Sitting of 3 June 1985

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

PRIVATE BUSINESS
C-POULTRY COMPANY LIMITED BILL
Considered; to be read the Third time.
DURHAM CITY COUNCIL BILL [Lords]
Read a Second time, and committed.

Oral Answers to Questions
  ENERGY

    British Gas Corporation
    Mr. Wallaceasked the Secretary of State for Energy when he next expects to meet the chairman of the British Gas Corporation to discuss the proposed privatisation of the corporation.
    Sir William van Straubenzeeasked the Secretary of State for Energy when he expects to be in a position to announce a target date for the privatisation of British Gas.
    Mr. Nellistasked the Secretary of State for Energy what representations he has received on the future of British Gas.
    Mr. Parryasked the Secretary of State for Energy if he will make a statement on progress with the proposed privatisation of British Gas.
    The Secretary of State for Energy (Mr. Peter Walker): I have regular meetings with the chairman of the British Gas Corporation Government policy on the privatisation of BGC was set out in my statement to the House on 7 May.
    Mr. Wallace: Does the Secretary of State accept that many of us fear that if, and when, the British Gas Corporation is privatised it will seek to maximise sales and push up demand to increase profits? Will the right hon. Gentleman discuss with the chairman of the corporation possible statutory duties on any privatised board to take full account of conservation efforts and, in particular, to consider demand management as much an option as other sources of supply?
    Mr. Walker: The British Gas Corporation would have a vested interest in ensuring that there were sensible policies to ensure that the supply of gas was always available. That would be very much in the corporation's mind.
    Sir William van Straubenzee: Does my right hon. Friend appreciate the fact that my request for a target date illustrates the impatience that many of us feel and our hope of seeing his industry in the private sector? Will he therefore do all that he can to bring the date forward, in the hope that there will then be widespread ownership among those who work in the industry?
    Mr. Walker: I very much admire my hon. Friend's volunteering to serve on the Committee stage of this legislation. I know that he will help us to expedite the passage of the measure. The proposal has been widely welcomed by employers, customers and others. I hope that it will reach the statute book and be implemented as quickly as possible.
    Mr. Nellist: Is this not just the latest action in all the all-too-long line of handouts and bribes to the millionaire backers of the Tory party and which has absolutely nothing to do with increased efficiency, increased democracy or a better deal for gas consumers? Is it not a fact that £5 billion has been raised through special gas price increases and that it is due for transfer from the public purse to the bank balances of the sharks and speculators represented by

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    the Secretary of State for Energy? Those people will lose that money on renationalisation of the British Gas Corporation.
    Mr. Walker: In my reply to the previous question I expressed the hope that my hon. Friend the Member for Wokingham (Sir W. van Straubeneezee) would remain a firm supporter of the proposal. I also hope that the hon. Member for Coventry, South-East (Mr. Nellist) will remain a firm opponent of it. The hon. Gentleman's opposition is, as always, primitive and totally incorrect. He should talk to some of the employees of industries which have been privatised and see how many of them have any desire to go back to nationalisation.
    Mr. Skeet: I congratulate my right hon. Friend on his privatisation proposals. However, will he bear in mind, as the monopoly moves into the private sector, the need to safeguard the raw materials of the chemical industry— ethane and other materials—so that they have a ready flow and are competitive on world markets?
    Mr. Walker: I do not think that there will be any difficulties about that. The British Gas Corporation is anxious to do that in connection with its customers. The 1982 legislation and the proposed legislation will enable such organisations to make those supplies.
    Mr. Hoyle: Has the Secretary of State any plans to meet the chairmen of other nationalised industries, especially the chairman of the United Kingdom Atomic Energy Authority? Will he discuss with the authority's chairman the Exclusive Office Cleaning strike? Women cleaners' wages are being reduced by 21p an hour and their holidays are being reduced from four weeks to one week. Will the right hon. Gentleman take up this question with the authority?
    Mr. Walker: That question is clearly a wide abuse of Question Time.
    Mr. McQuarrie: While I delight with my right hon. Friend in the fact that privatisation is to go ahead as quickly as possible, may I ask whether he intends that Scottish gas should be a separate entity within that privatisation?
    Mr. Walker: No, Sir.
    Mr. Wrigglesworth: Does the right hon. Gentleman agree that the regulatory arrangements for the prices charged by a denationalised corporation are of great importance not only to consumers but to the whole of the energy industry? Will he give a clear statement of how the regulatory framework and criteria for prices will work? Will they, for instance, be similar to those applying to British Telecom?
    Mr. Walker: I hope the hon. Gentleman will understand that at this stage it is not possible to give detailed proposals, but there will be an effective regulatory system that will both protect the consumer and encourage the industry to improve its efficiency.
    Mr. Watts: As no gas has been supplied direct from producer to customer making use of the common carrier provisions in the 1982 Act, is my right hon. Friend satisfied that no further measures are required to make those provisions more effective before the corporation is privatised?
    Mr. Walker: I have said that we will keep this matter under review. Certainly the 1982 provisions are important
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    and can be used to advantage, and I believe that that will happen in a number of cases. However, there is no doubt that the bulk of gas distribution will be through the present system operated by the corporation.
    Mr. Orme: As this is a highly controversial matter, is the Secretary of State contemplating producing a White Paper before he produces a Bill?
    Secondly, what consultation has the right hon. Gentleman had with employees of the corporation through their trade unions?
    Mr. Walker: The answer to the first point is no.
    On the right hon Gentleman's second point, representatives of an organisation representing all the unions involved asked to see me when our proposals were first made known, I wrote to them immediately after my announcement and asked if they would like to have a meeting—I should be only too delighted to have such a meeting—and I am awaiting a reply.

    Heysham and Torness Power Stations
    Mr. Proctorasked the Secretary of State for Energy what are the anticipated commissioning dates of the Heysham 2 and Torness power stations; and if he will make a statement.
    The Parliamentary Under-Secretary of State for Energy (Mr. Alastair Goodlad): The anticipated commissioning dates for the two reactors at Heysham 2 power station are mid-1987 and mid-1988, respectively. Matters relating to electricity supply in Scotland are for my right hon. Friend the Secretary of State for Scotland.
    Mr. Proctor: Will my hon. Friend consult our right hon. Friend the Secretary of State for Employment concerning the disposal of Her Majesty's Nuclear Installations Inspectorate to Bootle against its wishes, which coincides with the receiving of the station safety reports from the CEGB to the inspectorate? Will he ensure that the safety aspects are considered in depth and that there will be no delay in the commissioning of power stations, because any delay will cost the nation about £250,000 per day per station?
    Mr. Goodlad: I am advised by the Health and Safety Commission that dispersal of the inspectorate will not have any implications for the anticipated commissioning dates of Heysham 2. The Government are conscious of the need to maintain the high standards of the inspectorate. The detailed arrangements for dispersal are a matter for the Health and Safety Executive. I understand that it does not believe that dispersal need have serious consequences for the effectiveness of the inspectorate.
    Mr. Crouch: Will my hon. Friend assure us that before the Government reach a decision on the type of nuclear generation for the future they will wait to see the successful results of those two power stations in operation?
    Mr. Goodlad: The relative merits of the AGR and PWR were exhaustively rehearsed at the Sizewell inquiry. In view of my right hon. Friend's quasi-judicial position, it would be wrong for me to comment further.
    Mr. Andy Stewart: Can my hon. Friend confirm that the National Coal Board took into consideration the commissioning of those two nuclear power stations when it set its target for the production of coal last year?
    Mr. Goodlad: I believe that that was the case.

    Wind Power
    Mr. Yeoasked the Secretary of State for Energy what steps his Department has taken to promote the use of wind power for energy purposes.
    The Minister of State, Department of Energy (Mr. Alick Buchanan-Smith): My Department has spent over £13 million, since 1979, on research and development into the use of wind energy for electricity generation.
    Mr. Yeo: Can my right hon. Friend say whether the expenditure has revealed any useful applications for wind energy and, if so, whether such applications have any export potential?
    Mr. Buchanan-Smith: Yes, it is one of our most promising areas in using a renewable energy source. The work done so far in the Orkney Islands has proved effective. In relation to the second medium-sized aero-generator that we have there, the firm concerned is already exploring the possibilities of selling its equipment overseas, so there are good opportunities.
    Mr. Colvin: Is my right hon. Friend aware that there are firms in my constituency which are now well into wind power technology, both ashore and afloat, through wind-assist schemes for ships? Will he take the opportunity to pay credit to Gifford Technology, which is already exporting epoxy timber composite windmill blades to the United States of America, where it is said that one of the main incentives to people buying the new technology is the tax credit system which the Americans use, which might be a better form of encouragement to British firms to invest in wind power than the present encouragement given by our right hon. Friend the Chancellor of the Exchequer?
    Mr. Buchanan-Smith: A considerable number of firms are involved in the Orkney Islands development and in Carmarthen Bay, and the developments are of benefit to them. My hon. Friend's point relates to the responsibility of the Chancellor of the Exchequer, but I take note of what he said.

    Coal Industry
    Mr. Beithasked the Secretary of State for Energy whether, when he next meets the chairman of the National Coal Board, he will discuss the future potential for coal extraction under the sea off the north-east coast of England.
    The Parliamentary Under-Secretary of State for Energy (Mr. David Hunt): I am aware of the prospects for further development of coal mines under the sea in north-east England, and expect to discuss these with the chairman of the National Coal Board from time to time as the board's plans develop.
    Mr. Beith: Does the Minister agree that the closure of old pits with expensive production costs will prove to have been a disaster if it is not accompanied by new investment in areas with high potential, such as the North sea? Will he note that the sinking of a new pit in the Amble area could give access to enormous reserves and be of tremendous value in creating employment in that area?
    Mr. Hunt: I agree with the first part of the hon. Gentleman's question. I was very pleased when, on 26 April, the north-east area of the NCB announced approval for a £3 million drilling rig for Westoe, Wearmouth and
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    Ellington collieries. I was very pleased to hear about that when I went underground at Ellington just over two weeks ago.
    Mr. Kenneth Carlisle: Does my hon. Friend agree that there is good potential for the extraction of coal in the north-east only if there are markets for that coal? In that respect, the coal conversion scheme is very important. Can he say how that scheme has been progressing since the strike, in the hope of expanding markets?
    Mr. Hunt: Sadly, the shadow of the NACODS position still hangs over the coal industry. Nevertheless, there is still a very good argument for industry to convert to coal, and there is still a useful amount of money in the coal conversion scheme. My hon. Friend is absolutely correct in what he said.
    Mr. Mason: When the Minister next meets the chairman of the National Coal Board, will he draw his attention to the severe breakdown in industrial relations in the coalfields, caused particularly by the stupid and outdated attitude of the chairman and his deputy, Cowan? Will the Minister also mention the reports that local trade union officials are working five days a week underground and are put on a three-shift system, which makes it difficult to have good trade union relations at the pithead?
    Will the Minister note that, having disturbed and misled NACODS, the country is now hovering once more on the brink of a national strike? What will the Minister and the Secretary of State do to rectify and get a grip on the position?
    Mr. HuntI hope that when the right hon. Gentleman is able to consider carefully what he has just said he will recognise that it was extremely wrong and in bad taste for him to use that inflammatory language at such a crucial stage—[Interruption.]—in the present situation. I ask him to take time to go underground, as I have done at Point of Ayr, at Ellington and at Selby—[Interruption.]—and he will hear from the men underground that all that they want to do is to put the tragic strike behind them and to work together for the future of the industry.
    Mr. Speaker: Order. It would have been more appropriate if the right hon. Member for Barnsley, Central (Mr. Mason) had asked his supplementary question after the next question. However, he has his answer now.
    Mr. Dormand: Is the Minister aware that the multi-million pound drilling project in the north-east has been generally welcomed? Will he urge the National Coal Board, when it talks about pit closures, to give full consideration to the fact that the reserves in the Durham coalfield have been established for some time? Some of that coal will easily be obtained. When the chairman of the National Coal Board talks about the economic aspects of pits, surely that is a matter that should receive the utmost consideration before further pit closures are thought about?
    Mr. Hunt: The hon. Gentleman is right to talk about extensive coal reserves, because last year the National Coal Board located at least 200 million tonnes of new reserves off Westoe and Wearmouth collieries and has spent about £15·5 million in the past 12 years drilling for coal in the North sea. A further £3 million will be spent this summer. He is also right to stress that the coal industry's future lies in the development of low-cost

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    productive pits, such as the massive Ellington complex. Of course, that has to be taken into account when allocating resources in the future.

    National Coal Board
    Mr. Pikeasked the Secretary of State for Energy if he has any plans to change the membership of the National Coal Board.
    Mr. Peter Walker: No new appointments to the board are imminent.
    Mr. Pike: Does the Secretary of State not recognise that, despite the answer given a few moments ago, most people in the industry and in the country are convinced that the National Coal Board was largely responsible for causing last year's dispute and is likely to cause a further dispute because of its apparent failure to comply with agreements that it has reached? Is it not time that changes were made so that the industry can start to go forward again?
    Mr. Walker: No. I believe that most people agree that last year's strike was politically motivated and that it was one for which no ballot of miners took place.
    Mr. Bowen Wells: Is my right hon. Friend aware that it is essential for the present membership of the NCB to be maintained and supported by him and the country in order to put the industry right? Will he take this opportunity to explain the difficulties which have arisen between the National Coal Board and NACODS?
    Mr. Walker: After NACODS had a meeting last week, I was asked whether a meeting could take place with the National Coal Board. I conveyed its message to the NCB and a meeting took place at the invitation of the NCB. In accordance with its wishes, the matters that NACODS had asked to have clarified at its meeting with me were clarified completely at the meeting with the NCB. I hope, therefore, that NACODS members will quickly return to work.
    Mr. Foot: Does the right hon. Gentleman appreciate that what was said by my right hon. Friend the Member for Barnsley, Central (Mr. Mason) represents the widespread feeling throughout all the coalfields that Mr. MacGregor, the chairman of the NCB, is utterly distrusted and that he is making a major contribution to the present dispute? We are all aware of the fact that the Secretary of State has had his disputes with Mr. MacGregor. Mr. MacGregor was insulting at the end of the dispute when he said that the Secretary of State had had nothing to do with the conduct of the dispute. That was misleading the country. We know that the Secretary of State never wanted him. Therefore, can he not now intervene and get rid of him?
    Mr. Walker: No. At the majority of coalfields production has returned to normal levels and at many of them it is high. It is giving a completely distorted picture to say that there is great discontent throughout the coalfields. I am pleased to say that coal production and deliveries are reaching good levels at present. I am only sorry that damage is being done to the full recovery of the industry, which is necessary if we are to persuade industrialists and others to convert to coal in the future.
    Mrs. Kellett-Bowman: Will my right hon. Friend acknowledge the excellent work that the chairman of the NCB has put into securing export orders upon which a long-term future for the coal industry can be founded?
    Mr. Walker: The marketing of coal is immensely important both at home and abroad and is something to which I hope the board will give ever-increasing attention.
    Mr. Benn: Is not the truth that during the dispute the Secretary of State allowed pledges to be given on almost any terms to NACODS to get the dispute ended? Now that the current dispute is more than three months old, NACODS feels entirely betrayed by the chairman of the board and by the Government. The result of victimisation of miners and some of the savage sentences is that more and more people think that the NUM was correct in the defence that it mounted last year.
    Mr. Walker: No, Sir. The opposite is the truth. The reality is that the agreement on modified procedures was virtually reached before the NACODS overtime ban took place and was entirely in accordance with procedures. It is also true that I met the NACODS leaders for two hours, when they asked for two matters to be fulfilled, both of which have been fulfilled.
    Mr. Nellist: What sort of vindictiveness is it that causes the Secretary of State to refuse to allow the 700 sacked miners—11 of them in the area of Warwickshire which I represent—to return to their jobs? Is it not a fact—
    Mr. Speaker: Order. There is a related question on this issue.
    Mr. Nellist: Let me finish my supplementary question, Mr. Speaker.
    Mr. Speaker: The hon. Gentleman must read the questions that appear on the Order Paper. Question No. 9 is about membership of the National Coal Board.
    Mr. Nellist: Is it not a fact that the sackings—
    Mr. Speaker: Order. That is just the point. If the hon. Gentleman will read the question and relate it to the board, he will be all right. I shall give the hon. Gentlman one more chance.
    Mr. Nellist: Is it not a fact that the board's membership means that the sackings were targeted at union organisers and that many of those who were sacked have been found not guilty in courts of law? Does that mean that the present membership of the board and the Secretary of State are setting themselves up as judge, jury and executioner?
    Mr. Walker: There is a right of appeal in all cases. It would be pleasing if occasionally the hon. Gentleman showed some concern about the vindictiveness of some of those who have been sacked.
    Mr. Orme: Does the Secretary of State agree that the NCB is responsible for the present NACODS' dispute? The board has violated the agreement and is demanning pits, such as Horden in the north-east and St. John's in south Wales. It is therefore getting round the agreement and allowing pits to be run down so that they can be closed. Is that not another example of the board's dubiety?
    Mr. Walker: I wish that the right hon. Gentleman, with his keen enthusiasm for the future of the industry,

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    would recognise that when a pit has been virtually destroyed, because of the coal strike, and the majority of the men at the pit want to be transferred or to take voluntary retirement, it would be right for him to criticise the board if it ignored the views of the majority at that pit.

    Coal Industry
    Mr. Nichollsasked the Secretary of State for Energy how many miners have taken voluntary redundancy since 1 March.
    Mr. Peter Walker: I am encouraged by the levels of production attained since the end of the strike, although damage to coal faces has had a lasting effect. Between the beginning of March and 4 May over 2,000 miners took voluntary redundancy, reducing the number of men on colliery books to approximately 169,000.
    Mr. Nicholls: May I take that answer as meaning that working miners are now satisfied that their applications for voluntary redundancy or transfer are being processed speedily? Does my right hon. Friend agree that if earlier reports that miners were not satisfied that such applications were being processed speedily were justified, that would have reflected a substantial betrayal of a brave body of men?
    Mr. Walker: It is up to the management to take decisions on the applications of individual miners. All the individual cases forwarded to me have been taken up by the board and have been dealt with satisfactorily by the management.
    Mr. Ray Powell: Is the Minister aware that at the St. John's colliery 350 miners have volunteered for redundancy payments as a result of two years of threatening closure by the National Coal Board and the Minister? The Minister, in response to an Adjournment debtate that I initiated, said that investigations would take place. Is he aware that the chairman of the board condones actions by the board and by its officers to put pressure on miners to volunteer to become redundant?
    Mr. Walker: I do not agree. Any closure will be dealt with under the proper, agreed procedure.
    Mr. Peter Bruinvels: Does my right hon. Friend agree that, as about 14,000 miners have now accepted voluntary retirement, there was no need for the dispute in the first place, Arthur Scargill was completely wrong, and the Government were right in supporting the National Coal Board in getting good value for money and ensuring that the miners did a decent day's work. Does he further agree that the industry is in a better position now than it was 12 months ago?
    Mr. Walker: It is not true that the industry is in a better position. Considerable damage was done by the dispute to markets, coal faces, mining machinery and by delaying substantial investment programme. It is certainly true that a good investment programme, much higher than that of the rest of Europe together, is the best way to guarantee a good future for the industry.
    Mr. Eadie: Why does the Secretary of State allow the chairman of the NCB to walk all over him? Regarding redundancy payments, is it not a fact that the NCB is instituting by stealth the closure of collieries without negotiation, and that miners are losing their jobs as a
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    consequence? is the Secretary of State aware that the NACODS' dispute is costing the nation about £24 million a week? He should be worried about that, instead of answering, as he has been doing today, by saying that everything in the garden is lovely. We know that the garden is not lovely.
    Mr. Walker: The main cost of the present dispute is the potential loss of markets for the industry to which the hon. Gentleman has devoted his life. The loss of coal production has been minute, as the hon. Gentleman knows, and there have been only small delays in starting production. The damage to the reputation of the industry has been considerable. With the guarantees given by the NCB, there is no need for the overtime ban to continue.

    Nuclear Power Establishments
    Mr. Adleyasked the Secretary of State for Energy if he will list the nuclear power establishments which Ministers in his Department have visited in the last three years.
    Mr. Goodlad: During the past three years departmental ministers have on various occasions visited all the principal Atomic Energy Authority and British Nuclear Fuels sites and a number of nuclear power stations. I shall give details in the Official Report.
    Mr. Adley: I thank my hon. Friend for that answer. During the visits, has he been made aware of a concerted campaign which is being waged and seeks to imply that the presence of these establisments in a locality is itself a primary cause of cancer for those who live nearby? Is there any medical evidence to support that? If not, will my hon. Friend please take this opportunity to destroy those scaremongering techniques, which are causing a great deal of unnecessary anxiety to many people?
    Mr. Goodlad: As my hon. Friend knows, this is primarily a matter for my right hon. and learned Friend the Minister for Health. However, the radioactive discharges from Winfrith, about which my hon. Friend and others have written to me, are strictly controlled by the Department of the Environment and the Ministry of Agriculture, Fisheries and Food. Monitoring carried out by both MAFF and the operators confirms that the radiological impact of discharges is well within internationality recommended limits and is insignificant in relation to naturally occurring radioactivity. It is most unlikely that Winfrith discharges could have given rise to increased levels of leukaemia. Variations in the local incidence of leukaemia are found throughout the country. Studies are being carried out by the local health authorities to identify the incidence of leukaemia throughout east Dorset, and are still at a preliminary stage. There is certainly no evidence that connects any increase in leukaemia with Winfrith.
    Mr. Donald Stewart: Is the Minister aware that the announcement in a written answer on a Friday of the new nuclear development at Dounreay is regarded as an affront to Scottish opinion? Since, in the words of Sir Christopher Hinton, the chairman of the Atomic Energy Authority at the time, that installation went there originally because there was an element of danger, is the Minister aware that the new development is regarded in the same light in Scotland?
    Mr. Goodlad: My understanding is that the announcement has been widely welcomed in Scotland.
    Mr. Teddy Taylor: Is there not a need for the Government to mount a major campaign to put across to the largely uninformed public the basic point that that nuclear power is by far the safest form of energy conversion? Will he at least get across the simple point that one gets more radiation from having a colour television set in one's house than from living beside a nuclear power station?
    Mr. Goodlad: I agree with my hon. Friend that reiteration of the facts can do a great deal to dispel misconceptions.
    Mr. Wallace: If, in the near future, a Minister visits Dounreay, will he also take the opportunity to take the short trip across the water to my constituency in Orkney, where many people are worried that the new reprocessing plant may well cause difficulties and dangers to farming and marine interests? Will he reassure the House and my constituents that there will be a public inquiry so that these genuine anxieties can be fully expressed?
    Mr. Goodlad: I understand that my right hon. Friend the Secretary of State for Scotland has today announced his intention of calling in the planning application for his own decision and that a public inquiry will be held. As the hon. Gentleman will know, no one in the House is more alive to the interests of his constituents than I am.
    Mr. Rowlands: Is the Minister aware that there is genuine concern about aspects of nuclear discharges? For example, in Winfrith there is genuine local concern about unusually high levels of leukaemia, which are as yet unexplained? In order to allay these fears and worries, will he pull some of the information together and produce a comprehensive statement about the issues and problems arising from Winfrith so that those concerns and worries can be met?
    Mr. Goodlad: When the result of the investigations to which I referred is available, I shall make sure that it is properly disseminated.
    The following are the details.
    Nuclear power establishments visited by Department of Energy Ministers during the past three years are:

    United Kingdom Atomic Energy Authority

    Harwell Atomic Energy Research Establishment

    Dounreay Nuclear Power Development Establishment

    Risley Nuclear Power Development Establishment

    Springfields Nuclear Power Development Laboratories

    Winfrith Atomic Energy Establishment

    Culham Laboratory

    British Nuclear Fuels plc

    Sellafield Plant

    Capenhurst Plant

    Springfields Plant

    Headquarters, Risley

    Central Electricity Generating Board

    Berkley Nuclear Laboratories

    Heysham I and II Power Stations

    Hinkley B Power Station

    National Nuclear Corporation

    Headquarters, Knutsford

    Electricity Prices
    Mr.Greenwayasked the Secretary of State for Energy if he will make a statement on the report on two-tier pricing of electricity.
    Mr. Goodlad: The Central Electricity Generating Board and the National Coal Board have put to my Department ideas for reducing further the price of electricity to the largest users. These ideas will be discussed with the industries.
    Mr. Greenway: Does my hon. Friend agree that it is quite wrong for landlords to be able to surcharge tenants for electricity above the rate that they would pay themselves? Will he bring that practice to an end?
    Mr. Goodland: I know that my hon. Friend has taken a great interest in this matter, which has been the subject of a number of inquiries by my right hon. Friend the Secretay of State for Trade and Industry. The Department of Trade and Industry is currently studying a report produced some months ago by the Office of Fair Trading, and I understand that no decisions have yet been taken. I shall ask my right hon. Friend to write to my hon. Friend in due course.

    Coal Industry
    Mr. Teddy Taylorasked the Secretary of State for Energy if he is satisfied with the steps taken by the National Coal Board to protect miners who worked during the recent dispute from intimidation and harassment.
    Mr. Peter Walker: I am confident that the National Coal Board has made strenuous efforts to deal with the problem of intimidation in the coal industry. Firm action, including dismissal, has been, and will continue to be, taken against those indentified as offenders.
    Mr. Taylor: In view of the complaints from the NUM about the need to avoid victimisation, may I ask whether my right hon. Friend has had any indication of support and co-operation from the NUM in order to avoid the intimidation and harassment that have been applied to a number of working miners?
    Mr. Walker: Not exactly, but in the great majority of pits working conditions have very quickly returned to normal and no intimidation is taking place. However, instances have taken place in a minority of pits, and they have been dealt with firmly by the management.
    Mr. Eastham: If there is a genuine desire to protect the rights of miners, may I also remind the right hon. Gentleman that many miners have been dismissed even though they have been tried in courts or have appeared before industrial tribunals which have found in their favour? Is it not about time that the Secretary of State made representations to Mr. MaGregor to reduce the number of such cases?
    Mr. Walker: A considerable review has taken place and management decisions were taken. There are procedures to be followed if anyone considers that such decisions were incorrect. Those procedures are taking place.
    Sir Peter Emery: Will my right hon. Friend have words with the chairman of the NCB to ensure that, in the context of continuing and increasing NCB productivity,

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    those who worked throughout the whole of the strike are given absolute preference to allow them to play a major role in the future success of the coal industry?
    Mr. Walker: They did play, and are playing, a very major role. I am sure my hon. Friend will also agree that a large number of miners were kept out of work by various methods although they have the same desire for their industry to succeed. We need to support them as well.
    Mr. Skinner: Is the Secretary of State aware that those who suffered the greatest intimidation and harassment are the 720 miners who did not get their jobs back after the strike ended? Is it not strange that in some NCB areas intimidation and harassment are occurring involving those who have not got their jobs back, whereas in other areas, where seemingly the strike was almost solid, almost every sacked miner has been given back his job? Perhaps someone at NCB level is involved in serious intimidation and harassment on an area basis. Why does not the right hon. Gentleman put that right?
    Mr. Walker: I believe that that is inaccurate.
    Mr. Orme: Does the Secretary of State agree that industrial relations are at an extremely low level following the dispute, and that the NCB has deliberately stirred this matter up and done nothing to ensure that normal relations are resumed? What is the Secretary of State doing about that?
    Mr. Walker: The facts are that at the majority of pits normal relations have been resumed and production is at a high level, as are deliveries of coal. I am sorry that the right hon. Gentleman is not being more positive in encouraging all working to return to normal.

    Energy Audits
    Mr. Hannamasked the Secretary of State for Energy what steps he is taking to introduce a system of energy audits.
    Mr. David Hunt: My Department's energy efficiency office continues to make grants of up to 50 per cent. towards the cost of energy surveys of non-domestic premises under the energy efficiency survey scheme. The energy efficiency office has supported the development of home energy audits, some of which are currently available to the public.
    Mr. Hannam: I congratulate my hon. Friend on his successes in the industrial and commercial sector. Will he accept that we need a similar system to that operated in the United States, whereby anybody in the domestic sector can get a home energy audit done for only $15 through local electricity and gas companies? Would it not be desirable to introduce this system here? Pending the time when it is introduced, will my hon. Friend look at the position of local authorities and exert maximum pressure on them to ensure that their stock of housing is brought up to a reasonable standard?
    Mr. Hunt: My hon. Friend is right to stress the need to learn lessons from others, and I have been able so see at first hand in Sweden and Denmark the progress made there in energy efficiency in the domestic sector. A number of lessons still need to be learnt, and my hon. Friend is right to stress the importance of encouraging
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    home energy efficiency labelling and to show our acceptance of the fact that it is in the local authorities that considerable savings can be made.

  HOUSE OF COMMONS

    River Traffic (Noise)
    Mr. Greenwayasked the Lord Privy Seal if he will make representations to the Port of London Authority about the level of noise from vessels passing close to the Palace of Westminster; and if he will make a statement.
    The Lord Privy Seal and Leader of the House of Commons (Mr. John Biffen): The authorities of the House keep in touch with the directorate of marine services of the Port of London Authority with regard to river traffic. If my hon. Friend has any particular point in mind, perhaps he would let me know.
    Mr. Greenway: Is it not unnecessary for certain pleasure steamers to come so close to the Terrace, with the result that noisy bands and sometimes raucous singing drown the proceedings of Committees, sometimes for minutes on end? Cannot something be done about this?
    Mr. Biffen: I must confess that this has been going on for some years and a bit of good-natured commentary from the river does not necessarily do any harm. However, I shall look into the point that my hon. Friend raises.
    Mr. Skinner: Has the Port of London Authority sent the right hon. Gentleman any complaints based on the noise emanating from this place and disturbing the people travelling up the river?
    Mr. Bifffen: Again, in terms of entertainment, it is a good two-way traffic.
    Mr. Dickens: Does my right hon. Friend agree that if the Palace of Westminster were built in Trafalgar square or Hyde Park comer we might have something to worry about? However, as it is situated alongside Old Father Thames, with just a few vessels, tugs and motor boats going by, which is rather lovely, I agree for the first time with the hon. Member for Bolsover (Mr. Skinner) that there is much more noise from this Chamber than from the River Thames.
    Mr. Biffen: Whatever supernatural force has joined those two together, let me put not asunder.

    Parliamentary Procedure
    Mr. Nicholas Bakerasked the Lord Privy Seal if he has received any representations about improvements in parliamentary procedures.
    Mr. Biffen: Yes, Sir. The latest report of the Procedure Committee — the Second Report from the Select Committee on Procedure, Session 1984–85 — includes major recommendations for changes in the Standing Committee procedures of the House.
    Mr. Baker: My right hon. Friend will be aware that the private Member's motion to be moved on Friday to ensure the debate of a Bill that has the support of the House is within the rules of order, and it is proper that it should be debated. However, does he agree that there is a procedural loophole here, at which both he and the Select Committee on Procedure should look, to see whether action can be taken to stop it? [HON. MEMBERS: "Why?"]
    Mr. Biffen: My hon. Friend identifies that the procedures that are for debate in Friday are both in order and of general interest. I shall not now anticipate the remarks that I intend to make then.
    Mr. Pavitt: Does the Leader of the House recall that, on a number of occasions, on a Friday, objections have been made and there have been requests from hon. Members on both sides of the House that the hon. Members concerned should be identified in Hansard and not remain anonymous? Has he looked at that, and will he try, with the Procedure Committee, to right that patent wrong?
    Mr. Biffen: The Procedure Committee has reported on public Bills. But the hon. Gentleman is right to say that there are aspects of private Members' legislation which have given rise to anxiety in the past. I have no doubt that the hon. Gentleman's point will have been heard by the Chairman of the Procedure Committee.
    Mr. Maxwell-Hyslop: Would it not be for the convenience of the House if my right hon. Friend made available in the Vote Office the report of the Procedure Committee which led to both the starting and the terminal hours on Fridays being brought forward one and a half hours, which was not done with the object of undoing it by sitting later?
    Mr. Biffen: I shall look into that.
    Mr. Peter Shore: In respect of this Friday's innovation, to put at its lowest, and major misuse of parliamentary procedure, to put it another way — [Interruption]—does the right hon. Gentleman not think that it would be wrong to allow this proposal to go ahead without first referring it to the Select Committee on Procedure, so that we might have a proper report on what would be a most dangerous precedent?
    Mr. Biffen: The very remarks of the right hon. Gentleman and the way that they have been received in the House today suggests that it is a topic far better dealt with within the parameters of the debate rather than at Question Time.
    Sir Peter Emery: I refer to my right hon. Friend's original answer about the last report of the Procedure Committee. As it has considerable importance for the House, may we have his assurance that we shall debate it before the House rises for the summer recess?
    Mr. Biffen: I have said already that the Committee's proposals will be debated. I do not want to be specific about the precise time. But since I am always under pressure for the House to rise before getting too far into August, my hon. Friend will understand that any debates which might occur with advantage in the autumn are considered prime candidates for that treatment.

    Members' Secretarial Allowance
    Mr. Dubsasked the Lord Privy Seal what recent representations he has received advocating an increase in the Members' secretarial allowance.
    Mr. Biffen: The Members' secretarial allowance has been the subject of parliamentary questions and, more recently, of an early-day motion.
    Mr. Dubs: Is the Leader of the House aware that nearly 200 hon. Members of all parties have signed that early-day
    16
    motion? Is that not a remarkable sign of the strength of feeling in the House, given that the signals from the Government are that they are not sympathetic to the idea? I appeal to the right hon. Gentleman, whose job it is to protect the interest of ordinary hon. Members and not those of the Cabinet, to show sympathy to a reasonable request to enable us to do a better job for our constituents.
    Mr. Biffen: The hon. Gentleman will know that the Government are committed to periodic reviews of these allowances. That remains the position. If we are to play the numbers game, I remind the hon. Gentleman that he could get only a little more than a score of his supporters to vote when he tried to persuade the House to move to a secretarial allowance of £17,000.
    Sir John Biggs-Davison: If more hon. Members made good use of the superb facilities of the House of Commons Library, would there not be less need for research assistants and the money to pay them?
    Mr. Biffen: My hon. Friend makes a fair point. I am anxious not to be drawn into the controversy about the adequacy of the secretarial allowance, other than to say that it is only 12 months since the figure was voted by the House of Commons and that the Government made it clear that it was subject to periodic review. I do not think that it would be wise to depart from the present arrangements so shortly after they have been concluded.
    Mr. Beith: When considering this matter, was the Leader of the House influenced by the Prime Minister's remarks just before the recess, which implied that there had been a disproportionate increase in the costs of the House of Commons? If so, or if he believes what the Prime Minister said, does he believe that he has in some way neglected his duties to contain that expenditure or that he has properly stood up for the needs of the House to challenge the Government and what they are doing?
    Mr. Biffen: Before getting into that type of debating exchange, the hon. Gentleman should remember that a great deal of the House's expenditures are not cash limited and that there have been substantial increases in the costs of running the House, which might well be merited but which still have to be justified.

    Research Assistants
    Mr. Peter Bruinvelsasked the Lord Privy Seal how many research assistants were employed by hon. Members as at 1 May; and how this compares with those employed on the same date in each of the past 10 years.
    Mr. Biffen: The number of Palace of Westminster photo-identity passes on issue to Members' research assistants on 1 May 1985 was 469. This figure compares with a total of 452 on 1 May 1984.I regret that the records which are held by the athorities of the House do not enable me to give comparative figures for the other years requested.
    Mr. Bruinvels: Does my right hon. Friend agree that it is ridiculous to have so many research assistants working in the House? Is he aware that 102 hon. Members have two or more research assistants, one hon. Member has eight research assistants, two have nine, nine have four, three have five and four have six? Should we not try to tie the number down so that. Members have no more than one research assistant and that research assistants on the books are paid?
    Mr. Skinner: The hon. Gentleman was a half of one himself.
    Mr. Biffen: In that case my hon. Friend speaks from experience. My hon. Friend makes an interesting point, but perhaps it would be better elaborated in the debate that has been promised on the second report of the Services Committee, dealing with research assistants.

  CIVIL SERVICE

    Unions (Meeting)
    Mr. Teddy Taylorasked the Minister for the Civil Service on how many occasions he has met representatives of the Civil Service unions over the past 12 months.
    Mr. Winnickasked the Minister for the Civil Service what recent meetings he has had with trade unions representing Civil Service staff.
    The Minister of State, Treasury (Mr. Barney Hayhoe): Other than informally, I have met the unions on six occasions in the last 12 months. The last occasion was at a meeting on 30 April held by my right hon. Friend the Secretary of State for Employment to discuss the question of arbitration with the general secretaries of four Civil Service unions in relation to their 1985 pay claims.
    My right hon. and noble Friend the Chancellor of the Duchy of Lancaster most recently met representatives of the Institution of Professional Civil Servants on 2 April to hear their views in favour of extending unified grading in the Civil Service.
    Mr. Taylor: Does my hon. Friend agree that the pressure of work in some local Departments, especially the Department of Health and Social Security and Customs and Excise, is probably greater now than ever before? In view of the rather low morale of the Civil Service, will my hon. Friend make it abundantly clear at his next meeting that the Government fully appreciate that Britain has an extremely loyal and efficient Civil Service, which is one of the best in the world, and the least corrupt?
    Mr. Hayhoe: I willingly and wholeheartedly endorse my hon. Friends comments.
    Mr. Winnick: Is it really intended that disciplinary action be taken against those at GCHQ who refuse to give up their union membership? Is the Minister aware that the Opposition would deplore any such action?
    Mr. Hayhoe: I note what the hon. Gentleman says. He will know that questions on this matter should be directed in the first instance to my right hon. and learned Friend the Foreign Secretary.
    Mr. Dickens: A civil servant wrote to me this morning stating that, during the past 60 years, access to arbitration had been turned down by the Government 10 times, three times by the present Government. Civil servants feel very sore about the Government's denial of arbitration, but I do not know whether my information is right. Can my hon. Friend say whether it is?
    Mr. Hayhoe: Post-war Governments of all persuasions have maintained that access to arbitration can be refused by the Government on grounds of national policy. I can confirm that the Government have refused access to arbitration.
    Mr. Wrigglesworth: As it is the Government's view, as stated by the Chancellor of the Exchequer and his predecessor, that pay awards in the Civil Service should not fall consistently below awards in the private sector, what steps does the Minister propose to take in the forthcoming year to rectify what has happened in this year's pay award and other recent ones in which civil servants have fallen a long way behind the private sector?
    Mr. Hayhoe: I confiim that both the present Chancellor of the Exchequer and his predecessor made such clear statements to representatives of the Civil Service unions. The hon. Gentleman will know that in the context of this year's pay negotiations the Government have made it clear once again that they are very anxious and willing to proceed to negotiations, with the aim of establishing an agreed pay system which will have long-term implications for the determination of future pay settlements.
    Mr. Ashby: Does my hon. Friend not think that many of the Civil Service problems over pay and conditions would be resolved if the Ombudsman dealt with these matters?
    Mr. Hayhoe: That is highly unlikely, but I am prepared to consider my hon. Friend's novel suggestion.
    Mr. Janner: Has the Minister considered the answers given by each Department of State to my question about the ethnic origin and sex of its equal opportunities officer? In each case the reply was that the equal opportunities officer is white and male, except for the Secretary of State for Transport, who replied that his equal opportunities officer is a British citizen and that he does not understand the relevance of sex.
    Mr. Hayhoe: The hon. and learned Gentleman's question goes very wide indeed of the question on the Order Paper. However, if he cares to pursue it with me in other ways I shall try to give him a definitive answer.
    Dr. McDonald: Does the Minister think that the letter from the chairman of the Inland Revenue to his staff, threatening that those who engaged in industrial action were likely to have their career prospects blighted, is a sensible way to conduct industrial relations within the Civil Service?
    Mr. Hayhoe: As ever—no, not as ever, but as so frequently happens—the hon. Lady has got it wrong. I have here the text of the letter that was sent by the head of the Inland Revenue to his staff. It begins:
    "The first point I must make is that there is not, nor has there been, a ban on the promotion of those who have taken industrial action."
    He then went on to make the points that I covered in the House when I answered questions on 18 February. I refer the hon. Lady to the answer that I gave then.

  ENERGY

    Coal Industry
    Mr. Willie W. Hamiltonasked the Secretary of State for Energy if he will make a statement on the financial resources available for use in the Scottish coalfield in the light of pit closures and the consequent employment problems.
    Mr. David Hunt: NCB (Enterprise) Ltd., the National Coal Board's job creation subsidiary, is active throughout

    19
    the British coalfields. The funds available to the company are not allocated between areas but may be used in support of schemes wherever there is the opportunity to create real jobs. The House has been informed that the funding of the company will be kept under close review as operations progress.
    Mr. Hamilton: Is the Minister aware that there is acute and growing concern in Scotland about the future of the coal mining industry? Is he further aware that in the area of the Seafield colliery in Fife male unemployment already stands at over 30 per cent. and that unemployment there would be considerably worsened if Seafield colliery were to close? Why does the Minister not do the same trick as was done by the Secretary of State for Scotland when he obtained £150 million from somewhere to get himself out of a hole over rates? If he can do it, why cannot the Secretary of State for Energy do it to create new jobs for miners who are to be thrown out of work because of pit closures?
    Mr. Hunt: As I have already pointed out to the House, the funding of NCB (Enterprise) Ltd. will be kept under review. However, the hon. Gentleman must realise, referring in particular to Seafield, that in Scotland we are seeing the result of damage caused by an unnecessary and tragic strike. Scotland suffered great damage during that dispute and, as a result, lost 11 coal-producing faces.
    Mr. Wilson: Does the Minister not understand, first, that many people in Scotland believe that damage was caused by the manager of the National Coal Board in Scotland and, secondly, that if the Government, instead of creating NCB (Enterprise) Ltd., had, together with the NCB, put additional investment into new coal faces in Scotland, the unemployment problem would have been taken care of? What proposals does he have to authorise investment in the Musselburgh extension?
    Mr. Hunt: First, may I put the record straight. There is no question but that Polkemmet was flooded as a direct consequence of the NUM strike, and I much regret the disgraceful suggestion made by the hon. Gentleman. As to investment, four major projects in Scotland are under way with an estimated capital cost of £91·8 million. In real terms, investment in the Scottish coalfield is 43 per cent. higher under the Conservative Government than it was under the Labour Government.

    Coal Industry
    Mr. Eadieasked the Secretary of State for Energy, following representations to him for reinstatement of sacked miners arising from the miners' strike, how many have been reinstated as a consequence of inquiries to the National Coal Board.
    Mr. David Hunt: I understand from the National Coal Board that of the 1,013 employees dismissed for offences related to the dispute, 373 have subsequently been re-employed.
    Mr. Eadie: Will the Minister tell us about the cases that have been referred to him? He made great promises to the House that he would take up the cases of victimised miners. How many cases did he take up, and in how many cases was there reinstatement? In Scotland he has failed abysmally, because no miner has been reinstated following a request by the Minister.
    Mr. Hunt: I have taken up every case that has been referred to me. I should tell the hon. Gentleman that all of us have been impressed by the responsibility of the vast majority of miners, who are now working together to repair the damage caused by the strike.

European Cup Final (Brussels)
3.30 pm
The Prime Minister (Mrs. Margaret Thatcher): With Permission, Mr. Speaker, I shall make a statement about the events at the European Cup Final in Brussels last week and the measures which have been put in hand in this country to deal with football violence.
Last Wednesday, television viewers throughout Britain and the world witnessed the appalling scenes of violence at the European Cup Final in Brussels, which resulted in 38 deaths and a much larger number of injuries; 27 people are still in hospital. I know that the whole House will share the nation's profound sympathy for the bereaved and injured, and the sense of outrage and shame at the behaviour of some of our citizens which led to the tragedy. The House will also wish to associate itself with the message of sorrow and condolence sent by Her Majesty the Queen to President Pertini of Italy and King Baudouin of Belgium. I have sent similar messages on behalf of the Government to Signor Craxi, Mr. Martens and President Mitterrand. The immediate contribution that we have announced of £250,000 for the families of the victims is an expression of our deep sympathy and support for those involved.
The Belgian authorities and UEFA are conducting formal inquiries into the arrangements for the match and into the disaster. They will no doubt report on the extent to which the internationally agreed guidelines and precautions for spectator safety were followed. We cannot prejudge the outcome of those inquiries, but we must recognise that there has been a terrible record of violence at European football matches in which, I regret to say, English supporters have played a large part over many years.
In those circumstances, the Government welcomed the initial decision of the Football Association to withdraw English clubs from participation in European competitions next season, and we fully understand the subsequent decision of UEFA to ban English clubs from European competition for an indefinite period, and we believe it to be right. This withdrawal gives English football authorities the opportunity to introduce effective measures to combat violence and to convince other countries that they have done so.
Last week, I was able to have discussions with several people, including the chairman and secretary of the Football Association, who returned immediately from Mexico after receiving news of the tragedy, the chairman of Liverpool football club, my hon. Friend the Parliamentary Under-Secretary of State for Employment, who happened to be present at the match and was an eyewitness to the events, and a number of football correspondents, who were also present at this and similar occasions in the past.
The following measures will be taken, or are already in hand, to put our own house in order.
First, we shall introduce as soon as possible legislation similar to that contained in the Criminal Justice (Scotland) Act 1980. That Act makes it an offence to be drunk or to possess alcohol on football coaches, on entry to grounds and in most areas of grounds. It also makes it an offence to be in possession of containers that could be used as missiles. Subject to discussions through the usual
22
channels, it is our intention to have this legislation on the statute book by the summer recess, in time for the coming football season.
Second, we shall proceed next Session with the legislation envisaged in the Government's White Paper on the review of public order. The proposals on assemblies in the open air will considerably strengthen the powers available to the police to guard: against the risk of disorder. Wherever they have reason to expect disorder at a football match, the police will, in effect, be able to limit the gate and impose other conditions. Under this provision, the police should be able to stipulate whatever steps they judge necessary to minimise the risk of disorder.
Third, Mr. Justice Popplewell will continue with his inquiry into the events at Bradford City and Birmingham football grounds on 11 May. His terms of reference are already wide enough to allow any lessons learnt from Brussels to be taken into account. I understand that Mr. Justice Poppelwell hopes to submit an interim report before the beginning of next season.
Fourth, my right hon. and learned Friend the Home Secretary has set in hand the procedure for designating under the Safety of Sports Grounds Act 1975 all clubs in the third and fourth divisions. We have, in addition, agreed with the football authorities on a number of measures, including acceleration of the introduction of closed-circuit television, with the help of the Football Trust. I have been informed today that the trust is proposing to allocate £500,000 for this purpose as a first step. That would give cover in more than 30 grounds, in addition to the 11 at which experiments are already taking place.
Events at Brussels last week have, however, made it clear that more is now needed. I shall be discussing urgently with the football authorities proposals for the introduction of a practical scheme of membership schemes, either on a club or national basis, proposals for far more all-ticket matches and stricter controls or, in some cases, a ban on visiting spectators.
I recognise that such measures would mean a radical change in the way in which football is conducted in this country, but radical change is needed if football is to survive as a spectator sport and if English clubs are once more to be acceptable abroad.
Fifth, in parallel with our own action, we shall continue to co-operate in developing international measures to deal with hooliganism. Next week, my hon. Friend the Minister with responsibility for sport will be attending a meeting of European Ministers for that purpose.
In the meantime, we are anxious to give the Brussels authorities every possible assistance in bringing to justice and dealing appropriately with people from this country who have committed offences in connection with last Wednesday's match. My right hon. and learned Friend the Home Secretary has sent a message to the Belgian Minister of the Interior offering the assistance and co-operation of British police forces. The Mersey side police and the Metropolitan police are examining television film closely to see whether they can identify those responsible for last Wednesday's violence.
We also want to do everything within our power to remove any possible difficulty in the way of any charges that the Belgian authorities may decide to bring. Arrangements already exist between the United Kingdom and Belgium for the extradition of those accused of serious offences of violence such as murder, manslaughter,

23
wounding or serious assault. If the Belgian authorities were to seek the extradition of someone accused of such an offence, we should naturally give them every assistance to meet our requirements on evidence.
One disincentive for the Belgian authorities may be that it is less trouble simply to expel Britons who may have committed offences rather than to prosecute and sentence them appropriately. We intend to offer the Belgians the opportunity, in accordance with the Repatriation of Prisoners Act, of removal to prison in this country of anyone who may be given a prison sentence in Belgium.
I hope that last Wednesday's sickening events will unite all decent people in helping to eradicate hooliganism. To curb violence requires effort and commitment from us all. If English clubs are to play football in Europe again, they can do so only when their good name, and that of their followers and supporters, has been restored.
Mr. Neil Kinnock: First, I should like to repeat my complete condemnation of the violence that led to the deaths and injuries at Heysel stadium last Wednesday. Naturally, we in the official Opposition join all others in offering our deepest condolences to the relatives of all those who died and of those who were injured. As I have already said, we agree with the Government's decision to give £250,000 to the relief fund set up by the Italian Government. I welcome the assistance being given, and announced in the Prime Minister's statement, in bringing to justice the criminals of any nationality and of any affiliation who were responsible for the tragedy in Brussels.
As to today's statement by the Prime Minister, I should like to tell the right hon. Lady that the Opposition support the Government's decision to bring in legislation similar to the Criminal Justice (Scotland) Act 1980. However, we are frankly surprised at the rather restricted action proposed by the Government, and disappointed at the decision to extend Mr. Justice Popplewell's inquiry beyond its already stretched limits. Does the Prime Minister really consider that the learned judge, with all his vigour and undoubted thoroughness, has the resources and facilities necessary for yet another major area of inquiry? Surely it is not enough to hope, as the right hon. Lady said in her statement, that Mr. Justice Popplewell will produce an interim report in time for proposals to be implemented before the beginning of the next football season. We need a firm assurance now that the report will come in time for proposals to be implemented before the season begins, and that any necessary resources will be available for practical implementation.
I refer to the problems of football and football hooliganism. May I specifically ask the right hon. Lady whether she will bring forward proposals to ensure that some of the revenue taken out of the game is returned in the form of improved safety and security at football grounds? That is clearly necessary to assist with the cost of better accommodation and effective policing. Frankly, the proposals that we have heard so far do not begin to match the scale of the crisis in British football, both in and near to British football grounds. When we consider that it is now 12 weeks since the awful scenes at the Luton ground in the Cup match against Millwall, and that it is exactly the same period—12 weeks—until 24 August, the beginning of the new football season, that shows how
24
much speed and effectiveness is necessary to tackle the problem directly before we are afflicted again next season by the scenes that we have witnessed in this and previous seasons.
In the official Opposition and, I think, in the House generally, we are and must be intent on securing arrangements by both the Government and other relevant authorities, which will help football clubs and genuine football supporters, who are in the vast majority, and the police, to defeat the criminals who are destroying the game, terrorising spectators and inflicting misery on people who live near football grounds or who travel when football games are taking place. In the Opposition, as a basic principle, we seek properly to maintain the civil liberties of the decent and innocent majority to go to games in safety, and to live in peace. To that end, I say to the Prime Minister that our responses to this matter cannot relate simply or solely to punishment or to policing; neither can they relate only to a period of probation for English football.
On 14 March, I asked:
"Will the right hon. Lady agree that we need action to identify and deal with the causes of these afflictions and the breakdown of behaviour in society?"—[Official Report, 14 March 1985; Vol. 75, c. 431.]
We want the thugs caught and punished, but does the Prime Minister agree that in addition it is essential to discover not only those who commit the crimes but why they commit such crimes? Therefore, can we look forward to a quick and thorough investigation with that in view, which would involve the police, youth and social workers and others with direct practical experience from week to week of dealing with the issues posed by the spread of thuggery? [Interruption.] If it is the case, as Mr. John Smith and hon. Members have suggested and as others have noted in years gone by, that any of this thuggery is related in any way to political organisation by racists, Fascists or anyone else, that must be among the areas to be inquired into so that the menace to democracy is taken out.
We have witnessed a terrible tragedy in Brussels, and we now know UEFA's response. The thuggish minority, who are a stain on British football and British society, are the cause of both. It must be our determined purpose now to ensure that they have had their day once and for all. On football grounds and anywhere else in society we shall never permit them to show their ugly and thuggish face again.
The Prime Minister: If I may reply to some of the right hon. Gentleman's points. I am grateful to him for saying that the Opposition will support legislation similar to the Scottish legislation. As I said, we shall be in touch through the usual channels on this matter.
I did not say that Mr. Justice Popplewell will inquire into the matters at Brussels. I said, and drafted this point very carefully:
"His terms of reference are already wide enough to allow any lessons learnt from Brussels to be taken into account."
I cannot speed up the rate at which Mr. Justice Popplewell will report. I understand that he intends to make an interim report before the beginning of next season. In the meantime, the Football Association and the Football Trust are active. Each of the football clubs is responsible for the safety of people on its ground. Fire officers are now looking at the stands. The Football Ground Improvement Trust and some surveyors are

25
looking at the stands to ascertain the changes that can be made. Those changes cannot all be made in time for next season. But the numbers of people that the clubs allow into the grounds must take into account the condition of the stands already on the grounds because the clubs are responsible for safety.
On finance, there is already a working party under the chairmanship of my hon. Friend the Member for Sutton and Cheam (Mr. Macfarlane), consisting of the Football Association, the Football League, the Football Trust, the Football Grounds Improvement Trust, the Pools Promoters Association and the Sports Council to make an assessment of the moneys that are needed to make the grounds safe. This assessment will be made in view of the numbers of spectators many of those grounds now have, and not in relation to the stands that they had for higher numbers of spectators in the past. Of the money that is available at the moment, £7 million a year goes from the football promoters to the Football Trust and £3·3 million was distributed retrospectively in 1984 from the Football Ground Improvement Trust — not for new applications for safety provision but because there were no applications for safety provision. The £3·3 million was distributed retrospectively for work that had already been done. A further £5 million a year is received direct from pools promoters as payment for the copyright on the fixtures list, without which the pools could not operate and £3·5 million a year is received from television. That is apart from the proceeds from the gate. Considerable sums are already going into football. We are prepared to allocate more, should the committee's findings show that that is necessary.
The right hon. Gentleman suggested that there should be an inquiry into crime and hooliganism. That could go on for years and find as many answers as there are people on such an inquiry. There is violence in human nature. There are only three ways of trying to deal with it— persuasion, prevention or punishment. We shall try to operate all three.
Mr. Eric S. Heffer: Is the right hon. Lady aware that the two grounds of Liverpool and Everton are in my constituency? Over the weekend I went round my constituency and spoke to people who were on the Z,Y and X terraces at Brussels? Is the right hon. Lady aware that there is a deep feeling of grief among the people of Liverpool? They are crying for the dead and for their families; they are crying for the city, because they never expected, with their record, that such an event could occur; they are crying for football both in Britain and internationally; they are crying because the truth has been a casualty; and they are crying because they believe that the time has come to face up to the political elements that were involved in that and other matches—incidentally, from both ends. Mr. Brian Moore, the ITN correspondent, was the only person who clearly explained that the forces involved were trying desperately to create trouble and cause problems for our people.
I have today told the Italian ambassador, on this Italian day, that my people in Liverpool have as much grief in their hearts as the people of Milan, Turin or elsewhere in Italy.
I ask the right hon. Lady not to become involved in a cover-up of the terrible events. Other questions must be asked. What about the fact that many people have run away from their responsibilities? What about the position
26
of the Belgian authorities, the fact that the ground was unsuitable and that police action was insufficient to deal with the outbreak of violence? What about the fact that UEFA has been quick to introduce action but has not dealt with the situation?
I say to the right hon. Lady that whatever is being suggested must not be used as a further attempt to undermine our civil liberties. We must deal with the individuals and groups concerned; we must root out and isolate them. We have to say who they were and explain why they did it. We must find the reason—that is the important factor. I hope that the right hon. Lady will not be misled in other directions.
The Prime Minister: I think that the whole nation shares the grief expressed by the hon. Member for Liverpool, Walton (Mr. Heffer). Indeed, we are united in sharing and expressing that grief.
We cannot prejudge the results of the inquiry in Belgium. Some of the matters to which the hon. Gentleman referred would not be necessary unless there were soccer hooliganism. It is appalling that supporters of one club cannot stand alongside supporters of another club without the fear of violence. That used not to be so in football, or in any sport in this country. It is that that we must try to eradicate. In the meantime, we must tackle the situation by a mixture of prevention, above all, and of punishment when these events; occur.
Mr. David Ashby: As someone with the closest possible connection with the town of Turin, may I speak of my great shame at the events of last Wednesday? There should be no cover-up and no excuses for the disgrace of those events.
We talk about giving help to the police in Belgium, but why on Thursday morning were there not hundreds of police officers at all points of entry into this country finding out the names and addresses of those returning from Belgium and what they had been doing, so that we could discover exactly who was responsible for that outrage?
Does my right hon. Friend agree that the responsibility should be placed firmly on the football associations and on the clubs themselves, and that clubs and stadiums should be licensed in the same way as public houses, so that, if clubs failed to meet the requirements of good order, they could be closed until they could met them? Then we would not export our violence to the continent of Europe.
The Prime Minister: With regard to police help, the police are giving all the assistance that they possibly can. In addition to looking at videos, they have been active at some of the ports of entry of football supporters on their return, as my hon. Friend would expect.
The question of drink at football clubs will be dealt with under the legislation that will shortly be brought before the House. There are one or two ways in which English clubs differ from Scottish clubs, and my right hon. Friend the Home Secretary is in consultation with the police about any differences in legislation that may be advisable.
Several Hon. Members rose—
Mr. Speaker: Order. I understand that the House feels very deeply about this matter, but I must have regard to the subsequent business. Therefore, I ask for brief questions, and I shall allow them to run until 4.15 pm.
Mr. David Alton: I associate myself and my hon. Friends with the expressions of sympathy and with the condolences which have been offered to the bereaved and to those who were injured in the terrible events of last Wednesday.
May I also tell the Prime Minister and the House that the people of Liverpool feel not only acute grief but a profound sense of shame at the mindless acts of a minority who dragged the name of a great foolball club and city into the dust by their actions? Those actions cannot be forgiven by people trying to sweep aside the blame and pass it on either to the Belgian authorities or to UEFA.
Will the Prime Minister consider extending the ban on alcohol to areas around football grounds? When matches are played away from home, alcohol should be banned not only on the coaches taking people to matches but on the duty-free ferries.
I ask the Prime Minister to urge those who witnessed the scenes in which there was a breakdown of personal responsibility last Wednesday, and those who have some say in running the affairs of the city of Liverpool at this critical time, not to break the law or to elevate mob rule to some sort of cult, but to endeavour to achieve the highest levels of personal responsibility which are necessary if we are never again to witness the kind of scenes that we saw last Wednesday.
The Prime Minister: I am grateful for what the hon. Member said. There are, I believe, no excuses for what happened, and we must not try to find any.
With regard to the hon. Member's comments about alcohol being available in areas around football grounds, the police can already apply to the magistrates, so that public houses and places where alcohol is sold can be closed on a particular day for a particular time. Use can be made of that power.
I echo the hon. Member's suggestion that we should all attempt to ensure that there are the highest levels of effort and commitment to stamping out violence, because we all have some part in setting the standards by which our society lives.
Mr. John Carlisle: I have been particularly interested in the subject since the Luton and Millwall game. Does my right hon. Friend accept that there will be some disappointment at her statement?
The remedies that she has put forward in regard to legilsation concerning alcohol, club membership tickets and all-ticket games will not necessarily eradicate the problem. I listened in vain for some hint of the severe penalties that might be imposed upon hooligans. Nowhere in my right hon. Friend's statement was there any suggestion about penalties that would impose on hooligans the sort of physical pain that they so readily impose on other people.
In addition to the legislation that my right hon. Friend intends to bring before the House, which will receive all-party support, could not some amendment be made to the Criminal Justice Act 1982 to enable hooligans to be punished so severely that they will not commit such crimes again?
The Prime Minister: The penalties available for these serious crimes are already severe. The penalties meted out at Cambridge about a fortnight ago were of the order of five years' imprisonment, and we all thought that they were appropriate sentences. There could, indeed, be even
28
more severe sentences. The Court of Appeal has already said that severe crimes of that nature should in general meet with a prison sentence. Recent events will probably mean that heavier sentences are meted out, and I think that that would be right.
Mr. Merlyn Rees: Is the Prime Minister aware that, of course, it is right to act against violence? Does she recall that it was Frank McElhone, a junior Minister at the Scottish Office, who did the research upon which the Scottish legislation was based? I speak as someone who lives alongside Elland road football ground. We know that violence occurs outside the ground—in city centres and on the trains— and that people are afraid. Violence does not just occur in the grounds. Has the Prime Minister considered—it is what I asked myself when I was Home Secretary—what has gone wrong? On 3 September, 40 years ago, the Welsh Guards went into Brussels as its liberating force and anyone with a daffodil in his hat was well received. Then we saw what happened last week. Something has gone wrong in this country and the right hon. Lady as Prime Minister must give some thought as to what it is.
The Prime Minister: The right hon. Gentleman is aware that there has been what one of the newspapers called at the weekend
"a chronicle of violence in soccer"
for over 15 years. There has been violence elsewhere also. Violence is frequently caused by people who have quite a bit of money. Violence is caused partly because there is now more money and far more mobility than there was in the past, and that enables people to move from one soccer club to another much more quickly. In the meantime, we must act on prevention and punishment. Punishment is part of prevention. I do not believe that it would help to have an extended, indefinite inquiry into the causes of crime which has been with us as long as man has existed.
Mr. Eldon Griffiths: Is my right hon. Friend aware that amid all the shame and humiliation to which our country has been subjected abroad, the only reaction so far that has cut any ice overseas is her clear condemnation of the atrocity, her outright apology and the announcement that she has made today that we intend to put our own house in order? Will she nevertheless accept that no words and no legislation will be effective unless the police can enforce that legislation? The police are fed up with being used as the "poor bloody infantry" in such disputes. They are fed up with asking for powers and being denied them. In particular, they need to be able to search for weapons, liquor or drugs under the clothing of those who enter football grounds. That power was denied them in the Police and Criminal Evidence Act 1984. They need the power to ban a football match if those going to it pose a clear threat to public order.
The Prime Minister: I have made it clear many times that there are no excuses for what occurred. There is only shame that it should have occurred. With regard to legislation, under the proposed public order legislation, we shall try to see that the police have increased powers to decide what goes on in football grounds if they apprehend that there might be public disorder. I have said that that legislation will come forward during the next Session. I understand that the Police and Criminal Evidence Act 1984 does not prevent the police from searching for weapons in any case where that is considered necessary.

