive travel concessions under a travel concession scheme established under that section.
(2) In respect of travel concessions provided under this section, any such council may, if they think fit, from time to time transfer to the credit of the account of their transport undertaking sums from the general rate fund or, where that council is the council of any region or islands area in Scotland, from the general fund (within the meaning of section 93 of the Local Government (Scotland) Act 1973).
(3) Sums so transferred must not exceed the cost to the council concerned of providing the concessions or so much of that cost as would not apart from subsection (2) above fall to be met out of the fund there mentioned.")
Amendment No. 269ZB: Schedule 6, page 146, line 1, at end insert—
(" . In section 10(1)(xiii) of the 1968 Act (power of Passenger Transport Executive to charge for services, etc.), after the word "Act" there shall be inserted the words "and section (Travel concessions on services provided by Passenger Transport Executives) of the Transport Act 1985 (travel concessions on services provided by Passenger Transport Executies)".
. In section 15(2) of that Act (approval of Passenger Transport Authority required for alterations by Executive in general level of charges and for reduction or waiver of charges by Executive), for the words "138(1) of this Act" there shall be substituted the words "(Travel concessions on services by Passenger Transport Executives) of the Transport Act 1985 (travel concessions on services provided by Passenger Transport Executives)".")
Amendment No. 269ZC: Page 146, line 2, leave out ("the 1968") and insert ("that").
These new clauses are necessary to clarify and establish the powers of PTEs and local authorities to provide travel concessions on their own services. I think of such things as the Glasgow Underground, the Tyne and Wear Metro and the Scottish ferries. I beg to move.
On Question, amendment agreed to.
Lord Belstead Lord Belstead moved Amendment No. 253G.
[Printed above.]
On Question, amendment agreed to.
Lord Denham: I think by general consent we have reached as far as we usefully can this evening. I beg to moved that the House do now resume.
Moved accordingly, and, on Question, Motion agreed to.
House resumed.

Consolidated Fund (Appropriation) Bill
Brought from the Commons endorsed with the Certificate from the Speaker that the Bill is a Money Bill within the meaning of the Parliament Act 1911; read a first time, and to be printed.
Child Abduction and Custody Bill [H.L.]
Returned from the Commons agreed to with amendments; the amendments ordered to be printed.

Oxfordshire Bill [H.L.]
Returned from the Commons agreed to with amendments; the amendments considered and agreed to.
House adjourned at twelve minutes before midnight.

  SEAT BELTS IN PASSENGER COACHES
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