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I hope that my hon. Friend will take the view that we are increasing the available powers. In the proposed legislation we shall be implementing measures similar to those contained in the Scottish legislation and we shall be prohibiting the supply of alcohol on trains.
Mr. Jack Ashley: Is the Prime Minister aware that the despair and disaffection of so many young people in Great Britain today is the breeding ground for the mindless and appalling aggression that we saw in Brussels last week? However, that is no excuse for it. I agree with her that we must not try to find excuses.
However, she must face the fact that aggressive economic and social policies exacerbate the problem and that, unless those policies are softened or modified, what happened in Brussels last week may well be a tragic and chilling prelude to what may happen in Britain in the future.
The Prime Minister: I accept a good deal of what the right hon. Gentleman says. I think that this nation has done something creditable, which shows its underlying and overwhelming sense of decency, by accepting that there are no excuses and by feeling a national shame. That shows that civilisation and civilised values in this country still run strong. I believe that we have the overwhelming majority of people behind us when we take rather sterner action than we might have previously thought necessary. I believe that people expect that action to be taken now.
Mr. Stefan Terlezki: People in Wales are shocked and horrified by what happened in Brussels. Wales has only four professional clubs. We understand the horror of what occurred in Brussels, and we hope that such a thing will not happen in Wales or the rest of the United Kingdom.
I agree with the proposals that my right hon. Friend has announced this afternoon, but I was somewhat perturbed when she mentioned membership cards. I should like to see a membership card with a photograph issued to young supporters aged between 12 and 20. I am convinced that that would go a long way to help. When I was associated with Cardiff City football club, such passes were issued to young supporters. I remember one evening when Cardiff City played Hereford United. There were 35,000 people watching, but there was not one arrest or prosecution. I should like to see such passes introduced by every football club before the kick-off in the autumn.
The Prime Minister: A number of views are held about membership cards. Unfortunately, they are different. Some believe as fiercely as my hon. Friend that there must be club membership cards containing a photograph. Others say that there should be national membership cards. I am assured that with modern technology either is technically feasible. I shall be discussing that point again with the Football Association which, before the events in Brussels, was resistant to the idea of membership cards. I shall be doing my utmost to persuade it that club membership cards are necessary to achieve the requisite control.
Mr. John Maxton: As the Member representing Hampden park who has seen the Scottish experiment in operation, may I ask the Prime Minister to consider the closure of all licensed premises within a radius around a football ground as well as banning the taking of alcohol into football grounds in the
30
legislation that she intends to introduce? Secondly, and more positively, may I suggest that when she studies the Scottish experiment she reads the report produced by the late Frank McElhone and considers the positive ideas that he proposed — in particular, all-seat stadiums and that there should be more community facilities within them to make football grounds part of the community, not just part of the football scene?
The Prime Minister: With regard to the hon. Gentleman's first point, it is already possible for the police to apply to the magistrates for the closure of licensed premises near to grounds. I agree with the hon. Gentleman that that is necessary. We have already discussed with the Football Association seating in stadiums, the provision of family enclosures, to which the Football Trust frequently makes special subsidies to the various clubs, and more all-ticket matches. All these things are under discussion already with the Football Association. I take note of what the hon. Gentleman has said.
Mr. Barry Porter: Does my right hon. Friend accept that the majority of people on Merseyside do not and will not attempt to justify or excuse the actions of the drunken and homicidal hooligans in Brussels the other night? Does she accept also that Merseysiders, who were so disgraced in Brussels, will support whatever measures are necessary — the measures which are announced or measures which are suggested in future — to ensure that what took place in Brussels never happens again?
The Prime Minister: I am grateful to my hon. Friend. I believe that there is a national sense of shame and that the people of Liverpool feel especially deeply about what took place in Brussels. We shall be introducing appropriate legislation to deal with the drink problem. However, I think that it would be a mistake to believe that that will solve all the problems. The term "mindless violence" is used frequently, but my worry is that it is often calculated and mindful violence, which is an important factor. We must try to apprehend and punish severely those who commit acts of violence wherever violence occurs.
Mr. Eddie Loyden: The Prime Minister will be aware that there has been universal condemnation in Liverpool of the actions of those who were responsible for the violence last Wednesday. Liverpool does not abrogate responsibility for the part played by so-called Liverpool supporters. I hope that the right hon. Lady will make every effort to ensure that we seek out those who were responsible and that our actions do not amount to a universal condemnation of the city. As I have said, Liverpool has profound sympathy with the families which have been bereaved. Indeed, that sympathy was reflected in a service that took place in Liverpool on Saturday.
Will the Prime Minister recognise that the violence which we saw on Wednesday has been developing over the past decade and is not an overnight phenomenon? That is my view as a Liverpool supporter of many years' standing who has stood on the terraces. Little attention has been give to those who now occupy the terraces, which used to be occupied by those who wanted to watch a sporting game. The present occupants are those who go to matches for purposes that are limited to violence, thuggery and

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hooliganism. Will the right hon. Lady ensure that proper access is given to all those who witnessed certain events at the Brussels match so that the fullest and most comprehensive inquiry can take place? Only that approach will lead to the elimination of violence at football grounds.
The Prime Minister: I agree very much with the hon. Gentleman's contribution. Given the scenes that we saw on television and the terrible consequences, it is something of a disappointment that so few have so far been apprehended or arrested. The anonymity of the crowd is one of the deeply disturbing factors in such crimes, and that is why we are trying to do so much with closed circuit television. We are going through the photographs to ascertain whether we can identify those who were responsible for what took place. That is why we are so anxious to see the introduction of identity cards and other means by which we can readily identify those who attend football matches. Everything possible will be done to apprehend those who were responsible and to bring them to justice. That would be the best thing possible, and for that we need the co-operation of those who were present who know those who were responsible.
Mr. Kenneth Warren: I accept that there is no excuse for the violence that took place in Brussels. Will my right hon. Friend give an assurance that every co-operation will be given by her Ministers and by our police to the Belgian police, especially in the light of evidence that has come before me today and which I intend to place before Ministers? The evidence suggests that there was inadequate policing at the stadium before and after the match and that Belgian police officers were seen selling tickets at random outside the stadium before the match.
The Prime Minister: I think that these matters will emerge as the inquiry into the events which took place in the stadium, which the Belgian authorities are conducting, continues. My hon. Friend is aware that the inquiry is taking place. We must have the right arrangements to prevent these violent events from taking place and these must include seating and limitations of crowds and of who shall be present. The matters to which my hon. Friend has referred would not have been harmful if there had not been a tremendous streak of hooliganism within the stadium.
Mr. John Cartwright: Does the Prime Minister accept that the anti-hooligan measures that she proposes make sense but involve major financial problems for the less wealthy football clubs in the lower divisions? Does she accept that pool betting duty is now raising £220 million a year for the Government and that a 2·5 per cent. reduction of the duty would generate £15 million? If that sum were distributed throughout the Football Trust there would be enough money to bring all league clubs up to acceptable safety standards and to pay for the anti-hooligan measures in the lower divisions which she proposes. Will she consider that as an urgent measure?
The Prime Minister: The football pool betting levy is a tax on gambling, not on football. The Government must have income to carry out the many social and other services for which they are responsible. We are prepared to find more money if the committee which is now sitting says that that is necessary. As I have said, £7 million goes to the Football Trust each year and £5·5 million goes to
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football league clubs for the copyright of the matches which are played. Television rights amount to £3·5 million. Last year, in the absence of further applications for improvements to grounds, the Football Ground Improvement Trust disbursed £3·3 million in support of improvements which had already taken place. We must direct ourselves to the money which is available and is being used for safety purposes and to the new rules which the Football Association, after discussion, may think fit to introduce. There is no point in re-doing up old stands which are far too large for the numbers of spectators who now attend matches.
Mr. Jim Lester: I am sure that we all accept that football should not be a vehicle for violence, that there are no excuses for violence and that violence has become a disgrace for teams, towns and the country. Will my right hon. Friend accept that there are millions of football supporters who watch matches every week and that many of them organise supporters' clubs? Is she aware that the supporters' clubs have a great deal to offer in terms of prevention and identifying the hooligans? Will she ensure that the supporters' clubs have a full part in all the discussions that take place?
The Prime Minister: I take note of my hon. Friend's remarks. I am sure that we shall have the overwhelming support of all members of supporters' clubs who love football and who wish to see an end to hooliganism and violence. I am sure that these supporters want once more to be able to take their families to football matches to see the game played as it used to be played.
Mr. Kinnock: The Opposition want to co-operate as much as possible with the improvement of legislation and with other measures which are intendedd to combat hooliganism at football grounds and elsewhere. However, I listened intently to the right hon. Lady and I heard no effective proposals for co-ordination between the various interested bodies. She has given no undertakings of adequate finance being made available, despite the fortunes that are made out of football. She has given no undertaking to investigate the causes of violent criminality. Instead, we have heard the Prime Minister confine herself almost entirely to addressing the symptoms of the sickness, and only as they relate to football, which is only a part of the problem afflicting our society.
I ask the Prime Minister further to reflect on these matters and to reconsider her attitude so that we can get directly to the sources of the savagery and by that means find real answers. I plead with the right hon. Lady to do that before she commits herself irrevocably only to dealing with a small part, albeit a horrific one, of the problem.
The Prime Minister: I said in reply to the right hon. Gentleman's earlier contribution that there is already a co-ordinating committee on finance under the chairmanship of the Minister with responsibility for sport, my hon. Friend the Member for Sutton and Cheam (Mr. Macfarlane). On his working party there are represent-tatives of the Football Association, the Football League, the Football Trust, the Football Grounds Improvement Trust, the Pools Promoters Association and the Sports Council. The committee is considering the very finance to which the right hon. Gentleman refers.
Regarding the right hon. Gentleman's desire for a general inquiry into the causes of violence, there are books

33
and books, papers and papers, and courses and courses upon it. They have not found the answer and they never will. I do not intend to ask for yet another inquiry.

Social Security Review
4.20 pm
The Secretary of State for Social Services (Mr. Norman Fowler: I will with permission, Mr. Speaker, make a statement on the review of social security.
During the last 18 months the Government have been examining the major areas of social security provision. In that time more than 40,000 consultation documents were issued, 4,500 pieces of evidence were received, and 62 organisations and individuals gave oral evidence at public sessions. The Government are today publishing a Green Paper which sets out their proposals. We will now be seeking comments on the proposals from interested organisations and will be providing an opportunity for the House to debate them.
The social security system in the United Kingdom owes a great deal to the report of Sir William Beveridge in 1942. Although much of what he proposed was changed when it came to implementation, and more has been changed since, many of the principles on which his proposals were founded remain sound. The Government remain committed to the concept of a national insurance system, under which entitlement to the major benefits is earned by the payment of contributions during a working life. The Government also believe that our tradition of state support for those in need is one which should be maintained and developed. However, social security is not a function of the state alone. It should be a partnership between the individual and the state—a system built on twin pillars.
Any review of social security must recognise its considerable achievements, but the review has shown that there are several major causes for concern. By common consent the social security system is too complex. That is to the disadvantage of both the public and the staff. In particular, the research evidence shows that substantial numbers of supplementary benefit claimants do not understand how their entitlement is worked out, in spite of the fact that 38,000 staff are now working exclusively on supplementary benefit. With the pressures now being faced there is a danger that some parts of the system will break down. It is, therefore, a matter of urgency that we devise a simpler and more coherent system.
The social security system also needs to be modernised. It is not properly co-ordinated with the tax system and operates with outdated equipment. We now need a major computerisation strategy for social security, which can link effectively with other Government systems, including that of the Inland Revenue.
In terms of spending, the cost of the social security system has increased fivefold in real terms since the war and now totals some £40 billion a year. That is over 30 per cent. of all public spending and represents over 11 per cent. of gross domestic product compared with only 4·7 per cent. after the war. Nor has the pressure for growth in spending ended. In the first part of the next century we need to provide for an extra 4 million pensioners. That, taken together with the state earnings-related pension scheme, means that spending on pensions will at least treble. We must ensure now that we have a soundly based social security system which the country can afford.
Above all, perhaps, the social security system does not always help those most in need. More than half of those living on the lowest incomes are in families with children. This affects not only the unemployed, but families where

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the head is working. Yet, under the present system, low income working families can face both the difficulty of escaping the poverty trap, where they may get no increase in total income when their earnings rise, and the unacceptable position that they can be better off out of work. That position must be changed.
To make better provision to meet the needs of poor working families with children has been a major priority of the review. We therefore propose to introduce a new benefit, to be called family credit, to provide better help for such families. Family income supplement will be abolished. Family credit will have three main features. First, it will be paid on the same basis as help to unemployed families, in that help will be related to the age of children. That means that families with children cannot generally be better off out of work than in work.
Secondly, family credit will be related to take-home pay, not to gross earnings, as is family income supplement. The worst effects of the poverty trap will be eliminated by making it impossible for people to face a marginal tax rate of more than 100 per cent. Thirdly, it will be paid by employers through the pay packet. Families will see their benefit as part of their income from work, whether as an offset to tax and national insurance, or, in the case of the lowest paid, as an addition to gross pay.
Family credit will be paid in addition to child benefit. The Government believe that the extra responsibilities carried by all those bringing up children should be recognised. Child benefit will, therefore, continue to be paid for all children, irrespective of the means of the family.
Family credit will be part of a coherent system of income-related benefits. That system, covering basic income support, assistance with housing costs and help for low income families, will be based on a common income test and a common structure. It will be simpler, fairer and easier to administer, and it will provide the same level of help at the same level of income for those in and out of work.
We propose to replace supplementary benefit with a new income support system. The central concept of the income support scheme is that the regular extra payments, now made on the basis of detailed individual assessment, should be absorbed into the main rates of benefit. Those rates will provide a special higher level of benefit for pensioners, the long-term sick and disabled and lone parents. Families with children will not only receive assistance for each child, but a premium to reflect the extra pressures that they must cope with. At the same time, the capital rule will be eased by introducing a taper between £3,000 and £6,000, instead of the present inflexible £3,000 cut-off. We shall also ease the earnings rule for the long-term unemployed and the disabled.
The income support scheme should provide for the needs of almost all claimants, but we recognise that the system must be ready to cope flexibly and quickly with particular problems. Instead of the present single payments system, we propose to set up a social fund which will be operated on a discretionary basis by specially trained staff at Department of Health and Social Security local offices. It will provide emergency help where needed, and help those who face particular difficulties. We also expect that
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the social fund will, in time, provide a better basis for contributing cash help to enable people to be cared for in the community rather than in institutions.
Today I am also publishing the report of the housing benefit review team, and have accepted most of its recommendations. The review team found that housing benefit was excessively complicated, involving six different tapers applied to different groups at different income levels. It is also expensive and poorly targeted, with more than one third of all households, some with incomes up to average earnings, receiving benefit.
We intend to move to a simpler and clearer system. It will be based on the same net income assessment basis as the income support and family credit systems. It will also provide help on the basis of rent and rates together rather than separately, as at present.
For the poorest families, housing benefit will meet 100 per cent. of rent. At present 100 per cent. help goes only to those on supplementary benefit. In future, it will apply equally to those in and out of work.
We believe, however, that the basis on which help is provided with rates needs to be changed. At present some 7 million householders receive help with some or all of their rate bills and over 3 million householders pay no rates. As a result, a large proportion of people live in households in which no rates are paid. This means that there is no effective link between payment for and use of local services. The whole structure of rates is currently under review, but the Government believe that, so long as domestic rates remain, all householders should be directly responsible for making some payment towards them. The Government have in mind a figure of the order of 20 per cent.
The review also examined the contributory national insurance benefits for unemployment, maternity and widowhood. As I have already made clear, the Government remain committed to the principle of basic provision for these contingencies organised by the state through the national insurance system. We propose no change in unemployment benefit, which will continue to be paid for 12 months.
For widows under 60, we propose to replace the widow's allowance currently payable for the first six months after bereavement by a single lump sum payment of £1,000 to give them more help when it is most needed. In addition, widowed mother's allowance will now be paid from the time of bereavement rather than after six months as at present. Widow's pension will also be paid from the time of bereavement, but the rules of eligibility will be modified to concentrate help more on older widows who are least likely to be able to resume work. The changes will not affect the benefit paid to any existing widows.
In maternity, we propose to adjust the rules governing materinity allowance so that the mother can have greater freedom in choosing when, around the time of her confinement, she wishes to be paid the allowance. We also intend to change the qualification period so that the benefit is more likely to be paid to women who have had to give up work in order to have their babies.
The maternity grant and the death grant have been left at their present level—£25 and £30 respectively—for many years and are now quite inadequate for their purpose. The average cost of a funeral is now over 10 times as much as the death grant, and it costs £20 in administration to pay out each £30 grant. We propose instead a new maternity grant of £75—three times the level of the present grant

37
—available to all low income families. Help with the full cost of funerals will also be made available more widely than at present to anybody who has responsibility for a funeral and lacks the resources to pay for it. Help will be provided through the social fund to ensure that it can be given quickly and flexibly and with the minimum of detailed inquiry. These changes will concentrate help where and when it is most needed instead of providing a token contribution to everybody when it may be of little practical use.
The largest single area of social security spending is on pensions. The basis pension alone accounts for over £15 billion a year and is paid to 9 million people. That pension accounts, on average, for half the income of pensioners and has been a major factor in raising pensioners' living standards since the war. It is, and must remain, the basis on which individuals can build additional pension provision. The question is how that extra provision should be made.
At present only about half the working population belong to occupational pension schemes. The develop-ment of occupational pension schemes has been an important factor in improving living standards since the war, but the coverage of schemes has not increased since the mid-1960s. The development which it was hoped would follow the Social Security Pensions Act 1975 has not taken place. Nor has the forecast of cost on which the 1975 scheme was based proved sound. The analysis undertaken during the review has shown that the number of pensioners for whom we will eventually need to provide is 3 million greater than was recognised in 1974 and 4 million higher than it is today. It is clear, therefore, that the long-term costs of state pensions are set to rise steeply in the first 30 years of the next century. If the basic pension was uprated in line with prices, its cost would increase in real terms by half to £22 billion. If it kept pace with earnings, the cost would treble to nearly £45 billion. On top of that, the cost of the state earnings-related scheme will add another £23 billion. Thus, the total pensions bill will at least treble and could increase by over four times. At the same time the ratio of contributors to pensioners will worsen, and it is estimated that there will be only 1·6 contributors for each pensioner compared with 2·3 now.
As a country we cannot ignore these emerging costs. If the best estimates available to us lead us to question whether we will be able to afford the promises we are making, we have a duty to re-examine the position. It would be an abdication of responsibility to hand down obligations to our children which we believe they cannot fulfil.
The real question is not whether action should be taken on the state earnings-related scheme, but what action. There are those who argue that we should restrict the emerging cost of the state scheme by changing its provisions. The difficulty of that course is that contributions would remain the same while benefits would be reduced. There is no reason to believe that there would be any increase in occupational pensions to fill that gap. The Government have concluded that it would be better to adopt a different approach. This would be based on the aim of ensuring that in addition to the basic pension everyone has his own pension with his job—whether it be an occupational pension, membership of an industry-wide scheme or a personal pension. In all cases every employee would have the right to a contribution from his employer.
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We recognise, however, that relatively older workers would have difficulty in building up adequate occupational pension cover. We have decided, therefore, not to make any changes for those within 15 years of retirement. For men aged 50 or over and women aged 45 and over at the time of implementation, the existing state earnings-related arrangements will continue. This means that no one retiring during the rest of this century will be affected by the change and nor will any existing pensioner.
All rights built up in the state scheme at the time of the change will be honoured. In addition, we also intend to give a special enhancement of rights for men aged between 40 and 49 and women aged 35 to 44. They will be given a bonus of added years of entitlement, which will give them higher pensions when they eventually retire.
For those to be covered by the new arrangements the Government will lay down a minimum contribution level of 4 per cent. of earnings, at least half of which must be provided by the employer. The new arrangements will be phased in over three years. These changes will mean that in due course all employees will be contributing to their own additional pension through their jobs. This will represent the biggest ever extension of occupational pension coverage in this country and will add to the reforms of occupational pensions, involving improved rights for early leavers and transfer of pensions, currently in legislation before Parliament.
The Government must also ensure that the social security system is managed as effectively as possible to provide the best possible service to the public. The Government's benefit proposals will in themselves make the system simpler, but we are now to embark on the largest programme of computerisation ever undertaken in this country to modernise and improve its operation.
The benefit changes and the computerisation both of my Department and the Inland Revenue will provide opportunities to achieve better co-operation and closer working between the tax and benefit systems. The Government intend to take advantage of those oppor-tunities and will be considering this further in the context of the Green Paper on personal taxation.
Meanwhile, we have decided to take a major step towards better harmonisation by aligning the tax and benefit years. Instead of benefits being uprated in November each year, the uprating date will be moved to April. This means that all tax and benefit changes will be implemented at the same time. It will also be of considerable assistance to local authorities which at present have to reassess housing benefit cases twice a year.
The change in the benefit year will be brought in at the time of implementation of the major structural reforms. We expect this to be in April 1987. After the uprating of benefits due at the end of November 1985, there will, therefore, be a 16-month period before the change in April 1987. It would clearly be wrong to allow such a gap between upratings, but it would not be practicable to have upratings both in November 1986 and April 1987. Accordingly, the Government have decided that, following the November 1985 uprating, there will be two upratings at eight-month intervals, the first in July 1986 and the second in April 1987.
The programme of reform that I have announced will provide a system which is easier to understand and simpler to administer. It will mean the most substantial changes in income-related support for 50 years, and for the first time give equal support for those in and out of work. It will

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provide more help for low income families with children.It will establish a better partnership between state and individual provision, especially in pensions, giving everyone the right to his own pension with his job. Above all, the reforms will provide a modern social security system to take us into the next century.
Mr. Michael Meacher: Is the Secretary of State aware that, behind all the rhetoric about restructuring, this statement represents the erosion of the fundamental principle of a welfare state for all citizens? [Interruption.]
Mr. Speaker: Order. The Secretary of State was given a fair hearing.
Mr. Meacher: Is the Secretary of State further aware that the statement represents the reintroduction, for the first time this century, of Victorian values in an invidious distinction between deserving and undeserving poor? Is he also aware that this package as a whole will bring about a net loss in the next few years to pensioners and the unemployed of at least £1,000 million a year even before the huge losses from the abolition of SERPS begin, and that the main beneficiaries, whom he did not mention, will be the rich, who will receive even bigger tax handouts in future Tory Budgets?
We welcome the Government's limited reprieve on SERPS, in response to our demand.[Interruption.]
Mr. Speaker: Order. We have a full day ahead of us.
Mr. Meacher: It is patently clear that the Government lost their nerve after their original intention had been made clear in repeated leaks. Is the Secretary of State aware that the Government's longer-term abolition of SERPS, which is the central arch of the welfare state, is still a betrayal of an unequivocal pledge by the Prime Minister three weeks before the last general election, when she said:
"nor are there any plans to change the earnings-related component of the State pension."
Is the Secretary of State aware that if SERPS were to continue it would roughly double the pension in the next 13 years, and that if it is abolished millions who would have enjoyed dignity and security without a means test in retirement will be forced into poverty? How does the Secretary of State justify the fact that women, low-paid workers, and the longer-term sick and disabled and the millions of carers who look after them will be shifted compulsorily into private schemes to which they will be forced to make higher contributions for less benefit?
Is the Secretary of State aware that there can be no justification for claiming that SERPS cannot be afforded in the next century, when the Government's own Social Security Advisory Committee said explicitly less than two years ago:
"At this distance of time we do not think there can be solid grounds for altering the scheme now for fear of all the worst outcomes occurring steadily for 40 years."
Is the Secretary of State aware that any allegations that SERPS cannot be afforded reflect not adverse demographic trends but an admission that the Government's policies will lead to longer-term economic stagnation?
Secondly, is the Secretary of State aware that the huge cuts in the housing benefit package will bring a loss to tenants of about £750 million a year, forcing up rents for
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tens of thousands by £7 to £12 a week? Is he aware that the poverty trap will be enormously intensified by his decision to increase the loss of housing benefit as wages rise from 38p in the pound to 70p in the pound? Is it not harshly unjust that the 7 million people receiving housing benefit, of whom 4 million are pensioners, will for the first time have to pay 20 per cent. of their rates and all of their water rates? Is he aware that nearly 2 million households now receiving housing benefit, of which the great majority are owner-occupier pensioners, especially widows with small occupational pensions, will lose it altogether?
Thirdly, this statement virtually makes the unemployed into the outcasts of society—the new undeserving poor in the Prime Minister's vision of this new Victorian poor law. Not content with clawing back £650 million a year from the unemployed by taxing unemployment benefit for the first time over the past three years, and not content with ending, three years ago, the earnings-related supplement to unemployment benefit, worth £16 a week to an average paid worker, the Government are now proposing to force the unemployed on to the lowest rate of the new income support scheme. Is the Secretary of State aware that that will take about £5 a week from those who are 25 or younger, will deprive them of all help with heating bills and of single payments for clothing and furniture, will force them, for the first time, to pay 20 per cent. of then-rates and all of their water rates, and will replace the present basic benefit safety net by a discretionary and recoverable loan? The Government have trebled unemployment. With these cuts, they are now gratuitously twisting the knife in their victims.
Fourthly, families across the nation will be hit. Will the Secretary of State confirm that child benefit will be frozen or uprated by less than inflation, so that the benefit for 7 million mothers and 12 million children will begin to decline in real value? Will he confirm, too, that the new, vaunted family credit will begin to be phased out when earnings exceed £40 a week, which is lower than for the family income supplement, and that the rate of withdrawal will be 60p in the pound, which is higher than the 50p in the pound under FIS, so that the poverty trap will be worsened? Will he also confirm that benefit will be transferred from the woman to the man, which is not publicly supported, and that entitlement to free school meals and school milk will be ended? The Prime Minister has not only become the pensions snatcher — she remains the milk snatcher that she always was. Changes such as this will not strengthen family life, but will undermine it.
Fifthly, will the Secretary of State confirm that the death grant will be abolished and that the discretionary help will be available to the deceased's relatives only on the basis of a means test? Is he aware that this means bringing back for hundreds of thousands of our poor elderly the shame and indignity of a pauper's funeral, which no civilised society should inflict on its citizens?
This is a black day for the people of Britain — a monument to six harsh years of Thatcherite rule. The themes of this statement are more means testing, bigger cuts, penalising pensioners, the unemployed and low-paid in order to enrich still further the already rich, and the privatisation of the welfare state on the American model, which the people of this country want no more than they want the Prime Minister's fancy for the Americanising of our hospital management. There is no shred of political mandate for the proposals, since they derive from partisan

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committees hand-picked by a partisan Government for pre-determined ends. Today's statement opens up the central issue which will dominate the next general election and, because the Government have profoundly misunderstood the commitment of the British people to the welfare state, it will pave the way for the election of the next Labour Government.
Mr. Fowler: Not on anything that we have heard from the hon. Gentleman today will it pave the way for the election of any Labour Government. We have had from the hon. Gentleman a typically hysterical response. He cannot even get his shadow Cabinet to back his own proposals, and it was clear from the response of his Back Benchers that he could get very few of them to back what he was saying.
However, I am grateful for what I took to be the endorsement of my proposals on the state earnings-related pension scheme for the rest of this century. I am grateful to the hon. Gentleman for the generous way in which he endorsed them.
The hon. Gentleman asked about the overall cost of pensions. The 1975 Act was based on the assumptions, which the then Labour Government were making, of 3 per cent. growth and 2·5 per cent. unemployment and, above all, that there would not be an appreciable increase in the number of pensioners. It is now clear that between 2010 and 2035 we shall see an increase of about 3 million in the number of pensioners, and that over the period to 2035 there will be an increase of about 4 million pensioners. In 1975 the Labour Government did not have that information, or, if they had it, they ignored it. The question before the House is whether to ignore the best advice and the best estimates that can be made today of the emerging costs of pensions.
As for the case for change, it is clear that the cost of the state earnings-related pension will increase very substantially.
In terms of income support, the new system gives a guaranteed weekly income, with higher rates for disabled people, pensioners and children. The hon. Gentleman is wrong about families, because, in addition, there will be a family premium, which families with children do not get at the moment.
At present, one in three households receives housing benefit—7·5 million households altogether. Costs have risen from £1·2 billion in 1979 to £4·2 billion today. I have made it clear, and I do so again, that we shall be looking to housing benefits to make significant reductions in the social security budget.
The hon. Gentleman asked about the social fund. I am sure that in his calmer moments he will agree that the present system of supplementary benefit is not serving well those who need special help and special care. One of the ways in which I hope that the social fund will be able to develop is to give special grants to people coming from institutions into the community, but also to pay to keep people at home and to support them, rather than their going into institutions.
The hon. Gentleman's comments on the death grant were a total travesty of our proposals. The death grant was last increased in 1967. It has remained at £30 since then. Surely no one will claim that that is adequate. The choice that has to be made is whether the country is prepared to go on with a token gesture of that kind or whether it makes
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more sense to give help directly to those who need it— to give full help and better help. That is what the Government want to do.
Mrs. Jill Knight: Bearing in mind that this is the most far-reaching and fundamental statement on social security benefits for many years and that its soundness and sense will be apparent to everyone once it is properly explained, will my right hon. Friend assure the House that he will make a similar statement to every sector of the media which makes itself available and even consider the production of leaflets for the separate groups of people involved? Will my right hon. Friend also shoot down the myth put forward once again by the hon. and boringly predictable Member for Oldham, West (Mr. Meacher) that means tests should not be employed, because unless we employ means tests we cannot be sure that the maximum benefit will go to where the maximum need exists?
Mr. Fowler: We are not means testing, but seeking to test incomes. In addition, we are making help available to people on the basis of their income, and not according to whether they are in or out of work. That is a very significant change in approach. It means that the 100 per cent. marginal tax rates, which at the moment are a scandal, can come to an end. That is one of the most significant changes in the review.
Mr. Michael Foot: In view of the far-reaching nature of the proposals, and in view also of the cuts and additional means tests which they impose on some of our poorest people, will the right hon. Gentleman say, first, when the proposals were forecast and explained by the Prime Minister at the time of the last general election, and, secondly, exactly what is the saving on the social security budget which he aims to secure by these measures?
Mr. Fowler: When the inquiry into social security was set up we made it absolutely clear that the Government intended to have a fundamental review of the social security system. That has been the position throughout.
The right hon. Gentleman asks about the savings. The emphasis in the Green Paper is on the new structure. Until that is settled it is impossible to provide a detailed analysis, because clearly it depends on the benefit rates set in April 1987. However, the main direction of savings is clear. The major savings will be the long-term savings in the next century resulting from the phasing out of the state earnings-related pension scheme.
Changes in supplementary benefit structure are not intended to reduce the overall help provided. As a result of the structural changes in supplementary benefit, we shall ensure that as far as possible there are no cash losers. Support for low-income families will be increased by family credit. The Green Paper makes it clear that we expect spending on housing benefit to be reduced considerably. This will not be at once. We expect spending to be reduced eventually by about £500 million.
Several Hon. Members rose—
Mr. Speaker: Order. I know that this is a statement of great interest to the House, but I have to bear in mind that there is another statement to follow it and that we are to have further debates in what will be a long day. The Secretary of State said that there would be a debate on this matter later. I shall allow questions to go on until 25

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minutes past five before we move to the next statement. If those who are called put short questions to the Secretary of State, I hope that I shall be able to include most hon. Members who are seeking to catch my eye.
Mr. David Howell: Does my right hon. Friend agree that his proposals are skilfully targeted at the changing and future shape of society and that he should ignore the ridiculous cries from the past from the Opposition? Does he further agree that, whether we like it or not, there is an increasing trend towards part-time work, which inevitably means part-time incomes, and that his proposals, by concentrating on improved social provision as part of income for the low-paid, is in line with that trend and reinforces those who are most dispossessed by the trend towards part-time work? Does he agree that the change will make a major contribution to the expansion of occupation and employment?
Mr. Fowler: I am most grateful to my right hon. Friend. He is right. Family credit will bring direct help to low-paid families with children. It will prove a substantial base on which to build even further.
Mr. Archy Kirkwood: Does the Secretary of State agree that it is difficult to form a detailed judgment without the figures? My colleagues and I cannot support his proposals on pensions, because they do not tackle the present problems. The pension is too low, and we would not counternance any change unless there was some recognition of that. As for supplementary benefit, we are worried that we are drifting away from the Beveridge system, which applies to all, to a service exclusively for the poor. That would be wholly wrong. We are worried that if the Green Paper is fully implemented it will fracture the all-party consensus. We must consider the detail before making final decisions.
Mr. Fowler: I accept that my documents are long and detailed, and also what the hon. Gentleman says about his party's view. Lord Banks, the Liberal spokesman on social security in the other place, has said that the Liberal party consistently opposed the introduction of an earnings-related state pension scheme. It is not clear from what the hon. Gentleman said whether that remains Liberal policy.
Sir David Price: In view of my right hon. Friend's declared intention to modernise our social security system and to make it more responsive to changing social needs, will he introduce flexibility of retirement age and equality between men and women in eligibility? He will recall that that was proposed by the Select Committee and by me in a private Member's Bill in the previous Session of Parliament.
Mr. Fowler: My hon. Friend will find that in the Green Paper we deal with flexibility in retirement. I do not pretend that there are easy answers to that matter, but, like him, I should like there to be more flexibility. We invite comments on what we have set out in the Green Paper as a decade of retirement.
Mr. Frank Field: As the Secretary of State has boasted that the four reviews will result in nothing less than a new Beveridge, will he give two pieces of information so that we can see to what extent the reviews live up to that self-imposed objective? If the Government enact all of these proposals, how many
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people will cease to be poor? Secondly, as the hon. Gentleman acted as co-ordinator for all four reviews, can he say how many people will gain and how many people will lose? Will he give a commitment that those who bear unemployment will not have their benefits cut further?
Mr. Fowler: For various reasons, I cannot give the figures for which the hon. Gentleman asks. As I explained to the right hon. Member for Blaenau Gwent (Mr. Foot), no detailed analysis of cost can be made until benefit rates have been set in April 1987. [HON. MEMBERS: "HOW much will it cost?"] My answer is entirely frank and reasonable.
As for help to the poor, family credit and other proposals in the review will reduce poverty. The social security system must be capable of coping with changes in the pattern of poverty. We have proposed family credit because we have considered the pattern of poverty in detail and it is clear that, in the past 15 years, families with children have been most in need.
Mr. Robert McCrindle: Will my right hon. Friend accept from one who has expressed reservations that there is a great deal to commend in these proposals and much that is long overdue? Will he confirm that those who are most likely to be affected by changes in housing benefit include widows and occupational pensioners? Is my right hon. Friend open to some suggestions on that matter, because the changes in housing benefit seem to lie strangely with his commendation of occupational pension schemes? My right hon. Friend said that on the phasing out of the state earnings-related pension people would have a right to opt for a private pension scheme. What happens if people choose not to exercise that right and reach retirement age with nothing but the basic pension?
Mr. Fowler: I am grateful for my hon. Friend's comments about the review. I hope that the Green Paper will go some way to meet the issues that he has in mind. Housing benefit goes further up the income scale than any other benefit. On that basis, it is more reasonable to look for economies there, bearing in mind the scale of the increase in expenditure on housing benefit in the past six years. There will be minimum requirements for individual pensions. Employees and employers will be required to make provision. There is no question of people in work reaching pension age without having an additional occupational, personal or industry-wide pension.
Mr. Jack Ashley: Is the right hon. Gentleman aware that the Government are making social security a scapegoat for the failure of their economic policies and that, instead of caring more for the growing number of casualties of their incompetence, they are planning to care less? That means that the Government are incompetent and insensitive to the poverty, degradation and suffering caused by the unemployment that they have created.
Mr. Fowler: I do not accept that for one moment. We all respect the right hon. Gentleman's knowledge and experience in these matters, and I hope to dissuade him from that view. Few people in the country or the House believe that the present social security system is capable of continuing without major change. This is the first Government to tackle that problem for 40 years. The Government and the country have a responsibility to

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change the social security system to provide a modern system which can be sustained by present contributors and our children.
Mr. Andrew Bowden: I am delighted to support much in my right hon. Friend's statement, but will he confirm that the Green Paper is not a White Paper in disguise and that no decisions have been made? How will the income support system affect pensioners who do not claim a supplementary pension? As to housing benefit, may I stress the grave anxiety for pensioners, the value of whose savings has been destroyed and whose financial circumstances have been undermined by their not having inflation-proof pensions? They must not be worse off as a result of these proposals.
Mr. Fowler: This is a Green Paper. The purpose of the review has been to consult the public. We shall continue to consult the public and to listen to issues that are raised with us. The simplicity of the income support scheme will bring immeasurable benefit to all. I remind my hon. Friend of what we are doing to preserve the interests of people approaching pension age. Nobody who retires this century will be affected by the changes in the state earnings-related scheme. It goes without saying that rights which have accrued and which are in payment will be honoured fully. That includes inflation-proofing.
Mr. Gordon Brown: Will the Secretary of State confirm that today he has praised the Beveridge report only to bury it, and that he is ratting on promises made not only about the state earnings-related pension scheme but about child benefit and help for the unemployed? Will he confirm that under these new poor laws 7 million people will receive less in housing benefit, and that 1·8 million people — 3,000 in every constituency — will lose help with rent and rates? Will the Secretary of State tell us by how much the basic pension and the supplementary pension will have to rise to compensate for the loss of heating, dietary and clothing additions and the death grant, and for his demand that the poor should pay 20 per cent. of the rates? Why is it that the poorest, the weakest and the most frail in our community have to pay the price for his Government's economic failure?
Mr. Fowler: That is not the case, and the hon. Gentleman is too intelligent to believe that it is. I have made it clear that there will be reductions in housing benefit, but I have to point out to the hon. Gentleman a fact which he probably knows well enough in any event —that housing benefit expenditure has increased from £1·2 billion in 1979 to £4·2 billion in 1985–86.
The hon. Gentleman also knows that housing benefit expenditure goes further up the income scale than any other benefit. We are spending £40 billion a year on social security. Furthermore, spending on social security by this Government has increased by about 30 per cent. The majority of that increase is spent not on unemployment benefit but on making improvements in real benefits. It helps absolutely nobody to believe that expenditure of this kind can continue in a totally uncontrolled manner. I believe that our proposals are fair to the public and will help to bring about the recovery of the economy that we all want.
Mr. Roy Galley: My right hon. Friend will be aware of the wide welcome that there will be for the
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better targeting of benefits, for the concentration of help on families in need and for basing benefit on take-home pay and reducing the poverty and unemployment traps. Does my right hon. Friend agree that one aspect of the poverty trap has been the way in which supplementary benefit has been the gateway to a plethora of other benefits? Will he elaborate upon how far these various additions will be consolidated into the income support system and upon how free school meals Will be related to the family credit system?
Mr. Fowler: As a general aim, the Government are trying to make benefits available equally on the basis of income. In other words, rather than having the distinctions that exist now between those on supplementary benefit and those in work—as my hon. Friend points out, having passports which take one to particular benefits — we shall make the same benefits available on the basis of equality of income, whether people are in work or out of work. I should make it clear that we intend to include some of the extra benefits in family credits and to pay those benefits in cash rather than in kind.
Mr. Donald Stewart: Is the Secretary of State aware that the United Kingdom is lagging behind a number of other European countries in providing this type of benefit and that these proposals will push us further down the league? Is he also aware that some of the poorest people in our society will experience the rigours of the Victorian workhouse? As maternity and death grants will be means tested and paid for out of a so-called discretionary fund, does the Secretary of State not realise that people will be means tested literally from the cradle to the grave?
Mr. Fowler: There is a profound misunderstanding of the Government's proposals. They are based upon a test of net income. If one believes in trying to target help on those who need it most, it is impossible to devise any other way to bring that about. Therefore, I ask the right hon. Gentleman to study with greater care the proposals in the Green Paper. As for the social fund, I do not think that anybody would defend the present position under which additional payments are made. It does not work. It has not worked for some time. The social fund will enable us to provide a more sensitive and better targeted way of providing help for those in need.
Dr. Brian Mawhinney: Does my right hon. Friend accept that his concentration of help on families with children and the testing of incomes is very welcome and will be widely supported in the country? Can he confirm that the contributions to SERPS of those who will not be retiring this century will, nevertheless, be inflation-proofed against price rises, to cover the time when they will receive the benefit of the contributions that they have made?
Mr. Fowler: The position of any man over the age of 50 and of any woman over the age of 45 is preserved. The accrued rights of people generally are also preserved in the same way.
Mr. Derek Foster: Is it not outrageous that the Secretary of State should come to the House this afternoon and claim to be proposing a new Beveridge and yet be quite unable or unwilling to tell us how many will gain and how many will lose under these proposals? Out of the many thousands of poor people who

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will lose under these proposals, will the right hon. Gentleman tell us how many pensioners with small occupational pensions will have their heating and dietary additions removed?
Mr. Fowler: I dealt with that question in some detail when I answered the right hon. Member for Blaenau Gwent (Mr. Foot). The purpose of the social security review is to put forward a new structure and to seek the views of the House and the public on that structure. It is impossible to provide a detailed analysis of the cost until the benefit rates have been set. I have been entirely frank in saying that we expect there to be significant savings in housing benefit. I gave that figure to the right hon. Gentleman.
Mrs. Edwina Currie: Given the huge size of the social security budget—£40 billion a year—and given also the growth of that budget, its complexity and the muddle and confusion which appear to be rife within it, does my right hon. Friend agree that it would be a thoroughly irresponsible Government who did not undertake these long overdue reforms? Does he accept that we shall all benefit — taxpayers, recipients and particularly the less well-off—and that the people of this country will have cause to give thanks to my right hon. Friend, particularly after several upratings in 1987?
Mr. Fowler: There is no question but that a re-examination of the social security system was long overdue. There is also no question but that the majority of the public share that view. I believe that many Opposition Members secretly share that view, too. This Government have had the courage to undertake that review. The hon. Member for Derby, South (Mrs. Beckett) laughs, but the only thing that the last Labour Government did was to ask a team of officials to look at the supplementary benefit scheme. That is not the way to reform social security, and that is not the way in which this Government propose to reform it.
Mr. D. N. Campbell-Savours: Is it not clear that the Secretary of State is refusing to give these figures for singularly party political advantage? Has he forgotten what was contained in the Conservative party's manifesto at the last general election? The Conservative party gave a solemn undertaking to the British people that it would protect pensions and other linked long-term benefits against rising prices. Has not that solemn undertaking been broken today? Is it not clear that the Government do not have a mandate for pursuing this policy? Their only reason for pursuing it is that they cannot make their economic strategy work. They cannot make the nation pay the bill. They have failed.
Mr. Fowler: The hon. Gentleman has not understood a single word of what has been said today. We stand entirely by the words to which he referred. We have kept pensions up with prices, and we have also tackled inflation. Under the Labour Government inflation increased by 110 per cent., which was a cruel blow to pensioners.
Sir Brandon Rhys Williams: Will my right hon. Friend accept my warmest congratulations on his decision that occupational pensions should be based on real funding, and on his courage in slaying the Hydra of
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the state earnings-related scheme, which is not even an honest system of repartition? With regard to benefits that will still be based on a redistribution of the national income, would it not have been more logical and practical to integrate the income tax wholly with the contributory system, so that the residual welfare state, which is still concealed inside the income tax system, could be integrated into a logical new system of benefits?
Mr. Fowler: I have much sympathy with what my hon. Friend says, but we are still some distance from that position. First, we must computerise the DHSS system. We are taking several steps in a direction which my hon. Friend would support. The alignment of the tax and benefit years is a major improvement. Family credit will prove a natural system for bringing together social security and tax affairs, and computerisation will undoubtedly help. Some of the further points put forward by my hon. Friend can be examined in the Green Paper which my right hon. Friend the Chancellor of the Exchequer will introduce later this year.
Mr. Robert N. Wareing: Is the Secretary of State aware that his statement is a kick in the teeth for all disabled people, especially for the non-industrial disabled, who do not receive disablement benefit? They depend for 20 per cent. of their incomes on the additional allowances, such as the heating allowance, which, at a stroke, he is abolishing. Have the Government considered compulsory euthanasia as a way of solving their monetary problems? It seems to me and to millions of disabled people that they are being sacrificed on the altar of Conservative monetarism.
Mr. Fowler: That is a very silly intervention. The hon. Gentleman must understand — if he does not, he had better read the document — that the income support scheme will include a special premium for the disabled. I advise the hon. Gentleman to look at that.
Dr. John G. Blackburn: As someone who represents 70,000 pensioners, may I ask my right hon. Friend to accept that they will welcome his proposal for a review of the housing benefit scheme, which will be to their advantage? Does he further accept that the widow's grant of £1,000 will be widely welcomed? Will he, as he said earlier, accept further representations?
Mr. Fowler: Yes, indeed. On any of the proposals made in the Green Paper, the Government will wish to hear representations from interested organisations outside the House and from hon. Members. The widows' arrangements are more flexible and better targeted than the present ones, but I am open to suggestions on how to improve them.
Mr. Hugh Brown: Does the right hon. Gentleman accept that almost everyone in the House accepts the need for some reform—[Interruption.] I shall put my question in my own way. From so many proposals, there must be one or two that can be accepted by us all. Is not the real indictment that the Government seem to be incapable of creating a society without 4 million unemployed? In those circumstances, there is no possibility of obtaining a consensus on the broad approach to social reform. Will the right hon. Gentleman confirm that the poorest section of the community—those in

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receipt of supplementary benefit — will not be cash losers? He used the phrase. Can he explain what he means by it?
Mr. Fowler: Exactly what I said. We shall ensure that the structural changes will not result in cash losses by those who are now in receipt of supplementary benefit. I accept the hon. Gentleman's more general point. The aim is not to increase and improve social security benefits. The aim is to reach a position whereby we can reduce unemployment and dependence on those benefits.
Mr. Roger Freeman: Is my right hon. Friend aware that his proposals on SERPS will be widely welcomed because they are founded on common sense? Will he confirm that the required mandatory contribution for additional pension provisions, which is set at 4 per cent.—half of which will be paid by the employer—is only one third of the contribution rate normally applicable in occupational pension schemes and, therefore, should be financially acceptable and is basically sensible?
Mr. Fowler: Yes, I can confirm that. I can also confirm — I know that my hon. Friend has expressed anxiety about this — that the contribution will be available for personal pensions as well as for occupational pensions or for membership of industry-wide schemes.
Several Hon. Members rose—
Mr. Speaker: Order. I shall take two more questions from each side, and in the debate that is to follow I shall give preference to those hon. Members who have not been called today.
Mr. Charles Kennedy: On the question of alleviating family poverty, will the Secretary of State explain why, under the proposed family credit plan, payments will go direct to the pay packet? Given that that represents a major redistribution of wealth in the family away from mothers, would it not be better to adapt that proposal before the White Paper is published so that mothers can claim it if they wish? As to the income support scheme, is not the most glaring omission the fact that the right hon. Gentleman has firmly set his face against an extension of the rate to the long-term unemployed, who are the new poor under the Government's policies?
Mr. Fowler: The hon. Gentleman must remember that we are adding a family premium to the income support scheme. The family premium and children's rates will be added to the standard rate, which will provide help where it is needed—among low-income families with children. As to the argument about the purse to the wallet, it is more sensible to make family credit part of the total income from work. That will improve the present poor take-up of family income supplement, which has caused us anxiety for a long time. Although initially it will be assessed by the DHSS, there is no reason why it should not go into the pay-as-you-earn system, which is something that the hon. Gentleman might welcome.
Mrs. Elaine Kellett-Bowman: I warmly welcome my right hon. Friend's efforts to rebuild personal incentive, and especially his help to families with children, who are by far and away the largest proportion of people with below accepted nutritional standards. The new family credit scheme will help to equate those who work with those who do not, and the £1,000 grant to widows at a
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difficult time in their lives will be welcomed. May I also congratulate him on his efforts to co-ordinate the tax and benefits systems, which was recommended to the Chancellor of the Exchequer by the Select Committee on tax credits 13 years ago?
Mr. Fowler: I am grateful for my hon. Friend's generous welcome for the proposals. One area that caused those who conducted the review most anxiety was that of low-income families with children. That is what the proposals try to tackle, and I believe that family credit will make a great contribution.
Mr. Andrew Faulds: Should not this supposed Green Paper be simply titled "Dismantling the Welfare State"? As the right hon. Gentleman claims that he cannot give figures — that has been a persistent theme of his responses today — will he publish an assessment, based on demographic developments and Treasury forecasts, of a range of likely benefit payments in the April 1987 Budget, so that the people of this country can judge for themselves the damaging implications of this developement before the next general election?
Mr. Fowler: There will be no difficulty in finding out the implications of the proposals before the next general election. In the Green Paper we have tried to set out the structural reforms and changes that we are making. That is an entirely proper and right course to take in a Green Paper. A White Paper and a Bill will follow and go into even more detail.
Mr. J. F. Pawsey: As my right hon. Friend's Department is responsible for 43 per cent, of all Government spending, will he confirm that help will continue to be concentrated on those who are most in need and that his proposals will result in a more efficient service, which, in turn, will mean that resources are used more adequately and efficiently?
Mr. Fowler: I very much hope that we shall be able to achieve the last part of what my hon. Friend has set out. There is no doubt that we need a modern system of social security which provides a better service. The present system does not achieve that, and I believe that it is common ground on both sides of the House that we should move towards that goal.
Mr. Meacher: Is the Secretary of State aware that he was wrong when he said that the majority of increased spending on social security since 1979 has been devoted ' to improve benefits?
Will the right hon. Gentleman give the House an assurance that, given the magnitude of this exercise, we will have not merely a one-day debate, but a two-day debate, so that we may explore fully the implications of his statement?
On the funding of SERPS, does the Secretary of State recall that in 1954 the Phillips committee said that the pension could not be afforded over the next 30 years? If we had listened to that committee, the pension would be about £15 a week today and retirement ages would be 63 and 68. Does that not show the folly of making drastic decisions now about unknowable circumstances 50 years on?
Are we seriously expected to believe that the Government are launching this massive exercise without being able to estimate any costs until the benefit rates are

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fixed in 1987? Is that not utterly irresponsible, or is it that this Treasury-dominated cuts exercise still has a long way to run and that, given pressure from the Treasury, the overall cuts may turn out to be £2 billion or more?
Mr. Fowler: The hon. Gentleman is getting carried away again. I have already given the figure and, like everyone else, the hon. Gentleman listened to it. Since 1979 the majority of increased spending has gone on extra benefits and beneficiaries.
Mr. Meacher: Ah!
Mr. Fowler: I should point out to the hon. Gentleman — just in case he should have other ideas — that additional beneficiaries have to be paid for.
I cannot commit my right hon. Friend the Leader of the House to a two-day debate. Certainly, we are committed to a debate. The hon. Gentleman made the classic dud point about the Phillips committee. I ask him to go back to the committee. The one figure that it was able to predict with almost total accuracy was the future number of pensioners. That is the great difference between the situation in 1975 and the situation now. On the best predictions that can be made, we shall need policies for dealing with between 3 million and 4 million more pensioners in the first half of the next century. That is the best estimate, and I advise the hon. Gentleman to accept it.

Sri Lankan Tamils
5.34 pm
The Secretary of State for the Home Department (Mr. Leon Brittan): With permission, Mr. Speaker, I wish to make a statement.
On 20 May, in reply to a question from my hon. Friend the Member for Lewisham, West (Mr. Maples), I announced my future policy towards Sri Lankan Tamils who expressed a fear of return to Sri Lanka. In the week following that statement, more than 500 Tamils arrived here seeking asylum. I decided that further measures were necessary to reduce the influx and, after consultation with my right hon. and learned Friend the Secretary of State for Foreign and Commonwealth Affairs, I announced on 29 May the imposition of a visa requirement for Sri Lankan citizens, to come into effect the following day. The need for such a measure was demonstrated by the fact that 244 Tamils arrived on 29 May. A further 76 Tamils arrived shortly after the visas requirement came into effect, but there have been no further arrivals over the weekend or so far today.
The imposition of a visa requirement will not prevent the entry of those Sri Lankan citizens who qualify for admission in the normal way—for example, as visitors or students — although they will, of course, have to obtain visas before travelling. It will save the cost and disappointment of wasted journeys for those who would not be allowed to enter because they do not qualify under the immigration rules. If a Tamil not qualifying under the rules and seeking in present circumstances to leave Sri Lanka wishes to come to this country, he will be able to apply for a visa. Such applications will, however, be granted only if the individual can show that he is suffering severe hardship and the circumstances—including, for example, family links with this country — warrant the exercise of discretion in his favour outside the normal immigration rules.
The position of all the Tamils who have recently arrived will continue to be considered individually on the basis set out on 20 May. Where an application for asylum is refused, there will be an opportunity for the United Kingdom Immigrants Advisory Service of the United Nations High Commissioner for Refugees to consider the case and representations from Members of Parliament will continue to be considered.
It was only with great reluctance that I decided that it was necessary to impose a visa requirement on a fellow Commonwealth country. The need for it will be kept under review and I hope that it can be lifted in due course.
Mr. Alfred Dubs: Is the Home Secretary aware that his statement represents a major departure from two important traditions? For the first time, Commonwealth citizens — albeit from only one Commonwealth country at the moment—will require a visa to enter this country. Secondly, the British tradition of offering haven and hospitality to those seeking asylum has been breached.
Does the Home Secretary agree that some Tamils who came here were very much in fear for their safety in Sri Lanka and that that was the motive which prompted them to seek asylum in this country, as it prompted many of their fellow countrymen to seek asylum in Germany and other countries in Europe? Is the Home Secretary aware

53
that we are asking that the tradition of granting temporary admission for those in fear for their safety which has operated for many years should be continued?
How long will those applying for a visa in Sri Lanka have to wait before it is granted? Have those who are fearful for their safety any chance of being granted a visa to come to this country and seek temporary admission while their claims for asylum are being considered? How many Tamils arrived in this country seeking asylum in May?
My final point was not mentioned by the Home Secretary: What is the reason for the diminution of the rights of hon. Members to make representations on behalf of our constituents or relatives of our constituents? Why has the tradition of making such representations been whittled away to a 24-hour period? Will the Home Secretary explain the reasons for that and tell us how the system is to work? In fact, will he drop that provision?
Mr. Brittan: With regard to the alleged major departures, the hon. Gentleman is right to say that up to now visas have not been required for Commonwealth citizens coming to this country. I regret the fact that it should be necessary to impose such a requirement for the first time. However, other Commonwealth countries, such as Australia, Bangladesh, Nigeria and India, require British citizens to have visas. It is also the case that most Western European countries require persons from Sri Lanka to have visas.
With regard to a breach of our tradition of haven and hospitality, I cannot accept that the position is for a moment as the hon. Gentleman said. It seems to me to be far more sensible that the question whether someone is likely to suffer severe hardship should be considered in Sri Lanka itself by appropriate representatives of the British Government than that people should simply come to this country, having nowhere to go to, and have to be dealt with at Heathrow or Gatwick. There is nothing in the slightest bit more humane than a policy that allows people to come in, provided that there is machinery for considering whether they would suffer severe hardship and whether this country is the appropriate place for them to go. Let us not forget that large numbers have gone to India and not been refused admission.
With regard to coming here to seek temporary admission, that is inconsistent with the changes that I announced on 20 and 29 May. For the reasons that I gave just now, it is preferable for the question whether someone is suffering the sort of severe hardship that would lead to them being admitted to the United Kingdom to be considered in Sri Lanka itself. The number of officials dealing with the matter is being strengthened—two have gone out, two more are being transferred by the Foreign Office and another two are going there on 1 July. I cannot say how long it will take to consider applications.
I can give the numbers coming to Britain during the month of May. From 1 May to 15 May, approximately 240 arrived. From 16 May up to and including 20 May, when I made the previous statement, 218 came. But between 21 May and 27 May, a total of 532 came; 26 came on Tuesday 28 May; and on the day that I made the announcement about visa requirements, 244 came. Therefore, the number was accelerating. Of that there is no question.
Referring to the rights of Members of Parliament, the hon. Gentleman has, I am sure unwittingly, misrepresen-ted the situation. There was never any question of these
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cases being considered within 24 hours. I made that clear in my statement. I said that in the process of proper consideration, which of course will be given to people whether they are here or applying for a visa in Sri Lanka, it was reasonable, in the case of those who are here, to ask Members of Parliament to make their representations, which are only a part of the process, within 24 hours if at all possible.
A delegation of hon. Members came to see me about that matter, and I made it clear to them that if, in a particular case, there were special difficulties that made it impossible for them to make their representations as quickly as that, they should inform the Home Office and we would consider a short extension of the time during which the representations could be made. However, I believe that it is reasonable, in the interests of the Tamils as much as anything else, that the representations should be made quickly, and that it should not simply be possible for Members of Parliament to take an indefinite period of time to make representations, particularly when, as I have made clear, the machinery for considering all the points in an individual case, whether put forward by the individual, UKIAS or the United Nations High Commissioner for Refugees, was fully in place.
Mr. Roger Sims: Is my right hon. and learned Friend aware that, when I had the opportunity of visiting Sri Lanka earlier this year, I formed the view that the Tamils in the north of the country lived in fear of their lives because of the possible over-reaction by the army to Tamil terrorist incidents, such as the recent one at Anuradhapura, where a number of Sinhalese were not only in fear of their lives but were killed? Elsewhere in Sri Lanka, where the Tamils are in a minority, they are nevertheless active and involved members of the community, but some of them naturally fear the possibilities of a backlash against them, with rioting and bloodshed such as has occurred in the past.
However, does my right hon. and learned Friend also accept that we are talking of a population of about 3 million people, and it is unrealistic to expect this country to open its doors to a number of people approaching that figure who believe that they are in fear of their lives? This is a serious and worrying internal problem. It may well be one that other people will have to help the Sri Lankan authorities to solve. It will not be solved by us opening our doors to anything up to 3 million Tamils.
Mr. Brittan: I am grateful to my hon. Friend for his analysis of the situation. I had the benefit of talking to him about it shortly after he returned from Sri Lanka. He is right; I do not in any way underestimate the gravity of the problem. It is complex and must have a political solution. I welcome the fact that there have been recent discussions, as the House will be aware, between President Jayawardene and Mr. Rajiv Gandhi. I hope that such contacts can lead to a solution of the problem.
There has been disorder in Sri Lanka. As my hon. Friend said, the position will vary from one part of the country to another. But it is not the case that we have a situation that is in any way analogous to that of Amin's Uganda, for example, where the Government were seeking to persecute a particular minority, because, as the House will be aware, prominent members of the Tamil community hold extremely prominent positions in Sri Lanka. It is worth mentioning that the Minister of Home

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Affairs, the Minister of Rural Industrial Development, the Chief Justice and the governor of the Central Bank are all Tamils. Such a situation would have been inconceivable for Ugandan Asians during Amin's regime.
Mr. Michael Meadowcroft: Is the Home Secretary aware that, whatever the cause of the internal problems in Sri Lanka, his view of the reality in that country is greatly different from that of the Tamils, who are outnumbered by about four to one by the Sinhalese, and who clearly need some help and sympathetic refuge? Why was there no mention in the right hon. and learned Gentleman's statement of talks with the Commonwealth? Is it not important for the Commonwealth to be involved corporately with this urgent problem, which involves two of its members? Will the right hon. and learned Gentleman support the moves for an early debate on the Floor of the House on the Liberal prayer against the changes in the immigration rules?
Mr. Brittan: I hardly think that the hon. Gentleman seriously expects me to give an answer to his final point. My right hon. Friend the Leader of the House will consider it. Of course, it is a general problem of an international nature. The most able and best placed countries to deal with it are, of course, Sri Lanka and India. However, if my right hon. and learned Friend the Foreign Secretary can assist in any way, of course he is ready to do so.
Mr. Terry Dicks: Does my right hon. and learned Friend accept that many of my constituents are concerned that any Tamils have been allowed into the country at all? Many people in my constituency and, I am sure, up and down the land feel that this country has done enough. Enough is enough. We have our own problems across the board, from unemployment to social services. When will the first Tamils be sent back, because the Government of Sri Lanka have clearly said that there is no threat to their existence in that country?
Mr. Brittan: Ten Tamils were returned not to Sri Lanka but to European countries and, I believe, in one case, to India, over the weekend. With regard to the others, the process outlined in my statement of 20 May and today's statement will be followed. Careful consideration will be given. However, my hon. Friend is right to draw attention to the fact that on 31 May President Jayawardene gave our high commissioner a formal personal assurance that no Tamils returned to Sri Lanka would be harassed or persecuted in any way. That is something that we shall certainly seek to build and rely on as the situation develops.
Mr. Dave Nellist: Will not this disgraceful change in the appeals procedures and visa requirements result in many Tamil refugees in Britain being sent back to arbitrary arrest or even death? The Home Office says that only 1 per cent. of Tamil refugees in Britain are genuine refugees. Is the Home Secretary aware that Germany has accepted 95 per cent. of its 10,000 Tamil refugees as genuine? Does the right hon. and learned Gentleman realise that his remarks give credence to the crude racism coming from some of the gutter newspapers and Tory Back Benchers who talk of stemming a flood when 1,300 refugees spread equally
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across the country would mean that a city the size of Coventry could absorb eight more people out of a third of a million? Where is the flood there?
Are not the arrangements which have been announced today — which were made during a recess so that Parliament could not question them and which were announced in a written answer of 20 May—just the kick-back from this Government to repay the discussions that the Prime Minister had in April with President Jayawardene and in exchange for a new naval base for America and Britain in Sri Lanka and for influence in the Indian ocean?
Mr. Brittan: The hon. Gentleman's observations are extravagant and inaccurate. There has been no change whatsoever in the appeals procedures. The hon. Gentleman's reference to the statement that 1 per cent. of Tamil refugees are genuine shows that he has not distinguished between refugees under the convention and persons who might be subject to severe hardship and who would be considered outside the rules. There is a complete difference between the two. The German rules and appeal procedure are quite different. There is a clear distinction between the very small number of people who are counted as refugees and those who might qualify under the policy which I announced on 20 May and reaffirmed today.
Mr. Jeremy Hanley: The United Kingdom has an honourable record in giving refuge over the years to hundreds of thousands of people who have suffered from persecution in their own countries. Does my right hon. and learned Friend agree that we must continue to give that refuge and that it is vital for care to be taken in assessing those who are genuine refugees so as not to dilute the status of refugees, past, present and future? Will he assure the House that once a person has proved his status as a refugee, fleeing from a totalitarian regime, we shall still treat him with humanity and not as part of immigration control?
Mr. Brittan: I agree with everything that my hon. Friend has said. There is no question but that we will honour to the full in spirit and in letter our obligations under the convention relating to refugees. My hon. Friend is absolutely right in saying that no useful purpose is served by seeking to muddy the waters, as the hon. Member for Coventry, South-East (Mr. Nellist) does, and to confuse the position of genuine refugees and others for whom one may have a considerable degree of sympathy, but who are not necessarily refugees.
Mr. Max Madden: Is it not shameful that a Home Secretary whose family sought refuge in this country has slammed the door in the face of those coming from a Commonwealth country who believed that their lives were in jeopardy? Will the right hon. and learned Gentleman give a clear assurance that no Tamils who have sought entry to Britain will be returned directly to Sri Lanka? Does not the right hon. and learned Gentleman understand that Tamils awaiting entry clearance in Colombo — for a month or even longer — face harassment, injury and possible death? Will he give a clear assurance that no Tamils will be returned until there has been a proper opportunity for full inquiries to be made? Does not the right hon. and learned Gentleman recognise that it is an insult to hon. Members and to parliamentary democracy for these shameful decisions to have been taken when the House was in recess?
Mr. Brittan: The hon. Gentleman's personal references are wholly inaccurate, but I do not think that he greatly worries about that. The initial statement of policy was made on 20 May in a written answer to the House. It was capable of being challenged in the normal way. The subsequent change was necessitated by escalating numbers of people who were arriving on our doorstep. I do not believe that there would be anything in the least humane in allowing that process to continue unimpeded. Today's statement was made at the earliest possible opportunity after the recess.
Sir John Page: The calm and moderate Tamil community here realise that this country is in a difficult position over the possibility of a mass immigration of Tamils. They will understand that it was necessary for my right hon. and learned Friend to take some steps. Will regular visitors to this country — business men, politicians and others—who are Tamils, coming from countries other than Ceylon, have the opportunity to obtain a visa in a much shorter time than two months? 1 shall write to my right hon. and learned Friend about a particular case.
Mr. Brittan: I appreciate my hon. Friend's statement. I should like to take this opportunity to pay my tribute to the Tamil community in this country who, faced with a tremendously difficult situation, have been able in a very short period to look after a large number of people. It is not our intention to prevent people who would be eligible in the normal way from coming to this country. Obviously, within the context of the visa regime, we shall want to do everything that we can to ensure that that happens as quickly as possible.
Several Hon. Members rose—
Mr. Speaker: Order. An application under Standing Order No. 10 will be made immediately after this statement and, in fairness to Scottish Members who are concerned with the following business, I shall take two further questions from each side.
Mr. Jeremy Corbyn: Does the Home Secretary accept that his performance since 20 May on this issue has been one of disgraceful subterfuge of the House and Members of Parliament? Why, when a delegation of three hon. Members—my hon. Friends the Members for Newham, North-West (Mr. Banks) and for Coventry, South-East (Mr. Nellist) and myself—met him on 29 May, did he not tell us that he was planning to announce visa restrictions the following day? Will the right hon. and learned Gentleman confirm that last week the United Nations High Commissioner for Refugees, Mr. Hartling, had an extended meeting with representatives of most European countries and many others and discussed this and many other matters? The statements of that meeting which came from Mr. Hartling's office suggested that he was highly critical of the attitude taken by the British and Dutch Governments.
Should not the right hon. and learned Gentleman look once again at the reports that he received from Sri Lanka which suggested that improvements were taking place? There is no evidence whatever to support that idea. Indeed, all the evidence points to a deterioration and danger to the Tamil people because of the position in Sri Lanka. Is it not incompatible for the right hon. and learned Gentleman to make statements such as the one he made
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this afternoon while the British Government continue to supply arms and to train army officers in Sri Lanka, showing exactly on which side of the communal divide in Sri Lanka they have placed themselves?
Mr. Brittan: Neither the hon. Member for Islington, North (Mr. Corbyn) nor anyone else has said anything to suggest that there has been a subterfuge. The policy was announced first in a statement on 20 May, then in an announcement on 29 May, and today a statement has been made in the House. At least the hon. Member for Islington, North was good enough to state that the strictures of the United Nations High Commissioner for Refugees covered the Dutch Government as well. The fact is that virtually all the countries of western Europe have found it necessary to operate a visa regime. I therefore feel no need to apologise for taking action which was necessitated by circumstances that were not the making of Her Majesty's Government.
Mr. Bowen Wells: I congratulate my right hon. and learned Friend on his action to protect Britain from this type of immigration through the excuse that some Tamils are—
Mr. Nellist: Excuse!
Mr. Wells: It has been used as an excuse on a type of immigration which should not take place and which protects them through the visa requirements. I congratulate my right hon. and learned Friend also on jealously guarding our proud reputation of providing a political refuge for those who are genuinely in danger in their own country. Will he ensure that his requirements apply equally to Tamils and Sinhalese who apply to this country for entry? The Sinhalese are also under attack from the Tamil guerrillas in many parts of southern Sri Lanka and their lives are in danger. Has my right hon. and learned Friend made strong representations to the Indian Government to prevent further Tamil aggression and the supply of Tamil guerrillas from India? If preventive measures were implemented, they would put an end to this immigration and the need for Tamils to try to enter this country.
Mr. Brittan: I am grateful to my hon. Friend for what he said at the beginning of his remarks. I shall draw his latter remarks to the attention of my right hon. and learned Friend the Foreign Secretary.
As far as I am aware, there have not been any applications from Sinhalese, as opposed to Tamils, seeking refuge or asylum. If there are, I shall keep in mind my hon. Friend's points.
Mr. Sydney Bidwell: Will the Home Secretary be more trenchant in rejecting the attitude expressed by the hon. Member for Hayes and Harlington (Mr. Dicks), who believes that this country can be insulated against its responsibilities for refugees out of line with other European countries that subscribe to refugee responsibilities?
Should we not be ultra careful in handling these matters on an individual basis? I have experience in these matters, and I ask the right hon. and learned Gentleman to consider one particular aspect. It appears to be mostly single young men, rather than families, who are seeking refugee status. They have many anxious relatives both in this country and in northern Sri Lanka, who are scared that they may become involved in terrorist activities in southern India or

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elsewhere. They have combined their efforts to ensure that these young men came to Europe to escape that. Will the right hon. and learned Gentleman keep that in mind when deciding on individual cases? The majority of such young men are asking for refuge for only a limited period, not for all time.
Mr. Brittan: I recognise what the hon. Gentleman says and respect his great experience in these matters. However, I do not really think that someone subject to pressure to become involved in Tamil terrorism could regard that as a reason to come to Britain. It is possible to avoid being involved in Tamil terrorism, as evidenced by the many millions of Tamils wo have succeeded in doing just that and have not had to resort to coming to Britain.
Mr. John Stokes: Is my right hon. and learned Friend aware that there has been a massive misrepresentation of his actions, especially in the press and on television? It has been suggested that many Members of Parliament have asked him to allow more Tamils into Britain. The truth is that the majority of hon. Members are against that, as are the large majority of people in the country. My right hon. and learned Friend has acted moderately and responsibly. Britain is no longer a colonial power, and the main responsibility lies with India. He should stick to his guns.
Mr. Brittan: I am most grateful for my hon. Friend's support.
Later—
Mr. Harry Greenway: On a point of order, Mr. Speaker. I seek your guidance in relation to the very important statement on the Tamils. There are about 2,000 Tamils living in Ealing, which has within it the excellent weekend Tamils' school. Therefore, I represent a considerable number of them. It would be helpful, in advance of statements such as this, if hon. Members with particular concerns could notify you, Mr. Speaker, of their interest so that you would know of their anxiety to catch your eye.
Mr. Speaker: That was a good try by the hon. Gentleman. My feeling is that he does fairly well. It would be ideal if I could call every hon. Member who rose. I allow as good an opportunity as possible for hon. Members to put questions on statements. However, with the best will in the world, and in fairness to other hon. Members, it is not possible for me to call everyone who wishes to question a Minister.

Immigration (European Court Judgment)
6.4 pm
Mr. Gerald Kaufman: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 10, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
"the urgent need to re-examine the cases of those husbands and male fiances whose refusal of admission to Britain is placed in question by the decision of the European court."
The matter is specific because it relates to a judgment delivered in the European Court of Human Rights six days ago, during the recess. It is extraordinary that the Home Secretary has not come forward with a statement today, and that makes this application all the more necessary.
The matter is important because the European court has on two counts found that the British Government are in violation of the European Convention on Human Rights, and accordingly have been acting unlawfully for almost six years. First, the Government have been acting unlawfully because the applicants to the court have been victims of discrimination on the ground of sex, in violation of article 14 taken together with article 8. Secondly, there has been a violation of article 13 of the convention, which provides that everyone whose rights and freedoms as set forth in the convention are violated should have an effective remedy before the national authority, notwithstanding that the violation has been committed by persons acting in an official capacity.
The matter should have urgent consideration for two reasons. First, the law as embodied in the 1983 immigration rules — which continues and, indeed, exacerbates the sexual discrimination of which this Government have been found guilty—clearly must be changed speedily. It is essential that this House should be able to express a view on how that law should be changed before the Government reach an irrevocable conclusion. It is essential that the Government accept the spirit of the European court's judgment, rather than seek to avoid their responsibilities arising out of the judgment by changing for the worse the immigration status of wives and female fiancees. It is essential that the Government give an unambiguous commitment to abolish the sexually discriminatory primary purpose rule.
Secondly, the House must debate the matter urgently to safeguard the 3,350 husbands and male fiances whose applications have been refused since November 1979, and who share with the menfolk of the successful applicants at Strasbourg the injustice that the Government have committed. In all justice, those men must have their rejected applications urgently considered afresh in the light of their legal rights as established by the Strasbourg judgment. After some of them have had their rights withheld for nearly six years, and thousands for a substantial, if lesser, period, it would be wrong if they and their female partners, who are suffering injustice with them, should have to apply afresh and wait a further long period for interviews and decisions.
It would be wholly unacceptable if those unjustly treated men were made to wait in suspense until the Government changed the rules — and did so in a restrictive manner which would extinguish the legal rights established by the European court's judgment.

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Major principles of justice are involved. Within those principles, the individual rights of thousands of men, women and families are at stake. It is the right and the duty of this House of Commons to debate and consider how best properly to safeguard those rights before the Government act in the way that the Secretary of State acted, precipitately and without notice last week, and without the House being given an opportunity to debate the issue.
In the light of those considerations, Mr. Speaker, I request that you grant my application.
Mr. Speaker: The right hon. Member for Manchester, Gorton (Mr. Kaufman) asks leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that he thinks should have urgent consideration, namely,
"the urgent need to re-examine the cases of those husbands and male fiancés whose refusal of admission to Britain since 1980 is placed in question by a decision of the European court."
The right hon. Gentleman and the House know that the decision that I have to take is whether to give this matter precedence over the business set down for today or tomorrow. I listened carefully to what the right hon. Gentleman said, but I regret that I do not consider the matter that he raised appropriate for discussion under Standing Order No. 10 and, therefore, I cannot submit his application to the House.
Mr. Kaufman: On a point of order, Mr. Speaker.
Mr. Speaker: Order. No point of order can arise on that matter.
Mr. Kaufman: It is a new point of order, Mr. Speaker. I am in no way seeking to challenge your decision, but wish to put a point to you. Prior to my application there was a statement by the Home Secretary on his decision relating to Tamils, which was not a voluntary statement, but arose from your decision to allow a private notice question, as advertised to the House on the Annunciators earlier today. Therefore, no confidences are involved. The Home Secretary never intended to make a statement. He did so only because you, in your wisdom and discretion, allowed a private notice question. Because of your decision, the House was able to question the Home Secretary.
The right hon. and learned Gentleman has not volunteered a statement on the matter that I raised in my application under Standing Order No. 10. There are thousands of people whose personal situations are at stake and who have no idea of where they stand. Can you advise the House on how we are to obtain some explanation from the Government on how they intend to proceed as a result of the Strasbourg judgment?
Mr. Speaker: Order. What the right hon. Gentleman said may or may not be true, but I do not control statements that are made by the Government. That is entirely a matter for them. I am sure that the Home Secretary listened to what the right hon. Member said. With regard to opportunities for discussing this important matter, it is not for me to advise the right hon. Gentleman on tactics, but I suggest that it would perhaps be a good topic for an Opposition day.

Orders of the Day

  Rating (Revaluation Rebates) (Scotland) Bill
  Order for Second Reading read.
  Mr. Speaker: As the debate is starting fairly late, I appeal to hon. Members for brief contributions.
  6.11 pm
  The Secretary of State for Scotland (Mr. George Younger): I beg to move, That the Bill be now read a Second time.
  Before detailing the provisions of the Bill, it is important to set out something of the background. Events in this field have moved very quickly indeed in the past few months, and the Government have responded quickly and flexibly to meet exceptional circumstances by exceptional measures.
  There are two main questions which have been asked over the past few weeks. First, why did we have to have a revaluation? In Scotland, the law clearly lays down that there should be regular revaluations every five years to ensure that properties continue to bear appropriate shares of the overall rating burden. No one has argued against that in principle. While we have a rating system, it is only just that the relative values on which the tax is levied should be kept in line with reality and reasonably up to date.
  In August 1983 the Government confirmed in the White Paper on rating reform in Scotland, Cmnd. 9018, that there would be a full Scottish revaluation to take effect from April 1985. Again, that was approved by all parties and by the Convention of Scottish Local Authorities. Indeed, it would be fairly difficult for anyone to argue in favour of perpetuating indefinitely a set of old and increasingly out of date relative values. There was no further justification for postponement, and the time when the 1985 revaluation could have been postponed in an orderly manner came and went.
  The second question with which I must deal is: why could special help not be given earlier and in one tranche instead of several?
  Mr. Robert Hughes: There is a third question to which I hope that the Secretary of State will give an answer. Why was there a change in relationships between industrial ratepayers, commercial ratepayers and domestic ratepayers?
  Mr. Younger: I shall come to that point. The hon. Gentleman is very perspicacious in these matters.
  It was in the autumn of last year that the results of the assessors' work over the preceding months first began to become available. By the time of the rate support grant announcement on 7 December I had been made aware of the very substantial shift of rateable value away from manufacturing industry and towards domestic property. This was not, as some have suggested, an arbitrary or a political judgment of the assessors. It reflects the fact that over a period of seven years, in which there has been substantial economic change, the heritable assets of Scottish industry have not risen in value in the same proportion as the homes of the Scottish people. It was not

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  surprising, and the Government's reaction to it was to use both the instruments available to me to moderate the general effects of the shift.
  In December, therefore, taking account of the benefits that revaluation would bring to this sector, I made an order adjusting the level of industrial derating down from 50 to 40 per cent., and at the same time announced that the level of domestic rate relief would be increased from the equivalent of a penny in the pound to 5p in the pound. Those decisions were taken on the basis of indications from the assessors of what the average effect of revaluation on the different sectors would be: that domestic subjects would lose, commerce would neither gain nor lose, and industry would by and large gain.
  In mid-February the assessors were required by law to deliver the new valuation rolls to the local authorities for publication, and swiftly thereafter it became clear to us that there would be some very large increases involved for domestic ratepayers once the local authorities set their rate poundages. In the few weeks between the publication of the rolls and the last date for setting of rate poundages, we decided exceptionally to increase the domestic rate relief yet further, from 5p to 8p in the pound, at an extra cost of £38·5 million. This was announced early in March.
  Up to this point, we had been concentrating on the effects of broad movements of rateable value in terms of the averages for the different sectors. It seemed that, with the action already taken, domestic, commercial and industrial ratepayers could now be expected to live with the results of the revaluation as we saw them in terms of those average sectoral figures. We must bear in mind that it is the precise purpose of having a revaluation to reflect changes in values both upwards and downwards. It never was the purpose to ensure that nobody had an increase and nobody had a reduction. That would merely perpetuate the unfairness which revaluation is designed to reduce.
  However, by the time everyone had received his valuation notice and then his rate demand, it became very clear that, whatever the average might be, there were still very many ratepayers whose valuation increases were so steep as to lead to unacceptably large increases in their rate bills. Many of these were in the commercial sector where, as I have said, we were aware that the overall effect of the revaluation was neutral. It is, however, of little help to know that the average effect of something is neutral if its effect on one's own business is fatal.
  During March and April the evidence built up that the sudden effect of the more extreme valuation changes that 1985 had brought would be damaging and unacceptable. The Government decided that a limit should be set. With the average revaluation multiplier for all property being 2·33 times, the limit was fixed at three times. We are in no doubt that there are many in Scotland who, even after the new rebates, will continue to face hefty rate increases this year, especially in areas where the local authorities have been less than responsible in their budgeting. The measure before the House today is not able to, not is it intended to, bring down all high rate bills. It is, I repeat, an exceptional measure intended to tackle selectively the exceptional hardship which would be suffered by those individuals and businesses facing extrememly high increases in the rates that they would have to pay.
  I now deal with the Bill itself and what is in it. It is deliberately short. It creates two new statutory duties.
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  First, there is a duty on rating authorities to give rebates to those whose valuations have increased more than three times between the most up-to-date version of the "old" roll, which was valid on 31 March this year, and the new roll which came into force a day later. The essence of the Bill is that it applies to properties for which this comparison can be made. If the comparison is not possible, the property cannot benefit.
  The exclusions—listed in clause 1(2)—are: properties which are already valued by a statutory formula approved by Parliament, properties which benefit from their valuations being already reduced by statutory derating, and local authorities' own properties.
  Properties occupied by the Crown — hospitals, Government offices and the like — are technically not liable for local authority rates as such, and the Bill does not therefore need to exclude them. The usual procedure whereby the Treasury valuer arranges for payments in lieu of rates will operate, unaffected by the Bill.
  The second new duty created by the Bill is laid upon me, to reimburse the rating authorities the amount of all the rebates that they pay. The amounts of such rebates granted to ratepayers, and liable for reimbursement by the Scottish Office, will not be relevant expenditure by the local authorities and will not count against their guidelines.
  The Bill is an enabling measure. I intend immediately after its enactment to bring to this House an order which will contain all further necessary provisions for operating the scheme, including the ceiling of £10,000 on the rebate on any one property. This order is being discussed with COSLA, whose representatives have already made several useful contributions. In particular, they have argued that it would be preferable for the rating authorities in the first instance to calculate and grant rebates rather than for ratepayers to send in individual claims. Only if someone feels that he has been missed out will there be a claim procedure to fall back upon. I agree with COSLA that this would seem desirable. As well as making for more economical administration, it will be less trouble for qualifying ratepayers.
  I might add that it would be helpful if ratepayers did not write to their assessor or rating authority about this scheme at present. The assessors have plenty to do, with the many appeals against valuations now being lodged, and the Scottish Office intends to make sure by giving suitable publicity to the fact that those who may qualify for the new rebate will not lose out through inadvertence. Meanwhile, if a ratepayer judges that, because he may qualify for rebate when the Bill is enacted, he will be better off not paying his 1985–86 rates by instalments, he may of course opt for that, but he then becomes liable to make a lump sum payment at the end of September of the whole of his year's rates, less any rebate which his authority should have calculated by then.
  The Bill does not limit the laying of such an order to this year alone.
  Mr. Barry Henderson: I have one slight anxiety about the possible use of clause 1 in future years. My right hon. Friend may not wish to deal with the matter now and it could perhaps be dealt with in the reply to the debate. It is a technical point. The clause obliges rating authorities to grant rebate. I am not clear whether that provision could be used by a Secretary of State in

  65
  future to be selective about which rating authorities would be obliged to do so, or whether the provision would always apply to all rating authorities.
  Mr. Younger: I take my hon. Friend's point. The important thing is that the Bill makes it possible in future years to lay an order which is similar, or slightly different if such should be deemed necessary. I am not sure—I shall make inquiries—whether, if the Bill were passed by the House, it would be in order for a future order to be selective in its application. I should have thought not, but I shall check and write to my hon. Friend, or my hon. Friend the Under-Secretary the Member for Edinburgh, South (Mr. Ancram) might be able to deal with it in replying to the debate.
  Mr. James Wallace: The Secretary of State referred to the number of appeals received by the assessors. Will he say something about the psychological effect that the Bill might have? People might not now be disposed to appeal, and that could have long-term consequences. It could mean that money was being paid out under an order which would be unnecessary if an appeal were allowed.
  Mr. Younger: The hon. Gentleman's main point is right. The point of appealing is not, principally, to alter the amount that a ratepayer pays this year. The object of appealing is to ensure that the basic valuation upon which the rate is based is correct and just. If ratepayers feel that their basic revaluations are too high or in some other ways defective, they should still appeal, irrespective of the aid to be provided this year under an order which I hope the House will approve later.
  Mr. Robert Hughes: To follow up the point made by the hon. Member for Fife, North-East (Mr. Henderson) about whether an order might discriminate between one authority and another, the Secretary of State must surely intend that all rating authorities as specified in the Bill — "Regional and Islands Councils" — will be treated equally. I hope that he will therefore make it clear that, however the wording of the Bill might be construed, he intends to treat all rating authorities equally with regard to rebate.
  Mr. Younger: I appreciate the hon. Gentleman's point. I shall check to ensure that this is correct, but the Bill discriminates between classes of ratepayer, not between authorities. I believe that that is the answer, but I shall ensure that it is correct. I hope that my hon. Friend the Under-Secretary will be able to let the House know about that.
  Finally, I come to the figures in the explanatory and financial memorandum. There has been a good deal of public interest in the likely cost of the revaluation rebate scheme and I should therefore like to say a word or two about that. At the time, a few weeks ago, when evidence was coming in about the effects of certain steep valuation increases, and the Government were deciding that these were not acceptable, we did not have direct and confidential access to the data banks or the data handling facilities of the Scottish assessors, and had perforce to make estimates of the prevalence and the nature of such extreme valuations on the basis of quite a small sample. Nevertheless, once I had announced the threshold multiplier of three, the rating authorities were enabled to use their computers to begin calculations of rather more
  66
  accurate figures by matching up the entries on the old and new roles. We have consulted the convention, and the figures that it has given us are not yet complete.
  While it looks as if the total cost should indeed be contained within the £50 million figure attached to the Bill, and may be a bit less, it is not possible yet to be sure what it will amount to, and not at all certain that the lower estimate of £30 million which has been mentioned in the press would be enough to cover all the rebates.
  Whatever the outturn figure, the Government take the view that it is surely right in principle that ratepayers in Scotland should not suffer through sudden and unexpected changes in the tax base raising their valuations to levels greater than three times last year's. That is, and always was, the purpose of the scheme that we are debating today.
  While there will be a number of details in the Bill which hon. Members will wish to question and scrutinise today, I am grateful to the Opposition for their undertaking to facilitate the passage of the Bill through the House.
  Mr. Bruce Millan: As we are rushing this measure through, why does the Bill provide that it only comes into effect two months after the Royal Assent?
  Mr. Younger: That seems to be the normal procedure. As the right hon. Gentleman knows, there are procedures to be followed between Royal Assent and the coming into effect of the Act. I do not believe that that will cause any great difficulty, but if the right hon. Gentleman feels that it will I should be glad to hear any points that he would like to make. He may have a sensible point to make.
  As I said, I am grateful to the Opposition—
  Mr. Millan: In other words, the Secretary of State does not know the answer to my question. Could he perhaps answer another question? When will we have the statutory instrument?
  Mr. Younger: The right hon. Gentleman will be aware from having read the Bill that various things have to be done between those two points. For instance, there has to be an Order in Council. That is bound to take some lime. If the right hon. Gentleman had been listening, he would have heard me say that I would bring in the order as soon as I could after the Bill had been passed by the House. I hope that he will feel that that is satisfactory.
  Mr. Robert Hughes: Is the Secretary of State aware that if the Bill comes into effect two months after the Royal Assent, and the order cannot be laid until the Bill comes into effect, that will take us into the middle of the summer recess? Surely he will not introduce such an order during the summer recess. As I understand it, the Bill requires an affirmative order, and that could not possibly come in until about October or November.
  Mr. Younger rose—
  Mr. Millan: The Secretary of State mentioned an Order in Council. Where is there a provision in the Bill for an Order in Council?
  Mr. Younger: It is a statutory instrument that must be produced. I am sorry if I misled the right hon. Gentleman.
  As there is plainly some anxiety about this matter, I shall lay out a clear schedule of the likely timing. I understand that this measure is generally supported, and I hope that with the agreement of the House we can get the legislation through reasonably quickly. There will then be

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  no delay in putting forward the necessary further procedures so that local authorities, assessors, and ratepayers can be in no doubt of their position. I hope that that is helpful.
  It will be welcome to ratepayers in Scotland to see that their real concerns are being acted upon generously and decisively by the Government, and that Parliament can act quickly and with general agreement when there is a clear need to do so.
  6.30 pm
  Mr. Donald Dewar: Monday is not the best of days for the Second Reading of a Scottish Bill but I do not think that there will be too many complaints from Conservative Members. One feature of Scottish politics is that the Conservative party, which used to campaign with some elan and enthusiasm on rating, now finds the issue a deeply embarrassing one. It was clear that the Secretary of State did not have his heart in the job this afternoon. His arguments were cursory and simplistic.
  The Bill provides a measure of relief for the hard-pressed Scottish ratepayer and that is why we are allowing it to go through on an expedited timetable. I was surprised when the right hon. Gentleman explained to my right hon. Friend the Member for Glasgow, Govan (Mr. Millan) that a delay of two months is normal. We are using abnormal procedures to expedite the Bill's passage and to help the Government and for the right hon. Gentleman to plead that it is normal to have delay against that background is remarkably irrelevant.
  If the Bill is to give anything to the ratepayer in Scotland, we shall give it a helping hand. However, the measure has been born out of a great deal of indecision and confusion. It is the product of a good deal of disordered panic in the Scottish Office, which over the past few months has become the mark of this Administration.
  The Secretary of State took us through the history of the Bill. He seemed to suggest that there was almost a master plan. He implied that the necessity for the Bill had been seen months ago. It is usually the hon. Member for Edinburgh, South (Mr. Ancram), the Under-Secretary of State for Scotland, who comes up with that sort of earnest alibi, which he utters implausibly. The Secretary of State has rather disappeared from the Scottish political scene of late. However, both the right hon. Gentleman and the hon. Gentleman agree that the provisions in the Bill were all foreseen. That alibi is implausible. First, the domestic element was set at 5p. The Government admittedly produced £19 million and £31 million had to be produced by local authorities. The £31 million was clawed from the already reduced services provided by the authorities. The Government's attitude at that time was "Not a penny more".
  The heat came on and suddenly and mysteriously £38·5 million was added to the domestic element. That sum was ripped out of the Scottish Office budget. Again the Government said, "Not a penny more". However, another £50 million has been found to save the Secretary of State from the wrath of his own supporters. The week at Perth must have been one of the most expensive weeks for the country and the Treasury for a long time. However, the result appeared to offer some help and much needed relief
  68
  for the Scottish ratepayer. I suppose that we were all supposed to go home happy at the end of that little performance.
  We have seen Ministers being driven from pillar to post. They thought at each step that they would get away with it but at each step the public's wrath mounted and each time Ministers had to produce something else because they had it lamentably and politically wrong. Once a Government lose control—there is a lack of confidence and grip in the Scottish Office—it is extremely difficult to re-establish any form of authority.
  Mr. Younger: Who wrote that?
  Mr. Dewar: I did and I am proud of it. I think that it has the ring of truth for most people in Scotland, who are not impressed by what has been happening in the Scottish Office. For a long time the press machine of the Scottish Office was telling us that the Secretary of State had earned a glittering prize and that he had done so well that he should be promoted. However, his friends, with endless ingenuity, are now saying that the right hon. Gentleman must be moved because he is a liability. At least that has a kernel of hope for most of us.
  As I have said, any help for the Scottish ratepayer is welcome but the help which the Government are providing is on the margin. There is no doubt that the scheme that the Secretary of State has introduced will result in many inequalities. There will be rough justice and much discontent when it is seen in operation.
  I accept that the scheme is based upon rateable values and is designed to take the peaks out of the effect of revaluation, but the public think very much of what they have to pay at the end of the day. It is no doubt well known to the Secretary of State that some domestic properties which had a rateable value of £300 have had that valuation increased to £900. The threshold in Glasgow will be 39 per cent. and in Aberdeen it will be 19 per cent. A similar picture emerges for commercial property. An increase of 53 per cent. in Glasgow will not qualify for relief but in Aberdeen relief will be triggered by an increase of 37 per cent. I recognise that there may be a logic in the Government's argument but it turns on rateable value and has nothing to do with what people pay at the end of the day. It is the effect of the Bill that the public will judge. The examples that I have given can be extended to other areas, including Tweeddale. There will be problems and the right hon. Gentleman should address himself to them.
  The Secretary of State has a better case on the commercial side than on the domestic. I reckon—I have been helped by COSLA—that the concessions in the Bill will amount to about 4 per cent. of the total bill for the commercial sector. There will not be a great deal of gratitude from anyone for that because many people will still face substantial increases. However, I accept that there is something of consequence in the Bill.
  I understand that slightly more than 50,000 commercial properties will benefit following the Bill's enactment. That sounds pretty impressive but it must be put into perspective. I have no doubt that the Minister has been giving some thought to what has been happening. In Tayside, for example, about 12,700 commercial properties will benefit from this form of rate relief. That is the good news. The not so good news is that 8,000 of those properties are lock-up garages. Does that suggest to the right hon. Gentleman as it does to me that the scheme

  69
  has produced an unintended consequence, or is it a piece of careful Conservative planning? If that example is projected throughout Scotland — I do not suppose that there is anything particularly unusual about Tayside—a picture emerges that is different from the one that might be expected.
  The concession for the domestic ratepayer is extremely thin. There will be marginal assistance for a few but there will be nowt for the vast majority. There is an air of unreality about many of the arguments that have been advanced. For example, there was a pompous announce-ment by the Scotish Office in the text of a reply to my hon. Friend the Member for Glasgow, Maryhill (Mr. Craigen). The impression was given that the Government were introducing an important concession by means of the £10,000 cut-off on individual properties in the domestic sector. Is there a property in Scotland that will benefit from that cut-off? If there is —perhaps the right hon. Gentleman is more expert than I am on stately homes—I have no doubt that we shall be told when the Under-Secretary of State replies. Perhaps there is a marquis or duke somewhere who will benefit from the concession. Who knows, there may be a more humble chatelaine who is saying his prayers and counting his blessings.
  Mr. Younger: Surely the fault lay in the form of the question, or is the hon. Gentleman suggesting that the question should not have been answered?
  Mr. Dewar: We have said consistently to the right hon. Gentleman that he might want to consider a cut-off, but we did not consider a cut-off of £10,000. Surely that concession has the air of a make-believe figure. There is little in the Government's concession for the owner-occupier at the bottom end of the market. I suspect that there is even less for the council house tenant.
  There are houses in the Garscadden constituency that will benefit from the Government's scheme. There are some that will enjoy an advantage but not very many. I have taken some examples of houses in Knightswood. I do not claim that it is an enormously rich and sensitive sample but it is one that produces some interesting facts. It is a scatter of individual examples of rateable values that have increased by a factor of more than three. The greatest saving will be 6·6 per cent. on the new rates bill. The smallest saving in my constituency is 0·5 per cent. in the sample that I have considered. The greatest cash reduction will be £31·71 on a bill of £591. However, I have considered only a handful of properties and the majority of my constituents will get not a penny piece. The bleak reality is that many will face increases in their rate bills of 30 per cent. or 40 per cent. and will receive no help from the changes that are being introduced.
  Mr. Younger: I am sorry to keep interrupting. The hon. Gentleman is an advocate of revaluation and, indeed, supported and pressed for it. What does he suggest should happen? He says that the Government are giving help to people with exceptionally high increases, and he supports revaluation, so what does he want?
  Mr. Dewar: I shall come to that, and the right hon. Gentleman will no doubt await my reply with interest.
  I am establishing the simple point that large numbers of people who rightly feel hard pressed by the increases in their rates bills will not be assisted. We shall wish to ask many questions in Committee on Wednesday. I was
  70
  delighted to notice in the Daily Express of 30 May, for example, a direct quote from the Secretary of State, which stated
  "Mr. Younger admitted that the figures for the original calculations were hurriedly produced.
  'They were necessarily speculative,' he said. 'But the whole matter will be thrashed out in Parliament next week."
  I look forward to the exciting Wednesday that we shall have. Today, I shall give the right hon. Gentleman a taste of some of the points that we shall raise on Wednesday, and which will be the subject of specific amendments.
  The first relates to the take-up. I recognise that there is an element of error and that there may be some minor changes. I have examined the figures from COSLA, which were produced by running the new and old rules through all the major rating areas to extract the properties that are eligible for benefit. COSLA is confident that the pay-out will be, not £50 million, but £29·5 million or near to it. It will not do for the Secretary of State to say in a lordly way that the figure may be less than £50 million. Any reasonable calculation shows that it will be a hell of a lot less.
  It is remarkable that COSLA was consulted about this rickety scheme for the first time only last week. A shortfall of £20 million is unacceptable. The Secretary of State is trying to buy peace, and if he does that he must pay the price for it. If £50 million is to be shaken from the piggy bank of the Chancellor of the Exchequer, it should be spent as was advertised at Perth. We shall want assurances that that money will be devoted to relieving the pressure on Scottish ratepayers.
  I accept that there may be difficulties in simplistically dropping the multiplier, because if we reduce it by even a small amount we include an enormous slice of the total properties in any one sector. However, we shall certainly table an amendment to give the power to include other classes of ratepayer, and to vary the present rules. If that is impracticable, the right hon. Gentleman may consider whether he should put a further l½p on the domestic element, which would benefit every domestic ratepayer, and which would be covered by a figure short of £20 million, which it appears will become available.
  Mr. Norman Hogg: Has my hon. Friend seen the Glasgow Evening Times of 29 May, which states that the hon. Member for Strathkelvin and Bearsden (Mr. Hirst) threw his weight behind the campaign to ensure that the full £50 million is taken up? Is he encouraged by that?
  Mr. Dewar: I do not know how much weight there is there. The hon. Member for Strathkelvin and Bearsden (Mr. Hirst) has always struck me as being a slight figure in every sense of the word. 1 certainly welcome his help, for what it is worth. To be fair to the hon. Gentleman, he is right to say that it would be unacceptable to hon. Members if £20 million were returned to the Treasury as some sort of baksheesh for the mandarins there. It should be used for Scottish ratepayers, and on Wednesday we shall want the Secretary of State to deal with that issue.
  Secondly, there is the question of the future of the assistance during the latter part of the quinquennium. Obviously, this is a rescue package designed for 1985–86, but what will happen in the second, third, fourth and fifth years when the revaluation is in operation? The right hon. Gentleman is a reluctant Samaritan in the first year, and there will be a great deal of disappointment and anger if

  71
  he allows the victim to be sandbagged in the second year and leaves everyone to meet the full impact of revaluation. It is important that we move away from the present provisions which permit the continuation of the system in the latter part of the quinquennium, and that we receive guarantees from the Secretary of State.
  I do not like raising unpleasant subjects, but recently there was an unpleasant incident in Scotland when the Chancellor of the Exchequer visited Perth. The Glasgow Herald of 11 May quoted the Chancellor as saying that
  "he… had bailed out Mr. George Younger… in his crisis with… 'exceptional extra funds'."
  The Guardian of 11 May stated that the Chancellor said:
  '"No more money is likely for Scotland next year. I don't think he (Mr. Younger) will find me in the same compassionate, open-handed and generous mood next time'."
  From that, it appears that we must help the Secretary of State in his fight against the Chancellor over what will happen in future years. I hope that Conservative Back Bench Members will support us in that fight. I cannot think of anything that would put their marginal seats in more jeopardy than, having mounted the rescue bid for the coming financial year, abandoning it in future. They should join us in tabling amendments, which will buttress the Secretary of State's efforts by placing on him a statutory duty to continue this system at some level during the remaining years. That would help the right hon. Gentleman greatly in his fight against the Chancellor. I genuinely hope that there will be all-party support for the amendments, and that Conservative Members will join us in the Lobby on Wednesday.
  The third question relates to administrative expenses. The financial memorandum suggests that they will amount to £1 million. I do not know whether that is accurate, but the figure will be substantial. It will be necessary to identify the people who will be entitled to some form of rebate. In many cases it will be necessary to call in and adjust or issue new payment books for those who pay on a 10-instalment basis. Despite the strictures of the Secretary of State, there will be a great volume of work dealing with inquiries from disappointed and enraged people, who find that they are entitled to nothing. As the Secretary of State said, at least by implication, there will inevitably be a considerable delay in collecting rating revenue compared with a normal year, and, as a result, interest charges for local authorities will rise.
  By operating the formula we have the power to reimburse the money given to the ratepayers. Perhaps the Secretary of State will tell us when that reimbursement will take place. It will not be satisfactory if local authorities must wait until the start of the next financial year. I hammer the point that there is power to reimburse, but no power to reimburse the expenses which, according to the explanatory memorandum, will fall entirely on local authorities. I am grateful to the Secretary of State for what I believe to be an assurance—I shall read what he said —that we shall not be in the black farce in which that will be counted against guidelines, and prayed in aid in evidence of excessive and unreasonable expenditure. We want a guarantee. It would be perfectly fair for administrative expenses to be refunded to local authorities. They should not be asked to foot the bill for the Secretary of State's incompetence.
  We would normally discuss at length an enormous number of further points. I am glad that the Secretary of
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  State has shifted his ground regarding whether there should be individual applications or whether the onus should be on local authorities. In his statement of 14 May he made it clear that he was thinking in terms of individual applications. I welcome the fact that he has written to COSLA on that point.
  At present there is no appeal mechanism in the Bill, and presumably anyone with a grievance will have to go to judicial review, which means to the Court of Session. I suspect that effectively there can be no appeal. The right hon. Gentleman should also consider that point.
  The whole thing is shot through with anomalies which will cause difficulties. The amount of money, while not very large, will cause irritation. For example, it will be somewhat anomalous if someone buys a house half way through the year without paying the rateable value in the previous year. In a row of houses under completion, there could well be cases—I can think of some in Glasgow— where one of them will have been occupied in time to get on to last year's roll and will qualify for assistance, while others with identical rateable values on the new roll will not qualify. That is bound to cause problems.
  Difficulties could also arise over disabled persons' rating relief. If there is a variation in the discount on the rates payable during the previous year, it could well be that the payment has gone up by more than a factor of three whereas the rateable value has not. In such circumstances, will a person qualify for this relief? An enormous number of detailed points such as those can arise, and I have no doubt that the Parliamentary Under-Secretary will do his best to deal with them.
  The Parliamentary Under-Secretary of State for Scotland (Mr. Michael Ancram): Is the hon. Gentleman saying that he envisages a situation in which the revaluation goes up by less than three times while the rate of payment increases by more than three times?
  Mr. Dewar: Yes, because of a change in the special discount allowed to disabled persons. I have quoted cases where that could happen. I concede that it is a marginal problem, but it could arise. I instance that as an example of the rough justice that could result from the Bill.
  Many of my hon. Friends will want to take up general points during the debate, but I am sure that I speak for all of them when I say that we take very little satisfaction from what, on the whole, has been a sad and sorry tale. The whole thing began with the revaluation saga, and the Secretary of State is never blate in suggesting that I pressed for the revaluation to go ahead. Initially, revaluation was on; then it was partially on; then it was off. Ultimately, it proceeded with the maximum of confusion.
  I certainly agree that there must be revaluation in a rating system, otherwise anomalies will grow. But we cannot have a rating system or revaluation when that is combined with ruthless and relentless cumulative cuts in the rate of central Government support—where there is a determined effort, as there has been over recent years, to shift the burden from the Treasury to the individual ratepayer.
  The figure that we have used again and again is central to the argument. COSLA has calculated that had the percentage of rate support grant been held at its 1980–81 level in the intervening years since then, local authorities would have had another £1,000 million of central Government support. Revaluation has been the final

  73
  insult. It has certainly been a tremendous blow to individual householders. But the real problem and complaint is that the amount of money to be paid has been rising, directly reflecting the policy of the Secretary of State. In that sense, he has been his own executioner.
  Ministers have been ambushed, and realise that they are in mortal danger. That is why we have had a rout and scramble for safety over the last few months. Indeed, the difference a few weeks makes is extraordinary. On 5 March, in an article in The Scotsman, the Parliamentary Under-Secretary, the hon. Member for Edinburgh, South, said:
  "we had to accept that the routes"—
  to rating reform—
  "which had been examined were unacceptable and that for the time being we would have to continue with the rating system".
  He was asked specifically if he favoured changes in the rating system and whether he ruled them out. He replied:
  "I do not think you can rule out anything for ever".
  Three weeks later his political master was sounding a retreat, and the hon. Gentleman was duly spinning on his heels and heading in exactly the opposite direction.
  It is worth remembering the reason why that was done. Indeed, the right hon. Gentleman was engagingly frank about the matter. He said:
  "We have had one go at trying to reform rates and everyone was against the alternatives. This time we have to deliver. Not acting at all means there will be severe political consequences".
  That was the great pilot's statement of principle. The Minister knew that the political ground under his feet was shifting and that he had to scramble to save not only his seat but those of his hon. Friends. We are now committed to we know not what. All we know is that a manifesto pledge will not be enough. We know from the right hon. Gentleman's speech at the Tory party conference that there will be a scheme by the end of this year, but I suspect that when that pledge was given Conservative Members, including the Secretary of State, did not have a clue about what they would do or how they would do it.
  Mr. Ancram: Perhaps the hon. Gentleman will use this opportunity to answer a question that I put to him previously. Does he and his party favour finding an alternative to the rating system, and, if so, will he clearly say so?
  Mr. Dewar: I am happy to state our position. We will look very hard at the alternatives — [Interruption.] Conservative Members laugh at responsibility. I suppose that they must, because they are strangers to it. I believe that there is a very strong case for local income tax because it meshes with our plans for a Scottish Assembly and the financing of it. We shall look carefully at that. However, we shall not go in for some hastily cobbled together solution based on expediency and political opportunism and, I suspect, a strong dash of fear, and which will not provide any real basis on which local democracy can flourish.
  Mr. Albert McQuarrie rose—
  Mr. Dewar: No, I shall not give way.
  We want to see a sensible reform of the system, but we shall not adopt the silly course of promising something without knowing exactly what it should be. That has been a mark of recent months. We at least shall try to keep in touch with reality, responsiblity and our duty to local democracy and the system in Scotland.
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  The responsibility for the present problems lies squarely with the Secretary of State. The disarray and distress behind him is a mark of that. A few moments ago the hon. Member for Renfrew, West and Inverclyde (Mrs. McCurley) said that as a result of present incompetence in the Scottish Office she predicted that only four Scottish Conservative Members of Parliament would be left after the next election. The hurried and ill-prepared scheme which is now being talked about will reflect that calculation rather than any real basis of principle. This is all too obviously a deathbed repentance on the part of the Secretary of Sate, and deathbed repentances are seldom convincing. He and his hapless friends will not be saved, because he has not brought forward the kind of relief for the hard pressed ratepayers of Scotland that the crisis demands.
  6.58 pm
  Lord James Douglas-Hamilton: I am glad that the hon. Member for Glasgow, Garscadden (Mr. Dewar) said that he welcomed the Bill. He said that any help is welcome, and this measure will be very welcome to the large number of my constituents who are affected. The hon. Gentleman also referred to years two, three and four. The reform of the rating system may have gone through well within that time scale, and I for one very much hope that it has.
  I welcome the Bill and regard it very much as a stage in the continuing process. After all, the Secretary of State increased to £88 million the domestic element of the rate support grant. That means relief of £40 on a value of £500, and more on higher values. I take as just one example shopkeepers in my own constituency. One lady selling clothes found that the rateable value of her shop went up from £650 to £2,800. A great many like her will benefit from the Bill. It is encouraging that relief will be at least 100 per cent. in respect of that part of the rates bill relating to total valuation that is more than three times the revaluation for this year.
  The upper limit on total relief will relate to the property concerned to allow maximum help both for successful small businesses and for businesses in general throughout Scotland. That will be important to many people. I hope that my hon. Friend the Under-Secretary of State will do everything within his power to identify those concerned as soon as possible so as to make it certain that those who are entitled to claim are aware of their rights.
  This morning I received a letter from the National Federation of the Self-Employed and Small Businesses, which raises a question about appeals that has already been touched on by the hon. Member for Garscadden. It says:
  "We also urge you to ensure that this relief will not act us a disincentive to the ratepayer exercising his right to appeal".
  I ask my hon. Friend to look at this matter bearing in mind expenses. For most appeals, costs are probably minimal. They start off with a letter, which the assessor may accept. In one case in my constituency, where a railway stop has just been established, the assessor has automatically accepted the appeal at no more expense to the appellant than a postage stamp. However, if appeals mean substantial expenses and having to go through a long detailed court case, it might become counter-productive for the person to go ahead with the appeal. I hope that, before the Bill is finally passed, some guidance will be given.

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  The federation has said that in one case an assessor increased the rate from £1,100 to £13,000. This means that rate relief can be claimed on £9,700 and as local rate poundage is 70p, relief will be £6,790. On the federation's advice, the person concerned was appealing, but in that case the assessor had already offered to reduce the valuation from £13,000 to £5,000.
  The assessor may act reasonably in most cases, but I can give an example of him acting unreasonably. When Edinburgh airport established a new runway, the assessor refused to accept that there should be any difference in rateable value, although the new runway was pointing straight at the citizens concerned. They had to go through an expensive case, at the end of which the rateable value on their properties was reduced.
  Mr. McQuarrie: My hon. Friend has quoted an example of an assessor in Edinburgh reducing an assessment from £13,000 to £5,000—a cut of £8,000. Does my hon. Friend accept that this answers the case that we have been endeavouring to put forward, that assessors have merely been taking figures out of their heads and applying them to anybody's household, to such an extent that the increases are unacceptable to most people?
  Lord James Douglas-Hamilton: I cannot tell my hon. Friend about the exact circumstances as the case was put to me by the National Federation of the Self-Employed and Small Businesses. However, I think that in most cases the assessors tried to act professionally, although in some cases they were way out. I invite my hon. Friend the Under-Secretary of State to give some guidance about appeals if there is any danger that substantial expenses may be involved.
  When the statement about this Bill was originally made, I flew straight up to attend a large meeting of ratepayers at which one of the assessors was speaking. He said that what we would be doing today represented a distortion of the system, and in a sense it is. However, that serves only to underline the need to reform the rating system generally. I was glad to see that, as part of the transitional arrangements, clause 1(6) makes it clear that the Secretary of State will be enabled to continue these arrangements next year, should the necessity arise. By then we shall know a great deal more about how successful in giving assistance this has been. We may need to modify the scheme depending on the representations that we have received from interested parties.
  Recently, I tried to discover the difference in rateable value between properties north and south of the border. A few days ago, I received an interesting reply from my right hon. Friend the Prime Minister. She said:
  "It is in the nature of a system based on evidence of local rental values that the valuation of similar buildings will vary both within a locality and from one area of the country to another. The detailed legal basis for the valuation differs in Scotland and more importantly Scottish figures are now shown at the levels of 1985–86 revaluation while those for England and Wales are set in relation to the 1973–74 revaluation."
  The significant part of the letter says:
  "On the domestic side, it may be reasonable to look at the average rate bill for a domestic property. The Scottish figure including the domestic water rate is £397 in the current year as against around £430 in England when water charges are included. Even with these figures there is the difficulty that the mix of properties may not be comparable as between houses and flats, urban and rural property, owner-occupied and local authority owned housing."
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  As there are far more local authority houses in Scotland, it is difficult to get a comparison, but I can say with certainty that in Edinburgh the rateable values for commercial, industrial and domestic properties have increased far more than in East Lothian, Midlothian and West Lothian.
  Mr. Robert Hughes: What about Aberdeen?
  Lord James Douglas-Hamilton: I shall look up the facts and try to answer the hon. Gentleman's question. The same may apply in the countryside outside Aberdeen.
  John Lewis, the large department store in Edinburgh, has compared the rates that it has to pay with the rates that John Lewis in Oxford street, London has to pay. It says that the rates paid per square foot in Edinburgh are 20 per cent. higher than those in Oxford street. The store fears that it may soon have to pay twice as much in Edinburgh as it does in Oxford street. In a letter to me, the managing director says:
  "I need scarcely point out that Oxford Street is perhaps the finest trading pitch in the world and that our branch there enjoys an island site with extensive frontages at shopping level, whereas in Edinburgh we are in an essentially secondary location with no exposure to the principal shopping thoroughfare."
  My hon. Friend the Under-Secretary is bound to take into account the overspending of Edinburgh district council, which is 48·3 per cent. above the guidelines, which would increase the district rate by 79 per cent. I made inquiries as to what it had been spending on. More than £100,000 worth had been spent on propaganda.
  Mr. Donald Stewart: Might not the trouble be with the original assessor? The hon. Gentleman will no doubt have received, as most of us have, a letter from the Football Association in Scotland, with a copy of an article by the chairman of the Celtic football club. In it, he claims that his club paid more in rates in one year than a leading English club paid in 25 years. Are not the assessors to blame for the enormous discrepancies rather than local councils?
  Lord James Douglas-Hamilton: That may be so in certain cases and I am making inquiries into that case. However, in the case of John Lewis in Edinburgh, the rise in rates has had much to do with the expenditure by the council.
  I can give examples of the £100,000 that has been spent on propaganda. More than £10,000 was spent on a full page advertisement in the Edinburgh Evening News. Some £3,900 was spent on hand-painted banners and some £1,300 on the erection of the banners. One poster says, "Support Democracy". We all support democracy, but it is not necessary for us to spend more than £1,000 in doing so. Producing art work for posters cost £3,873, 48 sheet posters cost £4,810 and so on.
  When the interests of those involved in the local economy are at stake I hope that my hon. Friend the Under-Secretary will take such expenditure into account because selective action may become a necessity if the local economy is to survive. The director-general of the Retail Consortium spoke about the Bill in a letter that arrived today.
  Mr. Norman Buchan: What percentage of loss to the local economy will be caused by hand-painted banners, and what percentage will be caused by the proposals made by the Secretary of State for Social Services? Are not other, related matters involved?
  Lord James Douglas-Hamilton: I do not think that there is any connection between the two. If there is overspending of £100,000 on propaganda, that is not what the ratepayers want. There has also been £150,000 spent on a new women's committee. If one scrutinises the accounts carefully, which I have no doubt we shall do in a future debate, the position will become clearer, but I think that it is a pity that we should have to go over the same course as that followed by Lothian regional council a few years ago.
  Mr. Henderson: If the Labour party wants to indulge in propaganda, that is entirely legitimate in a democracy provided that it pays for it itself and does not expect the ratepayers to pay for it. For example, if Fife regional council wants to support striking miners, which bring disaster to the Fife economy, Labour party members should use their own money and not expect ratepayers to foot the bill.
  Lord James Douglas-Hamilton: I agree with my hon. Friend. The significance of this is felt by many shopkeepers, who will not benefit from this measure. For those who are affected by overspending of the sort that we have seen in Edinburgh, it must be taken into account.
  However, a much more fundamental issue is the reform of the rating system, and I am glad that a review has been set up to find a fairer scheme than the existing rating system and a fairer and clearer way of distributing rate support grant. At the Perth conference, the Prime Minister said:
  "We have reached the stage where no amount of patching up the existing system can overcome its inherent unfairness."
  There is a vital need to reform the system. In fact the director-general of the Retail Consortium said that there requires to be "a change of attitude by local and national governments, away from rates being regarded as a tax on the occupation of property to that of a reasonable payment for the value of services actually received and equitably allocated." I hope that the reform of the system will take place within the lifetime of this Parliament, finally and irrevocably in the interests of fairness and justice.
  7.12 pm
  Mr. Gregor MacKenzie: Like my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar), I give a cautious welcome to the Bill. I put it no higher than saying that I am not opposed to it. It is born of the statement by the Secretary of State at his own party conference in Perth, although later he made a statement about it here as well. It reminded me of a Budget statement. I have listened to a great many Budget statements. They always seem good when they are first heard. But, after two or three weeks' reflection, doubts begin to emerge. That is my view of the Bill and of the statement by the Secretary of State at his party conference.
  At first glance, it seemed that a great many people would be assisted and that all would be helpful. But now we begin to wonder about the extent to which the average commercial and domestic ratepayer will be assisted and, more to the point, which of our domestic and commercial ratepayers it will help. That does not come through clearly to me either in the Bill or in the speech of the Secretary of State today.
  My third worry arises very much from what the Secretary of State said in his 16-minute speech because, only a few weeks ago, I was chided by the Parliamentary
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  Under-Secretary of State for saying that I thought that the Government's proposal had been hastily conceived. I was extremely worried when the Secretary of State said that even now he did not have all the information from the various assessors, computers and all the paraphernalia available to him. That proved what many of us had been thinking—that the Secretary of State only a few days before his party conference plucked a figure and a formula out of the air. It was all far too hastily conceived, and that does not make for very good government.
  Like my hon. Friend the Member for Garscadden and the hon. Member for Strathkelvin and Bearsden (Mr. Hirst), I hope that this £50 million will be spent fairly and squarely on domestic and commercial ratepayers. However, what is sometimes fogotten by many right hon. and hon. Members is that the £50 million will come not out of some fairy grotto beneath New St. Andrew's house, but out of taxpayers' pockets, and the taxpayers are entitled to a better report from the Secretary of State than they had in his 16-minute speech about how the Government's proposal will be administered. Certainly before I give the Bill unqualified approval, I want to hear a great deal more about how the money will be spent, because taxpayers are entitled to more information about it.
  My main concern is with the domestic ratepayer. I have spoken to dozens of my constituents and, as yet, I have not found one who will benefit from this proposal. Not one will meet the requirement specifying a threefold increase in the valuation of his property. Most of them come very near three times—2·7, 2·8, 2·9—but not three times. That means that they will not benefit in the way that many of them had hoped. I must stress that these are not crummy houses. They are houses in the Burnside or Kirkhill areas of my constituency which the hon. Member for Moray (Mr. Pollock) knows well. They will not benefit, so I wonder who will benefit.
  The people who give me great cause for concern are the young people who have been encouraged by this Government and others to buy their homes. They have bought three-roomed and four-roomed houses taking on huge mortgages, and they are now working on very tight budgets. Their valuations have been increased, but nothing like three times. They will still be asked to pay a great deal more in rates, and that will be very difficult for many of these young people. They are the people who concern me most of all because they will not get one penny piece.
  Many of us want to hear from the Parliamentary Under-secretary of State who among the domestic ratepayers will benefit in any way. Apparently only those with large and comfortable houses will benefit. We did not hear a great deal from the Secretary of State about that. However, we are sure that the people who will be paying the extra money in the form of tax to raise this additional £50 million are those young people who are buying their homes on huge mortgages. It is they who will be asked to pay extra tax to help those who are a great deal better off than they are. That does not seem to be right. These young people are being asked to subsidise those who are better off than they are.
  I shall not say much about the commercial sector, but I hope that in the weeks ahead the position will be made much clearer. From the correspondence that hon. Members have received from the National Federation of the Self-Employed and Small Businesses and the Retail Consortium it is clear that commercial ratepayers

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  themselves are not sure how their problems will be sorted out. The Secretary of State was kind enough to concede some months ago that the problem was being dealt with in a piecemeal fashion, which cannot be good for the rating system in Scotland. It appears to many people that the rating system is turning into a shambles.
  We do not know what will happen in the years ahead. Even the Secretary of State does not know. It appears that the only person who knows is the Chancellor of the Exchequer, judging by his comments at the Perth conference. However, most of us want to take a fundamental look at the rating system. Legislation such as this will not help Scottish ratepayers for ever more. We must examine the system fundamentally. I hope that the Government will iron out the anomalies in the systems in England and Scotland as Scottish people feel that they are being penalised. I should like there to be just one system for the whole of the United Kingdom. The Secretary of State has time to work something out with his Cabinet colleagues. I hope that they will come up with something better than this piecemeal approach.
  We were told recently at Question Time that the Government are considering how to raise local government money, whether by income tax or some form of poll tax, which would be reprehensible. I hope that the matter will be given much more thought than has been put into the Bill. I do not favour change for the sake of change. There are deficiencies in the present system, but it is better than some of the hare-brained notions that have been put about recently. I am merely asking the Secretary of State to give the matter a good deal of thought and to devise a sensible system which applies to the whole of the United Kingdom and is fair to the ratepayers of Scotland.
  7.21 pm
  Mr. Michael Hirst: I am grateful to you, Mr. Deputy Speaker, for calling me sufficiently early to enable me to host a dinner downstairs on behalf of a colleague who is not here today. I therefore apologise to the Front Benches and to the House if I am absent during the winding-up speeches.
  We were led to believe that the Opposition would give this welcome measure constructive support. The support given by the hon. Member for Glasgow, Garscadden (Mr. Dewar) was somewhat half-hearted. The Opposition's new found enthusiasm for the cause of ratepayers seems a little synthetic when we consider what the hon. Gentleman's comrades are doing in Edinburgh and Stirling. Unlike him, I have no hesitation in welcoming this measure to help those who are worst affected by revaluation.
  I congratulate my right hon. Friend on his success in getting money from the Treasury to provide relief. That success should be contrasted with his reception when he announced additional rate relief. The Opposition could only crib that it was a reallocation of the Scottish Office budget.
  I am pleased that it has been possible to assist commercial and domestic ratepayers who were hardest hit by revaluation. It is preferable that domestic ratepayers be helped selectively as indiscriminate rate relief would not target relief on those whose rates bills are highest. I hope that my right hon. Friend will continue to take a firm line on local government spending. I have heard some councillors, who are not of my persuasion, suggesting that
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  this is a safety net under ratepayers with the highest valuations and that they can continue to spend without conscience.
  I spoke to the finance director of Strathclyde regional council last week to discover how many of my constituents will benefit as a result of the Bill. I am grateful to Mr. Paterson and his staff for digging out the information for me. In Bearsden, 421 commercial ratepayers, or nearly 30 per cent., will benefit. In Strathkelvin, 658 commercial ratepayers, or 27 per cent., will benefit. Those are the highest percentages in Strathclyde region, and they confirm that rateable values in my constituency are excessively high. I hope that ratepayers will avail themselves of their right of appeal to get justice.
  The story is rather different for domestic ratepayers, 243–1·71 per cent.—of whom in Bearsden will benefit and 979–3·3 per cent.—of whom in Strathkelvin will benefit. I see that 36,000, or 12 per cent., of ratepayers in Glasgow will benefit. It is not fair for the right hon. Member for Glasgow, Rutherglen (Mr. MacKenzie) to tell the House that he knows nobody who will benefit. I cannot believe that some of those 36,000 people do not live in his constituency. I am sure that 12 per cent. of my constituents will be pleased to qualify.
  Strathclyde regional council has advised me that £14·6 million will be available. I appreciate that my right hon. Friend is unable to announce the bill for Scotland, and I understand his difficulty in putting the scheme forward on the basis of insubstantial information. I am nevertheless glad that he was prepared to push for the scheme. However, it seems that there will be a shortfall which may be significant. I appreciate that eligibility should be set down in the Bill, but is the revaluation of three immutable? Could some other figure, which used up the money, be applied?
  Mr. John Maxton: That is not what the hon. Gentleman said last week.
  Mr. Hirst: I stand by what I said to the Evening Times last week when I was asked for an instant reaction to the news. I have no fear about saying one thing in Scotland and quite another here. I congratulate my right hon. Friend on persuading the Treasury to come up with an extra £50 million.
  Mr. Norman Hogg: The hon. Gentleman said that at the beginning.
  Mr. Hirst: It is worth repeating. I hope that it will be possible to ensure that the majority of the money is spent.
  I am glad that the Bill provides for the scheme to be continued. Although it is unrealistic to expect my right hon. Friend to give commitments about spending in the future, he will have the undivided support of this side of the House if he can continue this form of relief until a replacement for rates is found. I am sure that my right hon. Friends on the Front Bench know that the burden that this year seems to be so intolerable to those who will qualify under the scheme will not be lightened next year.
  There is one point upon which I should be grateful for clarification. I recognise the benefits of a simple Bill. I recognise also that certain categories will be exempted. However, I should be grateful if my hon. Friend the Under-Secretary of State for Scotland could deal with the position of the quarrying industry. I understand that quarrying is treated like any other normal industry.

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  However, certain quarries have experienced an enormous increase in their valuations. I understand that quarries qualify for industrial derating, but, in view of the references which have been made to legislation, I should be grateful if my hon. Friend could let me know whether the quarrying industry will qualify for relief.
  Mr. Norman Hogg: I strongly support the request of the hon. Member for Strathkelvin and Bearsden (Mr. Hirst). In my constituency, the rateable value of a quarry will rise 2·9 times—2·9 being a very significant figure — from £27,000 to £77,400. I hope that the Under-secretary of State for Scotland will answer the point made by his hon. Friend.
  Mr. Hirst: One of the interesting aspects when legislation comes before the House is that letters are sent to Members of Parliament. I expect that all Members have been bombarded with letters about the Bill from the Retail Consortium and the National Federation of the Self-Employed and Small Businesses, which, incidentally, were asking for a much smaller sum than is now on offer. One of the benefits of such letters is the constant reference by the retail sector to the damage that high rates do to businesses.
  During the past week I have spoken to a number of small business men, one of whom recently opened a second shop which is facing a rates increase of 96 percent. That man will benefit from the legislation, and he is very pleased about that, but he will still be faced with a significant increase in his overheads. His comment to me was, "Well, Michael, we hoped to take on a school leaver this year, train her in the business and provide a job for another person. Unfortunately, because of the rates increase, that will probably not be possible." I took the opportunity to remind him that the lion's share of the rates increase will go to Strathclyde regional council, which is still spending £43 million in excess of Government guidelines.
  Bearing in mind that comment, the Opposition seem to be showing synthetic concern for commercial ratepayers. Only a few months ago they wrote in their campaign briefing:
  "There isn't a single shred of evidence to show that rates force firms to lay off workers or deter new businesses from starting up."
  I welcome the conversion of the Opposition, whether on the deathbed or not. I hope that when they return to Scotland and redraft their campaign briefing, they will be prepared to acknowledge that high rates harm the commercial and industrial health of this country.
  Perhaps I ought to refer to the warped priorities of the Liberal spokesman. I am not surprised that the Scottish spokesman for the Liberal party has not had the guts to turn up today, nor that today its strength is only one eighth. Having accused the Secretary of State of adopting warped priorities in providing aid amounting to £40 million to commercial ratepayers, I am not surprised that he has stayed in his fastness of Gordon, albeit temporarily.
  Even with this scheme, many of my constituents will still be paying the highest rates in the country. I echo their demand for reform. Although this measure is welcome, it represents a further tinkering with the system and is no substitute for the radical reform which all of us want. Scottish ratepayers should take note of what is said in the debate. They will clearly see that it is the Conservative party which shows real concern for ratepayers and,
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  moreover, that the Conservative party is the only party with the political will to grasp the nettle and to introduce rating reform.
  7.34 pm
  Mr. Donald Stewart: I have only a few points to make, simply because the Secretary of State appears in the Bill to be forking out instead of clawing back. Therefore, it would be wise to take the money and run. Prior to the announcement of the rates relief which we are discussing today, the Scottish Nationalist party stressed that any relief given must be new money from the Treasury. We are glad to note that this will happen, but we are concerned that the full £50 million allocation may not be used. It would be scandalous if it were not used. Even the £50 million of relief represents only about one and a half days of Scottish oil revenues. Compared with the money pouring into the Treasury from Scotland, and compared with the amounts being spent on fortress Falklands and Trident, £50 million is small beer. It is essential that that sum of money should not be reduced.
  What will happen in subsequent years? We may assume that two or three years will elapse before a major reform is seriously discussed in Parliament. At the beginning of his speech the Secretary of State omitted to deal with a point which I subsequently put, while the right hon. Gentleman was absent, to his hon. Friend the Member for Edinburgh, West (Lord James Douglas-Hamilton), namely, the enormous discrepancies between the assessments in Scotland and England. I do not agree with the right hon. Member for Glasgow, Rutherglen (Mr. MacKenzie) that there should be uniform rating throughout the United Kingdom. The situation in the two countries is different. However, the case that I mentioned earlier showed that there was a difference of 25 times between the rating of the Celtic football ground and the football ground of a team in England. Therefore, the Secretary of State ought to take into account such enormous anomalies.
  As the Government have promised that the rating system will be reformed, what plans have they made to take care of the position in Scotland during 1986–87? To help to spread the benefit that may be obtained through the rebates, the qualifying level should be set at a lower figure for the increase in the rateable value instead of the three times increase which is proposed in the Bill.
  I suggest that a limit of £10,000 should be placed upon rebates. This would ensure that as many businesses as possible, in particular small businesses, would benefit from the rebate. I hope that those with large revaluations will appeal before applying for a rebate. If their appeal is successful, the rebate may not be needed. More money will then be left in the kitty for those who are faced with greatly increased rates bills.
  The Bill will be enacted. Nobody shoots a one-legged Santa Claus. Today, however, the Secretary of State for Social Services said that the poorest people would be obliged to pay 20 per cent. towards their rates bills. This burden will have to be borne by those who are currently in receipt of rates relief. It shows the brazen effrontery of this Government. On the day that the Secretary of State for Scotland is giving away money with the one hand, his right hon. Friend the Secretary of State for Social Services is taking it back with the other. When looked at in these terms, one sees that Santa Claus does not have a leg to stand on.
  7.38 pm
  Mr. Nicholas Fairbairn: First, I congratulate my right hon. Friend the Secretary of State on having obtained a huge sum which will benefit the ratepayers of Scotland, both commercial and domestic. It is not good for the right hon. Member for Western Isles (Mr. Stewart) to pooh-pooh such a sum of money as small, when comparatively huge sums of money are spent on transport for his constituents. Indeed, at least a quarter of that sum is spent on transport in his constituency, so a little modesty might suit him better.
  Mr. Donald Stewart: The highest subsidies for transport in the United Kingdom are in London, where an enormous mass of rolling stock is needed to take in commuters in the morning and take them out again at night. Expenditure on transport in the Western Isles is peanuts compared with that.
  Mr. Fairbairn: I am not an expert on transport in London, but I am informed about the right hon. Gentleman's constituency. I assure him that the sums which it enjoys from other people's pockets are disproportionate to those enjoyed in any other part of Scotland.
  Mr. McQuarrie: The right hon. Member for Western Isles (Mr. Stewart) should have no cause for complaint. He should remember the integrated development programme, which is expressly suited to his constituency, and which injects massive sums into the Western Isles. It would be much better to spend that money in the Grampian region, and especially in my constituency of Banff and Buchan.
  Mr. Fairbairn: Yes, and if there is any left over, perhaps it could go towards transport in London.
  We have seen some remarkable schizophrenia in the debate. As ever, the hon. Member for Glasgow, Garscadden (Mr. Dewar) made a fluent and cogent speech, but Socialists and Socialist authorities have always believed that the people who should be milked are those who own houses and shops and run businesses—
  Mr. David Lambie: And castles.
  Mr. Fairbairn: Yes, indeed, and I think I am right in saying that it was a Socialist Government who said that ancient monuments such as myself and the house in which I live should be derated to some extent. I am grateful for that. It is strange for the Opposition suddenly to be on the side of those whom they have always regarded as the milch cows for their extravagance. Fortunately, I represent a constituency that is not of Edinburgh airport, and since Edinburgh airport is not of the capital city I have few reasons to go there, but I am horrified by the extent to which it is being defiled to advertise the extravagance in which the gauleiters of the Supreme Soviet of Edinburgh indulge.
  The system of rating taxation has never been fair, and it has always amazed me that the Conservative party should have tolerated it. It is a tax on everything which we believe the humblest, the poorest, the youngest and the oldest should be able to achieve and enjoy. The buying of a house probably represents the largest expenditure that most people will ever undertake.
  Mr. Robert Hughes: I am following the hon. and learned Gentleman's speech with great care. He seems to
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  be suggesting that only property owners pay rates, but that is untrue. Those who rent properties, whether from the private sector or from local authorities, also pay rates. That must be said repeatedly, because they get no credit for their contributions.
  Mr. Fairbairn: That is slightly inaccurate, because I understand that only 26 per cent. of those who pay rates do not receive some form of rate rebate.
  Rates are a tax on the home, which is the centre of family life. As it is normal for an ordinary family or an ordinary human being to wish to associate themselves with the home, unless they must move home for employment reasons, or unless they become more prosperous, they will not normally wish to change their homes. Although their children may marry and move away, the family home is still fundamentally important. Therefore, rates are a tax on the most important heritable object with which we are associated. I should tell the hon. Member for Aberdeen, North (Mr. Hughes) that the more homes are merely hired from some wretched local authority, the less significant they are to the family. The greater the influence of the home and the family, the greater will be social cohesion and decency.
  The tax does not take into account the ability of the occupant to pay. It is rendered on a property regardless of whether its inhabitants have a huge income or a petty one. That is unfair. It is especially offensive because domestic rating is a complete disincentive to improving one's property because one is punished for doing so. When one considers the GEAR scheme and the magnificent reconstruction of the tenements in Edinburgh and Glasgow, such as Georgie Dalry, Maryhill and Trongate, one sees that the improvement of property is a great social benefit. Therefore, it is extremely unfortunate to have a tax which is a disincentive to improvement.
  My right hon. Friend the Secretay of State has frequently said that the revaluation is all the assessors' doing. I agree, but the bases upon which the assessors do it are extremely unfair, arbitrary and inequitable in practice. The assessors must try to be like Pontius Pilate —absolutely fair between Barabbas and Christ—but it does not alter the fact that, in practice, the assessors and their staffs do not visit similar houses. They do not know what the differences are. They cannot make an intelligent comparison between a newsagent in Auchterarder and a newsagent in Aberdeen or in Ayrshire. Therefore, all that has happened is that a system based on appalling inequities and contrary to all the principles of Scottish law has been demonstrated to be even more unfair by revaluation.
  The myth about revaluation is that it is meant to make everything fair again. It is like saying that, in five years' time, the man who has made a million, the man who has made nothing and the man who has squandered a million will be equal.
  Mr. Robert Hughes: Will the hon. and learned Gentleman give way?
  Mr. Fairbairn: I have already given way to the hon. Gentleman.
  Mr. Hughes: The hon. and learned Gentleman shows such appalling ignorance of the rating system that he should give way.
  Mr. Fairbairn: I am sure that I cannot beat the hon. Gentleman for that.
  Mr. Hughes: The hon. and learned Gentleman should know that one guideline for revaluation which the assessors are supposed to follow is generally to ensure that the revaluations do not greatly change values in one part of Scotland as against another, except in exceptional circumstances—
  Mr. McQuarrie: That is not true.
  Mr. Hughes: It is true. The general understanding is that the assessors should ensure that valuations increase in broadly similar bands throughout the country, except where exceptional circumstances make it impossible.
  Mr. Fairbairn: I understand guidelines, and I have always been against them. I do not like the word "guidelines" and I shall give the hon. Member for Aberdeen, North an example of the effect of guidelines.
  The Socialist council in Glasgow has closed down almost every business in Jamaica street. If the assessor goes there, he will say, "This looks like Bhopal after the explosion. We had better decrease the rating valuation." However, if he comes to Perth high street, or Auchterarder high street, or Blairgowrie high street, and sees that the businesses that have been driven out of Glasgow have opened up in those streets, he will say, "These look like prosperous places." When one council has been extravagant, the guidelines will penalise places where the councils have not been extravagant.
  That is what happens because of the actions of the unneutral political masters of neutral assessors. Socialist councils take a sadistic view of properties and those who operate them and regard businessses as places to be looted.
  Mr. Dewar: May I divert the hon. and learned Gentleman — helpfully, I hope — from his somewhat ruminative look at the rating system?
  It has become clear, and will become clearer, that there will be a considerable shortfall on the payout under the Bill.It may not be £20 million, as I have suggested, but it will be substantial. What is the hon. and learned Gentleman's attitude to that? Will he be happy if £20 million of the £50 million is merely handed back to the Treasury?
  Mr. Fairbairn: I have always admired the hon. Gentleman's prescience, and he has made a point which I was about to develop. My regard for his intelligence has had corroboration from his intervention.
  Not only is the rating system unfair, but the Secretary of State's gallant attempts to make fair the unfairness of the revaluation will be even more unfair. Let us examine the microcosm of Braco, where the domestic rate increases throughout the village range between 25 and 40 per cent. in real terms. Not a single house will benefit under the Bill.
  It is all very well to say that inflation is 5 or 6 per cent., but people facing large increases in their biggest annual bill cannot budget for or afford such extra sums. It is not the fault of the Secretary of State, but it is an unfairness which we must correct, because the people involved have bought their own homes and are doing the best for their families, but they are being punished.
  Tourism is particularly important in Perthshire. Hotels and bed-and-breakfast establishments have to set their terms a year ahead. They cannot be altered because of a rating revaluation. A hotel in Comrie faces a rate increase from £7,900 to £10,000 a year—an extra £40 a week.
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  For those who are thirsty, let me give the example of a small company in my constituency that owns nine pubs. Prices in those pubs cannot be increased, because the Chancellor has already imposed increases of 2p a tot. To pay for those rate increases, the pubs will have to sell an extra 325,000 pints of beer, or 355,000 more whiskies. Even for the thirstiest—even for the right hon. Member for the Western Isles—that would be an awful lot of drinking. It is not a realistic burden to impose on people who are involved in tourism, which is one of our major industries.
  No one is a prouder Scotsman or less a nationalist than I, but I have to say that another major unfairness is the difference between Scotland and England. For example, a six-bedroomed hotel in St. Andrews will pay £32,000 in rates, but a similar hotel in St. Albans will pay only £5,000. Those hotels are supposed to be competing for the same tourists.
  The small businesses that have not quite qualified under the three factor will be hit hardest. If people's domestic rates go up, they can reduce the amount that they spend at the hairdressers or with the picture framer. The small businesses, which have already been hard hit, will be hit even harder because their customers will face bigger domestic rate bills. My picture framer has taken on a young man from the YOP scheme who is fully trained and an excellent employee. The increase in the picture framer's rates bill is exactly the same as the salary of that young man, whom he wishes to keep on. What does he have to do?
  The admirable efforts of my right hon. Friend the Secretary of State will demonstrate, by the chaotic and unfair comparisons that will reflect like magnifying mirrors the idiocies of the system, a great unfairness. I urge my right hon. Friend to think carefully about whether, if there is a shortfall, the money could be used to help those who are having to pay an extra 25 to 40 per cent. on their principal annual bill. People who budget carefully cannot afford such increases and, of course, there is next year and the year after to come. I do not know whether there will be appeals under the new system, but I know that the cost of appealing to the revaluation appeal court is considerable.
  Every time a defence has been made of this wretched revaluation, people have said, "The law of Scotland is different and we are proud to have a different law. It has compelled us to have a revaluation." I have an answer for the Secretary of State. Let us change the law on our own; let us not wait for objections from the Home Office, the Department of the Environment and the rest who are screaming for different systems because their empires are affected. Let us just have a new system in Scotland. Let us show them. After all, we have shown them how to deal with football hooliganism and a whole lot of other things recently.
  Let us have a new rating system set out in the Queen's Speech for Scotland only, and if England thinks that it is a rotten system it need not follow us. Let us do what suits Scotland, because the penalty for the system that we have, the revaluation that we have done and the extravagance of the councils is that many businesses will go to the wall and many families will not be able to pay their principal bill. So let us tackle the problem ourselves. I congratulate the Secretary of State, but let him go further and do for Scotland what ought to be done for Scotland. Let England do what it wants in its own time.
  Mr. Deputy Speaker (Sir Paul Dean): Mr. James Wallace.
  8.1 pm
  Mr. James Wallace: I shared some of the conclusions—
  Mr. Robert Hughes: On a point of order, Mr. Deputy Speaker. At the risk of incurring your displeasure, I should like to say that, while members of minority parties have rights, so have majority parties. So far only one Back Bencher from the majority party in opposition, the Labour party, has been called.
  Mr. Deputy Speaker: I hope that the hon. Gentleman is not criticising the difficult job that the Chair has in calling hon. Members to speak. Mr. Wallace.
  Mr. Wallace: While I agree with some of the conclusions reached by the hon. and learned Member for Perth and Kinross (Mr. Fairbairn), I do not agree with some of his reasoning. However, the time is ripe for the rating reform that he called for. I agree that there is no reason why Scotland should have to wait for England to catch up.
  I welcome the legislation, although it does not contain everything that one would wish to see. None the less, it is generally to be welcomed. As might have been expected, there has been some self-congratulation on the Government Benches. It would be churlish not to acknowledge the success of the Scottish Office in prising a significant sum out of a Chancellor of the Exchequer who is not renowned for his open-handed generosity. Indeed, it is reassuring to know that if an argument is good enough, and if the Secretary of State fights his corner, new money can be found. I am sure that that message and particularly the fact that the Secretary of State fought his corner will have been noted by the teaching profession in Scotland.
  Equally, if self-congratulation is fair on Conservative Benches, Opposition parties, too, can take some of the credit for keeping up pressure on the Government to make some of the changes. It is only fair to say that my hon. Friend the Member for Roxburgh and Berwickshire (Mr. Kirkwood) and other of my right hon. and hon. Friends, even before the full effect of revaluation on the commercial sector dawned upon the Government, were making representations. Those have been continued both in correspondence and on the Floor of the House.
  I wish the Bill a fair wind and confirm that we shall co-operate in getting it on to the statute book. It is not the Opposition's role to be blindly uncritical of what the Government are doing. My first point of criticism is that to date we have not had a reassurance that the additional money will be forthcoming next year or in subsequent years of the present quinquennium. The rates that will be levied in forthcoming years will be based on the same rateable values that are causing concern and anxiety this year. The only idea as to future plans that we have had was given by the Chancellor of the Exchequer at the Scottish Conservative conference, in the passages that the hon. Member for Glasgow, Garscadden (Mr. Dewar) quoted. He hinted that he would be reverting to his more typical tight-fistedness. Without the reassurance that that sum will be repeated in future years, what is being offered to the ratepayers, particularly to the commercial ratepayers, is not so much a lifeline as a short stay of execution.
  When I met several retailers in my constituency last month, what caused them considerable anxiety was not
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  simply the size of the rate increases that they faced— some were about 600 or 700 per cent. — but the uncertainty about whether the Government would provide relief for them. They had business decisions to make. They had to decide whether to cut staff and what overheads could be cut or dispensed with. Some of them even had to consider whether they could continue trading at all. At that time such decisions could be made only tentatively. It might be fair to excuse the Government this year for some delay as they assess the situation, but if we are to treat our small business sector with proper respect we cannot impose the same uncertainty on it next year. The hon. and learned Member for Perth and Kinross made that point graphically in the examples that he gave.
  Many small business men are operating on narrow margins. Their rates bill, particularly after revaluation, forms a large part of their annual expenditure. If small businesses are to exercise financial responsibility in budgeting and planning ahead, and if they are to show the enterprise that many of us would like to see, it is only fair that they should know at a relatively early stage where they stand vis-á-vis next year's rates bill. We should like reassurances from the Minister during the passage of the Bill. If that is not possible, I think that it would not be unfair to seek an announcement — a favourable announcement—before the summer recess, or, at least, early in the autumn.
  My second point is about qualification for payment. There is no doubt that the across-the-board approach that has been adopted has administrative simplicity. No doubt some of the larger chain stores are adversely affected and feel the pinch of rate increases, but they are not affected in the same way or threatened as much as several of the smaller businesses. Larger chain stores with branches in many towns throughout Scotland could reap the benefit many times over, whereas small businesses that fail to qualify under the multiple of three would not receive any assistance.
  Mr. Fairbairn: While I agree that chain stores will have more resources, stores that have moved into country towns, which will be operating on much smaller margins, and which have had huge increases, must ask themselves whether they will stay there. Again, that has a big impact on local employment.
  Mr. Wallace: I take the hon. and learned Gentleman's point that in many smaller towns the introduction of those stores has been worthwhile, and their head office will have to consider the matter. However, many of the larger stores could qualify for assistance, and the viability of many such stores is not threatened, so there appears to be some rough justice. One might have to consider the cut-off point and whether it should be linked to the number of premises, and what the total amount should be that any firm throughout the length and breadth of Scotland could claim back as a rebate.
  In introducing the Bill, the Secretary of State admitted that there would still be higher rate bills for several domestic and commercial ratepayers throughout Scotland. He said that the Bill would not necessarily help them. High rate bills will be faced by many who qualify for assistance, and particularly by those who just fail to qualify. I have a list of the revaluation and rate payment increases of many of the retail outlets in the Shetland part of my constituency. There are rateable value percentage increases of 300 per

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  cent., 500 per cent., and 600 per cent. Many, indeed all of those outlets will qualify for assistance under the Bill, and I am sure that they will be grateful for it. Nevertheless they will still be paying a substantially higher amount in rates this year than last year. The same applies to the Orkney part of my constituency, where people face rate bills that are 30 per cent., 40 per cent., and 50 per cent. higher, which is many times the average rate of inflation.
  The Secretary of State and other Conservative Members have tended to put the blame for increased rate bills, as opposed to what may be attributed to revaluation, on high-spending authorities. However, it is not many months since the Secretary of State, from the Dispatch Box, praised Orkney Islands council for having kept within guidelines. Yet commercial and domestic ratepayers in Orkney are also having to pay considerably higher rates this year. That cannot be attributed to a high-spending authority. It can be attributed in part to the reduction in central Government assistance and, in some cases in my constituency, to derating of external plant and equipment. This has resulted in a multi-million pound handback of money which would otherwise have been paid by the oil companies. The oil companies will not feel the pinch if they do not have that amount of money. I am sure that many ratepayers in my constituency would have benefited far more if that derating measure had never been taken, for the spurious reason that it would bring Scottish law into line with English law. It did not do that. Indeed, should one attempt to bring Scottish law into line with English law? The measure has had a serious impact on rating levels in Orkney and Shetland. Oil companies have benefited at the expense of smaller businesses and domestic ratepayers.
  What happens if the Government do not use the £50 million that has been set aside for this purpose? I join with those who say that the balance should be applied to give relief to ratepayers and should not be handed back to the Treasury. Perhaps a sliding scale should be introduced for those who pay the highest increases. Perhaps there should be a sliding scale for those whose rate increases are between 2·5 and 3 times the previous level so that that important sector of the small business community is given some relief.
  The exemptions in clause 1 mean that the whisky industry will not receive any advantage in the Bill. Conventional wisdom has it that the industrial sector has benefited from revaluation. Indeed, the cut in derating occurred in the light of that. Nevertheless, the whisky industry seems to be an exception to the rule. Revaluation generally has increased the amount of cash that is paid. The Scottish Whisky Association claims:
  "Revaluation has increased the amount of cash paid in respect of rates on distilleries and warehouses by an average of 36 per cent."
  In my constituency, there has been one cash increase of 100 per cent. and an average increase of 82 per cent. The average increase in the Lowlands is 75 per cent. and on Speyside it is 41 per cent. These high additional sums must be found in an industry that cannot be said to be prospering.
  The Chancellor made a specific point in his Budget statement of helping the industry by pegging the duty on whisky to the inflation rate. He recognised the industry's plight. Although that measure was welcome, it was not enough, especially after the abolition last year of stock relief. The increased rates are a further substantial blow. I have written to the Secretary of State about it. I know that
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  the Under-Secretary of State will look into the matter. Has the hon. Gentleman been able to make any progress in providing assistance to this important industry which makes a valuable contribution to the Scottish economy?
  The Bill underlines the extent to which radical reform of our rating system is needed. I welcome the fact that the Government have again put reform of the rating system on the agenda. It is no secret that my right hon. and hon. Friends favour a system of local income tax, especially one that is made more administratively easy with computerisation. In the past, we have heard pledges to reform the rating system. Today we have heard a more specific statement, that a proposal will be brought forward by the end of this year. I recall reading about Ministers making the same statement at the Dispatch Box about the road equivalent tariff. We were told that it was a complex matter involving many problems but that the Government would come forward with a solution at the end of the year. That statement was made in 1981 and 1982 and, eventually, in 1984 the Government told us that they had examined the problem and had decided to do nothing. Many of us fear that we are slipping into a similar pattern with rates. My right hon. and hon. Friends will continue to press the Government to ensure that, this time, they meet their commitment to undertake the much-needed and long overdue reform of the rating system.
  8.14 pm
  Mrs. Anna McCurley: I am happy to congratulate my right hon. Friend the Secretary of State for Scotland on the speed of his response to the most pressing problem for Scottish householders and small business men. The amount that my right hon. Friend has given during the past few months is no small beer. He began his measures when it was obvious that revaluation would affect ratepayers. He increased by £19 million the domestic element of rate support grant provision, increasing domestic rate relief from lp to 5p in the pound in post-revaluation terms. Subsequently, an additional £38·5 million was granted. We now have a total rebate of £50 million. I hope that the Government guarantee that amount.
  The actions of the Secretary of State have finally convinced the Government that rating reform is necessary. I refute the challenge of the hon. Member for Glasgow, Garscadden (Mr. Dewar) that this is just a matter of expediency. It is a matter not of expediency but of commitment. The Government have always been committed to rating reform and assisting the ratepayer. If anyone should be thoroughly ashamed of expediency it is the Opposition, who talked earlier about devolution and the establishment of a Scottish assembly. They know that, during the 1970s, that was their expedient response to what was happening in the Scottish national camp at that time.
  I hope that the firm stand taken by my right hon. Friend the Secretary of State means that many of the small businesses in my constituency will remain viable. Many shop doors have already closed. I hope that some, which were about to take that step, will remain open. It cannot be assumed, however, that this relief which is offered in part to commercial enterprises will serve to assist all these people. That worries me greatly because, although the proposals will have great merit, we must take account of the fact that those to whom the multiple factor of three does not apply will still pay much more than last year. There are some small businesses in villages in my

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  constituency that cannot tolerate the excessive increases of the past year. It is less noticeable in the cities when premises change hands or shut down, but when shop premises in villages and small towns lie empty or are neglected because rates are too high there are deleterious effects on the spirit and fabric of life in those areas.
  I am pleased that additional finances will be given to help householders. Although there was exhilaration at the press conferences because of the announcement of help to our commercial firms, some individuals were still reticent about the measures. Domestic ratepayers are still paying a great deal more than previously. The real problem occurs when rates are of more worry than markets. Even the choice of moving down market is closed to many because of the sheer costs of moving.
  Another problem which I have encountered goes slightly beyond the terms of the Bill. I have discovered on travelling round my constituency that the arbitrariness of these increases in rateable values has been remarkable.
  I want to explain how the assessor was completely out of touch with the accurate position for one of my constituents who had established a small market garden business. It will take two or three years to get the business going fully, and during that time he will receive subsidies. Surely that should explain to any assessor that agricultural premises are involved. But no, the assessor demanded that my constituent pay rates on his property being classed as a luxury bungalow. I do not know how many hon. Members know my constituency, but it includes a few areas with so-called luxury bungalows. The bungalow in question is in a conservation area, and meets the minimum standards required. It has three rooms—two bedrooms— and houses two adults and a child. That hardly constitutes a luxury bungalow. When my constituent challenged the valuation and told the assessor that a much larger house up the road had been given a lower valuation, the assessor uprated the valuation of the other house. That caused fearsome strife in the village.
  Assessors do not appear to know the difference between a garage and a store. My constituent was angered when, having demonstrated that the shed next to his house was not a garage, he was told, "That is only because you do not choose to use it as a garage." That is ridiculous, because the shed is used to store his business equipment.
  Mr. Michael Forsyth: I am intrigued by the use of the term "luxury bungalow." I have experience of assessors talking about good and bad areas. Does my hon. Friend share my concern that there is a little too much subjectivity creeping into assessments because there is no rental evidence? I wonder what rental evidence there is for the sort of place that she has described.
  Mrs. McCurley: I could not agree more with my hon. Friend that an element of subjectivity looms large in assessments. I hope that my right hon. Friend the Secretary of State will take that point on board.
  I am disappointed that my right hon. Friend the Chancellor of the Exchequer is not here this evening. When he was at Perth, he took credit for the new money that had been made available. It would have been nice had we had the opportunity to thank him — and also to remind him that until there is a new rating system he must honour in full the commitment to the ratepayers embodied in this Bill.
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  Under the Bill, the Secretary of State can continue the scheme, and will no doubt wish to do so during the next few years of the quinquennium. I wish him all the best in determining the allocation of resources. I hope that the Treasury appreciates the seriousness of the position for ratepayers in Scotland. No doubt the dexterity demonstrated by my right hon. Friend will hold him in good stead. However, I admit to having the same concern as that expressed earlier by my hon. Friends about whether the full £50 million allocation will be used. I am not as scrupulous as my hon. Friend the Member for Strathkelvin and Bearsden (Mr. Hirst). I would use any surpluses for additional relief for commercial ratepayers.
  I am worried that we are asking Scottish authorities to administer the cost of the rebate, which will amount to about £1 million. It is not a great deal of money, but a principle is involved. Perhaps the bulk of that financial burden will be placed on the more prudent authorities, some of which are Conservative controlled. I am aware of the deep division between local government and central Government about continuing financial restraints. However, I remind the House that only one third of the increase in rates concerns revaluation, while two thirds arises because of excess spending by local government. I want the rift to be healed so that we can obtain co-operation from local government in being accountable for its spending, and not simply using the prevailing conflict to be bloody-minded at the expense of the ratepayers.
  I have more respect for local authorities than simply to regard them as purveyors of bins, bogs and burials— indeed, I have served on a local authority—but I wish that they would confine their activities to those for which they were established. I have a dossier of what I would term political abuses by local authorities amounting to many thousands of pounds. It upset me when the Opposition quibbled with my hon. Friend the Member for Edinburgh, West (Lord James Douglas-Hamilton) when he mentioned that. Since May 1984 the city of Edinburgh district council has made political use of council funds amounting to more than £70,000. That includes donating money for public meetings on behalf of the Chile Democratico. That may be legal, but there is something very wrong when most of the councillors were elected not to act as the next Secretary of State for Defence, but to ensure that bins were emptied and roads were repaired. It appears that the Labour candidates' selection process now throws up the type of councillor who believes that his mandate makes him responsible for national defence, foreign affairs, civil liberties, national if not global ecology and anything else one can name.
  If we are to believe the constant call of the Left— that housing is in an awful state, that education is being decimated and that cuts in finance are causing hardship — it is reasonable to inquire how Labour councillors find the time to take on national tasks. It is difficult to explain to an electorate how they can attend the second international nuclear-free zone conference in Cordoba in Spain but not find the time to attend a tenants' association meeting. That is particularly hard as the Cordoba conference lasted only three days, but many of the Scottish Labour councillors stayed there for a week—no doubt at the ratepayers' expense.
  Mr. Robert Hughes: I accept that there are differences of opinion about what should and should not be done by councillors, but if the hon. Lady is suggesting that certain

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  councillors received expenses for staying in Spain longer than was necessary, I hope that she will name them and take to task the financial officers of the local authorities that sanctioned such expenditure.
  Mrs. McCurley: I shall happily take on that task.
  The new breed of Labour councillor — [HON. MEMBERS: "Name them."] As I said, I shall be happy to take on that task. I shall be in correspondence about that matter.
  Mr. Robert Hughes: That is not good enough. The hon. Lady should be prepared to substantiate her charge with names, dates and local authorities, either in or outside the House. She should not make a general smear on councillors which goes far beyond the reasonable partisan politics of this House.
  Mr. Bill Walker: My hon. Friend will be aware that I have in the past done exactly what the hon. Member for Aberdeen, North (Mr. Hughes) has been asking for. I have reported to the local authority auditor the city of Dundee and its councillors. Had they not stopped doing what they were doing, they would have been prosecuted. They had been printing a news sheet and did not even—[Interruption.] The principle is the same, and the hon. Member for Falkirk, East (Mr. Ewing) knows it. He has friends serving on councils who do not always obey the law.
  Mrs. McCurley: I should like now to continue with my own contribution.
  The new breed of Labour councillor is quite prepared to spend ratepayers' money to further his own causes. That is sad, because many decent people in the old Labour party are now prepared to support some of the nonsense on which Labour councils are spending our money. It is obvious that local authorities are finding legal ways to fund organisations which support their own political viewpoint. In that way, those councillors enjoy benefits which are not available to their political opponents. That gives them a clear advantage in financial terms and also in regard to the scale and effort of any campaign. If little or no time is required to organise funds for a campaign, more time and effort can be devoted to the campaign proper. It seems to be only the Left that is abusing the system at present. However, if no action is taken, it is likely that before too long every party may start to make use of this new system of finance. That is why it is extremely important to alter the rating system to exclude those abuses.
  It is to be hoped that the findings of the Widdicombe committee will strengthen the demand to ensure a fairer and more democratic system, and one which reflects the proper functions of local authorities. If local authorities behave themselves, we might just be able to manage with the system that we have; but as they have abused the system, changes are now urgent. Any money that we expend at the moment to help our hard-pressed ratepayers will be reimbursed suitably in the future when those changes are introduced and implemented.
  8.34 pm
  Mr. Robert Hughes: I very much regret the fact that the hon. Member for Renfrew, West and Inverclyde (Mrs. McCurley) made such disgraceful allegations of illegality without one shred of evidence to
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  back them up. It is no use the hon. Lady waving a news sheet which she has received from the Conservative Central Office.
  Mrs. McCurley: It is not a news sheet.
  Mr. Hughes: If the hon. Lady has names of councillors who she believes have broken the law with regard to expenses, she has a duty to name them, either in this House or outside it, otherwise she is an accessory after the fact in breaching the law.
  Mr. Fairbairn: Will the hon. Gentleman give way?
  Mr. Hughes: No.
  Whenever Conservative Members have an inadequate case, they use the grossest smears to cloud the issue. I thought much more highly of the hon. Member for Renfrew, West and Inverclyde before she made her speech. I hope that she will do me the courtesy of naming names, or withdrawing her general allegation.
  Mr. Fairbairn: The hon. Member makes a strange case. Socialist councillors went to Cordoba for a fatuous conference which had nothing whatever to do with local government. If a councillor can get to a place such as Cordoba at the expense of the ratepayers, it is not very expensive for him to have a holiday while he is there.
  Mr. Hughes: With respect, that is not what the hon. Lady said. Her allegation goes much wider and much deeper than that.
  Mr. Henderson: Will the hon. Gentleman give way?
  Mr. Hughes: No. Several of my hon. Friends want to take part in the debate, so I must get on with my speech.
  There has been a general welcome for the Bill, in so far as it helps commercial and domestic ratepayers, and I share that general welcome to some extent, especially as it is now clear from clause 1 that it is at least possible for the rebates to continue for more than one year if the Secretary of State thinks fit. The Secretary of State was pressed on that issue, very largely by the Opposition, and eventually the provision appeared in the Bill. Whether he will allow the rebates to continue after next year is another matter. I suppose that, even if it is for only one year, we should be grateful for small mercies, but there is one vital question that must be answered by the Secretary of State.
  As the £50 million—whether it is used this year or not is not the point at this stage—is available as new money this year, is it committed for as long as the transitional system lasts, until we have a new rating system, or are we to revert next year to £20 million, £30 million or £40 million being removed from the health budget, the education budget, or some other budget to meet the demands of the rebate system? The Secretary of State must give a clear answer to that question. Unless we have a clear answer, he will be guilty of deception. He has our consent for the Bill to go through without challenge, on the basis that it is to last for a considerable time. I hope that he will put our minds at rest on that.
  Mr. Michael Forsyth: Will the hon. Gentleman give way?
  Mr. Hughes: No, I must continue with my speech.
  I am sorry that the hon. and learned Member for Perth and Kinross (Mr. Fairbairn) is not here. He pontificated about the rating system and seemed to labour under the illusion that only house owners pay rates. When I

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  challenged him on the point and told him that all householders were eligible to pay rates and were eligible for assessment, his reply was that most of them live in local authority houses and do not pay rates because they get a rebate. That showed that the hon. and learned Gentleman knows little or nothing about the system. All householders are eligible to pay rates. The fact that some of them do not pay full rates and that some of them pay no rates is a reflection of their circumstances.
  It is interesting that in the statement by the Secretary of State for Social Services today he pointed out that 7 million householders receive some help with rate bills and that 3 million householders pay no rates. That simply reflects the poverty of people. The Secretary of State is to compound that poverty by saying that everyone now has to pay a minimum of 20 per cent. of his rates. Where is the compassion and the care that we hear so much about from the Government? They are making the poorest of all people—those who under their system cannot afford to pay any rates whatever—contribute at least 20 per cent. The contempt of Conservatives for local authority tenants is revealed by the way in which they speak about ratepayers as though ratepayers were only those who own their own property, and deny any rights whatever to those who are in rented property.
  Before coming to the generalities of the Bill I have one or two technical points to make. I understood the Secretary of State to say that automatically local authorities will examine all ratepayers in their area and decide whether they are to get a rebate under the Bill, and that ratepayers will not have to make application for it. I wonder how that is to be done. It will be a major administrative task. I do not see how it can be done within the cost of £1 million that is mentioned in the Bill. It is grossly unfair that local authorities should be expected to meet the administrative cost.
  The difficulty arises very largely because the balance as between one class of ratepayer and another has been disturbed. The Secretary of State comes to the Dispatch Box and blithely tells us that there has been a change in the relative gross annual values. The reason why the industrial ratepayers' gross annual value has gone down is that business is in such a parlous state. That is the state to which the Government have reduced industry in Scotland, and it is not able to pay the share of the rates that it used to pay.
  The Secretary of State should re-examine the timing of the Bill. It does not come into effect until two months after it has been enacted. He cannot produce a statutory instrument until the Act has been brought into force. That means that we shall not see an order—an affirmative order according to the Bill — until the middle of the summer recess. The House has never been known to sit beyond that glorious day, 12 August, and therefore it will be September or October before we return to this matter. We shall be at the end of the financial year before the right hon. Gentleman tells the local authorities what the rebates will be and before they are paid. That is nonsense.
  I reiterate what my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) said. The Bill is supposed to deal with an abnormal situation and is to be passed at great speed. I therefore do not see why the Secretary of State should not bring the Bill into force at great speed.
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  If all the values had remained relative one to another, and if the proportion paid by industrial, commercial and domestic ratepayers had remained broadly in balance—I do not know how three different things can be balanced, but never mind—the rates paid by the different classes of ratepayer would have been much the same but for rate increases. I accept that.
  The problem is that we have all been aware for a long time that the rating system provides rough justice. It is not fair. The system has been generally palatable because it has meant that rates have not been increasing enormously. The problems of the rating system have been accentuated by two factors. The first is the greater demand on and greater responsibilities of local government. I reject the idea that local government has somehow decided to spend as much money as it can just because it wants to spend more money. That is not true. Local authorities spend more money because they have greater responsibilities to meet.
  The second reason why the problems have been compounded is the inexorable reduction of the central Government share of financial support.
  I hope that we shall have a general debate about the future of the rating system, long before the Government are ready to produce a Green Paper. Whatever the faults of the rating system—I accept that it has many, and I could speak for an hour on its different faults—the one advantage it has is that local authorities are reasonably certain about their income. With local income tax, sales tax or some other such system, a local authority will not know what its income will be. It needs some certainty, and a least the present rating system provides that.
  The certainty of income is diminished by the way in which the Secretary of State constantly revises his provision downwards. I saw the Secretary of State for Scotland on "Weekend World" a few weeks ago. It is not often that I pay compliments, but I am bound to say that he dealt with the difficult situation extremely well. He defended his case well. One of the most significant concessions that he made on that programme was that he accepted that there had to be an element of central Government support to provide for local authority services. At the heart of the argument about the rating system—-the provision for people and the amount of rates to be paid—is the size of that element. So long as central Government reduce their element of the provision, the more rates paid locally will have to increase. That is an obvious truism. That is the main reason why we have problems.
  There must be a great deal more planning and thought than has gone into the Bill. Local government is there to provide a service. I do not defend abuses in local government or those who spend money illegally. I do not concede the case made by the hon. Member for Renfrew, West and Inverclyde and all the other hon. Members who go on about "political purposes". The actions are legal, but even if I were to concede that they may be inadvisable, which I do not, the amount of money involved is a small proportion of the gross amount of money paid by local authorities. That is not the problem.
  The problem is that neither the Secretary of State nor any of his hon. Friends has ever said a decent word about local councils and the needs that they have to face. Instead of being constantly at loggerheads with local government, the Secretary of State should be in constant dialogue with it about providing for people's needs. The Government are

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  not interested in ratepayers. They are interested only in one class of ratepayer. They are not interested in the services that ratepayers expect to receive — decent housing, education and other local services. All that the Government wish to do is to whine about the rates, but the objective of local government is to provide the best services available for those in need. I commend local government for that.
  I wish that the Government would pay tribute to the many local councillors who give hours and hours of their unpaid time and in many cases sacrifice their careers merely to receive brickbats, and not commendations, from Conservative Members, who should be ashamed of their narrow-minded and bigoted attitude towards local government.
  8.46 pm
  Mr. Michael Forsyth: May I say to my right hon. Friend on behalf of 3,100 domestic ratepayers and 700 non-domestic ratepayers in my constituency who will benefit from the Bill, for this relief much thanks. Businesses in Callendar blazed the trail for an event which turned out to be happening in other parts of Scotland such as St. Andrews and elsewhere.
  We must be clear tonight about what the Bill is about and what it is trying to achieve. It is not about reducing the excessive rate burden that ratepayers have to face. It is about protecting those people who have found themselves with a completely unexpected and sudden increase in their rates bill which they cannot meet. There is a clear distinction there. There are many people with large and intolerable rates bills whose rateable values will not have increased more than threefold.
  Opposition Members have ritualistically asked about what will happen next year and whether my right hon. Friend the Chancellor of the Exchequer will be the bogy-man or whether my right hon. Friend the Secretary of State will be St. George, or perhaps St. Andrew, on his charger and win the extra £50 million. There is no reason why the scheme could not be continued next year and be funded from the overall rate support. I commend that to my right hon. Friend as a possible way of dealing with the problem.
  May I also thank my right hon. Friend for having acted against Stirling district council? He has required it to rebate 3p to the ratepayers in my constituency because of its outrageous proposal to keep council house rents well below the Scottish average and to ask ratepayers to foot the bill. It is a matter of deep regret to me that members of the Labour party—I assume that the people who nan Stirling district council and Opposition Members who seem to have found sympathy for the ratepayer are in the same party—propose, if I am to believe what I read in the Stirling Observer, to obtain counsel's opinion and go to the courts, no doubt at vast expense to the ratepayers, to try to stop that 3p rate being returned to the people in whom Opposition Members have shown such great interest.
  The other argument we have heard has been about the rate support grant and the fact that reductions in rate support grant are to blame for the problem. I hope that I shall be forgiven for being parochial and talking about my constituency, but the cuts in rate support grant in Stirling have occurred because of the financial irresponsibility of the district and regional councils. They have decided to spend vast sums. We have heard about trips to Spain but my lot seems to go on trips to eastern Europe. The Central
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  region has spent £10,000 on a brochure to tell everyone what a marvellous job it has been doing over the past 10 years. Stirling district council is spending £100,000 a year on a scheme which is called "Stirling Future World". It is a world that is very much in the future and far removed from the real world. The authority has given more than £250,000 to miners in the region and more than £150,000 to those in the district.
  Mr. Henderson: Fife has given £2 million.
  Mr. Forsyth: My hon. Friend the Member for Fife, North-East (Mr. Henderson) reminds me in an aside that Fife has given £2 million to the miners. The authorities have made these donations despite the fact that they are overspent on their budgets and incurring penalties and loss of grant that amount to 85 per cent. for Stirling district council and 75 per cent. for the regional council.
  There are those who argue that my right hon. Friend the Secretary of State for Scotland has been ungenerous. I remind them that he could have taken much more back in reduced rate support grant. He gave every local authority the opportunity to reduce its spending and thereby to get its full rate support grant entitlement. To be fair to the Central region, from being £3 million in excess of its budget it has managed to reduce that sum to about £900,000. Last year Stirling district council started off with £600,000 in the bank and at the end of the year was £600,000 in debt. Its rent subsidies and spending beyond its budget have led the council to seek a rate of 23p whereas it should be only 18·p, as Conservative Members have said. That rate could be set without cutting £10,000 a year on the women's committee and all the other items that are the symbols of the Left. The loss of rate support grant in my patch is due entirely to local government extravagance.
  The hon. Member for Glasgow, Garscadden (Mr. Dewar) tried to explain that he was against the consequences of revaluation. He told us that he considered revaluation a good idea at the time but added that there has been too much chopping and changing and that he now wants to be certain of the current position. I am sorry that the hon. Member for Dundee, East (Mr. Wilson) is not in his place. I enjoyed reading the report of his recent speech, in the course of which he argued that Scotland would be disadvantaged if revaluation did not take place. He cited England as an example, and said that Scotland prides itself on quinquennial revaluations.
  It is rather disingenuous always to seek to place on the front pages of newspapers examples of Scotland at a disadvantage when set against other parts of the United Kingdom and to fail to draw attention to examples of differences in Scottish law that do not suit popular opinion.
  I hope that my right hon. Friend will recognise the injustice of the position that we now face. In the past only a tiny minority have been able successfully to appeal against the rateable value of their property. Thousands appeal and only hundreds are successful. The successful appellants tend to be those who employ expensive professionals, who know all the tricks. If an ordinary man cannot pay his rates bill, he has only the prospect of embarking on a long and arduous appeals procedure and the incurring of professional fees without any guarantee of success at the end of the day. As my hon. Friend the Member for Renfrew, West and Inverclyde (Mrs. McCurley) said, he will have the prospect of never having

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  his neighbours speak to him again if his appeal is successful because the consequence of that will be an increase in their rates. The appeal process is a daunting task and is one upon which the majority are unwilling to embark, for understandable reasons.
  Assessors are answerable to no one and those of us who have been involved in correspondence with them recently have had that fact underlined effectively. The rental evidence on which they supposedly make their judgments is non-existent, thanks to the Rent Acts, which we hope the Government will find time to deal with during the next Session. It is too often said, for example, that Falkirk is a bad area and Killearn is a good one and consequently rateable values in Killearn were increased accordingly. Why is it that council houses in my constituency have incurred an average increase of 2·57 times whereas the average increase in the private sector is 2·75? I hope that the assessor is not using the rental evidence that is produced by the fact that council house rents are depressed as a result of subsidies that are paid, in effect, by ratepayers in the private sector because their properties' rateable values have been increased.
  How do we explain the extraordinary differences in rateable values throughout Scotland? A massive number of businesses and domestic ratepayers are benefiting in the Borders, for example, but other areas have benefited to a lesser extent. Are we to conclude that the assessor for the Borders made a terrible mistake last year or that the Borders region is booming and that there has been a sudden hike in rents? There is no evidence to support the second theory. Either the assessor got it very wrong this time or he got it very wrong last time. None of us can say what has happened because none of us can obtain the criteria on which the assessor acted in the first place.
  Injustice is done to those in my constituency who have seen the rateable value of their property increase by more than 2·4 times. I was canvassing in Stirling on Saturday and in doing so I was knocking on doors of newish houses. Many of these houses were about 10 years old. I found that they had rate bills of £800, £900 or £1,000. When I told colleagues who represent constituencies south of the border about this, they were stunned. They thought that I was quoting exceptional examples. Such rate bills are intolerable and we must not fool ourselves into thinking that because we are dealing with the problem facing those who have been exceptionally hard hit we are dealing with the basic problem.
  There are a number of specific issues within the compass of the Bill which worry me. These include the anomalies to which the hon. Member for Garscadden rightly drew our attention. I understand, for example, that if I erect a new sun lounge, conservatory or extension, it will be rated in the following financial year. If there are two houses that are identical in every respect, one of which has had its rateable value increased by three times and the other by three and a half times because of the sun lounge that was built in the previous year, the owner of the house with the sun lounge will qualify under the scheme and enjoy a 100 per cent. rebate whereas the owner of the other property will not. Such a result would be intolerable. I hope that provision will be made in the statutory instrument for real changes arising out of revaluation and that the measure will not restrict itself to additional building works, for example.
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  What is the position when there is a change of use, from industrial to commercial, for example, that involves the 40 per cent. derating? If a factory becomes a warehouse and the owner loses the benefit of 40 per cent. derating, will that be regarded as a rating increase of more than three times? Surely that would be wrong. Worse still, what about the new housing estate with identical houses, some of which have been occupied prior to 1 April, and where rateable values have increased following that occupation by more than a factor of three? People who buy the identical house after 1 April will not get the rebate received by the neighbour who moved in prior to the new rule coming into effect. What is worse, assuming the scheme continues, when the person who benefits sells the house, the house will continue to be eligible for subsidy. Therefore, two people in identical houses will pay different rates because of the scheme. I hope that provision will be made to deal with that anomaly.
  I am not a great champion of hunting, shooting and fishing, but I have those interests in my constituency. I understand that the present practice is for beats on rivers and shooting interests to be lumped in aggregate and rated as a whole. Can people who have found that the aggregate has increased by 2·9 times on six or seven stretches of a river say that on one stretch it increased five times and on another two times? What is the position of the assessor? Can those people ask for information on each individual beat, and would they qualify?
  It is unusual for me to speak in defence of local government, but if we have this scheme, is it fair to ask local government to bear the administration and manpower costs? We cannot continue to tell local government to cut its cloth yet give it extra duties without making resources available. It is also unfair to the ratepayers who will not qualify for support because at the end of the day they will have to meet the bill for paying the extra allowance to more lucky neighbours and fellow citizens.
  I ask the next question in the expectation of receiving an answer to it on Wednesday. Will my hon. Friend tell me what the effect has been of the Valuation (Deductions from the Gross Annual Value) (Scotland) Order 1984? I understand from the regional assessor that it has altered the tables so that the difference between the gross annual value and the net value has been reduced because the allowance for maintenance on higher rated property was reduced and the allowance for maintenance on lower rated properties increased. I am told that the net effect — I would be grateful for my hon. Friend's guidance on this—is that in villages in my constituency, such as Killearn, the effective amount knocked off the rates, in crude terms the rateable value, was reduced, which adds about £75 a year to their rates bill. Could we re-examine those tables, and offer some help?
  My final point relates to the scheme. It is complicated, although I accept that it is as simple as is possible. It is vital that it is well publicised and that people understand what their rights are and what the effects of revaluation have been. My hon. Friend should counter some of the propaganda that has been funded at ratepayers' expense —the misleading attempt to blame overexpenditure and extravagance on revaluation — by setting the facts straight and explaining how the scheme will help ordinary domestic ratepayers. Far be it from me to incite my hon. Friend to indulge in political propaganda at taxpayers' expense. The Civil Service, unlike local government, has such high standards of professionalism that it would not

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  allow him to get away with it, if he were so inclined, which I am sure he is not. Has my hon. Friend thought of delivering through every letterbox a leaflet explaining the scheme and its background? That would help those of us who seek to do that through correspondence.
  The rating system has always been unjust, and the burden has now become intolerable. I have people who are now putting their houses on the market because they cannot pay their rates bill. We must regard the Bill as a palliative, and proceed urgently to get rid of the domestic rating system altogether and to tackle the problems facing commercial ratepayers. If we do that, we shall receive the widespread support of Scottish people, whether their local authority bills are higher or lower than at present. There is widespread recognition that the present system is unjust. In bringing the scheme into being, I hope that my hon. Friend will try to minimise the injustices and anomalies that we face.
  9.4 pm
  Mr. David Lambie: Unlike the hon. Member for Stirling (Mr. Forsyth), I am here to speak not on behalf of my constituents who this year are facing massive rates increases and who will not benefit one iota from the Bill, but on behalf of the small number of my constituents who will benefit, and for them I am grateful to the Government.
  This is the Government's second attempt this year to deal with the effects of revaluation. Had they taken my advice at the end of last year and halted the 1985 revaluation before it was announced, we would not be wasting the time of the House dealing with the £38·5 million given to domestic ratepayers or the £50 million that will be given through the Rating (Revaluation Rebates) (Scotland) Bill.
  It was all very well for the Secretary of State for Scotland to ask the Labour Front Bench their opinion on revaluation. He should be fair and recognise that over a period of years voices have been raised in all parts of the House against this revaluation and the one in 1978. Those voices said that Scottish revaluation must be stopped so long as similar revaluations did not take place in England and Wales. The right hon. Gentleman has never listened to those voices. He has always gone ahead on advice from his civil servants — the same civil servants who gave similar advice to the previous Labour Administration and Labour Secretary of State for Scotland.
  Given the uproar in Scotland over the effects of the 1985 revaluation, I hope that the political parties in Scotland will look realistically at the whole rating system and try to introduce a system that is fairer to everyone, be they domestic, commercial or industrial ratepayers.
  The Bill will give £50 million—although earlier we were told it might be £30 million—to certain categories of domestic and commercial ratepayer. In areas such as mine large industrial complexes will experience great difficulty because of the increases they face in their rates bills, yet they will get no help from the Bill. We should not fall over backwards to congratulate the Government on the small amount of help that they have been forced to give because of opposition from Members of Parliament representing all areas of Scotland. The Government have been forced to do so because they were stupid in continuing with the 1985 revaluation.
  One may sometimes think that one is a voice in the wilderness, and if one continues to shout about something
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  like this, people often say, "He is speaking on his own behalf. He does not have the support of his party. He is a wee bit eccentric. If the Labout party says something, he might well say the opposite." However, the political eccentrics are sometimes correct. Tonight the Government have been forced to act because of pressure over the last five and a half years from people such as myself.
  Mr. McQuarrie: The hon. Gentleman had made great play about the Government's decision on this revaluation. However, he must accept that during a previous debate on rating and valuation in Scotland the hon. Member for Glasgow. Garscadden (Mr. Dewar) said:
  "To push the revaluation back by two years will considerably disadvantage the ordinary ratepayer."
  He went on to say:
  "I hope that the Minister will tell us what will happen in 1985-86. Will he guarantee a full revaluation then?" — [Official Report, 28 July 1982; Vol. 28, c. 1194–95.]
  Therefore, the Labour party wanted to ensure that there was a full revaluation in 1985-86. If the hon. Gentleman feels that it was only on the Conservative Benches that there was a desire for revaluation, he should remember the facts stated by the hon. Member for Garscadden.
  Mr. Lambie: The hon. Gentleman cannot have been listening to what I said, because I made that point. The hon. Gentleman has been trying to make that intervention since half past five, but no other hon. Member would let him in. I have given him the chance because, like me, he is an eccentric and he does not bow down whenever the whip is cracked.
  The right hon. Member for Western Isles (Mr. Stewart), who unfortunately is not present, spoke about an article in a recent edition of the Glasgow Evening Times by Desmond White, the chairman of the Celtic football club. He outlined the serious problems facing the ratepayers of Scotland. He drew attention to the anomaly in the rating of football grounds in England and Scotland. The present rateable value of Ibrox park, the home of Glasgow Rangers, is £176,2:50, and Celtic park has a valuation of £120,750. However, the Manchester United ground, which includes a substantial restaurant, has a rateable value of only £37,000, and Arsenal has one of £30,500. I might be accused of distorting the picture by quoting only valuations, and it could be said that I should be quoting the amount of money that the clubs actually pay, but Mr. Desmond White points out that the Glasgow club paid almost £50,000 more in rates in 1984–85 than Manchester United, a club with approximately two and a half times Celtic's income.
  Mr. Dewar: My hon. Friend will remember that when we debated the Rating and Valuation (Amendment) (Scotland) Act, we received an assurance from the Minister that, by virtually abolishing the contractor's principle and allowing comparability with England when there was not sufficient local comparable property, the problem could be cured. Unless the Minister fails to live up to his advertisement, there is now no differential between English and Scottish grounds under the new valuation law.
  Mr. Lambie: I am glad that my hon. Friend has made that point.
  Desmond White wrote a similar article in a Scottish newspaper at about the time we debated the Rating and Valuation (Amendment) (Scotland) Act. He again wrote

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  to Scottish Members of Parliament on this subject. I replied that I thought that he and all the other football clubs in Scotland were being conned into accepting the assurance given by the Secretary of State for Scotland that the Act would deal with these anomalies. That Act has not dealt with the anomalies, and from the figures that I am quoting it is clear that the anomalies are greater than they have ever been because of the effects of the 1985 revaluation.
  Mr. Ancram: I am sure that the hon. Gentleman wants to be accurate in what he says. He will be aware that, as a result of revaluation, a number of Scottish football grounds, including Parkhead and Hampden, will pay less in rates this year than they did in 1984ߝ85. As for comparability, he will also be aware that the legislation provided that it could be done during the course of an appeal.
  Mr. Lambie: We are discussing the anomalies in valuations which have always existed between properties in Scotland and similar properties in England and Wales. We are not discussing whether they paid more last year or are paying more this year. Glasgow Celtic is paying £50,000 more this year than Manchester United is paying for much better facilities and on the basis of a greater income.
  Desmond White makes the valid point that he is concerned not just about the anomalies between similar places in Scotland and in England; he is also dealing with what he considers to be the special case of Scotland. He says:
  "If the Government wished an immediate partial solution it could very well drop the requirement that the Scottish local authorities require to pay 44 per cent. of their total expenditure to a figure of 40 per cent. This would have the immediate effect of reducing the rate burden of everyone north of the border by approximately 10 per cent."
  If the Government had tabled an order to increase the rate support grant in Scotland by 4 per cent., every ratepayer—not only those whom the hon. Member for Stirling was discussing earlier but thousands of my constituents who are ratepayers—would benefit to the tune of 10 per cent. I put it to the Government and their supporters that the problem has been accentuated by the 1985 revaluation. The real problem is the continuing reduction in the rate support grant to Scottish local authorities.
  Between 1977 and 1981—the period of the last Labour Government running into the first two years of the present Conservative Administration — the amount of local government expenditure paid by the Government was 68·5 per cent. In the orders that we have debated—and, unfortunately, passed by a majority — this year the amount paid by the Government to Scottish local authorities has been reduced to 56·6 per cent. of relevant expenditure. That is where the real problem arises. Unless the Government increase the rate support grant to local authorities, we shall never deal fairly with Scotland's ratepayers.
  I am disturbed that we are spending the time of the House, as we have on similar orders in the past, discussing this problem when the people whom I represent were telling me last weekend that we should be discussing unemployment in Scotland. The latest unemployment figures were published at the end of last week. In my
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  constituency, every third man is now unemployed, and, of those who are unemployed, every second one has now been unemployed for more than a year and in many cases for more than two years. That is the problem that the House should be discussing, and it is the problem that my constituents would like the House, Scottish Members especially, to discuss instead of wasting our time tinkering with the effects of a system which should have been altered years ago.
  All those hon. Members who have spoken so far have concluded their comments by saying what they thought was the real solution to the reform of the rating system. The only way in which to solve the problem of the rating system in Scotland quickly and fairly is to introduce a 100 per cent. Government grant. The days of the traditional idea of local democracy have gone. Local people can no longer pursue policies opposed to those of the Government. That is true to some extent even of Labour Governments. We cannot go back to the good old days before local government reorganisation. If we were to introduce a 100 per cent. Government grant for relevant local authority expenditure, we should have no more debates on the rating system in Scotland. Moreover, the people of Scotland would not have to face rates increases and we would be able to deal with the immediate problem of mass unemployment.
  9.20 pm
  Mr. Barry Henderson: We all know that the hon. Member for Cunninghame, South (Mr. Lambie) has consistently opposed anything to do with the rating system. He is one of the few hon. Members— perhaps the only one—who did not think that we should go through with the 1985 revaluation. These matters are of considerable importance to unemployment. High rates hurt unemployment. That fact should never be lost sight of, and I hope that the hon. Gentleman will encourage his friends in local government to keep it in mind.
  I welcome the Bill because it gives direct help to ratepayers who are most severely affected by the revaluation. It gives a full rebate to those whose valuation has been increased three times. That, combined with previous measures to give an eightfold increase in domestic rate relief, has gone a long way to reduce the effects of revaluation on ratepayers. The problem is that there are wide variations, even within districts, and to talk about averages is dangerous. However, as revaluation would affect domestic ratepayers more severely this year, the increase in relief has been of great help.
  I am glad that my right hon. Friend has introduced a Bill to deal with wildly increased valuations, but many ratepayers — possibly most — will face substantially increased rates bills. The best thing about the Bill is that it highlights the fact that it is not revaluation but the spending policies of local authorities that determines the size of most ratepayers' bills. Rate increases in my constituency could have been within the rate of inflation if it had not been for the spending policies of local authorities, especially Fife regional council. The product of 10 years of Labour effort in Fife regional council is that the area has gone from being one of the lowest rated in Scotland to one of the highest.
  What have the Liberals done to help to produce that result? They have not even voted for the last four budgets of Fife regional council. They were content literally to sit on their hands when these crucial votes were taken. The

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  Liberals were prepared to allow a 20 per cent. rates increase to be imposed on Fife ratepayers, when on average the increase could have been only 2 per cent. if they had voted at the right time. The cost of spending beyond guidelines by Fife regional council is hitting our ratepayers to the tune of 8p in the pound—interestingly enough, exactly the same amount in the pound that was provided by my right hon. Friend to help domestic ratepayers who were affected by the results of revaluation.
  Although the Liberals are far from perfect, I must congratulate north-east Fife district council, under its Liberal administration, on keeping its expenditure within guidelines. However, if one removes the effect of the rate support grant distribution formula, about which I should have had a few things to say to my hon. Friend the Under-secretary of State for Scotland if I had had more time, one sees that in one year the Liberal council in north-east Fife has increased the rates by twice as much as the Conservative council increased them in the previous four years. It does not, therefore, have a perfect record, either.
  The Labour party has tried to suggest that it is the Government's policies which have caused the substantial rates increases. Local authority expenditure is still higher than it was in 1978–79. The measures taken by my right hon. Friend represent a tiny reduction in rate support grant distribution, but a substantial increase in the direct help that is given to ratepayers. This means that total central taxpayer support for local government is no less than it was last year. Most of it has gone towards providing direct help for hard-pressed ratepayers. Therefore, I warmly welcome the Bill. I very much look forward to the proposals for fundamental reform which we are told can be expected at the end of the year.
  9.27 pm
  Mr. Jim Craigen: I have no doubt that the speech of the hon. Member for Fife, North-East (Mr. Henderson) will go down well in the East Fife Mail. However, the Bill has to be viewed in the context of the announcement by the Secretary of State for Social Services this afternoon: that many more Scottish people will have to pay rates because of the changes that are to be made in the housing benefits system.
  When he introduced the Bill, the Secretary of State for Scotland outlined some of the problems which followed the 1985 revaluation because of the shifting of the rates burden among the various sectors. My hon. Friend the Member for Cunninghame, South (Mr. Lambie) is not so eccentric as he makes out. It was the first time that I have heard him admit that he might be eccentric. I knew that to be the case with the hon. Member for Banff and Buchan (Mr. McQuarrie), but my hon. Friend the Member for Cunninghame, South has his head screwed on the right way. He knows that because the Secretary of State for Scotland cut back on rate support grant during the last five or six years, many revaluation difficulties have been created with which the right hon. Gentleman is now faced. The right hon. Gentleman went too far over the last cut-back in rate support grant. That is why the revaluation exercise upon which he embarked has come back to him with a vengeance.
  My hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) said that about £1 billion had been taken by central Government during the last five years from local authority services. There was a clear problem of hardship for many small businesses. We should remember the
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  different categories in the commercial sector. We heard earlier about the tourist industry and the importance of hotels, and we have discussed the problems of shops, although less reference was made to offices. Many small businesses face real hardship as a result of the sudden upsurge in their fixed costs arising from the revaluation exercise, compounded by the reduction in rate support grant. Those problems were especially acute in the Borders and in Dumfries and Galloway, and many problems emerged in Central region, Strathclyde and Lothian.
  Last month, I wrote to the Secretary of State asking for clarification about the amount of take-up under the scheme, because the evidence suggested that it would be nothing like the £50 million that has been allocated. The National Federation of the Self-Employed and Small Businesses, after conducting a survey of its members, reckoned that, of the £40 million for the commercial sector, the take-up might be about £22 million.
  The self-employed, who represent about one tenth of the work force, have become a significant sector of the economy. The Secretary of State was right to recognise the special hardships that would be caused to many of the self-employed. It was in the context of those figures that my hon. Friend the Member for Garscadden assured the Under-Secretary of State for Scotland last month that there was no statutory machinery whereby the Government could assist people in this predicament. My hon. Friend had every right to expect that the Scottish Office would do its homework and get the figures right. I wonder whether the Secretary of State would have got such ecstatic applause at the Tory party conference in Perth—
  Mr. Dewar: He did not. It was loyal applause.
  Mr. Craigen: My hon. friend points out that it was loyal applause. Indeed, my hon. Friend got the ecstatic applause on at least two occasions, when the Secretary of State said that the Opposition would help the Government with the passage of the legislation. I was about to suggest that the Secretary of State would have got a slow handclap if the delegates at Perth had known what we now know about the way in which it appears the scheme will operate.
  Scotland has been allocated £50 million, and we wish to ensure that we get that £50 million for the benefit of Scottish ratepayers. I know that in Committee we shall have the support of the hon. Members for Banff and Buchan and for Strathkelvin and Bearsden (Mr. Hirst) and the hon. and learned Member for Perth and Kinross (Mr. Fairbairn) in making a useful amendment by varying the threshold so that the whole £50 million is taken up.
  Preliminary work in Dumfries and Galloway suggests that a change in material circumstances could be a factor in some properties going over the 300 per cent. threshold. This is where the appeals machinery comes in. Will there be a shortfall as a result of successful appeals? We shall have two problems of take-up. One will be caused by the 300 per cent. threshold and the other will be caused by the unquantifiable number of appeals.
  The hon. Member for Stirling (Mr. Forsyth) must have held a constituency surgery on Friday, because he spelt out a number of anomalies in the new scheme. I can imagine a Maryhill ratepayer asking me, "How is it that the man next door will get relief because his valuation has gone up 320 per cent. and he had central heating put in last year,

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  but my valuation has gone up 299 per cent. and I am getting nothing?" My answer will be, "Speak to the Secretary of State for Scotland."
  The Secretary of State mentioned the cash flows of local authorities. I met representatives of COSLA recently and they were apprehensive about the delays that may result from people holding back until they see how the scheme works. Cash flow problems will inevitably lead to higher interest charges for local authorities. I am glad that the Secretary of State seems to be coming round to the idea that it would be administratively more convenient if, instead of shoals of letters being sent to rating authorities, those authorities identified the people who should qualify under the scheme. The Secretary of State expressed caution about a letter-writing campaign, but can he tell us how soon people will know when the scheme will come into operation? The scheme will depend on the statutory instrument that is to follow the primary legislation. Therefore, there will be a period of considerable uncertainty while people are expecting a benefit.
  New St. Andrew's house will be relieved of the responsibility, but I suspect that the computers of quite a few rating authorities will get overheated while trying to identify who will benefit from the new system. I suspect that many people will be disappointed when they find out how much they are to get from the new system. We are talking only about the margin over 300 per cent., and some figures that I have seen suggest that there may be some relatively small rebates, particularly for domestic ratepayers.
  I have a continuing curiosity as to which chairman of a Conservative party constituency organisation will benefit most from the scheme. After all, it is open-ended. We know that it is not Fordell castle. However, it will be interesting to see who benefits most from the scheme, on the domestic side.
  I should like the Minister to clarify a point that the Secretary of State made about the guidelines. Am I right in thinking that the administrative costs of the scheme, as presently intended, will not affect local authority guidelines? It would be ironic if the Scottish Office, which has so bungled this £50 million relief scheme, yet is in charge of a £3·4 billion local authority budget in Scotland as a whole and exercises rate-capping powers over the 65 local authorities, created a situation which meant that some of them got into trouble in the operation of the small scheme and the administrative charges that are to be imposed on the local authorities.
  The Opposition hope that the Government will come round to the idea of accepting the administrative costs for the scheme—in other words, reimbursing the rating authorities for the costs and the payments that will be made under the scheme. Moreover, I wonder whether we shall get a value-for-money scheme. It will be quite a costly exercise. Clearly, the less that is spent on its administration, the more that will be available to benefit ratepayers.
  I notice from recent parliamentary answers that the Minister has given to me that the cost of rates collection in Scotland as a whole is only 1 per cent. of the total amount collected, which next year is estimated to be £1·6 billion. I wonder whether this scheme will cost just 1 per cent. of the £50 million. I suspect that it will be fairly costly. When does the Minister expect the regulations to
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  be introduced under the scheme? Although we shall touch on these matters on Report on Wednesday, it is essential that we get some idea of when the regulations will come into force.
  The Opposition wish to give the Bill a proper launch. We were a bit apprehensive over the past few weeks at some of the uncertain noises emerging from the Scottish Office about whether the scheme would capsize before it was properly afloat. On Wednesday, our aim will be to make it an improved measure. As my hon. Friend the Member for Garscadden has said, it is a rough justice scheme. It will generate a postbag full of anomalies and complaints. I hope that they will find their way to the Secretary of State.
  I cannot but conclude that more Scottish ratepayers will be disappointed by the scheme and at their exclusion from it than will benefit from its introduction. The Secretary of State probably knows this, but he may expect little thanks from those who will be assisted, because the relief that they obtain under the scheme will probably be less then they bargained for much less than they were led to expect.
  I hope that the Under-Secretary of State will spend a little time explaining the intricacies of the scheme in relation to commercial ratepayers. They rightly feel considerable consternation about how the scheme will operate. They would like to know why the threshold cannot be brought down below the 300 per cent. mark.
  9.45 pm
  The Parliamentary Under-Secretary of State for Scotland (Mr. Michael Ancram): On 17 April this year during Question Time the hon. Member for Glasgow, Garscadden (Mr. Dewar) said:
  "In respect of the commercial ratepayer, the Minister"—
  I believe that he was referring to me—
  "has managed to give the impression that the only factor stopping help for at least those hardest hit is the lack of any statutory machinery' for doing so." — [Official Report, 17 April 1985; Vol. 77, c. 255.]
  I assure the hon. Gentleman that if he wishes to create that statutory machinery the Government will give that measure every facility and speed it through the House. The Bill provides that machinery and fulfils the commitment made by my right hon. Friend the Secretary of State to provide a mechanism to bring exceptional relief to commercial and domestic ratepayers, who, as my hon. Friend the Member for Fife, North-East (Mr. Henderson) rightly said, have been hardest hit by the effect of revaluation. The hon. Member for Glasgow, Maryhill (Mr. Craigen) says that those who have not been helped by it will be disappointed. I am sure that when the hon. Member for Garscadden was offering help to the hardest hit he appreciated that those people would be at the top of the scale.
  My right hon. Friend the Secretary of State has outlined how the scheme will work. In a sense, the Bill gives us the power to grant relief to domestic and commercial ratepayers in the circumstances outlined. It defines the class of ratepayer who will be eligible for such relief and the trigger of that eligibility. To that extent it fulfils the wish of the hon. Member for Garscadden, and I look forward to his co-operation during the remaining stages of the legislation. The speeches of the hon. Members for Garscadden and Maryhill tended to give a slightly new meaning to the word "co-operation".
  Mr. Dewar: The hon. Gentleman is being a little less than gracious. If he wished a withdrawal of co-operation, we could happily have promised him several months of consideration in Committee. We have not done that.
  Mr. Ancram: I think that the hon. Gentleman is aware of what I mean. In terms of welcoming this machinery, some of the points that he raised were not as gracious as he might have liked them to be.
  During the past few weeks the Opposition parties have been delighted to take advantage of what they have seen as a politically disruptive situation in Scotland. In political terms, I find it hard to criticise them for that. It is interesting to look at their record. I was interested to see tonight that the Liberals had decided to send forward not the hon. Member for Gordon (Mr. Bruce), who believes that any help to ratepayers is a warped priority, but an hon. Member who believes that helping ratepayers is a priority — the hon. Member for Orkney and Shetland (Mr. Wallace). It never ceases to amaze me how the Liberal party, with its small numbers, always seems to have a man for all seasons.
  I believe that we were all delighted to hear the right hon. Member for Western Isles (Mr. Stewart) tell us that, as a Scottish nationalist, he wished the position in England to be identical to that in Scotland. We welcome his conversion to unionism, which we have long been pressing on him.
  Mr. Donald Stewart: I merely expressed the view that I did not want to see that. I spoke about the appalling anomalies between the assessments in the two areas.
  Mr. Ancram: If the right hon. Gentleman reads the Official Report tomorrow, he will find that he called on the Government to ensure that the positions were similar. He neatly avoided the fact that, on 28 July 1982, the hon. Member for Dundee, East (Mr. Wilson) pronounced these exciting words:
  "There is nothing wrong with revaluation. In fact, there is much to be gained from it."
  I have listened with interest to some of the criticisms that his party has made since then about revaluation. — [Interruption.] The hon. Member for Glasgow, Cathcart (Mr. Maxton) points out that the SDP is not represented tonight. I did not mention that because it happens with such regularity that it is not worth commenting upon.
  I listened carefully to what the hon. Member for Garscadden said. He rightly pointed out that during the debate on 28 July 1982 he called for a full revaluation this year. He said:
  "The Minister should make it clear now that there will be no more flirting with this halfway house"—
  that is, partial revaluation—
  "and parboiled non-solution. He should tell us that there will be a proper revaluation in 1985-86."—[Official Report, 28 July 1982; Vol. 28, c. 1195-97.]
  The hon. Gentleman placed no qualification on that. He did not say that we had to provide mechanisms to bring relief to those who might be hardest hit by revaluation.
  The hon. Gentleman may say that he did not expect the sort of multipliers that have occurred during revaluation. If that was the reason why he was so keen to have a full revaluation without any qualifications, I must tell him that that does not hold water. When his party was in government, it experienced revaluation in 1978–79. He may remember the multipliers on that occasion — the domestic multiplier was 2·8, the industrial multiplier was
  110
  4·2, the commercial multiplier 4·1, and the category described as others 4·9. Therefore, the overall revaluation average multiplier was 3·6.
  What happened under the Labour Government to relieve the ratepayers' suffering because of the multipliers? Precisely nothing, other than that the domestic relief element of the rate support grant was reduced by 75 per cent. It is interesting to note the Labour party's new-found support for the ratepayers whom it was not prepared to help when it was in charge of revaluation in 1978.
  The hon. Member for Garscadden will never concede that any of the rating effects this year have been due to overspending by councils. I wish to put a serious question to him. He spoke earlier about the effects of RSG reductions. He knows that both I and my right hon. Friend have spoken about the effect on rates of overspending throughout Scotland. There is one example that he cannot ignore, and that is the one mentioned by my hon. Friend the Member for Edinburgh, West (Lord James Douglas-Hamilton) about Edinburgh district council, which, by its own hand and by its spending decisions, has increased its rate poundage by almost 80 per cent. He knows full well the direct effect that that will have on ratepayers in Edinburgh, both domestic and commercial.
  I hope that the hon. Gentleman will take this opportunity to tell the House whether he supports that council's spending decision, and whether the report in today's Glasgow Herald that the executive council of the Scottish Labour party has sent messages of support to the council is correct.
  Mr. Fairbairn: I can give my hon. Friend one good example of Edinburgh's rating policy. Jenners has a turnover which is 500 times less than that of Harrods, but has to pay to Edinburgh district council twice the rates,
  Mr. Ancram: I am grateful to my hon. and learned Friend. I am disappointed chat, once again, the hon. Member for Garscadden has failed to answer my question about rating reform.
  A number of specific questions were asked by hon. Members, and I shall do my best to answer them.
  My hon. Friend the Member for Fife, North-East, in an intervention during my right hon. Friend's speech, asked whether clause 2(2) could be used selectively in terms of the authorities to whom the rebate is paid on a future occasion. My answer is no. The subsection is drafted so that that cannot happen.
  The hon. Member for Garscadden asked whether we would consider paying the rating authorities some of their reimbursement "up front", as I think he put it. The Bill provides for flexibility in our repayment, and I should like to consider what evidence would be acceptable for making some early payment to the rating authorities before an audited certified claim can be prepared.
  The hon. Member asked about disabled persons' relief, and I think he appreciated that I was not altogether clear about it. I am still puzzled as to how it can arise. If the hon. Gentleman will write to me about it, I shall look into the matter.
  My hon. Friend the Member for Strathkelvin and Bearsden (Mr. Hirst) asked about mines and quarries. [Interruption.] I shall deal later with what hon. Members call shortfall. Quarries are formula-valued and will not qualify for relief under the measure.

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  The hon. Member for Orkney and Shetland asked about the whisky industry. As he knows, whisky distilling is manufacturing and benefits from industrial derating. Thus again, under the Bill as drafted, the industry will not qualify for relief.
  My hon. and learned Friend the Member for Perth and Kinross (Mr. Fairbairn), together with my hon. Friends the Members for Renfrew, West and Inverclyde (Mrs. McCurley) and Stirling (Mr. Forsyth), rightly pointed out that the lesson of the revaluation has been in underlining the anomalies and iniquities in the present system. Those have been highlighted by the revaluation, and that is precisely why the Government have been looking, for some years now, for a better way of financing local government.
  I must say to the right hon. Member for Glasgow, Rutherglen (Mr. MacKenzie) that the suggestion that we are being panicked into a solution or are rushing to find one has to be judged against the vast amount of work that has been done in this regard in the last Parliament and since November last year. It remains our intention to produce in the near future proposals which we believe will be acceptable as a better and fairer system of financing local government.
  My hon. Friend the Member for Renfrew, West and Inverclyde asked about the problems of market gardening. Market gardens other than the house are generally treated as agricultural subjects and therefore do not appear in the valuation roll. Obviously I cannot comment on a particular case, but if there is any doubt obviously the occupant should appeal in circumstances such as those mentioned.
  The hon. Member for Aberdeen, North (Mr. Hughes) asked why there was to be a delay of two months before the measure was brought into force. The answer is that it is not needed before that. The order can be laid and debated immediately. If Royal Assent is given in June, we would have that order by the summer recess. That would be in plenty of time for the authorities to make payments of the rebate before the due time when the rate bills have to be paid.
  My hon. Friend the Member for Stirling asked several questions, and I may have to write to him on some of them. With regard to fishing, if there is a separate entry in the new roll for a fishing beat which can be matched against a similar entry in the old roll, the property can possibly
  112
  qualify, but if the beats have been amalgamated or divided between the two rolls there can be no comparison and thus no rebate.
  With regard to change of use from industrial to commercial purposes, there has to be a comparison between lands and heritage before and after revaluation. If there is a difference of a kind to which my hon. Friend points, there will not be matching entries in the old and new rolls, and therefore there will be no rebate.
  Several hon. Members asked about the amounts of money involved. The scheme was devised by looking for a multiplier which we believed would deal with the harshest cases arising from revaluation and the effects on rate bills. The figure that we chose, which is very much in line with the figures for domestic relief which I quoted for 1978–79, was a multiplier of three. It is not easy to calculate how much that will cost, as hon. Members have realised. I believe that we shall not know the full answer to that question until all those who are eligible have been paid.
  The Bill fulfils the commitment that my right hon. Friend made to the House in his recent statement. It is good for Scottish ratepayers, and I call on the House to support it.
  Question put and agreed to.
  Bill accordingly read a Second time.
  Bill committed to a Committee of the whole House.
  —[Mr. Peter Lloyd.]
  Committee tomorrow.

  BUSINESS OF THE HOUSE
  Ordered,
  That, at this day's sitting, the Family Law (Scotland) Bill [Lords] may be proceeded with, though opposed, until any hour. —[Mr. Peter Lloyd.]

  RATING (REVALUATION REBATES) (SCOTLAND) BILL [MONEY]
  Queen's Recommendation having been signified— Resolved,
  That, for the purposes of any Act resulting from the Rating (Revaluation Rebates) (Scotland) Bill, it is expedient to authorise the payment out of money provided by Parliament of the expenses of the Secretary of State in paying rating authorities amounts equal to the total amounts of rebates granted by them under the Act.—[Mr. Peter Lloyd.]

  Family Law (Scotland) Bill [Lords]
  As amended (in the Standing Committee), considered.
  Family Law (Scotland) Bill [Lords]

    Clause 8
    ORDERS FOR FINANCIAL PROVISION
    10.1 pm
    Mr. Donald Dewar: I beg to move amendment No. 1, in page 6, line 20, at end insert—
    (2A) An order under subsection (1)(a) for the transfer of heritable property from one spouse to the other which is made by the court shall have no effect in relation to third parties transacting with the spouse against whom the order has been made unless it is registered in the Register of Inhibitions and Adjudications within fourteen days from the date on which it is made.'•
    Mr. Speaker: With this it will be convenient to take amendment No. 6, in clause 14, page 12, line 41, at end insert—
    (4A) An order under subsection (2)(d) which is made by the court shall not affect dealings relating to the former matrimonial home by the non-applicant spouse with third parties acting in good faith unless such order is registered in the Register of Inhibitions and Adjudications within fourteen days from the date on which it is made.'•
    Mr. Dewar: We come to what is on the face of it a fairly dry piece of law reform. I am not sure that I shall do anything to dispel that impression in the next 10 minutes or so. I am equally confident that the Solicitor-General will rise to a similar high standard when it is his turn to speak. This is a matter of some importance. I approach it with a good deal of caution because, although I am occasionally given to flamboyant claims of my expertise and virtue, I have never prided myself upon my knowledge of conveyancing law. A few obscure fragments are lodged in my memory. They have something to do with a mysterious Act which reached the statute book in—
    Mr. Nicholas Fairbairn: 1924.
    Mr. Dewar: Yes. The sight of the hon. and learned Member for Perth and Kinross (Mr. Fairbairn) and I discussing conveyancing must be quaint and strange.
    These two amendments to comparatively simple matters in terms of principle, although the complexities would puzzle someone with a great deal more expertise than myself. We are considering clause 8. Most hon. Members will be aware that clause 8(1)(a) deals with the transfer of property between spouses. That is when, in an action for divorce, there is an application to the court for an order to transfer property.
    Clause 8(1)(c) relates to an incidental order. It is defined, as hon. Members will be aware, in clause 14. Clause 14(2)(d) and (e) refer to incidental orders which, among other things, may regulate occupancy rights or outgoings of the former matrimonial home. This is an unashamedly difficult subject for me and somewhat confused.
    The first problem is that there has been some sort of clash or competition between an incidental order under clause 14 and occupancy rights which are awarded under section 3 of the Matrimonial Homes (Family Protection) (Scotland) Act 1981. That will to some extent be clarified by Government amendment No. 5. I had tabled amendments to the same end, but I shall give way to the Government's formulation. I am grateful to the Solicitor-General for having listened to the arguments that came
    114
    largely from the Law Society of Scotland and the professions and which were reflected by my hon. Friend the Member for Falkirk, East (Mr. Ewing), who raised the matter in Committee.
    I understand that once the Government amendment has been incorporated there will be a fairly neat demarcation, and occupancy rights under the 1981 Act will run to the point of divorce and will then, to use the fashionable terra, fly off. If there is any need for the enforcement of occupancy rights thereafter, it will have to be pursued through an incidental order under clause 14. That will arise only at or after the point of divorce. I hope that that is clear to those who are following the debate.
    Mr. George Foulkes: No.
    Mr. Dewar: I know that my hon. Friend is an honest trier and is not usually terribly discouraged by failing to understand what is happening. I look forward to one or more of his rumbustious speeches during the course of our exchanges.
    I turn now to the real issue behind the amendment, which is directed to how the new provisions will work. I am not clear about the way in which they will operate and their operation has not been explained to me by any of those learned in the law whom I have consulted. It is as plain as the nose on my face—it could not be much plainer than that—that the courts can make an order enforcing a transfer between the spouses. The timing is referred to in clause 12. The court can order that the transfer takes place on the granting of a decree of divorce or
    "within such period as the court on granting decree of divorce may specify."
    Even taking into account the provisions in clause 12, I presume that there will have to be a disposition. I presume that a formal document will be signed by the spouses transferring the property, which ultimately will give a good title that will be recorded in the register of sasines. I do not know how long it takes these days successfully to record a deed in the register, but I am told that it takes many months. I have been told that there can be a time lag of as long as nine months. I was rather surprised when I was told—this shows how much I am out of touch—— that the delay when land registration is involved can be as long as 18 months. That period can elapse before the new title is properly registered and, therefore, available for public inspection, or at least to the eye of a searcher who may be carrying out an examination on behalf of a prospective purchaser.
    If there is such a substantial gap between application and registration it has been suggested to me that a dishonest spouse may try to defeat the transfer by selling to a third party. How can the third party be expected to be aware of the fact that there is an order under clause 8(1)(a) in existence, which will presumably prevent the third party from getting a good title?
    The amendment suggests that when an order is made by the court under clause 8(1)(a) there should be a duty upon the parties — presumably upon the grantee, the person who will receive the property—within 14 days to register the order in the register of inhibitions and adjudications. If the grantee fails to do so, the theory is —I hope that it holds good in practice—that the third party sale would go ahead and would not be affected adversely by the existence of a section 8(1)(a) order.

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    I hope that this issue has been explained reasonably clearly. I an sure that the Solicitor-General for Scotland follows it. Indeed, there has been some correspondence between us on these issues prior to the debate.
    Obviously, the Bill complicates conveyancing, but complication will undoubtedly abound in this matter. That is the fault of the House. For sufficiently good reasons we try to get more sensible property laws on the break-up of a marriage, and in so doing we complicate the life of a conveyancer in Scottish legal practice. if, for example, a wife were to get the transfer of the house, her legal adviser failed to register the order in the register of inhibitions and adjudications, alienation took place and a third party bought in good faith because there had been no registration in the register of inhibitions and adjudications, the third party sale could not be overturned, and presumably there would be a nice action for professional negligence against the solicitor. Perhaps I should not be laying up such a store of trouble for my colleagues, and who knows what the future holds for me?
    There is common sense in the proposal, and great danger in leaving the position in the somewhat unsatisfactory state in which a clause 8(1)(a) order may be made, the complicated and laborious conveyancing process may be in hand, and there is an apparent transaction with a third party, such as I have described. That is the simple part of the story.
    Amendment No. 6 deals with the same sort of point in connection with incidental orders, to which I referred earlier. They are the orders made under clause 8(l)(c) and further defined in clause 14. Clause 15(3) states:
    "Neither an incidental order, nor any rights conferred by such an order, shall prejudice any rights of any third party insofar as those rights existed immediately before the making of the order."
    That seems to be conclusive, but I am not entirely sure that it is. I hope that the Minister can help me on that.
    If an incidental order confers on one spouse occupancy rights and the entitled spouse sells the property to a bona fide third party and, therefore, there is competition about which occupancy rights take precedence and are preferred, what is the position?
    Some time ago the Minister wrote me a complicated letter—I do not complain about that—which to some extent deals with the problem. It would be convenient if he would summarise the letter and incorporate it in his speech. He stated:
    "The Bill as introduced sought to protect the right to occupy a matrimonial home under a court order by providing that provisions of sections 6, 7 and 8 of the 1981 Act should apply. That would have meant that the right to occupy would automatically prevail over the rights of third parties who acquired right to the property."
    That was the position in the Bill as originally drafted. Sections 6, 7 and 8 of the 1981 legislation were imported into the Bill. That made it clear that in those circumstances an incidental order would prevail over a sale to a third party.
    Mr. Barry Henderson: Did I understand the hon. Gentleman to say that he expects the answer of the Solicitor-General for Scotland to be even more complicated than the hon. Gentleman's question to him?
    Mr. Dewar: I fear that that may be so, but we must wait with bated breath. I am glad that the hon. Gentleman has followed the question with his usual—
    Mr. John Home Robertson: Perspicacity.
    Mr. Dewar: I thank my hon. Friend the Member for East Lothian (Mr. Home Robertson). The point, before I lose my thread, is that the position as outlined was perfectly clear as the Bill was originally drafted.
    10.15 pm
    However, the Minister goes on, fairly, to point out that sections 6, 7 and 8 are no longer imported into the Bill because there were amendments. Therefore, the clear position that there will be an automatic preference over the rights of third parties is presumably undermined. The Minister makes that point, but goes on to say:
    "This does not of course mean that the person who is given the right to occupy is left without protection. The court in a divorce action could be asked in advance by the spouse to protect her right to occupy against adverse dealings in addition to its common law powers and the specific power to interdict avoidance transactions under clause 18 the court has a very wide power under clause 14(2)(k) to make any ancillary order which is expedient to give effect to its orders. Thus the court could, having regard to these various powers, interdict the former husband from disposing of, or otherwise dealing with, the house while the right to occupy lasts."
    As I understand what the Minister is saying—I hope that we have this clear in our minds—it means that as the Bill was originally drafted, it was quite clear that an incidental order regulating occupancy rights took precedence over any sale of a property to a bona fide third party. The situation has now been thrown into the melting pot, but that preference for the occupancy rights could still be re-established if an application were made to the courts to use their powers to interdict the husband from disposing or otherwise dealing in the property, thus settling the matter by that specific court order and provision.
    That may be satisfactory enough, but there may be many occasions when the court is not invited—perhaps through inadvertence or because it was not thought necessary—to use those additional powers to make that specific order. The question still arises about what would happen in that situation, where the powers under clause 14(2)(k) have not been called into play. It seems to me that we are left with a somewhat doubtful query, where the clear superiority of the incidental order no longer automatically prevails and where that position has not been put right by some specific and special order of the court.
    In that situation, amendment No. 6 comes into play and commends itself, at least to me, as a perfectly sensible idea. The House will remember that amendment No. 6 states that unless there is a registration of the incidental order
    "in the Register of Inhibitions and Adjudications within fourteen days",
    the preference in any competition of occupancy rights will go to the third party who has purported to buy in good faith. That is sensible and clarifies the situation. Although the Minister has rejected the argument in his letter, I hope that he will be prepared to look at the matter again.
    One of our difficulties—I say this with regret, but there is nothing we can do about it — is that the Bill began its journey in another place. Therefore, it is now at the end of its parliamentary passage. So often in this House we are able to say, "Ah, but the Government can take this away, think about it and put it right later." On this occasion we must put it right tonight. There is no doubt that there is great anxiety, particularly among the legal profession. That was eloquently expressed by Mr.

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    Graham, president of the Law Society of Scotland, who corresponded with the Secretary of State about the Bill. He said in a letter dated 16 May:
    "The Council is convinced that unless the Bill is radically amended in relation to certain of its provisions, it is likely to have the effect of bringing the conveyancing process in relation to domestic property to a virtual standstill."
    In fairness, I ought to say that part of the Law Society's anxiety has been met by the neat demarcation which will be put into the Bill via Government amendment No. 5. Therefore, I do not suggest that the amendments I am proposing are essentially what is referred to in Mr. Graham's serious suggestion. I know from my personal contact with the Law Society that it feels strongly that my amendments will sensibly clarify the position. I hope that, even at this late stage, the Minister will be prepared to turn his mind seriously to them rather than accepting the fait accompli and saying that there is no room for further movement.
    I recognise that I have spoken at some length on this matter and that I may have confused myself and the House. However, I have tried to make a serious point and to put across a genuine difficulty, as it is seen by many people who have to deal on a daily basis with our conveyancing system. I hope that the Minister will be prepared to look at what has been said, and the arguments that have been advanced.
    Mr. Gordon Wilson: I do not intend to follow the hon. Member for Glasgow, Garscadden (Mr. Dewar) through the maze in which he took us, although we were all impressed by his ability to steer us into it. Whether he got us out of it is another matter. I do not intend to show my ignorance of these matters. It is many years since I did conveyancing and I shall not pretend that my knowledge is sufficient to allow me to speak with expertise.
    As the hon. Member for Garscadden elaborated his case, certain memories of what happened during the formulation of the Matrimonial Homes (Family Protection) (Scotland) Act 1981 came back. The notice of warning to conveyancers and their clients first emerged then. Court orders that might have an effect on the heritable property were granted. However, nothing was available to warn everybody of what might be happening. I take it that this is what the hon. Member for Garscadden has been developing in the debate on this Bill.
    During the proceedings on the 1981 legislation, the Government had the opportunity to consider amendments that sought to make greater use of the register of inhibitions and adjudications, but turned down that solution on cost grounds. My readings of outpourings thereafter in various legal journals showed me that the profession was concerned that the Government, by bypassing the register, had made life more complicated. The great advantage of the register is that it gives an immediate warning of what might be happening. It is not subject to the delays that can be encountered in the register of sasines.
    I was struck by what the hon. Member for Garscadden said about delays. He spoke about nine months for a return of deeds duly recorded, and suggested that that might become worse under the new land registration procedures. In the days when I practised, six months was considered to be excessive, but it takes that length of time before any property can show up on the searches. During that period, many difficulties in the transfer of the property can occur.
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    In view of the complexity about which we have been talking, the fact that a greater number of people own their houses than did so a few years ago and the existence of the register of inhibitions and adjudications, why have the Government not thought of making better use of that register? It could be used to give fairly speedy notice to third parties and others that a problem might emerge. The register can give a reply quickly and it does not involve the technicality of registering deeds in the register of sasines. It always seemed strange that the Government should introduce new matrimonial provisions concerning the disposal of property in the most complicated way.
    If there is a simple way, we should try to follow it. Regardless of the argument powerfully deplored by the hon. Member for Garscadden — who knows his stuff, because none of us could follow it—would it not be desirable to try to make life as simple as possible? If these registers exist, they should be utilised. I do not believe that the cost would be all that great. In view of this amendment and thinking back to the 1981 Act, I recommend to the Minister that greater use should be made of those registers.
    The Solicitor-General for Scotland (Mr. Peter Fraser): Although both amendments cover much the same ground, the hon. Member for Glasgow, Garscadden (Mr. Dewar) will appreciate that in one sense they cover rather different areas although the remedies proposed by them are similar.
    The Government have sympathy with the objective of securing sufficient protection in the Bill against the disposal by the defender of property which is the subject of an order for transfer under clause 8. In the light of the representations received from the Law Society, we have considered carefully how far such additional protection is necessary or readily practicable.
    It is necessary to be clear about the nature of an order for the transfer of property. As the Bill stands, this is simply a personal order against one party requiring him or her to convey that property to another party. In itself, such an order cannot affect the rights of third parties. It is only after the property has been conveyed that the transferee acquires a real right to it. Therefore, there is no need for a specific provision that the order shall not affect the rights of third parties.
    The real question is whether there is sufficient provision to protect the interests of the person to whom it is proposed the property should be transferred against dealings with a third party before it is conveyed. It is my view that the existing powers available to the court under the Bill and at common law should be adequate and that it would not be justifiable to provide in addition a specific statutory requirement for the registration of orders for the transfer of property.
    Given the careful way in which the hon. Member for Garscadden advanced his argument, it might be helpful if I explained these powers.
    A defender who disposed of property in defiance of a court order for transfer could be punished for contempt of court. Under clause 14(2)(k), or clause 18, he could also be expressly interdicted from disposing of the property and punished for his breach of interdict. Most importantly, the transferor could be inhibited from disposing of the property. Clause 19 would enable a person applying for a transfer order, whether pursuer or defender in the divorce action, to obtain "on cause shown" warrant for inhibition on the dependence of the action, and such inhibition would

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    remain in force until the order for transfer was implemented. If a party had not obtained inhibition on the dependence of the action, he could still obtain warrant for inhibition at common law once the order for transfer of property had been made. Thus, by using the normal machinery of inhibition, the transferee could obtain the effects sought by the amendment, namely, publication to third parties and the setting aside of adverse dealings with such parties.
    Given this array of powers available to the court, both at common law and under the Bill, I am not persuaded that there is a clear need for additional protection against avoidance transactions in the form of a statutory scheme of registration. There is also the consideration that a statutory registration requirement would impose consider-able additional costs upon the Department of the Registers and would also increase the cost of searches in the register of inhibitions and adjudications and hence increase the cost of conveyancing generally. The delay in Scotland is no small consideration. To require additional work when there is sufficient remedy is undesirable. The Government's view is that it would not be justifiable to provide for the registration of orders for the transfer of property. On that basis, I ask the House to reject the amendment.
    10.30 pm
    Amendment No. 6 deals with circumstances in which there is what I might, in shorthand, call an occupancy order. It is important that a person who is given the right to occupy the former matrimonial home should be able to protect that right against dealings with third parties. It is also important that third parties who acquire the right to property should not have their rights prejudiced by finding that the property is subject to a right to occupy under a court order of which they have had no opportunity to learn.
    The Bill tried originally to protect the right to occupy a matrimonial home under a court order by providing that sections 6, 7 and 8 of the Matrimonial Homes (Family Protection) (Scotland) Act 1981 should apply. That would have ensured that the right to occupy would automatically prevail over the rights of third parties who acquired the right to property. The Law Society and the Department of the Registers have represented that that would impose an extremely heavy burden on conveyancers and the keepers of registers. In every transaction concerning residential property they would have to investigate whether a right to occupy under a court order existed. We have concluded that that would be difficult to justify, as there are only a limited number of cases, and other reasonable safeguards are available. On that basis, in Committee we deleted provision for including sections 6,7 and 8 of the 1981 Act.
    The result of that deletion is that court orders regulating the right to occupy the matrimonial home will have effect between the parties to the marriage, but there is no question of their having effect against third parties who acquire right to property in the absence of specific provision to that effect. Thus, third parties will acquire their right to the property free of the right to occupy. They will accordingly need no notice of the protection against that right.
    The question is whether the person who is given the right to occupy has the necessary protection. The hon. Member for Garscadden answered the question to some
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    extent. The court in a divorce action could be asked in advance by a spouse to protect his or her right to occupy against adverse dealings. In addition to its common law powers and a specific power to interdict avoidance transactions under clause 18, a court has wide power under clause 14(2)(k) to make any ancillary order which is expedient to give effect to its orders.
    The court could, having regard to those powers, interdict a husband from disposing of, or otherwise dealing with, the house while the right to occupy lasts. The ex-spouse would be liable to punishment for contempt of court if he or she breached such an interdict. The court could, in appropriate cases, circumvent this problem by ordering the property to be transferred into the joint names of both spouses or into the names of trustees. I refer the hon. Member for Garscadden to the power given in clause 14(2)(g). The Scottish Law Commission mentioned that possibility in its report. I am satisfied that the court has adequate powers to protect the interests of the person who is given the right to occupy.
    In Committee I also stated that we would consider strengthening these powers by giving the court power to grant a warrant for inhibition in respect of property which is subject to a court order granting the right to occupy. We have given this matter serious consideration, but have come to the conclusion that it is not desirable to amend the Bill in this respect. Inhibition is a remedy normally available against a creditor in an obligation to pay money or to transfer property against the debtor in that obligation. In this type of case there is no creditor, no debtor and no such obligation. We would thus for the first time be seeking to apply inhibition in a situation where it has not been applied before. It is uncertain how it would apply in these circumstances, and to provide adequately for its application could be extremely complicated.
    Another important consideration for those hon. Members who have been so concerned about this long-awaited report on diligence is that we hope it will be soon available. In these circumstances, it would be premature to extend inhibition to an entirely new area in advance of consideration of that report. The hon. Members for Dundee, East (Mr. Wilson) and for Garscadden referred somewhat tentatively to their experience of this law. I am sure that they recollect all too vividly their university lectures on the problems of future debts in such an area. It is important that on this point we should await the deliberations of the Scottish Law Commission.
    Mr. James Wallace: My recollection of warrants for inhibition on the dependence in a consistorial action is that one had to have allegations of the dependence being either vergens ad inopiam or in meditatione fugae. Clause 19 says:
    "the court shall have power, on cause shown, to grant warrant for inhibition … on the dependence."
    Is the Solicitor-General satisfied that the words "on cause shown" extend to causes which might be used to justify such a warrant for inhibition on the dependence beyond the narrow grounds upon which it is currently allowed by the courts?
    The Solicitor-General for Scotland: I compliment the hon. Member for Orkney and Shetland (Mr. Wallace) on his recollection of the Latin tags that have been put on these matters and, indeed, on the warrant which he doubtless put on many summonses during his practice in the courts. I concede that the phrase "on cause shown" is

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    potentially wider than either the prospect of vergens ad inopiam or in meditatione fugae. Nevertheless, on his more fundamental point, the application of inhibition to future debts is a matter which would be such an innovation in the law of Scotland that at this time its introduction would be undesirable.
    The amendment provides that an order giving the right to occupy may be registered in the register of inhibitions and adjudications and that unless it is so registered within 14 days the order shall not affect dealings with third parties. The amendment is not necessary or appropriate, since, as I have sought to explain, under the Bill as drafted the right to occupy would not affect the dealings with third parties. There is therefore no need for a system of publication to give notice of such a right to third parties.
    I should add that we have examined in considerable detail whether a system of registration of such orders is desirable. We have come to the conclusion that it is not. To provide adequately for such a system would require quite complex and detailed provision, quite out of proportion to any advantage arising from it. Such a system might also prove too rigid. It would prevent any dealings with the property, although in some cases the court might consider that dealings such as the grant of a security or the sale of surplus ground attaching to the property were reasonable. The arguments against allowing inhibition that I have mentioned would apply also to such a system if its effect were to place inhibition upon the dealings with the property.
    For those reasons, which I accept are somewhat complicated and specialised in the law of Scotland, I ask the House to reject this amendment as well as the first amendment.
    Mr. Dewar: I do not know whether my colleagues will be satisfied with that reply. Perhaps I watch "Weekend World" too much, but I have got into the habit of recapitulating an argument to make sure that I understand it. I am tempted to do so now, but I am sure that it would show my inadequacies and I shy away from the prospect. Besides, it might try the patience of my hon. Friends.
    I understand the Solicitor-General's point about the distinction between the two areas with which the amendments deal. The first is the section 8 order for the transfer of the property between spouses. If there is such an order and the spouse who is transferring decides to sell in defience of the order—one would hope that happens only rarely—he can be punished if there is an inhibition or an interdict to stop that. But assuming that there is not, and an order has been made simpliciter, if he then goes to a third party and says, "If you want a nice house, I will let you have it cheap," and the third party goes to his solicitor who proceeds to buy it in good faith, I wish to be clear about what will happen. Presumably, the sale is invalid because there is a court order. I did not understand the answer to that simple question. Perhaps the Minister will explain it.
    The Solicitor-General for Scotland: The example that the hon. Gentleman gave shows his difficulty. If he has in mind, to adopt the bankruptcy law provisions, a confident and conjunct person, clause 18 deals with orders relating to avoidance transactions, and, in general, the position that he postulates would be covered by the clause.
    However, if the court has ordered that the house should be transferred from the husband to the wife, one assumes
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    that, in the ordinary course of events, it will be advertised and there will be an opportunity for potential purchasers to inspect the property. I was trying to explain to the hon. Gentleman that, before the order was granted, the request for inhibition would have been within the action itself. Alternatively, if, subsequent to the decree of divorce, it comes to the attention of the spouse in favour of whom the order has been made that that is what is intended, under common law he or she would have the right to request inhibition from the court. In those circumstances, the hon. Gentleman's anxiety is misplaced, because the opportun-ity, which exists now, of using the common law powers of inhibition, would be available.
    Mr. Dewar: I am grateful to the Minister. It may be that I am making a mountain out of a molehill. I was thinking of the unlikely circumstances in which an order is made under which the husband is bound to transfer the property to the wife, who intends to live in the ex-matrimonial home and bring up the family there. The husband, perhaps cheesed off with the hardness of his fate, may decide to live on the Costa del Sol. He may therefore say to a third party, "I am going to Spain and I want to get rid of the house in a hurry. I will sell it to you." The purchaser then goes to his solicitor and says, "I have arranged to buy the house." Binding arrangements are then entered into, and the transaction goes ahead. However, unbeknown to the purchaser, there is a court order which says that the house must be transferred to the wife.
    Of course, if the wife was lucky enough, she could get her hands on the proceeds of the sale, if they were not already in Spain. However, she may not want the money; she may want to live in the house. I am simply asking the Minister what would happen then. Does the third party have a good title, or is the uncompleted order enough to defeat him in his attempts to buy?
    The Solicitor-General for Scotland: It is always difficult to deal with incomplete examples, but it seems that the more that the hon. Member for Glasgow, Garscadden (Mr. Dewar) elaborates, the closer he gets to a situation in which the provisions of clause 18 would apply.
    If it is anticipated on behalf of the pursuer spouse that the correct way to dispose of the property on divorce is a transfer of property order, it will be appropriate to seek for inhibition then. If that were not done at that stage, it would be appropriate, subsequent to the decree of divorce, to use the approach that is available under common law to seek for letters of inhibition.
    10.45 pm
    Mr. Dewar: I shall retreat. We shall have an opportunity to read what the Solicitor-General has said, and no doubt those with a particular interest in these matters will do so. I do not know whether they will be consoled.
    I do not wish to trespass on the time of the House by dwelling on the second amendment. It is clear that, with the Bill in its present form, the incidental order would not prevail and the third party's rights would be paramount. The question would be: what redress is open to the dispossessed spouse? I am not sure whether such situations will arise. Perhaps the best course is to hope that they will not.
    The Solicitor-General for Scotland has looked at the issues closely and I know that he has been pressed hard on

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    them behind the scenes. If he is sure that registration and a register of inhibitions and adjudications would be unnecessary, I must let the matter rest there. I beg to ask leave to withdraw the amendment.
    Amendment, by leave, withdrawn.

    Clause 14

      Incidental orders
      The Solicitor-General for Scotland: I beg to move amendment No. 2, in page 11, line 24, leave out 'An' and insert 'Subject to subsection (2A) below, an'.
      Mr. Deputy Speaker (Mr Harold Walker): With this, we may take the following: Amendment No. 3, in page 11, line 37 at end insert
      'made after the granting of decree of divorce.'
      No. 4, in page 11, line 40 at end insert
      'made after the granting of decree of divorce'.
      Government amendment No. 5.
      The Solicitor-General for Scotland: The amendments are intended to ensure that incidental orders regulating the occupation of the matrimonial home, the use of furniture in it and so on, or regulating liability for outgoings in respect of a matrimonial home may be made only at the date of divorce or thereafter.
      The amendments were tabled in response to views first expressed by the Law Society, which suggested that it would be inappropriate for the power to make incidental orders under clause 14(2) (d)or (e) to be available to the courts while the parties are still married, as disputes about occupancy and furniture arising prior to divorce should be dealt with under the powers conferred by the Matrimonial Homes (Family Protection) (Scotland) Act 1981. The hon. Member for Falkirk, East (Mr. Ewing) raised the matter in Committee and the views expressed by him and, in supplement, by the Law Society, seem to be correct.
      The Scottish Law Commission said in its report that some of the incidental orders under clause 14 (2) might not be appropriate before divorce and, accordingly, clause 14 (6) would allow the Court of Session to make rules restricting the types of order that may be made before the granting of a divorce. I think that in such cases it would be desirable to have express provision in the statute rather than leave the matter to rules of court.
      Opposition amendments Nos. 3 and 4 are designed to achieve the same effect as the Government amendments, but I believe that it is preferable to make separate provision, on the lines of our amendments, than to write the limitations into paragraphs (d) and (e) of clause 14 (2). The paragraphs relate to the types of orders rather than the times at which they may be made. However, there is only a difference of drafting between us.
      Amendment agreed to.
      Amendment made:No. 5, in page 12, line 10, at end insert—
      '(2A) An incidental order referred to in subsection (2)(d) or (e) above may be made only on or after the granting of decree of divorce.'—[The Solicitor-General for Scotland.]

    Clause 16

      AGREEMENTS ON FINANCIAL PROVISION
      The Solicitor-General for Scotland: I beg to move amendment No. 7, in page 13, line 32 at end insert—
      (2A) Without prejudice to subsections (1) and (2) above, where the parties to a marriage have entered into an agreement as to financial provision to be made on divorce and—

      (a) the estate of the party by whom any periodical allowance is payable under the agreement has, since the date when the agreement was entered into, been sequesrated, the award of sequestration has not been recalled and the party has not been discharged;

      (b) an analogous remedy within the meaning of section 10(5) of the Bankruptcy (Scotland) Act 1985 has, since that date, come into force and remains in force in respect of that party's estate; or

      (c) That party's estate is being administered by a trustee acting under a voluntary trust deed granted since that date by the party for the benefit of his creditors generally or is subject to an analogous arrangement.

      the court may, on or at any time after granting decree of divorce, making an order setting aside or varying any term of the agreement relating to the periodical allowance.'•
      Mr. Deputy Speaker: With this it will be convenient to take Government amendment No. 8.
      The Solicitor-General for Scotland: These amendments are intended to ensure that where a periodical allowance on divorce is payable under a voluntary agreement, it will always be possible for a payer who is bankrupt to apply to the court to vary or set aside the provision for the periodical allowance as may be appropriate in the circumstances. Where a person becomes bankrupt, the trustee in bankruptcy will take possession of almost all his assets and probably a fair proportion of his income. In these new circumstances, the amount of periodical allowance payable by the bankrupt person to his divorced spouse may be quite unrealistic. Where the periodical allowance is payable under a court order, the bankrupt person could apply for the order to be varied or set aside as appropriate under clause 13(4). Where it is payable under agreement, and the agreement provides for variation, he could apply for periodical allowance to be varied or set aside as appropriate under clause 16(1).
      It is only in those cases—probably very few—where the agreement does not provide for variation that difficulty could arise. The bankrupt person could find himself liable to an obligation which is already unrealistic in the circumstances, which he has no means of paying and which the other spouse cannot in practice enforce. That is not satisfactory for anyone. It is to allow variation in those few cases that the amendment is proposed.
      The additional power to vary would last only — I emphasise this — while the bankruptcy itself lasted. I stress that the amendment merely gives the court a discretion to vary or set aside a periodical allowance. It would not be obliged to do so.
      Amendment No. 8 would have the effect of extending clause 16(3) to the new subsection (2A) so that any term of an agreement that purported to exclude the right to apply to the court in circumstances set out in subsection (2A) would be void.
      As I have explained, the amendments deal with a problem that should seldom arise, but could cause considerable difficulties if it did. I therefore ask the House to accept them.
      Amendment agreed to.

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      Amendment made: No. 8, in page 13, line 34, after '(1)(b)' insert 'or (2A)'—[The Solicitor-General for Scotland.]
      10.52 pm
      The Solicitor-General for Scotland: I beg to move, That the Bill be now read the Third time.
      The main provisions of the Bill achieve a comprehen-sive reform of the law of aliment, the introduction of statutory principles to be followed by the courts in making orders for financial provisions on divorce, and the clarification of the law relating to property rights and legal capacity of married persons. They are based, as Scottish Members will certainly appreciate, on the recommenda-tions of the Scottish Law Commission, the proposals of which were widely supported,. That was reflected in the general welcome accorded to the Bill by hon. Members.
      I am grateful to Opposition Members for the constructive contributions that have been made, which have resulted, I hope, in an improvement of the Bill in certain important respects, for example, to the incidental orders that we have just been discussing on Report. I commend the Bill to the House.
      10.53 pm
      Mr. Dewar: On the whole, the Bill is a useful addition to the law of Scotland. The Opposition took something of a battering from the Government for their lack of co-operation. We had examples earlier this evening. I am grateful that it was not the Under-Secretary, the hon. Member for Edinburgh, South (Mr. Ancram), but the Solicitor-General, who was in charge on this occasion.
      Question put and agreed to.
      Bill read the Third time and passed, with amendments.

      STATUTORY INSTRUMENTS, &c.
      Motion made, and Question put forthwith pursuant to Standing Order No. 79(5) (Standing Committees on Statutory Instruments, &c.

      HOUSING (SCOTLAND)
      That the draft Scottish Special Housing Association (Limit of Advances) Order 1985, which was laid before this House on 23rd April, be approved.—[Mr. Neubert.]
      Question agreed to.

      Newham (Young Persons)
      Motion made and Question proposed, That this House do now adjourn.—[Mr. Neubert.]
      10.54 pm
      Mr. Tony Banks: I have sought this short debate on the problems of youth in Newham because I have become disturbed by the amount of evidence that has been presented to me by various agencies and youth workers operating in the borough of Newham and the evidence before my own eyes daily as I live in my constituency. What is emerging is making me angry and considerably alarmed for the future.
      On many occasions, I and my hon. Friend the Member for Newham, South (Mr. Spearing), who has joined me here, have pointed out that the people of our borough face social, economic and environmental problems that are greater than almost anywhere else. The Under-Secretary of State for the Environment — the hon. Member for Ealing, Acton (Sir G. Young) — knows that from his own experiences, because all three of the Members who represent Newham have been with him on a tour of the borough. By his Department's assessment, Newham is second only to our neighbouring borough of Hackney as the most deprived local authority area in England. Whereas Hackney has partnership status, Newham is still denied it. I hope that the Under-Secretary of State will give us the good news which I and my hon. Friend the Member for Newham, South have been waiting so long to hear. What more evidence does the Under-Secretary of State and his colleagues require to convince them of the justice of our case?
      In Newham, 11,000 households are without their own bath or inside toilet, 6,318 households are overcrowded; there is the highest percentage in the whole of London of children living in poor housing; 58 per cent. of children live in overcrowded accommodation; and 15 per cent. of children live in households containing at least one unemployed adult. For the first time, 30,000 people in Newham are on supplementary benefit. Sixty five per cent of the council's tenants receive housing benefit. With 17,000 people out of work, the unemployment rate approaches 20 per cent. The Under-Secretary of State knows these statistics, yet we still seem unable to convince him and his colleagues that we need that extra assistance that only his Government can give.
      Youth unemployment is considerably higher than 20 per cent. A review citing the percentages of young people who were eligible to leave school at the end of the 1984 academic year shows that their destinations were as follows: 30 per cent. stayed on at school, 8 per cent. attended college, and 62 per cent. left full-time education. At the earliest opportunity, 62 per cent. left school. Of that percentage, 20 per cent. are known to be in permanent employment, 11 per cent. are known to be on the youth training scheme, 25 per cent. are registered for work at the careers office and the destination of 44 per cent. is unknown. Of the 62 per cent. of those who left school at the end of that academic year, 69 per cent. are either registered for work or seem to have dropped out of the system — 42 per cent. of the entire output of that academic year. That is a tragic comment on the state of the job market and the prospects facing youth in Newham.
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      High unemployment, a poor environment, housing stress, low educational achievement and a general lack of social amenities combine to brutalise people, especially the young. What sort of background is that for the youth of Newham to grow up in? Would the Under-Secretary of State want his children to face those miserable prospects? A whole generation is becoming increasingly dispossessed of those rights and opportunities that were established, improved or maintained during the past 30 years.
      Youth as a group in our society is damaged far more by unemployment than others. The Government's blind and tragic refusal to assist any growth in the economy, together with the imposition of cuts in public expenditure and the insidious rolling back of the welfare state, hit the young disproportionately in Newham and elsewhere.
      It is all very well to talk about voluntary redundancies, early retirements and natural wastage. They sound painless —perhaps for some of the workers involved they are— but for the young, these devices merely mean more jobs lost and further restrictions placed on their all-too-limited job propects.
      In Newham, as elsewhere, the young are being continually bombarded, on television, in newspapers and in shops, with all the tempting luxuries that money can buy —if that money were available. In our acquisitive and materialistic society, the expectations and the needs of the young are being continually excited—but for so many of them the means to meet those expectations are being cruelly denied.
      The Prime Minister is fond of talking about moral values, but, frankly, she gives no moral lead to the young in Newham or in the country as a whole. After all, her economic policies are deliberately geared to promoting self-interest, greed, selfishness and soulless materialism. If we add to that a concoction of mindless populism and a willingness to employ crude force rather then arguments, we have the creation of a social time bomb that could yet destroy what civilised norms are left in this country. The recent upsurge in violent behaviour among football crowds can and is being seen by some as a harbinger of future developments in the wider society that we all ignore at our peril.
      At a recent meeting that I attended in Newham of young people in receipt of DHSS board and lodging payments — soon to be hounded out of the borough and moved around the country because of the Government's changes in regulations — one youngster said that he would be better off in jail. What an indictment of our times for a young person to say that in a meeting and get agreement from so many other young people. Yet this Government are busily creating among the young an ever-increasing number who adopt just that attitude. Those young people cannot see what stake they have in our society. Indeed, they have no stake. For them there are no social norms, about which the Prime Minister keeps talking. They feel that they have nothing to lose by turning to violence, drugs and crime.
      It is a matter of some regret that Newham has a high crime rate. Tragically, it is growing fastest among the young. But in a society that rewards the strong and denigrates the weak, is it any wonder that so many of our young are being corrupted and led astray? Professional youth workers in Newham have told me of 18 and 19-year olds who are already long-term unemployed, gradually losing all self-respect and respect for others. Young people in my borough spend large amounts of time begging—

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      this is 1985 — and it is tragic that that is becoming socially acceptable among the young. There is also increasing evidence that teenage prostitution is on the increase, and many young women in Newham are deliberately entering into disastrously early relationships and pregnancies as a way of trying to achieve some form of adult status and their own accommodation. They regularly come to my advice surgery. The borough already has more than 5,000 single-parent households.
      Against that frightening social background, Newham council and the voluntary organisations working with young people are subject to increasing attacks upon their resources. Youth services have been forced to cut back on their provision and curtail badly needed building programmes while the Government deliberately redistribute support to the shire counties and pump money into face-saving and cosmetic training schemes — neglecting those experienced agencies that have tradition-ally supported the young people who have difficulty coming to terms with the adult world.
      Many of the professional youth workers in Newham feel that we are approaching a situation where the majority of young people will be unable to take the normal steps to adulthood. It has been suggested—and I tend to agree from my experience — that inner-city areas such as Newham will eventually be reduced to battlefields of warring gangs of youth. Already the police in the borough are overwhelmed by the sheer level of street crime, racist attacks and burglaries. Householders in Newham, as in other parts of London, are being encouraged to employ private security firms to patrol the streets and protect their properties.
      Inexorably we are moving towards no-go areas, where policing will either be absent or very limited—and that, of course, will be complemented by middle class enclaves where police effort will be concentrated. Those are existing or possible images of life in Newham in the 1980s and the 1990s, as ordinary, decent people in my community are gradually overwhelmed by the sheer scale of the problems confronting them. Those images are not the product of my over-stretched imagination but are based on statments made to me by responsible individuals who are growing both frightened and alarmed by what they see and hear around them in the borough of Newham.
      Much as I have time for the Minister—although he has taxed me in terms of my patience and my sympathy on many occasions — I expect little, if anything from him or his Government, because it is his Government who are responsible for the the rapid pace of social breakdown in Newham. The youth of my borough, not surprisingly, want real jobs and decent pay. They want homes. They want social and recreational facilities into which they can channel their energy and exuberance.
      Mr. Nigel Spearing: Is my hon. Friend aware that in the south of the borough, in the royal Victoria dock, the borough council has a lease with the London Docklands Development Corporation for recrea-tion on that mile-long stretch of water? But it is a lease for only five years with an unelected body. Does not that emphasise one of our problems—the existence of an unelected body which governs a very large area of the south of the borough?
      Mr. Banks: I could not agree more. The Minister and his colleagues are continually pointing out to us the
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      success, as they see it, of the London Docklands Development Corporation, but the LDDC has been given resources and powers that the borough councils in the docklands area and the GLC can only have dreamt of in past years. The difficulty is that so many of the activities of the LDDC take place behind closed doors. I have to keep asking the Minister questions to find out what is going on in docklands.
      The one thing we know is that after the next Labour Government are elected in a couple of years' time, the LDDC will be abolished, and the resources that it is currently squandering will be given to the docklands boroughs to deal with the problems of the people of Newham in the way that they would want them dealt with.
      We want action from the Government. We do not want lectures from the Prime Minister, coming from her wealthy and privileged background, about the respon-sibilities of youth. There is no way that Newham borough council can provide out of our own resources the sorts of things that we want. We desperately need a Government who will recognise the social time bomb that is even now being primed in Newham and other inner city areas. We want such a Government to act with speed and determination to eliminate the economic and social deprivation which is the root cause of the problems that I have been trying to discuss.
      I do not expect to see this Government being sympathetic or taking any action. I know that that can come only with the speedy election of a Labour Government. I hope that that Labour Government will appoint a Minister with special responsibilities for the young, since the young represent society's investment for the future. It is an investment that is being cruelly squandered in Britain at the moment. The signs of social collapse starting with the young are there in Newham and elsewhere in London for all who wish to see, but tragically that does not appear to include the Prime Minister and her Government.
      11.9 pm
      The Parliamentary Under-Secretary of State for the Environment (Sir George Young): During the course of his remarks, the hon. Member for Newham, North-West (Mr. Banks) accused me of taxing him and taxing his patience. For the past 12 months I have been answering the parliamentary questions churned out by his research assistant. I think that my patience has been taxed just as much as the hon. Gentleman's. On the LDDC alone, I have answered 102 parliamentary questions in the past 12 months. I think that the hon. Gentleman is running out of steam, because his four recent questions were identical to one that he asked me only a fortnight ago.
      The hon. Gentleman has tabled some interesting questions about the number of paper clips purchased by my Department. Information that has been released to us from the GLC indicates that it is part of his campaign to try to destroy the stamina and the enthusiasm of my officials. I have to tell him that his campaign will not work. The hon. Gentleman is riding his hobbyhorse again. The reality is that the LDDC has produced action. Towards the end of his remarks he asked for action. There was little action before the LDDC. There was a great deal of talk. The GLC had access to all the resources that it needed, if it had wanted to make substantial progress in docklands, but it did not make use of them. There was a rather unconstructive dialogue between the GLC and the

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      boroughs. Now there is action. If one goes around the docklands area one can see work being created and homes being built.
      Although the hon. Gentleman wants the LDDC to be wound up, in other parts of the country where we have LDDC-type operations in the form of the new towns, each time that the Government want to wind one of them up we receive representations from his colleagues asking us to keep for another year or so that quango, appointed by Ministers, which is unelected and not accountable to local people.
      I come now to the theme of the hon. Gentleman's speech. I welcomed the time that he and the hon. Members for Newham, South (Mr. Spearing) and for Newham, North-East (Mr. Leighton) took when they escorted me around the borough for a day last year. It made a great impression on me. I enjoyed meeting the people in the borough. I hope that some, if not all, of the decisions that my Department has taken subsequently have been of some help.
      I want to assure the hon. Gentleman that the plight of young unemployed people is a matter of deep anxiety to me and to the Government. We are, of course, aware of the problems facing young people, about which the hon. Gentleman spoke so eloquently, many of them from disadvantaged groups and ethnic minorities who are living in inner city areas such as Newham.
      In many ways, it is those young people who have been hardest hit by the recession. It is in recognition of that that the Government are pursuing some specific initiatives aimed at improving employment prospects and providing social and community support for young people. Young people in Newham want hope, self-respect and a job. In that they are the same as young people in Acton or anywhere else in London.
      Our first priority must be to reduce the level of youth unemployment. I accept that the rate in Newham is among the highest in London. Some measure of the importance that we place on that is the £2·25 billion that the Government spent in 1984–85 on employment and training schemes, many of them aimed at young people.
      The main initiative directed at improving the skills and training of school leavers is, of course, the YTS. In view of the figures that the hon. Gentleman deployed, that is of special relevance to Newham. However, it is important that young people take up that opportunity. I hope that the hon. Gentleman and those in the voluntary organisations with whom he is in contact will encourage young people to take up the places.
      I was dismayed to find that only 82 per cent. of the YTS places in Newham were filled last year, despite the fact that nearly 80 per cent. of those who completed the training subsequently found jobs.
      In 1985–86, 750 places have been approved at a total cost of £1·5 million. That budget is bigger than that for Hackney, Haringey or Southwark. It shows the priority that we place on tackling the problems in Newham.
      I was encouraged to hear that Newham is sponsoring three schemes with over 90 places — a social services training workshop, a clerical and a building scheme. I was pleased to learn that there is a high ethnic minority participation in those schemes.
      Apart from the council, Newham does not have many large employers to run schemes. I was interested to see that
      132
      a successful project has been achieved by the Docklands and East London Training Agency, which is acting as a managing agent for a scheme sponsored by Grand Metropolitan Community Services. DELTA has links with 170 potential providers of training—mainly small firms covering a wide range of trades—and, when necessary, it can cater for trainees' individual preferences. Those have included locksmiths, glass blowers and Afro-Caribbean hairdressers. I believe that that shows a potential for providing training linked to local firms and the needs of young trainees.
      In addition, as from April 1986, YTS will be extended to provide two years' training for 16-year-old school leavers and one year for 17-year-old leavers, thus ensuring that anyone under 18 who is not still at school and has no job has the opportunity to receive good quality training.
      In addition to YTS, there are a number of MSC employment initiatives available to young people in Newham, of which the major one is the community programme. Under this, long-term unemployed over the age of 18 are provided with temporary employment on projects of benefit to the community. At the end of April this year there were in Newham a total of 249 community programme places, and I am glad to say the take-up here was 90 per cent. As with the YTS, young people must be encouraged to take advantage of the employment opportunities offered by the community programme, which is being expanded nationally from 100,000 filled places to 230,000 by the end of May 1986. Agreement has now been reached for an initial increase of 50,000 by December of this year, of which 13,500 will be in London. Additional places in Newham and other London boroughs are currently being considered.
      The hon. Gentleman spoke about the resources available to the local authority and complained about cuts in services. Between 1981–82 and 1984–85 the London borough of Newham's current expenditure increased by 30·8 per cent., ranking second to the London boroughs. The average increase was 17·6 per cent. The borough's 1985–86 target of £124·154 million is a 3·76 per cent. increase on the 1984–85 budget. The grant related expenditure of £544 per head ranks highest of the London boroughs and is to be compared with an average of £384. Some of the problems that the hon. Gentleman mentioned of deprivation and some of the client groups in the borough are recognised in some of the figures which I have quoted.
      Mr. Banks: Can the Minister tell us whether Newham will be rate capped in the next year?
      Sir George Young: No, I cannot. That is because the Government have not yet addressed themselves to the important problem of rate capping next year. I think that the hon. Gentleman knows that a number of councils are still grappling with their consciences over decisions for this year. I think that he knows also what the timetable is for rate capping next year.
      The hon. Gentleman mentioned, as I thought he might, the designation of the London borough of Newham under the urban programme. We provide extensive support for projects in Newham that are aimed at both improving the skills of young people and providing social and community support. The hon. Gentleman and his hon. Friend the Member for Newham, South have been consistent in their campaign for more Government resources to be directed towards Newham, particularly in

      133
      their support of the borough's case for promotion to partnership status. The argument in favour of partnership or programme authority status for Newham under the urban programme has been forcefully stated again tonight. The council narrowly missed such status when the lists were last reviewed in 1983. It had not at that time submitted the powerful submission which I discussed with hon. Members from the borough and representatives of the council, the voluntary sector and the chamber of commerce last December. However, I recognised at that meeting that when the list is next reviewed Newham will be knocking very strongly at the door. The hon. Gentleman asked whether we needed any more evidence. I can tell him that I think we have all the evidence that we need. I accept that the case has been presented forcefully. For the time being, the best course for the borough must be to maximise its benefits from the sources of funding that are available, and these are not insubstantial.
      I am delighted to see that Newham is making a more concerted attempt to benefit from urban development grant. The approval of the £500,000 UDG in March for the redevelopment of a former power station site by Gunson Sortex in the Marshgate industrial improvement area is an indication of the potential of UDG. It will directly lever £2·8 million of private investment and provide 82,000 sq ft of industrial and office space—a significant source of jobs in a depressed area.
      The programme of reclamation, job creation and housing provision by the LDDC is also a continuing positive force in the southern part of the borough. This year alone about £4·8 million has been allocated for environmental works, reclamation and utilities in the Newham area of docklands in addition to £250,000 of support for voluntary projects. In future, the development of the STOLport should attract more employment to the royal docks area. My right hon. Friend the Secretary of State acknowledged that in his recent decision to approve outline planning permission for the airport. Clearly these initiatives do not solve all the borough's problems, but they are not irrelevant to the issue of unemployment.
      I turn to the current position of other urban programmes support. Newham current receives funding for industrial and commercial projects as an other designated district — or ODD as it is generally called — and for social projects under the traditional urban programme. As an ODD, Newham receives grant towards a range of projects aimed at economic regeneration, in particular to help small businesses get established. In 1984–85 such support amounted to £475,000, and for 1985–86 nearly £250,000 has already been approved. A particularly good example of the cost-effectiveness of the support is the Stratford workshops project. We have recently approved a £35,000 grant for improvements and six new workshops, additional to the 89 small starter units already available and in action. They provide cheap and accessible accommodation for new firms and, in addition, grant can be made available to help new firms start up. That could provide the opportunity for new young businesses to build on some of the skills obtained from the training initiatives in the borough. Occupancy of the units is consistently high, and once established many of the firms move to larger premises.
      I have been impressed by the way in which Newham has managed its use of ODD funds and industrial development generally. It is good at giving advice and help to firms, and it receives active co-operation from the
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      private sector in the area, which proved willing to assist in making business expertise available to counsel and advise new businesses. As a result, the borough gives grants only when they are strictly necessary and will be effective.
      Mr. Banks: Is the Minister aware that the Greater London Enterprise Board gives considerable assistance in Newham? However, the Minister for Local Government is putting restrictions on the GLEB, which could jeopardise jobs in Newham and elsewhere. What has the Minister to say about that?
      Sir George Young: I think that I have seen the letter to my right hon. Friend the Minister for Local Government from the GLEB which asked for a meeting to discuss these issues. I hope that a meeting will take place shortly, when they can be discussed in sightly more detail.
      When I met the delegation from Newham in November 1984, it was clear that there were still opportunities for even wider use of urban programme resources to include broader-based training projects, particularly aimed at the young unemployed. I encourage projects of this type. No such schemes have yet been put to me, but my Department would be glad to discuss any proposals with the borough and we would be sympathetic to funding worthwhile projects.
      Regarding the traditional urban programme, we have always recognised Newham's high level of deprivation. For 1985–86 the borough has received the highest level of new approvals, not only in London but in the whole country. Six new projects, costing £400,000, were approved. That represents an increase of 50 per cent. over the level of new projects approved last year. I hope that the hon. Gentleman will accept that that is a clear reflection of our policy of concentrating traditional urban programme funds in the most extensively deprived areas. I hope that it reminds him that nationally, because of the continuing high level of support for existing schemes, resources for new projects have inevitably fallen again by about half. Newham receives considerable support for continuing projects, which amounts to £765,000 for 1985–86.
      The hon. Gentleman touched on the board and lodging regulations, which were debated extensively on 2 April. My only point this evening is that the DHSS is carefully monitoring the effects of the new regulations, and my Department will liaise with it closely. In the light of how the system operates, Ministers will consider whether any changes are necessary.
      The hon. Gentleman mentioned many issues about dealing with juvenile crime in the borough and relationships with the police. I was interested to hear of the way in which the police are working with youngsters in Newham, especially ethnic minority groups. No fewer than 13 initiatives have been brought to my attention, which aim to improve links between the police and young people, increase the understanding of police work, and provide social support for young offenders.
      I am aware that I have not done full justice to the wide range of issues raised by the hon. Gentleman. I shall write to him to deal with the more significant omissions, and perhaps he will table yet another question to me to elicit responses. I assure him that the Government are aware of the problems faced by young people in Newham and that

      135
      we are trying to help them. I have outlined some of the schemes introduced by the Government to tackle those problems.
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      Question put and agreed to.
      Adjourned accordingly at twenty-three minutes past Eleven o'clock.

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Preamble
Reassembling after the Spring Bank Holiday Recess the House met at half-past two of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Gloucester.

Human Rights Conference, Ottawa
Lord Shinwell: 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 are satisfied with progress at the conference on human rights in Ottawa.
The Minister of State, Foreign and Commonwealth Office (Baroness Young): My Lords, the review of the implementation of CSCE human rights provisions undertaken by the Ottawa meeting has just ended. This was a worthwhile exercise which gave us the chance to reiterate our concern at the continued abuse of human rights in the Soviet Union and Eastern Europe, and to call their representatives to account. The meeting has now moved on to discussion of new proposals to add to, or to refine, the existing provisions of the CSCE final act.
Lord Shinwell: My Lords, if that Answer means that the noble Baroness is not satisfied, I am not surprised. It follows the line of her statesmanlike speech on 23rd April, when many of my colleagues decided to give the Russians a chance to show what they could do. Now they have demonstrated what they cannot do and will not do. That is precisely what I predicted. I could put the usual question and ask what the Government are going to do about it; but what is the use? The Government can do nothing about it. They dare not do anything about it.
Indeed, the Russians have now decided to attack us for our failure to take advantage of the situation and to deal with human rights. That is what they are now doing. They have turned the tables on us. We have therefore to be very careful. We have to look around and to produce examples of how we deal with human rights in a civilised fashion in order to prevent other countries following the line of the Soviet Union.
Baroness Young: My Lords, I am not absolutely sure as to precisely the question that the noble Lord, Lord Shinwell, wished to raise with me. I can assure him that the meeting has seen discussions on a wide range of issues and that these have been complemented by very useful informal contacts between the delegations in the margins of the meeting.

Air Freight Facilities, Northern England
2.38 p.m.
Lord Gainford: 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 are satisfied with existing facilities for air freight in the North of England.
Lord Brabazon of Tara: My Lords, air freight facilities in the North of England, as elsewhere, are provided by airlines, airports and freight forwarders in response to demand. The growth of mixed passenger-cargo operations and the developing network of passenger flights out of regional airports, particularly Manchester, make the outlook for freight movement out of these airports brighter.
Lord Gainford: My Lords, the information that my noble friend has given, for which I thank him, is very encouraging. Has he any information about the North-East of England, particularly the airports at Newcastle and Teesside?
Lord Brabazon of Tara: My Lords, I have no figures for freight from those two airports. But, as part of our liberalisation of airlinks with Continental countries my honourable friend is this week visiting Scandinavia, where he hopes to secure agreement that should also lead to further freight traffic.
Lord Bottomley: My Lords, is the noble Lord aware that the northern airports can handle much more freight traffic if they are only given the opportunity? Cannot the Government do anything to encourage the transfer of flights from other parts of the country, in particular to the North-East?
Lord Brabazon of Tara: My Lords, the provision of facilities must be a commercial decision for those involved. The Government have helped, and are helping, by encouraging deregulation of the industry and the liberalisation of air services and by providing capital expenditure allocations where justified. Primarily, however, it is a matter for customers themselves to decide where to fly from.
Lord Gisborough: My Lords, with particular regard to Teesside, can my noble friend say whether any reasonable requests for grant aid have been refused and what encouragement has been given for expansion at Teesside?
Lord Brabazon of Tara: My Lords, I am afraid that I do not have any details specifically about Teesside and about whether any grant aid has been refused. I shall have to look into that matter and write to my noble friend.
Lord Mountevans: My Lords, would the noble Lord care to comment on the fact that air freight into Heathrow is trunked to Newcastle for Customs clearance and then moved back to London? Will he examine the Customs side of the business and not the air freight side of the business, because it seems to me utterly irrational that freight should be trunked 300 miles north for clearance and then 300 miles back?
Lord Brabazon of Tara: Indeed, my Lords, it does seem irrational. I shall certainly look into that matter and let the noble Lord know my findings.

NHS Prescribing: Selected List
2.41 p.m.
Baroness Macleod of Borve: 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 are satisfied with the working of the recent drug prescription regulations.
The Parliamentary Under-Secretary of State, Department of Health and Social Security (Baroness Trumpington): Yes, my Lords, we have been impressed by the smoothness of the introduction of the selected list and recognise that this is in large part due to the efforts of doctors and pharmacists. We hope that it is now generally recognised that the selected list is a very sensible way of making better use of National Health Service resources without harming patients.
Baroness Macleod of Borve: My Lords, I thank my noble friend the Minister for that encouraging reply. Does she agree that it is likely that an amount in the region of £75,000 a year might be saved? If that is so, on what will that amount—I am sorry, I should have said £75 million—be spent?
Baroness Trumpington: My Lords, in answer to my noble friend, the savings will go to help fund other parts of the National Health Service. By reducing the drugs bill we have been able to increase the funds devoted to other aspects of health care.
Lord Taylor of Blackburn: My Lords, is the Minister aware that while she may be satisfied, the department may be satisfied and the Government may be satisfied, there are many patients who are not satisfied?
Baroness Trumpington: My Lords, patients who are worried about how the selected list affects their medication should discuss the matter with their doctor, who should be able to advise on any necessary change.
Lord Ennals: My Lords, bearing in mind the point just made by the noble Baroness, Lady Trumpington, is she not aware that some doctors are themselves very much in a quandary? Certainly some doctors who treat patients, particularly children, can find no satisfactory alternative at all to expectorants or to mucolytic drugs, both of which have been banned. Can the noble Baroness say what progress has been made in the establishment of the appeal system which it was announced would be introduced, and also in the review system for the black list?
Baroness Trumpington: My Lords, we accept the view that there may be very occasional cases when, for individual reasons, a patient needs a drug which is not generally available under the National Health Service. Therefore, on 16th April the Government's proposals for an appeal mechanism were announced. We are awaiting the BMA's response.
With regard to the noble Lord's question about the review committee, we hope that the review committee
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will be set up and members appointed in the next few weeks.
The Lord Bishop of Norwich: My Lords, is the Minister aware that there may be the suggestion of a little self-help among noble Lords, because many of us have links with the great hospitals? When we hear of a particular drug which is irreplaceable, which one of the very responsible hospitals has discovered over a fairly long period in the first 12 months of the operation of this list, would the noble Baroness allow us to bring that particular drug, by name, by letter before her?
Baroness Trumpington: My Lords, the list has been carefully compiled to meet the clinical needs of patients in hospitals as well as those being treated by general practitioners. In drawing up the list, advice has been taken from experts with experience of treating and prescribing for patients in hospital. There should be no need to depart from it.

Fishing: Falkland Islands Area
2.45 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 what they are doing about a possible multilateral fisheries agreement in the South Atlantic.
Baroness Young: My Lords, we continue to work actively for the establishment of a multilaterally-based fisheries conservation and management regime in the area around the Falkland Islands.
Lord Kennet: My Lords, can the Government tell the House what advice they have sought, and from whom, about when the different existing fish stocks in that area will be irremediably damaged by the present free-for-all?
Baroness Young: My Lords, we are actively developing our multilateral approach. We are working urgently to ensure that we have as full and complete a picture as possible of fishing activity around the Falklands and its long-term implications for fish stocks.
Lord Campbell of Croy: My Lords, is my noble friend aware that this must be about the only part of the world where there is now not a fisheries limit and a conservation regime? If the proposals for multilateral agreement do not make progress, will my noble friend consider introducing a 200-mile limit? Can my noble friend confirm that the Argentine Government are not likely to raise trouble over this, because there are reports that they are aware how much the Argentine fishing fleets would benefit?
Baroness Young: My Lords, the answer to the first part of my noble friend's question is of course, yes. We are very well aware of the situation; we have been aware of it for some time, and we have listened to representations from a number of sources. The answer

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to my noble friend's second question is that our consideration of a multilateral régime is still a hypothetical matter. In answer to my noble friend's third question about Argentine reactions, I believe that many people in Argentina understand that action to conserve and manage fisheries in the South-west Atlantic would be in the interests of all, for serious questions of conservation are involved. Beyond that I cannot comment.
Lord Cledwyn of Penrhos: My Lords, can the noble Baroness not go a little further and tell the House whether there is any reaction whatever from the Argentine Government following the indication of Her Majesty's Government that we would welcome the participation of the Argentine in multilateral talks? Secondly, is it not a fact that large foreign deep-sea trawlers are fishing Falkland waters extensively? What view do the Government take of this? Is this developing in a way which is endangering the fishing stocks, and is it a matter of concern to the Government and the people of the Falklands?
Baroness Young: My Lords, in answer to the first part of the noble Lord's question, I think that it would be wrong for me to go into details on the whole matter of our multilateral proposals. In answer to his second question, we are of course aware that a great many vessels are fishing around the Falklands, and it is for that reason and for other reasons which have been made known that we are actively pursuing this multilateral proposal.
Lord Davies of Leek: My Lords, can the noble Baroness tell me whether whaling will be brought into these multilateral agreements, because the modern factory ships are conducting a devastating spoliation of the whaling industry?
Baroness Young: My Lords, I do not think that anyone is concerned with whaling around the Falklands.
Lord Buxton of Alsa: My Lords, can my noble friend say whether the Government understand that the conservation of wildlife is a very vital economic and social issue, and not just a scientific and aesthetic one? Is it appreciated that, if the present operations continue, the wildlife that will attract and provide the potential for tourism—the penguins, the sealions, the fur seals, and so on—will all starve to death and be unable to feed their young, and there will then be no potential at all for tourism?
Baroness Young: My Lords, yes. Of course I understand the point that has been made by my noble friend, who is such an expert on this subject. It is for that reason that we are urgently pursuing our multilateral approach. I can confirm that a study is being undertaken to pool information available from all sources, and it is being pursued as a matter of urgency. We need to understand as well as we can how stocks are being affected by current levels of fishing activity.
Lord Cledwyn of Penrhos: My Lords, beyond telling us that the Government are pursuing the multilateral
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talks the noble Baroness has been unable so tar to answer my question about the progress that has been made in these multilateral talks. If the matter is one of sensitivity then I feel sure that the House will be prepared to accept that. But could the noble Baroness be a little more explicit and tell us that Her Majesty's Government are in fact making attempts to get the multilateral talks going? Is she in a position to tell us whether any approaches have been made to the Argentine with a view to getting them to take part in them?
Baroness Young: My Lords, the noble Lord has asked an important question. As he himself has said, this is a sensitive matter and I think it would not be appropriate for me to go into it in the House today. I can give the noble Lord an assurance, and I can give the House an assurance, that the Government are urgently pursuing this matter. We are aware of the strong feelings, not only of your Lordships' House but of another place and of outside conservation interests; but, as the noble Lord will appreciate, it is a sensitive question and it needs to be handled carefully.
Baroness Vickers: My Lords, may I ask my noble friend how many British ships are fishing in the area?
Baroness Young: My Lords, to the best of my knowledge there are no British ships fishing in the Falklands waters.
Lord Kennet: My Lords, would the noble Baroness not agree that it is really no good the Government continuing to stonewall on this matter? If there is a delicate situation in the Government's pursuit of this multilateral agreement, can the Government please tell us with what countries they are pursuing the multilateral agreement? If not, why not? Can they say whether the multilateral agreement will be modelled on any of the many existing multilateral fisheries agreements in the world? If they cannot answer those two simple questions, why not?
Baroness Young: My Lords, in the first place, we are not stonewalling. In the second place, it is self-evident that to be workable a multilateral regime should include as many as possible of the nations with an interest in fishing in the South-West Atlantic. In the third place, in regard to the question of other areas, there are of course waters where fishing regimes are in force without heavy policing, but these are areas over which sovereignty is not contested.
Lord Campbell of Croy: My Lords, is my noble friend aware, with reference to the point raised by my noble friend Lady Vickers, that these fisheries are not now really for British fleets, which are no longer equipped for very distant waters, but that if a fisheries regime were developed it would bring considerable finance and employment to the islanders, and not only the Falkland Islands but South Georgia?
Baroness Young: My Lords, I take entirely the point that my noble friend makes.
Lord Elwyn-Jones: My Lords, can the noble Baroness say who is doing the fishing now? Apparently

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we are not, and we cannot therefore be blamed. Does this not give additional strength to us in securing an agreement, if possible? Who is—I was going to use the ugly phrase "the nigger in the woodpile", but that is a very unfashionable observation.
Baroness Young: My Lords, in order of activity, the main countries fishing round the Falklands are the Soviet Union, Poland, Spain and Japan. The others, in alphabetical order, are Argentina, although not in the Falkland Islands protection zone, Brazil, Bulgaria, Denmark, the Federal Republic of Germany, Finland, the German Democratic Republic, Italy, Norway, Sweden, Taiwan and Urguay.
A noble Lord: My Lords, why are we not there?

Business
2.54 p.m.
The Earl of Swinton: My Lords, at a convenient moment after 3.30 this afternoon my noble friend the Leader of the House will, with the leave of the House, repeat a Statement that is to be made in another place on the Brussels soccer tragedy. This will be followed by my noble friend Lady Trumpington, who will, with the leave of the House, repeat a Statement on the social security review. This will be followed by my noble friend Lord Glenarthur, who will, again with the leave of the House, repeat a Statement on the Sri Lankan Tamils.

Local Government (Access to Information) Bill
The Bill, having been brought from the Commons on Friday, 24th May and printed pursuant to Standing Order 48, was read a first time.

Intoxicating Substances (Supply) Bill
Baroness Macleod of Borve: 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.—(Baroness Macleod of Borve.)
On Question, Motion agreed to.

Social Security Bill
2.56 p.m.
Baroness Trumpington: My Lords, I beg to move that this Bill be now read a second time. I ask your Lordships to fasten your seat belts as I take you on a magical mystery tour of the Social Security Bill. The issues involved are tremendously technical and complex, but I believe that the resulting benefits will do a great deal of good for a great many people.
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The principles underlying the Bill are central to the Government's broad philosophy. We are determined to improve job prospects, particularly for young people. We want to improve incentives by increasing the rewards of employment at modest levels of earnings. We need to ensure that all unnecessary artificial barriers to job mobility are removed. We believe in letting occupational pension and sick pay schemes operate effectively and efficiently. And we want, wherever possible, to give people maximum freedom of choice and the information they need to use it. These themes will recur as I explain the provisions in the Bill.
Before doing that, I should like to mention one path down which I hope we will not stray. I refer of course to the Government's Green Paper on the social security reviews published today, about which I will be repeating a Statement shortly. I hope therefore that your Lordships will agree that it would be unproductive to argue any points in the Bill which is before us today on the basis of what could only be a cursory glance at the Green Paper.
Let me return to the Bill, which contains a number of important measures. It covers occupational pensions, statutory sick pay, and ranges over much of the wide field of social security. I may from time to time depart from the strict sequence of clauses in order to discuss like subjects together, and I hope your Lordships will find this approach helpful.
Part I of the Bill is concerned with occupational pensions. We believe that occupational schemes have a vital role to play in providing decent levels of income in retirement. Over the years they have shown how they are able to develop to meet the particular, and often changing, needs of employees. They have demonstrated that they are sufficently flexible to fit themselves to the needs of their members. But sometimes it is not enough simply to rely on voluntary action by schemes to bring about improvements. Government then need to give a firm lead, and that is precisely what we are doing now.
The Social Security Act 1973 ensured that those who leave a scheme over the age of 26 with five years' service should have their occupational pension rights preserved. Up until then, these early leavers usually received only a refund of their own contributions. So the 1973 Act marked the first important step along the road to looking after the interests of the early leaver. But there was a problem. Nobody then expected the high inflation levels that occurred from the mid-1970s. The flaw in the preservation provisions is that pensions do not have to be increased during the time between the member leaving and the preserved pension coming into payment.
This means that many early leavers lose, and lose heavily. By the time their pension is paid its real value can have been eroded substantially by the effects of inflation. Not only is this manifestly unfair to individuals, but it is also damaging to the economic wellbeing of the country as a whole. Job mobility is essential to economic growth and prosperity, and it is therefore very much in the national interest that any artificial barriers to job mobility should be removed. It is clear that the poor deal received by many early leavers can be a powerful disincentive to job mobility.

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Clauses 1 and 2 with Schedule 1 will provide future early leavers with a new deal. First, the age limit of 26 for preservation will be removed. That means that those with five years' service in a scheme will in future have to have their pension rights preserved, no matter what their age.
Secondly, preserved pensions will have to be increased in line with prices up to a ceiling of 5 per cent. a year compound over the whole period from leaving up to the scheme's pension age. This will apply to all benefits over and above guaranteed minimum pensions that accrue from 1st January 1985 for anyone leaving a scheme after the Bill comes into effect. This is broadly what the Occupational Pensions Board recommended.
There will of course be a cost for these improvements. Obviously costs will vary from scheme to scheme, but it is estimated that on average it will be between 1 per cent. and 2 per cent. of payroll. We do not intend to spell out how costs must be met. That must be for schemes and employers because they are best placed to decide what suits them. But they will be able to increase contributions for employers and employees, or both. Or they can meet costs out of the investment yields they have been able to obtain during the favourable investment conditions that we have seen over the past few years. Or they could restructure schemes' benefits, for example by taking state pensions fully into account.
Thirdly, we shall give early leavers the right to a transfer. Anyone leaving a scheme after the Bill comes into force will be entitled to the actuarial cash equivalent of rights that have built up in the scheme instead of a preserved pension. This value can be used to buy rights in another occupational pension scheme. Or it can be used to buy one or more insurance policies from a company of the leaver's choice. Or it can be used for any other arrangement approved in regulations. This will allow transfers to be made to a personal pension when they are introduced. The right to take a transfer will remain open until one year before the person concerned reaches the scheme's pension age. Future early leavers will therefore have the choice of securing their benefit rights in the way that best suits them. We believe that this is an important extension of freedom to choose.
There are two consequential changes resulting from these improved transfer rights. We are introducing a new state scheme premium, called a transfer premium. Basically, guaranteed minimum pension rights can be transferred only to contracted-out schemes. So if a leaver wants to transfer to a scheme that is not contracted-out, his GMP rights under existing law would have to remain in the first scheme unless he chose to secure them with an insurance policy. But when the new premium is introduced, the first scheme could preserve the GMP; it could secure them with an insurance policy; or it could pay the transfer premium, which would buy the leaver's GMP rights back into the state scheme.
The last part of this early leaver jigsaw puzzle is a provision for schemes to lose liability when benefit rights are bought out with an insurance policy. The law on this whole area has been uncertain for some time and the Bill is intended to end that uncertainty.
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That is the early leaver package. Perhaps I can dwell here a moment and explain one important factor that we have had clearly in view when formulating these provisions. We have tried to strike the right balance between the needs of leavers and what schemes and employers can reasonably be expected to afford. We think we have got that balance just about right, not least because we have been criticised for going too far as well as for not going far enough. It is important that early leavers get a fair deal, but it is equally important that the solvency of schemes is not threatened. So we have set a reasonable standard of protection for future leavers, thus giving schemes the chance to make adequate advance financial provision. We intend to bring these improvements into effect from 1st January 1986. That is what my right honourable friend the Secretary of State announced last year, and we are determined to introduce these improvements as soon as we possibly can.
The other, equally important, parts of our occupational pension reforms are contained in Clause 3 and Schedule 2. They will ensure that scheme members will have sufficient information to enable them to safeguard their pension rights. An occupational pension can be the biggest single asset many people will ever have—worth even more than their homes. It must be right that basic information about their asset should be readily available to them. That is why we are taking powers in this Bill to set out in regulations the information which will have to be made available. The basic principles are contained in the Bill itself and the detailed disclosure requirements will be set out in the regulations. We shall be consulting fully on these very soon now. Our intention, though, is that members should get basic information about their rights and entitlements automatically. Other information about the way schemes are run and funds invested will be available to scheme members on request. Overall the detail will be sufficient to enable a qualified person acting on a member's behalf to form a complete picture of the scheme.
This will involve schemes in some cost, hut in general the level of information we shall require is what any well-run scheme, which conducts its affairs properly, would provide. So for properly run schemes the costs should be negligible, and of course the regulations will provide a measure of consumer protection.
The Bill also provides in Schedule 2 for a pension scheme register as a back-up to disclosure of information. I have to say that a number of people have expressed doubts about whether a register is needed. As my honourable friends have said in another place, we are open-minded on this issue. We are looking critically at whether a public register is needed in order to achieve the Government's aims and if so what form it should take. A decision will only be made in the light of a detailed evaluation of the various options open to us. In the meantime, the Bill gives us the necessary flexibility to follow the most appropriate course when the work of evaluation has been completed.
That covers the occupational pensions provisions in the Bill. I should now like to move away from this mysterious world into the I think slightly less obscure world of social security. First, national insurance contributions. Turning to Part II of the Bill, Clause 7

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implements the national insurance contribution changes that were announced by my right honourable friend the Chancellor of the Exchequer in his Budget Statement. These changes constitute a major part of our programme to promote employment, especially for young people, and to focus additional help on those people in work at the lower income levels.
There are three main elements in this provision. First, we propose a graduated system of contribution rates. At present employees contribute at a fixed percentage of 9 per cent. and employers at a fixed percentage of 10·45 per cent. These rates are at present paid on all earnings up to £265 a week once earnings reach £35·50 a week. From 6th October we intend that there should be new, reduced rates at the lower earnings levels. For employees there will be three rates—known in the Bill as brackets—at 5, 7 and 9 per cent. And for employers there will be four brackets. They will be 5, 7, 9 and 10·45 per cent. Let me explain how this will work. For employees, people earning between £35·50 and £54·99 will contribute at 5 per cent. on all their earnings. For those getting between £55 and £89·99, the contribution rate will be 7 per cent., again on all earnings. And those earning more than £90 will pay at 9 per cent.
Employers' contributions will be similar. They will pay at 5 per cent. if weekly earnings are between £35·50 and £54·99; at 7 per cent. if earnings are between £55 and £89·99; at 9 per cent. if they are between £90 and £129·99; and at 10·45 per cent. if they are £130 or more. So from October employees will pay lower contributions if they earn less than £90 a week. Employers will pay less for people earning below £130 a week.
The second element of this provision will abolish the upper earnings limit for employers' contributions. At the moment, earnings above that limit—which is currently £265 a week—do not attract contributions. From 6th October employers will pay the 10·45 per cent. rate on all earnings for people getting £130 a week or more. The effect of this will be that employers will pay higher contributions for anyone earning more than £265 a week.
The third element, also from 6th October, will reduce Class 2 flat-rate contributions, which are paid by the self-employed, by more than a quarter. The rate will go down from £4.75 to £3.50 a week. There will also be comparable reductions in the voluntry Class 3 contributions available to people who, for a variety of reasons, wish to improve their contribution record.
Taken together, these provisions form probably the most significant change in the structure of national insurance contributions since full earnings-related contributions were introduced. Even with the increased income from the abolition of the upper earnings limit for employers' contributions, these changes will cost £450 million in a full year. That is made up of an £80 million reduction in employers' contributions, a £270 million reduction in employees' contributions and a £100 million reduction in contributions from the self-employed.
This change will have important social and economic consequences. First, it will foster the creation of new jobs as part of what my right
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honourable friend the Chancellor has described as a Budget for jobs.
The cost of employing the 8.5 million workers earning less than £130 a week will reduce by as much as £3 a week. For people earning less than £55 a week, employers' contributions will be more than halved. This will make existing jobs more secure and provide an important stimulus to create new jobs in this part of the labour market. It will of course be of particular benefit for the job prospects of young people.
A second major effect will be to smooth out the cliff-edge effect of the present lower earnings limit of £35.50 a week. At the moment, people go from paying no national insurance contributions at all if they earn £35.49 a week to paying £3.20 if they earn £35.50—hardly an incentive situation, my Lords! From October, the person earning £35.50 would pay £1.78. The proposed changes will produce steps; but, as I have illustrated, they will be much less steep than the present cliff and this innovation has been generally and rightly welcomed by those with whom we have consulted.
A third, very important, effect will be to improve incentives by giving greater rewards for employment at modest earnings levels and provide the lower paid with higher take-home pay. We need here to consider the effect both of the contribution changes and the increases in tax allowances announced in the Budget. Again, some figures might be the best way of showing what I mean. For the 3.4 million people earning less than £90 a week the contribution changes will increase net income by between £1.10 and £2.20 a week. Taken with the tax changes, a young woman earning £50 a week would gain a total of £3.15 a week—a 6.3 per cent increase in take-home pay. A married man earning £80 a week would gain £3.33—an increase of 4.2 per cent. I think these examples give a good idea of the valuable help these people will get. Your Lordships may care to note that we shall take steps to ensure that the benefit rights of people who might otherwise be affected by these contribution changes are protected.
Lord Marsh: My Lords, may I ask the noble Baroness whether she has taken into account the effect that these changes will have on companies which suddenly find themselves faced with an annual increase in their wage costs, their labour costs, of anything up to £2 million or £3 million a year? On some large companies this will have virtually no effect while on others there will be vast effects.
Baroness Trumpington: My Lords, I think that the noble Lord is unfair to interrupt me in the middle of my speech. So far as I know he has not put his name down to speak during the debate. There is a gap in which he can make his point later.
Let me continue by saying that, lastly, on the subject of contributions, perhaps I can briefly mention Clause 8 which puts right a recently discovered defect in the powers of the Secretary of State to vary by regulations the special rate of national insurance contributions paid by registered dockworkers. It will regularise retrospectively what is already happening, and nobody will pay any more than they do now.
Part II of the Bill deals with a number of other social security items. Clauses 9 and 14 both relate to

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invalidity benefits. Clause 9 provides that where both invalidity allowance and the earnings-related additional component or guaranteed minimum pension are payable with invalidity or retirement pension, the invalidity allowance will be reduced by the amounts of the other increases. Let me explain why we are doing this. Invalidity allowance was introduced in 1971 specifically to help people who became disabled or chronically sick early in life and therefore had no opportunity to build up savings or pension rights for retirement. There are three rates of allowance, depending on the person's age at the onset of sickness. The younger you are when sickness begins, the higher the allowance.
The additional component, which began to build up from 1978 as part of the new pension arrangements, and the equivalent guaranteed minimum pension for those in occupational pension schemes, increase the basic retirement pension. So both are in fact savings for retirement. They serve broadly the same purpose as the invalidity allowance, and this has led to duplication of cover. Something like 375,000–44 per cent.—of the 850,000 invalidity pensioners that we expect there to be in November 1985 will be subject to some degree of offset. But for many the overlap will be small. I must make one thing very clear. At no stage will anyone suffer an actual cash loss. We shall have transitional arrangements that will ensure this.
The amount of offset will vary between a few pence and £7·50, which is the maximum rate of invalidity allowance. But to put this into proper perspective, at April 1983 only 1,100 people receiving the highest rate of invalidity allowance were also receiving an additional component which equalled or exceeded that amount and thus would lose the full £7·50. In general, the amounts are likely to be small and to be covered entirely by the November up-rating. In effect, invalidity pensioners will receive the higher of invalidity allowance and additional component or guaranteed minimum pension.
Clause 14 requires my right honourable friend the Secretary of State to restore, at this year's uprating, the 5 per cent. abatement of invalidity benefit made in 1980. That means that invalidity benefit rates will be increased by that 5 per cent. over and above the increase due this year to compensate for the rise in prices. This will also mean that in all but a few cases the increased rate will more than offset the effect of the abatement provided in Clause 9.
The combined effect of the invalidity package will be cost neutral in 1985–86, will save about £5 million in 1986–87, and around £20 million in 1987–88.
We now come to three provisions which all move us further along the road to achieving equal treatment for men and women. First, there is Clause 10. This will finally remove what is known as "the married women's half-test", and will extend pension rights to about 25,000 married women who are at present disadvantaged by the residual effects of that test. This will be effective from the date the European Community's equal treatment directive took effect, which was 22nd December 1984.
As soon as the legislation is passed we shall identify and contact all the married women who stand to gain, so that we can invite claims from them. The cost of
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this will be about £25 million in this financial year, gradually reducing in succeeding years until, by the end of the decade, it falls to nothing.
Clause 11 also extends equal treatment. From this November the rate of the non-contributory over-80s pension for married women will be increased. All married women who qualify for this special non-contributory pension at the lower rate, currently £12.85, will then be entitled to the standard rate, at present £21.50. This is, we believe, a worthwhile and long-overdue rationalisation of the non-contributory retirement pension scheme for pensioners over the age of 80. It will end an unfairness between elderly married women and other elderly people. The cost is very small—some £75,000 in 1985–86 and £225,000 in 1986–87, which will be the first full year of operation. But the low cost should not prevent its being welcomed as a useful improvement for these elderly people.
Clause 12 will provide equal treatment for male and female beneficiaries who claim dependency additions for their wives or husbands respectively. The European directive on equal treatment does not oblige us to provide equality here, but we nevertheless believe it is right for us to do so. We also wish to establish what can be seen as a more realistic test of dependency than the present rule which applies to the wives of male claimants to invalidity pension. That rule tapers the reduction in the adult dependency addition from earnings of £45 a week. We think it is unrealistic to have a figure that is so much higher than the dependency addition itself. It can mean that the so-called dependant is earning more than the beneficiary would be receiving in benefit for himself. The clause allows the change to be set out in regulations which will be subject to affirmative resolution procedures.
The intention is that the level should be set at the rate of unemployment benefit, which is currently £28.45 a week. That seems to us to be the right level. It is somewhat more generous than the existing rules applying to the husbands of women getting invalidity benefit, but less generous than that at present operating for wives of men getting invalidity benefit.
There are two other social security measures I should like to mention. Clause 13 makes a small but, I hope, very useful and welcome change to special hardship allowance. This allowance compensates people who have reduced earnings because of an accident at work. The rate of the allowance is based on the difference between present earnings and earnings in the claimant's regular occupation before the accident. One effect of this is that at present someone who had no regular occupation, such as a student doing vacation work, cannot qualify for the allowance. This clause enables regulations to be made to provide for this sort of case.
Clause 15 is concerned with a judgment made last year in your Lordships' House. It provides that, generally speaking, a person should not be regarded as entitled to benefit unless a claim has been made within the prescribed time limit. Until a House of Lords judgment on 22nd November 1984, successive Governments had always understood the law to mean precisely that. This clause restores the law on entitlement to what we always thought it had been before the judgment. That, then, is Part II of the Bill.

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Part III is all about statutory sick pay. SSP was introduced in April 1983. Broadly, people get sick pay from their employer rather than from the state for the first eight weeks of sickness.
This whole story resulted from the successful way in which occupational schemes have been introduced by employers to cover absence through sickness. As far back as 1974 some 80 per cent. of employees were covered by occupational sick pay and state benefit was no longer the major element of income during short spells of sickness. It was clear that there was duplication of effort and provision between the state and occupational schemes so, after lengthy consultations involving organisations representing employees and employers, we introduced SSP.
The scheme has now been running for over two years, and the evidence we have indicates that it is both popular and successful. Employers have successfully incorporated SSP into their payment systems and we have received very few complaints about its operation. As far as employees are concerned, we have clear evidence that the majority prefer SSP to the state sickness benefit scheme. They find it more convenient and prefer to get their money from their employer when they are ill.
As I have said, my Lords, SSP covers the first eight weeks of sickness. But it is important to realise that it does, in fact, cover 90 per cent. of all periods of sickness. By Clause 16 we now intend to build upon this successful start by taking the logical step of extending the scheme to cover periods of sickness up to 28 weeks from April 1986. This means that people who are sick for longer than eight weeks will continue to receive SSP from their employer until they qualify for invalidity benefit. It will be more straightforward than the present arrangement whereby a person goes from SSP to sickness benefit and then to invalidity benefit.
There will also be financial effects. The overall effect in net Exchequer terms is a saving of £25 million.
Clause 17 enables us to relieve employers of the cost of their share of national insurance contributions paid on SSP. That will mean a saving to them of up to £60 million a year, and we shall make that effective back to April this year. I am sure that this will be welcomed by employers, who have played a vital role in making the scheme such a success.
These provisions are a good illustration of our determination to ensure that benefits reach people in the most efficient way. And, by encouraging the spread of occupational schemes, we firmly believe that benefits will develop that are better fitted to the needs of employees.
Part IV contains, in Clauses 23 to 30, all the nuts and bolts that hold the Bill together and make it work, together with some minor provisions in Clauses 20 to 22. I do not propose to go into these now, although obviously I shall be happy to do so later if I am so asked.
My speech, despite its length, amounts to a very quick canter over the main provisions in the Bill. As I said when I began, it covers a wide range of technical and sometimes obscure subjects, but I hope that what
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I have said will be sufficient for your Lordships to be able to agree with me that it will help a great many people and do a great deal of good. I commend this Bill to your Lordships.
Moved, That the Bill be now read a second time.—(Baroness Trumpington.)
3.29 p.m.
Lord Stallard: My Lords, perhaps I may first congratulate the noble Baroness on what I consider to be her first major contribution on a Bill from the Dispatch Box, and on the way in which she cantered through this awful Bill which is now before us. In view of the Statement on the future of the social security and welfare system generally (which I had hoped would come before this debate started rather than in the middle of it) and the discussion that will inevitably take place on that Statement both here and in another place, I have the impression that this debate, and indeed this Bill, is a little unreal. It seems a wee bit out of place that we should be discussing this in view of the awful things that are about to descend on us in relation to the whole scheme. It is no surprise of course because I have been saying that on every social security debate here over the past few months and certainly since the reviews were announced.
It always appeared to me and to many others that the most sensible thing to do would be to await the outcome of the reviews, to have consultations and then sit down and discuss in a reasonable way permanent and acceptable legislation that would fit the new circumstances as need arose. That seems to be a more sensible approach than this "thinking-on-your-feet" legislation to which we have been treated over the past 12 months. It is almost like the Government standing up and saying, "What shall we do with this? Let us do this; and because we have a huge majority there is no limit to what we can do, so let us do it anyway". It is bad legislation which comes from that kind of approach, and I have said so on a number of occasions.
Where there is an urgent problem, I would accept that we must be flexible enough to deal with it immediately it arises. I first of all therefore looked in this Bill for what was urgently needed in the field of social security in advance of the reviews. I would have thought that the proposals regarding occupational pensions could wait for more detailed scrutiny of our existing schemes. In my view that could and should happen because a great deal of discussion is going on outside among professional bodies and others about the whole future of occupational schemes—how they should be funded, and so on—and we could have awaited the discussion that will inevitably take place after the reviews. I think it must be apparent that anything we do now, even on occupational pensions, will have to be fitted into any future legislation.
Another main aspect of the Bill deals with invalidity benefits and allowances. Could not such changes dealt with in this Bill have been dealt with in the same way as exactly the same changes were dealt with in relation to other abated benefits? I give as examples unemployment benefit, which was abated, and the invalidity allowance, which was also abated. They were dealt with in the ordinary way in the annual

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review, and there was no need for primary legislation then to do that. What is the need for primary legislation to do it now, unless there are other motives? I say there was no need for that and therefore there was no urgency so far as that is concerned. What is urgent about the need to extend the privatisation of statutory sick pay, particularly when the Government so fiercely resisted just such a proposal from their own supporters during the Committee stage of the original Bill which introduced the eight-week scheme?
There was a proposal from the Government side that the scheme should be extended to 28 weeks, and that the employers should be relieved of national insurance contributions. But the Minister in charge of the Bill fiercely resisted that proposition in Committee. The Government were defeated at that time but they then put on a very heavy Whip when the Bill was reported back in the other place, and they were able to defeat—for a whole number of reasons I shall not go into now—any attempt to increase the eight weeks to 28 weeks and to relieve the employers of their national insurance contributions. That was the present Government's stance—it was not the stance of any past Government—and therefore what is now so urgent that they are going to do this about-turn and introduce what they had so fiercely resisted not so very long ago?
I therefore say that after today's Statement which is about to be made, and in view of the possible legislation that is to follow, my view is that this Bill can have only two functions. First, it complies with Treasury demands for immediate savings this year: hence the unprecedented number of new clauses and amendments that were put down to this Bill in the other place, not during the Committee stage when they would normally have been put down, but during the Report stage. As we all know, both here and in the other place the rules of debate are different in the Report stage from those which obtain in the Committee stage. For instance, one can only speak once in a Report stage and therefore the debate is of necessity limited and the necessary scrutiny of those 40 or 47 new clauses or amendments that were put down by the Government was in my view inadequate. That was also the view of many Government supporters. It was a rushed attempt to comply with the Treasury's demands that savings be made: that was the first conclusion that I came to.
My second conclusion was that, with the spectre of this onslaught on the social security and welfare services hanging over us, this is really a paving Bill. It really only paves the way for what is to happen in the future. It supplies a number of sweeteners both to beneficiaries and employers but it paves the way for the things that are about to happen, not just to the benefits but to the whole basic principles of the social welfare system that have been built up over many years. I would not argue for one moment that it is perfect, and it most certainly needs review—I do not think any of us would deny that—but it is still the envy of countries throughout the world, and it is still a model for many similar welfare systems. Therefore in my view this Bill is an attempt to pave the way for the now widely-expected attacks on pensions and on other benefits.
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Taken by themsleves, as the noble Baroness has outlined, some of the provisions in this Bill could, with reservations and amendment, be acceptable. I certainly welcome, with reservations, the occupational pension motives—the question of transferability, job mobility, and so on. I would certainly welcome some of those changes. The noble Baroness mentioned the half test for married women and I would certainly welcome that. Many of us have raised that point in the past.
A number of things can be welcomed. The noble Baroness mentioned the over-80s, and we welcome what she said. We would welcome the extension of the earnings limits, although we would remind the noble Baroness and others of the Government's manifesto commitment in 1979 to abolish the earnings limit altogether. So although we welcome any extension of the earnings limit, I would have thought that Government Members, with their commitment to what is said in the manifesto (which has been so much stressed recently) would have been keen to take this opportunity to put into effect that manifesto undertaking. However, they have not; and we are grateful for small mercies.
I am also grateful for, and welcome, the extension to the pneumoconiosis Act. I cannot at this stage go into the statistics which the noble Baroness mentioned because I have not had a chance to study them but I shall study them and come back on them later.
However, in regard to Clause 22 I would ask her why is it necessary to introduce pensions for those particular individuals at this stage in the pension discussion? As I say, there are some things which are to be welcomed but only in the context of this Bill. If we take them in the context of the whole legislation that is about to come, then of course they take on a different character altogether.
I should like to say a few words about the main proposals, and I recognise they can only be a few words in view of the fact that I have only just heard the noble Baroness's opening remarks. I, together with many colleagues, have spent long hours into the night in another place discussing social security legislation—certainly in the early and middle '70s and into the '80s—and I always understood, though never accepted, that the Government's broad policy stance, which was made clear right from the start and which has been spelt out by all Secretaries of State and Ministers who have been involved in the work of the department ever since, was that any measures introduced had to be at nil cost. Indeed, savings had to be maximised. That is the policy stance they take on all these matters of social security, and any extra benefit or concession granted would only be at the expense of other parts of the service.
Here again we have that stance repeated by the Secretary of State in this present Bill, when in his opening remarks, dealing with Part III, he said that this would save money and staff in his department. That has been the basis for the statutory sick pay extension. So we know that. As I said, we understand it although we do not accept it. But I would challenge the Minister, because he went on to say in that opening remark, in col. 676 of Hansard of 26th November 1984 of the other place, after making his point about

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the savings to be effected by the expansion of privatisation and the sickness benefit scheme:
"The responses that we have received suggest that many employees prefer statutory sick pay to sickness benefit from the state".
And in press releases they included employers in that general welcome. It was welcome, they said.
Let me challenge the Minister to produce the evidence for that. It must be available in the department and it must therefore be available to her. Why can we not see the evidence which was obtained from employers and employees about the enthusiastic welcome for this new statutory sick pay? I have sought the views of workers and employers in my old constituency, and I am bound to say that I found little enthusiasm for the present scheme, let alone the proposed extension; and it is not difficult to understand why.
For example, during the past 18 months companies and small businesses have been forced to set up their own administrative arrangements to operate the statutory sick pay. This has of course increased their overheads and it must be obvious that individual companies cannot possibly achieve the same economies of scale available to a centralised body such as the DHSS. Because employers under the scheme are liable for the full cost of any wrongful payments, innocent or otherwise, they have to go through the costly process of keeping detailed records of absences and must justify all statutory sick payments. Even then, last December the DHSS stated that out of 180,000 cases checked, one in six—that is, 16 per cent.—made either overpayments or underpayments. So there is no cause there for enthusiasm from either side, and I fully understand the point that the noble Lord, Lord Marsh, made in that unfortunate interjection.
In a paper produced last year the Spastics Society said:
"In some instances, small firms have taken to paying their employees full pay during short periods of sickness. It is an easy way out—especially where low paid employees are concerned. Faced with the administrative headaches of SSP and the risk of paying penalties if they get the calculation wrong—or for that matter if the DHSS inspectors do not agree that genuine sickness was involved—it is often cheaper to take this course of action. In the short term, of course, this also works in the employees' favour".
I understand that.
"Unfortunately, if the sickness subsequently develops into a long term chronic illness, because the original sick time was never recorded, this can adversely affect the employee's qualification for the longer-term invalidity benefit, i.e., because there would be no record of an 8-week period of illness. If employers continue this practice for 28 weeks, this could have very serious implications for those long term sick employees who try to claim invalidity benefit".
So there is not a lot of enthusiasm coming from people who understand those aspects of the scheme itself and of the extension to it.
As we all know, the statutory sick pay rates are paid on the basis of salary, not of need, and therefore families with children are worse off under the SSP than under the national insurance sickness benefit. Taxation and national insurance contributions are also payable on the SSP, but not on national insurance sickness benefit. Indeed the Government Minister himself recognised this when he was opposing the
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extension to 28 weeks. I do not understand this volte face of the Minister who opposed this—it certainly suits me; it suits most of us in this debate—when he said:
"If we were to extend that period"
—eight weeks to 28 weeks; this is the Conservative Government Minister speaking—
"there would be problems with employees with families.
"There has already been much criticism of the sick pay scheme on the basis that it provides for flat rate payment, irrespective of family circumstances … That argument would be much reinforced if we were to carry the period beyond 28 weeks.".
That is what the Government Minister said, and I agree with him. I seldom agree with Government Ministers, but he was absolutely right. So where was this enthusiastic welcome that the Secretary of State found when he talked to employers and employees? I really think that we are entitled to some evidence of that kind of satisfaction, if indeed it exists.
In money terms—I was not able to take down the noble Baroness's statistics, and they are probably different from mine, anyway—it means that a married man earning £60 a week would receive £32.26 under the statutory sick pay scheme, as opposed to £44.50 under the national insurance sickness benefit. I am bound to say he will be enthusiastic if he has already had an £8 reduction in his benefit! So that, together with all the other anomalies that have been exposed under the existing eight weeks' scheme and the proposal to extend privatisation to 28 weeks, will in my view only exacerbate the problems that already exist.
The Spastics Society, to whom I am grateful because they produced last year the excellent paper I have mentioned—I dare say most Members have read it—said in another part of their paper:
"Since most ordinary illnesses such as severe colds, flu and other viruses—are fairly shortlived, it is likely to be the more serious illnesses which last for up to, or more than, 28 weeks. In consequence employers are, more than ever, likely to discriminate against people with frequent sick records".
Similarly, disability is often mistakenly equated with poor health and the possibility of frequent absences. Trades unions have already noted an increase in employers monitoring sickness records, which underlies the preoccupation with past health records of prospective employees. The rate of unemployment among disabled people is disproportionately higher than that for other able-bodied job seekers, and the 28-week extension will do little to improve the situation.
Indeed, the chairman of the National Federation of Self-Employed and Small Businesses has already gone on record as saying that employers and the specialist mono-businesses will be viewing disabled applicants with a very unfavourable eye. I do not think I need say much more about that sickness scheme, but I have doubts about the enthusiasm. If I needed any more arguments—I do not think I do—I would ask the noble Baroness to consider the fact that in this Bill the Secretary of State is advancing the concession on employers' contributions to the current year, instead of waiting until the operation of the scheme next year; and that is surely an attempt to sweeten the pill that I have been discussing.

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So on to the invalidity pension. The proposal to restore the 5 per cent. abatement to IPB, the invalidity pension benefit, has been welcomed in some quarters, and I can understand that. But I personally see no case for congratulating the Government on restoring a cut which should never have been made in the first place. I can recall the long arguments that we had during the Committee stage of the original Bill when this 5 per cent. cut was made. It was made then, it was said, in lieu of taxation. These benefits were to be taxed. It was the Government's intention to introduce a tax scheme dealing with invalidity benefits and this benefit was to be abated. That was a posh word for cut. It was to be reduced by 5 per cent. in advance of that abatement. The Government certainly pledged themselves on many occasions—and there are a number of parliamentary replies to questions that I could quote if I had time—to bring in this taxation scheme for those benefits, but they never did.
As I said before, the restoration could have been made at any time. It did not need primary legislation. It needed only something in the annual up-rating, like the other abated benefits had already had. So we are entitled to query why it is in the Bill. The Government are surely admitting that no tax scheme is possible for this benefit. Certainly, to introduce a scheme to tax people who are already below the tax threshold is understandably difficult, if not impossible. The Government have now admitted this and they are therefore proposing to give back this invalidity benefit.
Instead of just mentioning statistics about how much it will mean, taking Clauses 9, 10 and 11 into consideration, there is a justifiable argument for making retrospective compensation to all those people who have lost the 5 per cent. benefit, to which they would have been entitled if it had not been abated. That should now be given back to them in ordinary justice. If the benefit was cut allegedly because of the introduction of a tax scheme which can now no longer be implemented, it can be restored. I should like to ask the noble Baroness to consider at what stage of the Bill she will recommend the retrospective payment of that cut.
I have not said anything about the occupational pension proposals, though I should love to do so, because, as the recipient of a small deferred—certainly not transferred—pension it might be thought that I have some interest to declare, which might be true. So I have avoided saying too much about that, but I shall certainly be extremely interested in the outcome.
I should like to conclude by mentioning something to which I referred earlier, which I consider to be urgent and just, and which could have been included in this Bill since this is the only vehicle that there is. I refer to the invalid care allowance and the omission of married and cohabiting women from entitlement to that benefit. We have deployed arguments on this in committees for many years, and I supported the Spastics Society in its campaign to get the invalid care allowance paid to married women and those other categories. I hoped that the Secretary of State could have put that omission right in this Bill. It would have been a justifiable urgent step on which to amend any Bill. So I hope to be able to return to this and other matters at later stages of the Bill, but for the time being I shall certainly read the record of this debate today.

Brussels Football Violence
3.54 p.m.
The Lord President of the Council (Viscount Whitelaw): My Lords, with permission, I shall now repeat a Statement being made in another place by my right honourable friend the Prime Minister. The Statement is as follows:
"With permission, Mr. Speaker, I shall make a Statement about the events at the European Cup Final in Brussels last week and the measures which are being put in hand in this country to deal with football violence.
"Last Wednesday television viewers throughout Britain and the world witnessed the appalling scenes of violence at the European Cup Final in Brussels which resulted in 38 deaths and a much larger number of injuries. Twenty-seven people are still in hospital. I know that the whole House will share the nation's profound sympathy for the bereaved and injured, and the sense of outrage and shame at the behaviour of some of our citizens which led to the tragedy. The House will also wish to associate itself with the message of sorrow and condolence sent by Her Majesty the Queen to President Pertini of Italy and King Baudouin of Belgium. I have sent similar messages on behalf of the Government to Signor Craxi, M. Martens and President Mitterrand. The immediate contribution which we have announced of £250,000 for the families of the victims is an expression of our deep sympathy and support for those involved.
"The Belgian authorities and UEFA are conducting formal inquiries into the arrangements for the match and into the disaster. They will no doubt report on the extent to which the internationally agreed guidelines and precautions for spectator safety were followed. We cannot prejudge the outcome of those inquiries. But we have to recognise that there has been a terrible record of violence at European football matches in which I regret to say that English supporters have played a large part over many years.
"In these circumstances the Government welcomed the initial decision of the Football Association to withdraw English clubs from participation in European competitions next season, and we fully understand the subsequent decision of UEFA to ban English clubs from European competition for an indefinite period and we believe it to be right. This withdrawal gives English football authorities the opportunity to introduce effective measures to combat violence and to convince other countries that they have done so.
"I was able to have discussions last week with several people including the chairman and secretary of the Football Association who returned immediately from Mexico after receiving news of the tragedy; the chairman of Liverpool Football Club; my honourable friend the Parliamentary Secretary, Department of Employment, who happened to be present at the match and was an eye witness to the events; and a number of football correspondents who were also present at this and similar occasions in the past.

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"The following measures will be taken or are already in hand to put our own house in order.
"First, we shall introduce as soon as possible legislation similar to that contained in the Criminal Justice (Scotland) Act of 1980. That Act makes it an offence to be drunk or to possess alcohol on football coaches, on entry to grounds and in most areas of grounds. It also makes it an offence to be in possession of containers which could be used as missiles. Subject to discussions through the usual channels, it is our intention to have this legislation on the statute book by the Summer Recess, in time for the coming football season.
"Secondly, we shall proceed next Session with the legislation envisaged in the Government's White Paper on the Review of Public Order. The proposals on assemblies in the open air will considerably strengthen the powers available to the police to guard against the risk of disorder. Wherever they have reason to expect disorder at a football match the police will, in effect, be able to limit the gate and inpose other conditions. Under this provision, the police will be able to stipulate whatever steps they judge necessary to minimise the risk of disorder.
"Thirdly, Mr. Justice Popplewell will continue with his inquiry into the events at Bradford City and Birmingham football grounds on 11th May. His terms of reference are already wide enough to allow any lessons learned from Brussels to be taken into account. I understand that Mr. Justice Popplewell hopes to submit an interim report before the beginning of next season.
"Fourthly, my right honourable friend has set in hand the procedure for designating under the Safety of Sports Grounds Act all clubs in the Third and Fourth Divisions. We have, in addition, agreed with the football authorities on a number of measures including the acceleration of the introduction of closed circuit television, with the help of the Football Trust. I have been informed today that the trust is proposing to allocate £500,000 for this purpose as a first step. This would give cover in over 30 grounds in addition to the 11 in which experiments are already taking place.
"Events at Brussels last week have, however, made it clear that more is now needed. I shall be discussing urgently with the football authorities proposals for the introduction of a practical scheme of membership cards, either on a club or national basis; proposals for far more all-ticket matches; stricter controls, or in some cases a ban, on visiting spectators.
"I recognise that such measures would mean a radical change in the way in which football is conducted in this country. But radical change is needed if football is to survive as a spectator sport.
"Fifthly, in parallel with our own action, we shall continue to co-operate in developing international measures to deal with hooliganism. Next week, my honourable friend the Minister for Sport will be attending a meeting of European Ministers for that purpose.
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"In the meantime, we are anxious to give the Brussels authorities every possible assistance in bringing to justice and dealing appropriately with people from this country who have committed offences in connection with last Wednesday's match.
"My right honourable friend the Home Secretary has sent a message to the Belgian Minister of the Interior offering the assistance and co-operation of British police forces. The Merseyside Police and the Metropolitan Police are examining television film closely to see if they can identify those responsible for last Wednesday's violence.
"We also want to do everything within our power to remove any possible difficulty in the way of any charges the Belgian authorities may decide to bring. Arrangements already exist between the United Kingdom and Belgium for the extradition of those accused of serious offences of violence, such as murder, manslaughter, wounding or serious assault. If the Belgian authorities were to seek the extradition of someone accused of such an offence, we should naturally give them every assistance to meet our requirements on evidence.
"One disincentive for the Belgian authorities may be that it is less trouble simply to expel Britons who may have committed offences rather than to prosecute and sentence them appropriately. We intend to offer the Belgians the opportunity, in accordance with the Repatriation of Prisoners Act, of removal to prison in this country of anyone who may be given a prison sentence in Belgium.
"Mr. Speaker, I hope that last Wednesday's sickening events will unite all decent people in helping to eradicate hooliganism. To curb violence requires effort and commitment from us all. If English clubs are to play football in Europe again, they can do so only when their good name, and that of their followers and supporters, has been restored."
My Lords, that concludes the Statement.
4.4 p.m.
Lord Cledwyn of Penrhos: My Lords, we are all grateful to the noble Viscount for repeating that important Statement. As it says, we are all conscious of a sense of shame, anger and sorrow after last Wednesday's shocking events in Brussels. We must realise that not only the football authorities and the Government but all of us share the weight of responsibility for what happened. We join with the Government in offering our deepest sympathy to the families and friends of those who were killed or injured.
The Brussels tragedy was the gravest of a series of vicious outbreaks of violence in and around football matches in this country and abroad. It must be a matter of regret that no firm action was taken before, in the light of, for instance, the Luton experience and following the clear pronouncements in the review of public order law; for example, on restricting the availability of alcohol. We therefore welcome the decision announced in the Statement on the sale of alcohol and on the introduction of future legislation.

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We welcome the further measures outlined in the Statement, but we will obviously wish to consider them in greater detail later. We shall need to examine not only this and other outbreaks of violence but also what is to explain these recurring, grave breaches of law and order which are threatening our society.
Can the noble Viscount say whether the measures proposed will require an increase in the strength of police forces in this country? On the face of it, it seems that the proposals will add to the duties of the police, who are already very hard pressed. Can the noble Viscount further say whether the Government propose to release part of the money which they receive by way of tax on football pools to help the poorer football clubs put their house in order, as the Government wish?
I recognise the importance of Mr. Justice Popplewell's inquiry, to which the noble Viscount referred when he repeated the Statement. As a final point, can the noble Viscount say whether the Government have any further proposals for an inquiry to examine longer-term measures to deal with this problem and to study the root causes of not only soccer hooliganism but also violence in other areas of society to which soccer hooliganism is inevitably related, especially among the young people of our country?
Lord Diamond: My Lords, perhaps I may preface my remarks in response to this Statement with a very short tribute to a close friend and very distinguished politician who was a member of my party who passed away yesterday. I refer to Lord George-Brown. He was a close friend and your Lordships will therefore forgive me for taking up the time of the House to express my profound admiration for a man of his great intellect, his great capacity, and his warm friendship.
Lord George-Brown was able to make contact up and down the country with millions of people who will sorely regret his death. He was a distinguished statesman, a great trade unionist, a Cabinet Minister, a deputy Prime Minister, and a deputy leader of the Labour Party. I thought your Lordships would therefore permit me to say how much I hope that his family will derive some satisfaction from our expression of sympathy in bearing this unhappy and tragic event.
I turn to the Statement and express my thanks to the noble Viscount for repeating what is a very important Statement on a very tragic occasion. We on these Benches naturally wish to express our sympathy to the bereaved families and to the authorities of all kinds in all the countries involved—government authorities, police authorities, and those responsible for organising the games. We especially want to offer our sympathy to lovers of football all the world over.
What has happened is a tragedy for our nation. As your Lordships will have seen on the television screens, it is our people who have committed these heinous crimes of premeditated, uncontrolled violence. It is no excuse that they did not necessarily intend the result of their actions. This is the kind of tragedy that is liable to happen if people behave in that sort of way.
The present moment is not the time for either recrimination or attempting to apportion blame. It is
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a moment to unite on the single objective of determining that such a thing will never happen again. We accept therefore the need for the legislation mentioned in the Statement, which we will consider carefully and co-operatively. We accept also the need for immediate action as there described.
There should be a dual approach, but the Government appear to have only a one-sided approach. We should certainly look at the effects and how they may be controlled and limited, but we must surely look also at the causes. I find precious little in the Statement to indicate an endeavour by the Government to ascertain what are the causes. Why do such incidents happen in our nation? We all know our fellow members of this nation and we know, too, how unnatural it is for them to behave in this way. Why does it happen? We must know whether there are parental, domestic, social, psychological or environmental causes—situations which contribute to this uncontrolled show of violence on this and similar occasions. We must know whether those young people who find themselves excluded from our accepted society find themselves driven to join the society of the rejected and even endeavour to shine in the unusual morality of that society.
We must know these things so that we can get at the root causes and prevent this violence showing itself in other forms if we control it in football. What are the Government proposing to do about that? Are they proposing to set up a deep inquiry on that profound issue? Are they proposing to set up another inquiry on the way people behave as a crowd and on mob psychology? Why do people who normally behave rationally, behave totally irrationally when they are members of a group? For example, why has this happened not only in this country but in a country where one would normally accept that self-discipline is of a very high order? I refer to China and the outburst that occurred there. That may indicate that the problem is much more widespread than among British football fans alone. Therefore, I hope that the Government will set up at least two deep inquiries so that we may know whether or not we are dealing only with what is called the "British disease".
Viscount Whitelaw: My Lords, I am grateful to the noble Lords, Lord Cledwyn and Lord Diamond, for their response to the Statement. Perhaps I should say at the start to the noble Lord, Lord Diamond, that I am sure my noble friends on this side of the House would like to be associated with what he said about his noble friend Lord George-Brown.
I spent many years in another place with Lord George-Brown and, like many other Members there, I both enjoyed his robustness and frequently felt the strength of his tongue and invective against me—something which was not unknown for everyone. Nevertheless, that did not in any way detract from the feeling that he was a very strong and colourful character of the sort that we are frequently told we ought to have more of in British politics; at least, that is what we are told. At the same time, no one could deny his outstanding loyalty to his country and the strength of feeling that he had for it. I am sure the whole House will wish to be associated with that particular expression.

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The noble Lords, Lord Cledwyn and Lord Diamond, referred to the feelings of shame, anger and sorrow that have been widely expressed in this country since the affair of last Wednesday. They both—and I am grateful to them for it—expressed their deepest sympathy with the families and the bereaved and joined with the Government in doing that. Both noble Lords also welcomed the decision on future legislation on the sale of alcohol. Both noble Lords will appreciate, as will the House, the importance of seeking to get this legislation through before the start of the next football season. That is why the Government have undertaken to have discussions through the usual channels in the hope that an agreed form of legislation can be produced which can be quickly passed through another place and this House.
I am grateful, too, for the welcome given by both noble Lords to the other measures. The noble Lord, Lord Cledwyn, asked whether some of these measures would lead to an increase in the police forces in this country. It is seldom that I can return to my old problems of Home Secretary; but perhaps I am entitled to do so on this occasion for once and to say that it is reasonable for me to point out that we now have 12,000 more policemen in England and Wales than we had in 1979. Perhaps I may be permitted to add that I had some part to play in achieving that. It is important that we recognise the importance of that increase. Whether the measures will need more than that is very difficult to say, but clearly that is a matter for my right honourable friend the Home Secretary.
As regards money from the football pools, I simply say this, particularly in the presence of the noble Lord, Lord Aberdare, who is chairman of the Football Trust and who has occupied that position with such distinction. It should be remembered that already money through that channel goes to the Football Trust and therefore to the various clubs. Of course, I announced in the Statement the £500,000 which the Football Trust is giving for closed circuit television.
Both noble Lords asked about deeper inquiries. I note what they say. At this stage I think that it is right to point out that there are a number of inquiries taking place. There are the inquiries through the Belgian authorities. There is the inquiry conducted by Mr. Justice Popplewell. I believe that it is important to hear the results of those inquiries on the immediate events before deciding what further action should necessarily be taken. We need very clear and very quick action. I always have a slight fear—perhaps more than a slight fear—that lengthy inquiries sometimes tend to postpone the action which ought to be taken quickly. I put in that proviso only because it is important to appreciate it and I do not, on behalf of the Government, rule out the possibility of an inquiry later; but much is going on at the present time.
Lord Cledwyn of Penrhos: My Lords, perhaps I may be allowed briefly to associate my noble friends and myself with the expressions of sympathy on the death of Lord George-Brown. Many of us on this side of the House had the opportunity of working with him, both in Government and when in Opposition, over three decades and more. We regarded him as one of the more significant political figures of our time. He was a
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man with a penetrating intelligence who in Cabinet could frequently strike the nail on the head very quickly where the rest of us took a long time to do so. He was a patriotic Englishman who had most admirable qualities. We send our deep sympathy to his family.
4.18 p.m.
Lord Stallard: My Lords, may I, as an ardent football supporter, welcome the Statement made by the Government and the noble Viscount this afternoon? I thank the Government and the football authorities concerned for the urgency which is being attached to the tragic circumstances which took place in Brussels last week.
I ask the noble Viscount one or two questions. I took the view that it was a little harsh to ban the clubs rather than the supporters. The supporters were guilty of the offences, not the clubs. I should like to ask the noble Viscount whether a ban on supporters rather than on the teams was discussed with the officials when he met them last week. Like other noble Lords who have spoken, I too welcome the proposed legislation to ban alcohol. I have two questions on that aspect. Will that ban include a ban on supermarkets, who liberally sell alcohol at all hours of the day outside, near and round about football clubs and elsewhere? Therefore, supporters are well "tanked up"—which I believe is the phrase—long before they get near the football ground.
If the ban can be extended to limit the sale of alcohol in supermarkets, for example, and other outlets not normally controlled by the licensing hours, that might be helpful. I hope that the noble Viscount will not allow this legislation to become confused with proposals in another place to extend the already too long licensing hours that we have at the moment. To mix up these two issues would lead to confusion. I ask the noble Viscount for his views on that.
I, too, welcome the inquiries into the Bradford disaster. I only hope that the noble Viscount can assure me that adequate resources will be made available to Third and Fourth Division clubs to bring their grounds up to the required safety standards, because we know that they would not be able to do so without some assistance.
In his discussions with the football authorities last week did the noble Viscount mention the possible effects of provocative behaviour on the field itself? I have in mind the almost obscene gestures that players make nowadays when they score a goal, running to their supporters and almost inciting a response. I think that that must be a contributory factor.
My last point is a wee bit controversial. The noble Viscount mentioned the Brussels judiciary, the possibility of an exchange of prisoners, court cases and so on. May I remind him—and I do not do this with any malice—that there is still a great deal of ill-feeling, particularly around the Tottenham area, about the young lad who was shot dead at about this time last year in Brussels as a result of another unfortunate incident? His name was later cleared in the court proceedings and he was certainly not in any respect a hooligan. There has been correspondence with the Prime Minister on this. He was the unfortunate victim

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of a shooting, and he died. The man who fired the gun was charged, but was given a derisory sentence in the eyes of most of us who knew the case. That does not augur well, and there should be a much more serious attempt to make the sentences fit the awful crimes perpetrated by the real thugs and hooligans responsible for these tragic incidents.
Viscount Whitelaw: My Lords, I am grateful to the noble Lord. First, I think that I should make it clear that my right honourable friend the Prime Minister met the various authorities mentioned in the Statement. I was not present on that occasion. Indeed, I have to admit to the House that I was far from London at the time. I have to give the views as I know them, but I was not present and did not hear them personally.
The noble Lord says that it was harsh to ban the clubs. That was not the view of the Football Association and it certainly was not the view of UEFA. It was certainly not the view of my right honourable friend the Prime Minister after she discussed the matter with all concerned. They all felt that such drastic action was the only thing possible to bring home to everyone the sheer horror of what had happened.
The noble Lord asked about finance to bring the grounds of Third and Fourth Division clubs up to standard. There have been discussions between the Government and the Football Trust as to how in various ways the finance may be found. No conclusions have yet been reached.
The noble Lord asked about the sale of alcohol in supermarkets. That is a matter for consideration by my right honourable friend the Home Secretary and it will be discussed through the usual channels. He also asked about the sale from all other outlets. I think that it would be fair to say to the House that a major problem that inevitably arises is that, as we all know, there are any number of sources of drink if people want to have it. I am always told that anybody at any time who wants a drink can find a means to have one. I suspect that that is almost certainly so. It is very difficult to widen the matter, but certainly the legislation ought to go as widely as it can.
With regard to the story that the noble Lord told about a certain individual, in four years as Home Secretary I learnt never to comment on individual cases, either those about to happen or more usually those that have happened. I do not think that I shall break my rule now, except to say that if the noble Lord's broad point was that if people who commit such offences can be brought to justice they should have stiff sentences, I am sure that that is the wish of the whole House and indeed the country.
Lord Gladwyn: My Lords, has the noble Viscount by any chance read in this morning's Times the important letter from Professor Ralf Dahrendorf on the reasons for hooliganism in this country? In any case, will the Government give serious attention to the proposals that he makes?
Viscount Whitelaw: Yes, indeed, my Lords, I read the letter. I would only add that of course the Government will pay considerable attention to what is
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said by Professor Dahrendorf and many others. I think it is fair to say that there are probably many reasons behind action such as that taken at Brussels, and they all have to be studied.
The Lord Bishop of Norwich: My Lords, I believe that from these Benches we would want to be associated with the tribute to Lord George-Brown, who used to delight in telling us on these Benches that he was a robust and loyal Anglican. He used to say it rather straight at our faces as though to say, "Cap that one!". He enjoyed keeping us bishops up to the mark. We mourn his passing with much regret and remember him with deep affection in our prayers.
Also I believe from these Benches that we would want to underline what the Prime Minister said in the Statement, which the Leader of the House repeated, concerning sympathy for the families who have been so deeply and suddenly shocked into bereavement after last Wednesday's tragedy. I must, though, declare an interest in the question that I want to ask the Leader of the House. My football club, Norwich City, won the Milk Cup—the League Cup as it used to be called—and is now barred from Europe.
If I may digress for a moment, on that day when we played Sunderland all our supporters and all theirs picnicked together in great amity before the game. Even after the game we visited each other's coaches before the long journeys back to the North-East and East of England. We shared each other's insignia—the black and red of Sunderland and the yellow and green of our Canaries—and there were no untoward incidents at all. That is a reminder of what can happen; and it is not news unless it is something bad. I should like to put on record that that and many other games in our country in this last season that has just closed have been marked by good sportsmanship and a recognition of each other's qualities. Particularly I believe that Liverpool and the members of the Kop have been very hurt by the tiny group of drunken and violent people, some of them, we believe, masquerading in Liverpool colours, who brought such shame upon the English game.
The question that I have to put is this. I wonder whether we have the Government's support for a plan which was made before Wednesday. Before Wednesday, as the winners of the Milk Cup, Norwich City had been in touch with Juventas about inviting the team—and the invitation still stands—to come across for a pre-season game in August here in our Carrow Road stadium. But we realise of course that now we are barred from Europe and we ourselves are barred from the Cup Winners competition which we had looked forward to so much.
I believe that it would be a deeply healing experience—and I certainly would want to contact the Archbishop of Turin and talk with him as Christian leader to Christian leader—if in August that game between ourselves and Juventas was able to go ahead. I realise that it touches so many rather wider political problems and must be seen against the fact that we now stand in shame because of that tiny group of English people who brought shame on our nation and our game—and that in the very week when we as a nation remember that 41 years ago young men of just that same age were seeking to liberate Europe.

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I therefore simply ask whether the Leader of the House would like to give consideration, sympathy and even encouragement to the negotiations that are going on now to invite Juventas to England for that game at Norwich. I believe that it could be a deeply healing experience and might do much to restore the level of our great national game as an exciting, fair and truly family game. It might also help to purge the shame and disgrace in which our great national game has now been brought into disrepute. I ask for some encouragement from Her Majesty's Government.
Viscount Whitelaw: My Lords, I am grateful to the right reverend Prelate. I know how sad the Football Association felt—this was certainly expressed by the chairman—for the Norwich City football club in the predicament in which it has found itself as a result of the ban on playing in Europe. The right reverend Prelate has expressed very plainly and very significantly how particularly sad this is for a club and, indeed, for supporters who have had such a good record with those against whom they have played. He has told us this very plainly. It makes it all the more sad that they have been to some extent the losers arising from the action of others, but that is, I am afraid, inevitable sometimes in life.
The right reverend Prelate asked me to give the support of the Government to his negotiations. The furthest that it would be proper for me to go, I believe, in the very touchy situation that obviously exists at the moment, with so many different people involved, is to say that I will make sure that the views that he has expressed are brought to the attention of all those concerned with this and that they will be able to consider what he has said and to give advice, no doubt to him and to others, as to the best way of proceeding. Frequently, it is a good thing that a little time should elapse—and this applies in the circumstances in which we find ourselves at present—before one makes decisions of that sort.
Baroness Burton of Coventry: My Lords, will the noble Viscount agree that perhaps the one good thing to come out of the dreadful happenings at Brussels is that the problem—what we call at the moment soccer violence—can perhaps be dealt with? Does he not agree that, really, violence at soccer grounds has gone on for some 10 or 15 years? I am sure that many people, in common with myself, who have seen this everywhere, have said, "Why don't they do something about it?" It has steadily got worse and nothing has been done.
I should like to say here what I think is right. I believe that we should thank the Prime Minister for the action that she took prior to Brussels. I believe that following Brussels the feeling of shame and indignation in this country would have produced action. But, prior to Brussels, it was my belief that neither the Football League nor the Football Association were going to deal with the problem, on the grounds that it was too difficult, that it was too expensive to have membership cards, that it was too expensive to have all-ticket finals, and that a lot of money would be lost if drink was stopped.
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Is the noble Viscount aware that a good many ordinary people like myself who have spent a lifetime in sport are very glad that this matter is at last going to be dealt with? In connection with the question put by my noble friend Lord Diamond, is the noble Viscount also aware that I was very glad to hear his response about the possibility of further inquiries without delay. It seems to me that the country has been so shocked—it is not only British football, but the British people, or the English people, if you like, who are on trial here—that there is a feeling that this matter should be dealt with at once. It is therefore on behalf of many people, I believe, that I thank the noble Viscount. I am sure that many people throughout the country will agree with trying to hasten through the legislation and are determined that something is done about this matter.
Viscount Whitelaw: My Lords, I am grateful to the noble Baroness, who has a distinguished record in sporting activities over many years. I shall be only too pleased to pass on her remarks to my right honourable friend the Prime Minister who will, I know, be very pleased to receive them. I should like to thank the noble Baroness very much for what she has said.
As to the question of further inquiries, I made clear, I believe, in answer to the noble Lord, Lord Diamond, and also in reply to the noble Lord, Lord Cledwyn, that I feel that the immediate inquiries on the most recent events must come first. These must go ahead quickly. I have simply said that I shall note—I do not think that any noble Lord would expect me to say more at this stage—the demands for further inquiries. But the initial inquiries will take place at once.

Social Security Review
4.34 p.m.
Baroness Trumpington: 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 Social Services about the social security review. The Statement is as follows:
"Over the last 18 months the Government have been examining the major areas of social security provision. In that time over 40,000 consultation documents were issued, 4,500 pieces of evidence were received and 62 organisations and individuals gave oral evidence at public sessions. The Government are today publishing a Green Paper which sets out their proposals. We will now be seeking comments on the proposals from interested organisations and will be providing an opportunity for the House to debate them.
"The social security system in this country owes a great deal to the report of Sir William Beveridge in 1942. Although much of what he proposed was changed when it came to implementation and more has been changed since, many of the principles on which his proposals were founded remain sound. The Government remain committed to the concept of a national insurance system under which entitlement to the major benefits is earned by the payment of contributions during a working life. The Government also believe that our tradition of state

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support for those in need is one which should be maintained and developed. But social security is not a function of the state alone. It should be a partnership between the individual and the state—a system built on twin pillars.
"Any review of social security in this country must recognise its considerable achievements. But the review has shown that there are several major causes for concern.
"By common consent the social security system is too complex. That is to the disadvantage of both the public and the staff. In particular, the research evidence shows that substantial numbers of supplementary benefit claimants do not understand how their entitlement is worked out—in spite of the fact that 38,000 staff are now working exclusively on supplementary benefit. With the pressures now being faced, there is a danger that some parts of the system will break down. It is, therefore, a matter of urgency that we devise a simpler and more coherent system.
"The social security system also needs to be modernised. It is not properly co-ordinated with the tax system and operates with outdated equipment. We now need a major computerisation strategy for social security which can link effectively with other Government systems, including that of the Inland Revenue.
"In terms of spending, the cost of the social security system has increased five-fold in real terms since the war and now totals some £40 billion a year. That is over 30 per cent. of all public spending and represents over 11 per cent. of gross domestic product compared with only 4.7 per cent. after the war. Nor has the pressure for growth in spending ended. In the first part of the next century we need to provide for an extra 4 million pensioners. That, taken together with the state earnings related pension scheme, means that spending on pensions will at least treble. We must ensure now that we have a soundly based social security system which the country can afford.
"Above all, perhaps, the social security system does not always help those most in need. Over half those living on the lowest incomes in this country are in families with children. This affects not only the unemployed but also families where the head is working. Yet, under the present system, low income working families can face both the difficulty of escaping the poverty trap—where they may get no increase in total income when their earnings rise—and also the unacceptable position that they can be better off out of work. That position must be changed.
"Making better provision to meet the needs of poor working families with children has been a major priority of the review. We therefore propose to introduce a new benefit—to be called family credit—to provide better help for such families. Family income supplement will be abolished. The new family credit will be paid on the same basis as help to unemployed families, in that help will be related to the age of children. It will be related to take-home pay, not gross earnings, as happens with family income supplement. And it will be paid by employers through the pay packet.
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"Family credit will be paid in addition to child benefit. The Government believe that the extra responsibilities carried by all those bringing up children should be recognised. Child benefit will, therefore, continue to be paid for all children, irrespective of the means of the family.
"Family credit will be part of a coherent system of income-related benefits. That system, covering basic income support, assistance with housing costs and help for low income families, will be based on a common income test and a common structure. It will be simpler, fairer and easier to administer; and it will provide the same level of help at the same level of income for those in and out of work.
"We propose to replace supplementary benefit with a new income support system. The central concept of this income support scheme is that the regular extra payments now made on the basis of detailed individual assessment should be absorbed into the main rates of benefit. Those rates will provide a special higher level of benefit for pensioners, the long-term sick and disabled and lone parents. Families with children will not only receive assistance for each child but also a premium to reflect the extra pressures they have to cope with. At the same time the capital rule will be eased by introducing a taper between £3,000 and £6,000 instead of the present inflexible £3,000 cut-off; we shall ease the earnings rule for the long-term unemployed and the disabled.
"The income support scheme should provide for the needs of almost all claimants but we recognise that the system must be ready to cope flexibly and quickly with particular problems. Instead of the present single payments system, we propose to set up a social fund which will be operated on a discretionary basis by specially trained staff at DHSS local offices. It will provide emergency help where needed and help those who face particular difficulties. We also expect that the social fund will, in time, provide a better basis for contributing cash help to enable people to be cared for in the community rather than in institutions.
"I am also publishing today the report of the housing benefit review team and have accepted most of their recommendations. The review, team found that housing benefit was excessively complicated, involving six different tapers applied to different groups at different income levels. It is also expensive and poorly targeted with over one-third of all households—some with incomes up to average earnings—receiving benefit.
"We intend to move to a simpler, clearer system. It will be based on the same net income assessment basis as the income support and family credit systems. It will also provide help on the basis of rent and rates together rather than separately as at present.
"For the poorest families, housing benefit will meet 100 per cent. of rent. At present 100 per cent. help goes only to those on supplementary benefit. In future it will apply equally to those in and out of work.
"We believe, however, that the basis on which help is provided with rates needs to be changed. At

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present some 7 million householders receive help with some or all of their rate bills and over 3 million householders pay no rates at all. As a result a large proportion of people live in households in which no rates are paid. This means that there is no effective link between payment for and use of local services. The whole structure of rates is currently under review but the Government believe that, so long as domestic rates remain, all householders should be directly responsible for making some payment towards them. The Government have in mind a figure of the order of 20 per cent.
"The review also examined the contributory national insurance benefits for unemployment, maternity and widowhood. As I have already made clear, the Government remain committed to the principle of basic provision for these contingencies organised by the state through the national insurance system. We propose no change in unemployment benefit, which will continue to be paid for 12 months.
"For widows under 60, we propose to replace the widow's allowance currently payable for the first six months after bereavement by a single lump sum payment of £1,000 to give them more help when it is most needed. In addition, widowed mother's allowance will now be paid from the time of bereavement rather than after six months as at present. Widow's pension will also be paid from the time of bereavement but the rules of eligibility will be modified to concentrate help more on older widows who are least likely to be able to resume work. The changes will not affect the benefit paid to any existing widows.
"In maternity, we propose to adjust the rules governing maternity allowance so that the mother can have greater freedom in choosing when, around the time of her confinement, she wishes to be paid the allowance. We also intend to change the qualification period so that the benefit is more likely to be paid to women who have had to give up work in order to have their baby.
"The maternity grant and the death grant have been left at their present level—£25 and £30 respectively—for many years and are now quite inadequate for their purpose. The average cost of a funeral is now over 10 times as much as the death grant and it costs £20 in administration to pay out each £30 grant.
"We propose instead a new maternity grant of £75—three times the level of the present grant—available to all low income families. Help with the full cost of funerals will also be made available more widely than at present to anybody who has responsibility for a funeral and lacks the resources to pay for it. Help will be provided through the social fund to ensure that it can be given quickly and flexibly and with the minimum of detailed inquiry. These changes will concentrate help where and when it is most needed instead of providing a token contribution to everybody when it may be of little practical use.
"Mr. Speaker, the largest single area of social security spending is on pensions. The basic pension
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alone accounts for over £15 billion a year and is paid to 9 million people. That pension accounts, on average, for half the income of pensioners and has been a major factor in raising pensioners' living standards since the war. It is, and must remain, the basis on which individuals can build additional pension provision. The question is how that extra provision should be made.
"At present only about half the working population belong to occupational pension schemes. The development of occupational pension schemes has been an important factor in improving living standards since the war. But the coverage of schemes has not increased since the mid-1960s. The development which it was hoped would follow the 1975 Social Security Pensions Act has not taken place.
"Nor has the forecast of cost on which the 1975 scheme was based proved sound. The analysis undertaken during the review has shown that the number of pensioners for whom we will eventually need to provide is 3 million greater than was recognised in 1974 and 4 million higher than it is today. It is clear, therefore, that the long-term cost of state pensions is set to rise steeply in the first 30 years of the next century. If the basic pension was uprated in line with prices, then its cost would increase in real terms by half to £22 billion. If it kept pace with earnings the cost would treble to nearly £45 billion. On top of that, the cost of the state earnings related scheme will add another £23 billion. Thus, the total pensions bill will at least treble and could increase by over four times. At the same time the ratio of contributors to pensioners will worsen and it is estimated that there will be only 1·6 contributors for each pensioner compared with 2·3 now.
"As a country we cannot ignore these emerging costs. If the best estimates available to us lead us to question whether we will be able to afford the promises we are making, then we have a duty to re-examine the position. It would be an abdication of responsibility to hand down obligations to our children which we believe they cannot fulfil.
"The real question is not whether action should be taken on the state earnings related scheme, but what action. There are those who argue that we should restrict the emerging cost of the state scheme by changing its provisions. The difficulty of that course is that contributions would remain the same while benefits would be reduced. There is no reason to believe that there would be any increase in occupational pensions to fill that gap.
"The Government have concluded that it would be better to adopt a different approach. This would be based on the aim of ensuring that in addition to the basic pension everyone has his own pension with his job—whether it be an occupational pension, membership of an industry-wide scheme or a personal pension. In all cases every employee would have the right to a contribution from his employer.
"We recognise, however, that relatively older workers have difficulty in building up an adequate occupational pension. We have decided, therefore, not to make any changes for those within 15 years of

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retirement. For men aged 50 or over and women aged 45 and over at the time of implementation the existing state earnings related arrangements will continue. This means that no one retiring during the rest of this century will be affected by the change and neither will any existing pensioner.
"All rights built up in the state scheme at the time of the change will be honoured. In addition, we also intend to give a special enhancement of rights for men aged between 40 and 49 and women aged 35 to 44. They will be given a bonus of added years of entitlement which will give them higher pensions when they eventually retire.
"For those to be covered by the new arrangements the Government will lay down a minimum contribution level of 4 per cent. of earnings at least half of which must be provided by the employer. The new arrangements will be phased in over three years.
"These changes will mean that in due course all employees will be contributing to their own additional pension through their jobs. This will represent the biggest ever extension of occupational pension coverage in this country and will add to the reforms of occupational pensions, involving improved rights for early leavers and transfer of pensions, currently in legislation before Parliament.
"Mr. Speaker, the Government must also ensure that the system is managed as effectively as possible to provide the best possible service to the public. The Government's benefit proposals will in themselves make the system simpler. But we are now to embark on the largest programme of computerisation ever undertaken in this country to modernise and improve its operation.
"The benefit changes and the computerisation both of my department and the Inland Revenue will provide opportunities to achieve better co-operation and closer working between the tax and benefit systems. The Government intend to take advantage of those opportunities and will be considering this further in the context of the Green Paper on Personal Taxation.
"Meanwhile, we have decided to take a major step towards better harmonisation by aligning the tax and benefit years. Instead of benefits being uprated in November each year the uprating date will be moved to April. This means that all tax and benefit changes will be implemented at the same time. It will also be of considerable assistance to local authorities who at present have to reassess housing benefit cases twice a year.
"The change in the benefit year will be brought in at the time of implementation of the major structural reforms. We expect this to be in April 1987. After the uprating of benefits due at the end of November 1985, there will, therefore, be a 16-month period before the change in April 1987. It would clearly be wrong to allow such a gap between upratings but it would not be practicable to have upratings both in November 1986 and April 1987. Accordingly, the Government have decided that, following the November 1985 uprating, there will be two upratings at eight-month intervals, the first in July 1986 and the second in April 1987.
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"Mr. Speaker, the programme of reform I have announced will provide a system which is easier to understand and simpler to administer. It will mean the most substantial changes in income-related support for 50 years and for the first time give equal support for those in and out of work. It will provide more help for low income families with children. It will establish a better partnership between state and individual provision, especially in pensions, giving everyone the right to his own pension with his job. Above all, the reforms will provide a modern social security system to take us into the next century."
My Lords, that concludes the Statement.
4.56 p.m.
Baroness Jeger: My Lords, I must congratulate the noble Baroness. She is getting better and better at reading ill-written scripts. The noble Baroness told us in conclusion that what was announced today would make the system easier to understand. I did not feel that there was a great rapport of understanding among your Lordships as this complicated document was being read out.
I want to start by saying something rather serious about the procedure of the House. I do not think that the House has done itself any good today in the arrangements for business. According to the Companion to the Standing Orders, a Statement should be followed not by a debate but only by questions and limited comment. I assure your Lordships that I shall do my best. But the Government have put us in a big difficulty. As I understand it, a Green Paper is supposed to be a discussion paper, but now we are in the situation where, if we abide by the rules of the House, we shall not discuss this discussion paper.
I do not think that it is to any advantage for the House to be presented with a discussion document—on which there will be many more debates to come—in the middle of another piece of legislation with which it has some connection. I hope that my memory is not playing me false, but I seem to remember the days when Green Papers were simply published; they were not made the subject of Statements. The Statement came at the later stage when the White Paper was published, and then it was debated. I am encouraged beyond all measure to see a former Speaker of the House of Commons nodding in my direction. I hope that those who arrange Government business will take note of that.
To get to the Statement and to try to keep myself within order, I have to welcome the fact that the Government have had many discussions. We hear there are to be more. What I am unclear about is whether those discussions will have any effect, or whether we are being presented today with a rigid list of the Government's thinking. The noble Baroness said time and time again, "The Government have decided this, that, and the other. The Government have decided something else". Therefore, the status of future discussions is a little unclear.
"By common consent",
the Statement says,
"the social security system is too complex".

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I have to ask your Lordships: who has made it complex? It has become more and more complex as the Government have had to try to bring in additional assistance for one problem or another which they themselves have created. Most people need heating allowances because we have what is virtually taxation on gas and electricity prices. More people need housing benefits because we do not have any sensible policy on housing finance. More people need special diet subsidies because the basic allowances are too low.
However, I want to make it absolutely clear—and I have been involved in this field for a long time—that I agree with one statement that the noble Baroness read out; namely, that there should be a revision of the social security system in this country. But that should not be to the extent of undermining the basic principles of the Beveridge Report which were that we as a society, as a community, should take responsibility for those who are also members of that society and who are not as fortunate as ourselves. My complaint is that this has not been, so far as we can see, radical enough. It is just tinkering with various allowances without getting down to what is vital. I must say a word about these extra 4 million pensioners. I think I might be one of them if I live long enough. I resent being referred to as if I were a nuisance.
Baroness Trumpington: No, my Lords! We are in the same boat. I do not want to be a nuisance either.
Baroness Jeger: Thank you, my Lords. What I cannot understand about this document is that it suggests that the children will not be able to pay for the old people. The contributions which the children make are for their old-age pensions. I have paid my contributions. I have been at work since I was 18 and I do not want anybody telling me that I am a burden on the younger generation. I should like to know what has happened because I am very suspicious of where my pension contributions have gone. I think that they have been swallowed up by the Chancellor of the Exchequer. I do not think that they have been properly invested. I should have done better to have put them in a building society or in national savings. Therefore it is wrong for the Government to put out this verbiage suggesting that old people are a nuisance and that the young people will not be able to afford to keep us. The logic of that would be to kill us all off, and that certainly would be cheaper.
This is a very depressing Statement because it seems to suggest that the Government are not hoping for an increase in productivity, that prosperity will be static, that there is no brave new world for the younger generation. I would have hoped that they would be living in a richer, fairer world and that their share of looking after old people in the community would be totally acceptable.
I am in trouble here of doing what I objected to before. Briefly on housing benefit review, let me ask the question: who introduced housing benefit in its present state and took no notice of those of us who foresaw some of the difficulties? Let me also ask the following question. As far as the poorest families are concerned, the noble Baroness says that housing
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benefit will meet 100 per cent. of the rent; but will it meet 100 per cent. of the mortgages? Many poor people are trying to buy their own houses especially since the introduction of the sale of council houses. Many people, encouraged by the Conservative Government, bought council houses, are now out of work and are having great difficulties in paying their mortgages. The Statement refers only to rent. I should like to know about these other people who number more than half the population of this country.
I am glad that the Government propose no change in unemployment benefit, but for different reasons. I was afraid that the Government would reduce the period from 12 months, but unfortunately there is nothing in the Statement to carry out the Social Security Advisory Committee's recommendation that this was a priority for more help.
On widows under 60, can the noble Baroness say whether the £1,000 is to be taxed, whether payment of it will depend on the husband's contributions or on the length of marriage? I gather from this Statement that the death grant as we know it is to be abolished, but that the poorest people are to be helped. The phrase used is "lacking the resources to pay for a funeral". I wonder what criterion there will be of the lack of resources to pay for a funeral. That is liable to involve all sorts of difficult subjective decisions.
I also think that the Government seem to be on the wrong track in their reference throughout to pensions as costing the state money. If we take more money out of the pockets of pensioners, they have less to spend, there is a drop in demand and therefore it does not do anybody any good. The payment of fair pensions and fair welfare benefits circulates money and creates employment because needs can be met. The Treasury has not heard about that yet.
As for the question of what is unbeautifully called SERPS, I shall restrain myself from that because I know that we shall be having a fuller debate. But I cannot find any reference in the Statement to the self-employed. We know that the Government are fond of the self-employed and the small businessman; but throughout this document refers only to employers and to employees. Many anxious people will be wondering what will be happening to their efforts to stand on their own two feet and to run their own small businesses perhaps by themselves or with a wife.
I know that many noble Lords will have questions to ask so I move now to limited comment, which I gather I am allowed to make. My limited comment is that we shall never get this aspect of life right until we fuse income tax and national insurance. That is the kind of radical reform for which many of us are looking. This is already fused in the minds of ordinary people. When I held my surgeries when I belonged to another place, people would come with their pathetic pay-slips and would say, "Look what the Government have taken". What the Government had taken was national insurance and income tax. There is no separation in the minds of ordinary people between what they pay in tax and what they pay in national insurance: it is all money that the Government take. We might as well accept that fact. There is no genuine relationship between personal contributions and the benefits which people need.

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There is this tangle of benefits and I am frankly disappointed because I had hoped for more imaginative and more far-reaching benefits. I may not have read it carefully enough but I cannot find in the Statement how much the Government expect to save, because many of us fear that this is a Treasury exercise. If there is any reduction in the amount being spent on welfare, that money is being taken away from the people who need it. Until we can ensure somehow that our social security review and the changes which need to be made are not based on Treasury economics, we shall never get the answer right.
5.9 p.m.
Lord Banks: My Lords, I should like to thank the noble Baroness for repeating that lengthy but important Statement. There will be general relief that the period of waiting and speculation is over and now the period of consolation—
A noble Lord: Oh! A better word, my Lords!
Lord Banks: Consultation, my Lords. Whether there will be any consolation for the noble Baroness and the Government remains to be seen, but there is some consolation for me in putting to the House this proposition: that we shall require to consider what has been put before us by the Government and we shall need to analyse it in order to see whether it is in fact the great review, the wide-ranging review of social security that we have been promised or whether or not it is a piecemeal, cost-saving exercise, as has been alleged.
In that connection I regret, as did the noble Baroness, that the integration of tax and social security seems to have been postponed to another day—which would seem to indicate that we shall have to have another complete rethink in a few years' time when that is undertaken, as I am sure that invevitably in the long run it will. I should like to ask the noble Baroness whether comprehensive tax credit systems have been considered. We shall certainly be very interested in the answer to that. I echo the question asked by the noble Baroness, Lady Jeger, as to how much saving, if any, the Government are proposing to make. I would make it clear that we on these Benches are not seeking any immediate net saving although we share in the general concern about the long-term cost of the present state pension scheme. We believe that if genuine savings can be made and justified then benefits which are recognised to be inadequate should be raised. I refer to items such as the basic retirement pension and unemployment benefit, benefits which at the present time require to be supplemented so often by supplementary benefit. We shall judge the Government's proposals in the light of that.
I should like to ask a question about child benefit once the new arrangements come into force, once the family credit is operating. Will child benefit then continue to be index-linked to rise in line with prices? There have been various rumours about that in the press in recent weeks. With regard to the death grant, would it not have been simpler to put the death grant at a level which was more approximate to the cost of the funeral but to recover it from people whose estates were more than a certain amount, which of course is known already to the Government?
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I want to say a word about the abolition of the earnings-relating pension. Naturally I am interested to see how the proposals which the Government put forward compare with the plan which I put before your Lordships' House a little while ago and which was submitted by the Minister at that time to the review body. I was interested to hear from the noble Baroness that employees would be able to take out personal pensions as of right and be able to claim a contribution from an employer. That procedure applied to those without an occupational scheme is the procedure which I have been advocating since 1958 and indeed put forward as an alternative to the plan introduced at that time by the noble Lord, Lord Boyd-Carpenter. It has in fact been the policy of my party since 1960.
As I understood the Statement, that, applied to those without an occupational scheme, will also apply under the new regime to people covered by occupational schemes. I would ask the noble Baroness whether that means that those employers who are paying into an occupational scheme will also have to pay 2 per cent. to a personal pension scheme in addition if that is claimed by an employee.
We shall be particularly concerned, in examining these proposals carefully, with the position of those who at the moment are not covered by an occupational scheme. The proposal that I have just been referring to should help them. As to those who are already retired and who have little or no earnings-related pension, an increase in the basic pension would have helped them; but unfortunately I do not see any reference to that in the Statement.
5.15 p.m.
Baroness Trumpington: My Lords, I thank the noble Baroness, Lady Jeger, for her compliments about my reading abilities. It is nice to have something goodish. She cannot hold me responsible for the way procedures worked out, but I would remind her that this is a Green Paper and that, as she knows, there will be further opportunity for consultation. The noble Baroness raised various points, but perhaps I may start with one which the noble Lord, Lord Banks, raised in regard to integrating taxes and benefits. The review has been concerned with the structure and objectives of social security. This is the right place to start but we are looking at links between the tax and benefits systems where these make administrative sense. Family credits is an example of this. The possibilities opened up by computerisation of the two systems are also being looked at and further ideas will be put forward in the Green Paper on personal income tax later this year.
Returning to the noble Baroness, who said there were more people who needed heating addition, housing assistance and diet help and that we must not undermine the basic support, these proposals do not undermine the basic level of support provided by the state but the new income support scheme will provide this basic support in a much easier and more effective and simpler way than now. If I may elaborate on the points and questions she raised about heating, the help currently given to supplementary benefit claimants by way of extra heating additions will be taken into account when the new supplementary benefit rates are set. But the evidence is that the current complex

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system of extra heating additions does not necessarily give the money to those most in need. We think that the new, simpler income support system will be better and I very much hope and believe that this is true.
With regard to people's contributions paying for their own pensions—a point which the noble Baroness also raised—the state system works on what is known as the "pay as you go" basis: today's contributors pay for today's pensioners. That has been the system for a very long time. On the question of paying for funerals, perhaps I may at the same time take up the point raised by the noble Lord, Lord Banks. In answer to the noble Baroness, Lady Jeger, I can repeat that the new system for help with funeral costs will be operated through the new social fund, as I have said. It will be operated flexibly and sensitively by DHSS local offices. Help will not be limited to supplementary benefit claimants as it is now, but the precise details have not yet been finalised.
With regard to the point raised by the noble Lord, Lord Banks, I have to say that paying a large death grant to everyone and then recovering from estates would impose a most unwelcome and cumbersome addition to administrative processes and the various hoops that the bereaved have to go through. I think it would probably also end up being more expensive for everybody, excepting perhaps the people who most need help. The noble Baroness, Lady Jeger, asked whether the £1,000 would be taxed and whether it would be based on the husband's contributions. The question of taxation and the new lump sum will be considered alongside the forthcoming Green Paper on personal taxation. The award of the new lump sum will depend on the satisfaction of the same national insurance contribution conditions by the late husband as apply now to the widow's allowance.
The noble Baroness asked why the self-employed are not covered by pension proposals. The self-employed are not at present covered by SERPS. They already have access to personal pensions, with very favourable tax advantages; and many take them out. It would not be right to impose rigid rules on people building up their own businesses. The noble Lord, Lord Banks, asked about personal pension and occupational pension schemes. The personal pension option will be alternative to occupational cover. Employers will not be required to contribute to both.
The noble Baroness, Lady Jeger—I am sorry to be jumping around from speaker to speaker like this, my Lords, but that is the way the cookie crumbles—asked me about housing benefit, and whether that provided 100 per cent. help with mortgages. The current system is that those on supplementary benefit get their mortgage interest paid in full. The Government think that consideration needs to be given to arrangements which provide less additional help for the unemployed compared with those in work, so we will be discussing arrangements which mean that more of the risk is borne by borrowers, in particular those unemployed for a short time. These proposals will be discussed with building societies and other interested bodies before any change is made.
Turning back smartly to the noble Lord, Lord Banks, who asked whether more pensioners would
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need supplementary benefit because SERPS is being wound up, my answer to him is that the Government proposals are aimed at ensuring reasonable pensions for everyone. We do not anticipate any significant rise in pensioners getting supplementary benefit in the future. Indeed, that will continue to fall. I think that I have covered the questions asked by the noble Baroness and the noble Lord.
Baroness Ewart-Biggs: May I ask the noble Baroness two short questions? The noble Baroness said that it was families with children who needed help most. Can she elaborate a little on how one-parent families are going to benefit through the changes; whether they would indeed go on receiving one-parent family benefit, or whether they would benefit from the family credit scheme that the noble Baroness was describing? Secondly, the noble Baroness implied that an older widow was in greater need of help because she would be less likely to get employment. That is what I understood her to say. Would she not think that a young widow—after all, there are some—is in greater need because she still has children to support and to bring up? I wonder whether she might clarify that point for me.
Baroness Trumpington: With regard to the second point, I think I am right in saying that the younger woman with children will get protection; but if she has no children she will not get the same protection as the older woman because she can go out and get a job. That is the principle of it. In reply to the noble Baroness's first question, the one-parent family benefit is to continue to aid one-parent families.
Lord Kilmarnock: My Lords, I wonder whether I may ask the noble Baroness for a number of crumbs from her cookie before it crumbles away. On the question of family credit, am I right in thinking that this is designed to be paid through the husband's pay packet? If that is the case, would she not agree that it must be adapted so that the mother can claim the benefit if she chooses? Unless that happens, there is going to be a major redistribution from the woman to the man within the family.
One welcomes the extension of the capital and earnings allowance under the income support scheme; but would the noble Baroness not agree that a great opportunity is being missed to raise earnings allowances for the long-term unemployed? Even if the Government felt they could not have done that for those unemployed for over one year, could they not have started perhaps with those who have been unemployed for over two years? Will the Government consider that during the consultative process, if it is going to be a genuine consultative process?
Finally, the Statement refers to providing an opportunity for the House to debate these very substantial Green Papers. Am I right in thinking that the Government are going to make their own time available for such a debate on these very important proposals?
Baroness Trumpington: My Lords, it would be for the usual channels to decide when there would or would not be a debate.
Lord Kilmarnock: My Lords it would not be for the normal channels to decide that in principle. The Government will have to guarantee in principle that they are offering time, and then we can try and work it out.
Baroness Trumpington: My Lords, the noble Lord will have to wait and see. The cookie has not crumbled; the yeast is rising. With regard to the first question that the noble Lord asked me, the answer is that the money will be in the breadwinner's pay packet. To turn to the second question that the noble Lord asked, earnings allowances will be raised to £15 for those unemployed over two years.
Baroness Faithfull: My Lords, the noble Lord, Lord Banks, asked whether child benefit would be raised in line with index linking. I think all of us are very concerned about child benefit. We are grateful that it is still standing, but we do want to know whether it will be index linked. Secondly—this is outside the Green Paper—as a social worker who has often accompanied claimants to supplementary benefit offices, and also as one who sat on the Fisher Committee, may I ask my noble friend the Minister whether she would bring to the notice of her right honourable friend the Secretary of State the difficulties that there are in supplementary benefit offices from the point of view of managerial structure? Very often the people on the counter dealing with claimants are very young girls, much to be admired and respected, but they have a very difficult time. I would submit that with this new Bill, with completely new outlines of work, there should be a different managerial structure in the supplementary benefit offices. I quite appreciate that that is not a question which my noble friend the Minister can answer, but perhaps I may just bring it to her notice.
Baroness Trumpington: I thank my noble friend Lady Faithfull for that last observation, which I feel sure will be noted by my right honourable friend in another place. With regard to child benefit up-ratings, that will be a matter for consideration at the time, and priority will be given to more money for low-income families through the family credit arrangements, which I have already referred to in the Statement.
Lord Roberthall: My Lords, I think we must recognise the tremendous importance of the subject that has been opened up today, and all that is in the Green Paper will no doubt be very widely discussed. I should like to congratulate the Government on grasping this nettle at last, in a way which is so full of promise.
I think that most important in what the noble Baroness has said is the reference to the problems of the future. I think our grandchildren are living in a fool's paradise, because the rapid change in the aid structure means that a much smaller number of workers has to support a very much larger number of pensioners. It is important that this question has been opened up.
Baroness Trumpington: My Lords, I am very grateful to the noble Lord, Lord Roberthall, who I hope has practically finished this sort of "baking session" on a very happy note.
Lord Ennals: My Lords, almost finished! Since the state earnings-related pension scheme and child benefits were introduced during the period that I was Secretary of State for Social Services, I wonder whether the noble Baroness can confirm one or two points. Does she accept that the scheme, when it was approved by both Houses of Parliament in 1975, was totally supported by the Conservative Party, then in Opposition, as well as by the Labour Party in Government? Does she accept that when it was launched in 1978 it was launched, again, with the full support of the Conservative Party and that Mr. Patrick Jenkin, as my shadow, spoke at the launching ceremony? Will the noble Baroness also accept that during the period of the last election, when the question of the state earnings-related pension scheme was put to the Prime Minister, she said there were no plans to change the earnings-related component of the state pension? It was brought on to the statute book, she said, with the full support of the Conservative Members.
Will the noble Baroness also accept that when the Secretary of State for Social Services announced the reviews, he made it quite clear that SERPS was not to be up for review? Can the noble Baroness say why all these assurances have been overturned?
If such assurances given by the Prime Minister and members of the Cabinet to the public and to Parliament are then overturned in this blatant way, does this not bring into some disrepute the words not only of the Prime Minister and Ministers but of politicians generally, if assurances that they have given are then totally broken?
Baroness Trumpington: My Lords, I will take separately the three points that have been made by the noble Lord, Lord Ennals. With regard to his first question, about the 1974 pensions Act, we made clear at the time our reservation about pay-as-you-go schemes, which are a blank cheque drawn on the future. My right honourable friend the Secretary of State warned specifically that the financing of SERPS could become extremely onerous if the assumptions in the Government's actuarial paper at the time changed. They have done so; and it was only right in the light of experience since then that my right honourable friend should look again at the state earnings-related pension scheme—
Lord Ennals: It was voted for on Third Reading, my Lords.
Baroness Trumpington: My Lords, if I may. I will remind your Lordships of what the Prime Minister said in 1983: that there were no plans to change the pension. I think I have her words correctly. That was true, and had we had any specific plans at that stage for changing the pension structure there would have been no point in setting up the inquiry. We did so against the background of public concern on a number of aspects of pension provision, and not only in regard to SERPS. It was in the light of detailed evidence and discussions during the inquiry that it became clear that radical change was needed.
The noble Lord, Lord Ennals, referred to my right honourable friend in another place speaking in the

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1970s. My right honourable friend said when the inquiry was set up that the aim was not to call into question the fundamental pension structure of the 1970s. That was not the aim of the inquiry. The statement was made in an admittedly vain attempt to head off the predictably hysterical claim from the Opposition spokesmen that we were setting up an inquiry with preconceived objectives and ideas. May I say that the aim of the inquiry was to look in a sensible and balanced way at all aspects of state and occupational pension provision. That could not sensibly exclude SERPS. We reached our conclusions on the basis of inquiry, evidence and discussions. I think that answers the noble Lord's questions.
Baroness Gardner of Parkes: My Lords, may I ask the Minister a brief question, or at least ask her to pass this point on for consideration? I certainly welcome the suggestion that everyone should be aware of what rates are and what services cost. I think it remains to be seen whether this is worked out in a humane way. However, may I ask her to ensure that when the new system of rate rebate comes into operation there will be no limitation in regard to the rateable value of property, in view of the fact that some people have suffered great hardship perhaps towards the fag-end of a lease in respect of what is a highly-rated property? Can that point be passed on to her colleagues?
Baroness Trumpington: My Lords, I thank my noble friend and I will see that her point is passed on as part of the consultations.

Sri Lankan Tamil Immigrants
5.37 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 entry to the United Kingdom of Tamils from Sri Lanka which is now being made in another place by my right honourable friend the Home Secretary. The Statement is as follows:
"On 20th May in reply to a Question from my honourable friend the Member for Lewisham West, I announced my future policy towards Sri Lankan Tamils who expressed a fear of return to Sri Lanka. In the week following that statement over 500 Tamils arrived here seeking asylum. I decided that further measures were necessary to reduce the influx and, after consultation with my right honourable and learned friend the Secretary of State for Foreign and Commonwealth Affairs, on 29th May announced the imposition of a visa requirement for Sri Lankan citizens, to come into effect the following day. The need for such a measure was demonstrated by the fact that 244 Tamils arrived on 29th May.
"A further 76 Tamils arrived shortly after the visa requirement came into effect, but there have been no further arrivals over the week-end or so far today.
"The imposition of a visa requirement will not prevent the entry of those Sri Lankan citizens who qualify for admission in the normal way, for
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example, as visitors or students, although they will, of course, have to obtain visas before travelling. It will save the cost and disappointment of wasted journeys for those who would not be allowed to enter because they do not qualify under the immigration rules. If a Tamil not qualifying under the rules and seeking in present circumstances to leave Sri Lanka wishes to come to this country, he will be able to apply for a visa. Such applications will, however, only be granted if the individual can show that he is suffering severe hardship and the circumstances (including, for example, family links with this country) warrant the exercise of discretion in his favour outside the nomal immigartion rules.
"The position of all the Tamils who have recently arrived will continue to be considered individually on the basis set out on 20th May. Where an application for asylum is refused there will be an opportunity for the United Kingdom Immigration Advisory Service or the United Nations High Commissioner for Refugees to consider the case and representations from Members of Parliament will continue to be considered.
"It was only with great reluctance that I decided that it was necessary to impose a visa requirement on a fellow Commonwealth country. The need for it will be kept under review and I hope it can be lifted in due course."
My Lords, that concludes the Statement.
Lord Mishcon: My Lords, with the usual courtesy of this House, may I thank the noble Lord the Minister for having repeated the Statement made by his right honourable friend in the other place? I ask for the forgiveness of the House, if, because of the grave constitutional and humane considerations that apply to this Statement, I speak for longer than I normally do in reply to a Statement which is made in this House.
It was against the background of press reports of great persecution of Tamils, civilian casualties among the Tamils, including women and children, and indeed of a statement that was issued by Amnesty International to all the relevant governments and delivered, so it tells me, to the Home Office on 24th May, that the decision and the statement of the Home Secretary on 29th May were made. I ask your Lordships' leave to quote but one paragraph from the statement of Amnesty International of 24th May.
Amnesty International says that it,
"urgently renews its appeal to the Governments of countries in which such persons have sought or will be seeking refuge not to return Tamils against their will to Sri Lanka. Amnesty International makes this appeal against the background of reports received in recent weeks of:
"Renewed and widespread extrajudicial killings of members of the Tamil minority by members of the Sri Lanka security forces;
"Widespread arrests and detentions in many parts of Sri Lanka of members of the Tamil minority, among them reports that persons who have allegedly been arrested by security forces' personnel have 'disappeared', officials denying knowledge of their arrest but their relatives expressing fears they may have been killed in custody;
"Widespread torture of detainees".
It appears—and I ask this of the noble Lord, the Minister—that the reply of the Home Secretary of this country, with its great tradition of mercy to those who are fleeing from persecutions, was to issue a directive

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for the first time to a Commonwealth country that citizens of that Commonwealth country, who indeed had been British citizens two years ago, and who were in trouble, could not even travel to this country without a visa. That was the response, I repeat, of her Majesty's Government. Ten hours' notice was given of that directive, that restriction. Even the Iranians, who were not members of our Commonwealth but who did indeed suffer persecution and terror, were given seven days' notice of the fact that visas would be required. As I say, the constitutional, quite apart from the human, point of view is emphasised by the fact that no other Commonwealth country has ever been issued with that restriction.
I move on, if I may, to the numbers quoted in the Statement. One would have thought that thousands of Tamils had entered this country. The Statement says that there were 500 before the directive and 200-odd just afterwards. Then the complacent statement is made—I am trying to use moderate words—that since the restriction no Tamils have arrived in this country over this weekend and today. Of course they have not, and The Times of Saturday says exactly why. If I may, I shall quote from The Times, from their correspondent in Colombo:
"Yesterday a crowd of about 200 waited outside the closed gates while security personnel stood by. Ten people were allowed in at a time".
I pause there. One could imagine the anxiety, if that be the appropriate word, of those in that queue being watched by the security police lining up to try and get out in order to save lives.
"Ten people were allowed in at a time. A single counter to give and receive forms created frustration but a High Commission official said visa section staff would be increased if the crowds continued".
I ask the noble Lord the Minister: how many staff are now in the Commission to deal with these visa applications, with what speed is it intended to deal with them, and who has the authority—is it the officials in our High Commission—to grant the visas or have the application forms transferred to this country first for a decision to be made?
Lastly, will those who are here be treated with compassion so that they can stay here at least until we are satisfied that they can return to their native country in safety? I ask the Minister: is it correct that what appeared in the press was the instruction of his right honourable and learned friend; namely, that Members of another place would have literally 24 hours within which to make representations on behalf of these people? Will the noble Lord the Minister assure the House that proper, adequate time will be given for these representations to be made? May I appeal to the noble Lord the Minister to ensure that whatever may have been suffered by this country in regard to its reputation in Brussels, our long-standing tradition of honour concerning political refugees, and certainly the treatment of citizens of the Commonwealth, will be upheld by this Government?
Lord Avebury: My Lords, would the noble Lord the Minister agree that while there may be, in a strict interpretation, no individual fear of persecution in that the policy of the Sri Lanka Government is not to murder and torture innocent civilians, there is nevertheless abundant evidence, set out in the
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Amnesty report quoted by the noble Lord, Lord Mishcon, and in other places, that the security forces are out of control and that they murder, torture, loot and rape indiscriminately in the Tamil areas? Apart from the Amnesty report, have the Government studied the report of the Parliamentary Human Rights Group, the representatives of which, Mr. Robert Kilroy-Silk and Mr. Roger Sims, recently spent 10 days in Sri Lanka? Following that visit they concluded that there was forced removal of thousands of Tamil people from their homes on the northern and eastern seaboard and that the figure of 100,000 of such refugees in Mana and Jaffna given by the Government was a conservative estimate; that there was indiscriminate rounding up of all men aged between 16 and 35 years in a large area around any terrorist incident, with the removal of those young men to detention camps many miles from their homes; that beating and torture during interrogation is the norm; that prolonged detention without charge or access to lawyers or relatives of these detainees is also usual; that dozens of political prisoners are detained under the emergency regulations either for trivial offences or on suspicion; and that there is mass killing by the army of innocent civilians.
Is the noble Lord aware that I have received a report just now of an incident in Pankulani, on the road between Trincomalee and Jaffna, when a bus carrying 57 Tamils was stopped by the airforce and 13 of the passengers were shot dead? It was only the latest in a series of massacres by members of the armed forces. Sixty people, for example, were rounded up by the Special Task Force in the Eastern province after being arrested on the 16th, 17th and 18th May and shot and buried in a mass grave near Thanbiluvil. Five refugees were murdered by a soldier in an army camp near Anuradhapura. Seventy-five civilians, including women and children were killed in Velvettiturai on 9th May. Forty-eight Tamil passengers on a bus between Delft and Ninativa were killed on 15th May. One could go on. There are a great many such incidents involving members of the security forces. Are the Government aware that at least 1,300 people, innocent civilians, perished in actions by the security forces during 1984, and that the scale of the carnage is much greater during the present year?
In these circumstances would the Government not be justified in granting exceptional leave to remain, unless there were good reasons to suppose that an applicant was not a refugee, thus taking the onus of proof off the individual, as we did of course, as the noble Lord will remember, in the case of Cypriots following the Turkish invasion in 1974, and in the case of the Iranians, as the noble Lord, Lord Mishcon, has reminded us, following the accession of the Ayatollah Khomeini? Granted that such a policy might create strains on our resources, would the Government not enter into urgent consultation with other receiving countries, with a view to sharing the burden equitably, and deciding on common policies which are in conformity with our obligations under the United Nations Convention on refugees?
In that connection may I ask three questions. First, did the Government notify the Secretary-General of the United Nations of the new procedures now being followed as a result of the Statement by the Home

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Secretary in another place on 20th May, as they were bound to do under Article 36 of the convention relating to the status of refugees? Secondly, how do they purport to impose an additional test of "severe hardship" which is not to be found in the convention? Thirdly, how are they complying with the provisions of Article 31(2) of the convention, which allows refugees a reasonable period and all the necessary facilities to obtain admission to another country?
Is the Minister aware that it is not correct to say, as the Statement does, that no Tamils arrived over the weekend; that I personally dealt with four such persons who arrived at Dover from Ostend on Saturday morning; that I understood from the Home Office official to whom I spoke that there were at least two other groups similarly situated, and that he agreed with me that it was absurd to suppose that my representations could be lodged within 24 hours? That would have meant that they had to be in the Home Office on Sunday, when there would have been no Minister there to deal with them, so he was graciously pleased to extend the 24 hours to 48 hours. That meant that the lawyer from the law centre involved who was dealing with the case had to fetch the persons from Dover to London to interview them and take their statements, and had to go round to my house on Sunday, and that I had to write a three-page letter to the Minister and deliver it by hand this morning. All this places the agencies looking after applicants under the most impossible disabilities.
I should like to ask the Minister whether he would deal with this particular case. What is the situation of Tamils who were legitimately resident in this country, who went abroad temporarily during the currency of their permitted leave to remain, and who are now attempting to return here following the introduction of the new rules? This family with which I have dealt consists of three students who were attending colleges of further or higher education, whose mother had come to see them on a short visit, and who did not intend to apply for asylum. They hoped that by the time they came to the end of their courses of study the situation in Sri Lanka might have improved. But they would not be able to put their hands on their hearts and state, as they have to under the rules, that they were definitely going to return to their country of origin on the completion of their studies. I want to ask the Minister what is the Government's policy on this matter, because it may be that, as a result of their panic measures, they will force many people into applying prematurely for asylum when otherwise they would be perfectly content to remain here as visitors.
Finally, is the Minister aware that consternation has been expressed not only in Britain, by organisations such as Amnesty International and the Joint Council for the Welfare of Immigrants, but from as far afield as Australia? I had a cable from Australia signed by the chairman of the Parliamentary Amnesty Group there, Senator Alan Misson, saying that he was very concerned to read in the Australian newspapers about the policies of the British and Dutch Governments; and I understand that the Dutch have now resiled from a statement similar to that made by the Home Secretary. Would the Government, before proceeding on the course of action that they have started, consult
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urgently with the United Nations High Commissioner for Refugees to ensure that any changes in policy that we finally adopt are examined by a dispassionate observer and found to be in conformity with our international obligations before they are put into effect?
5.56 p.m.
Lord Glenarthur: My Lords, I am grateful to both noble Lords for their comments on the Statement which I repeated. I am tempted to start by dealing with some of the history of the issue which the noble Lord, Lord Avebury, introduced, but I think that the most important point I can make is that we were faced with exceptional circumstances, and exceptional circumstances require exceptional measures. The noble Lord, Lord Mishcon, was quite right when he said that this is the first time that Commonwealth citizens have been subject to a visa requirement. But entry clearance has long been mandatory for Commonwealth citizens wishing to come here for settlement, and it has always been open to Commonwealth citizens wishing to come here for temporary purposes to apply for entry clearance.
The other side of the coin, to some extent, although I can see that it does not fully justify the argument, is that a number of other Commonwealth countries—Australia, Bangladesh, Nigeria and, most recently, India—require British citizens to have visas to go there in the same way. The fact is that Sri Lankan citizens were not British citizens up to two years ago—like all Commonwealth citizens, they were British subjects—and that, I am sure, is a point of which both noble Lords will be aware.
The noble Lord, Lord Mishcon, referred to the Amnesty statement. We shall, of course, have to study this statement with care, but, as my right honourable friend the Home Secretary explained in his Statement of 20th May, to which I referred, we do not believe that the situation in Sri Lanka is such as to require us to allow every Tamil who wishes to stay here to do so.
The noble Lord, Lord Avebury, quoted a number of figures taken from recent times to indicate the severity of the threat to them. Those figures are to some extent at odds with the information that we have. There has been no repetition of the massive violence against Tamils of July 1983, and I am aware of the fact that in that case several hundred died. Of course, the Government have made plain to the Sri Lankan Government our view that there must be a political settlement to such intercommunal problems as these, taking into account the interests and the concerns of all the communities. We shall continue to follow this through.
The noble Lord, Lord Mishcon, asked why it was necessary to impose this requirement at such short notice. The reason was that we were faced, as I said at the start, with an exceptional situation which was caused by a continuing large number of arrivals—some 1,336, or thereabouts—since the beginning of May. That is a very substantial figure which must be dealt with. These people must be found accommodation, and there is a great problem and burden which the staffs at the airports and ports have to take care of. If one had given more advance

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warning, one would only have encouraged the rush of more to come here in the intervening period, which I would not necessarily think would in every case be for the benefit of those who would come. As was made clear in the Statement, there would be those who were faced with return air fares, and so on.
It is not fair to compare this situation with that of Iran. There was a different situation then. That was a direct result of a foreign policy initiative—one in which, I think I am right in saying, other European countries joined. We were dealing with a simpler, pure immigration problem; one that embroiled the whole forum of foreign affairs.
As regards the figures for those arriving over the weekend. I note the remarks of the noble Lord, Lord Avebury, but no Sri Lankan families arrived over the weekend seeking asylum. If they were arriving in some other way, the noble Lord may have information that I do not have. But that is all I can tell him at this moment. I shall come to the 24-hour issue in a moment.
The noble Lord, Lord Mishcon, asked about the number of staff who were involved. He indicated that there could well be delays in processing people in Sri Lanka as a result of this requirement. I can tell him that two full-time Foreign Office staff will be available there from mid-July, but to meet the immediate situation two temporary staff will be going to Colombo today; another two more temporaries will be available there at the end of the week—and they could stay longer to cope with the immediate summer rush, if there is one—and at least two interpreters will be found locally to meet the needs of these people. Additionally, two immigration officers were sent out from the immigration department of the Home Office on Saturday to assist with reinforcement at the High Commission. The noble Lord referred to that article in The Times. I cannot say that the numbers the article gave were absolutely correct, but to allow 10 people or more than 10 people or a great many people into the High Commission at any one time would not have been possible without the staff to deal with this problem. That is why these new staff are being made available.
With regard to referrals, as I understand it the majority will be dealt with there but there may be particularly difficult cases which have to be referred to the Foreign and Commonwealth Office. That, I should imagine, is the normal course of events; but everything that can be done to speed things up will be done.
The noble Lord raised the question of the 24 hours, particularly for Members of your Lordships' House and of another place. There may have been a misinterpretation placed on this issue by the press or perhaps by those who read the press. We think it is reasonable to expect Members of your Lordships' House and others to make representations within about 24 hours. I cannot say that 24 hours is a thoroughly dogmatic figure, and there will be some give and take. Whether a weekend is covered in this way I am quite sure will be a point to be borne in mind by my right honourable friend. I think that the system will cater for that, but if there is a particular case that somebody is going to produce evidence or make a representation within 30 hours or something like that—by saying "30 hours" I am not now making that
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an absolute cut-off point—that is a perfectly reasonable time for representations to be made. It does not refer, as I think might have been represented, to a turn-around time, so to speak, for these people.
Lord Mishcon: My Lords, before the noble Lord the Minister leaves that point, whether it be 24 hours or 48 hours is he seriously suggesting that that is a reasonable time for public representatives to take instructions and to make sure that the facts that reach the Home Office have been checked and that the proper case is made on behalf of these people? Is this the sort of time limit that the Home Secretary feels to be just and equitable?
Lord Glenarthur: My Lords, yes. If it is the case that representations are made to Members of your Lordships' House or of another place in instances of this kind, then a time limit of 24 hours, give or take, is considered by those who deal with these matters to be appropriate. As I said just now in answer to the noble Lord, Lord Avebury, I understand that the machinery can cover weekends. He referred to one particular case over this weekend, but I do not have the details or that information with me. But, as I understand it, yes, it will be generally possible. However, I note the noble Lord's concern.
With regard to Sri Lankans returning from visits abroad, they should obtain visas but there is no reason why they should not be granted visas in order to continue their studies. I brought out this point when I repeated the Statement.
Lord Avebury: My Lords, these people came back from Ostend to Dover and they were not aware of the imposition of these new requirements by the Home Secretary. No one told them when they were in Europe and so the first they knew about it was when they came to Dover and were informed by the immigration officers that the new restriction had been imposed.
Lord Glenarthur: My Lords, there are always people who fall between two stools. I cannot comment on a particular case which the noble Lord brings to me. I am quite sure that if there were particular circumstances unusual to that group who were genuinely returning, if they were, as students from abroad, that would be taken account of by the authorities. What I cannot do is comment now on the case in any great detail.
With regard to the United Nations High Commissioner for Refugees and the issues associated with this, the people we are talking about are not refugees within the terms of the convention. The noble Lord, Lord Avebury, wishes to intervene. I shall allow him to intervene so that I can hear what he has to say.
Lord Avebury: My Lords, the noble Lord cannot say that. If they have not been given an opportunity to present their case it is quite improper for him to say that they are not refugees. The convention does provide that proper tests should be imposed to see whether a person can justify his claim. If the noble Lord is saying that all these people, because they are Tamils, are ipso facto deemed not to be refugees, that is a violation of our obligations under the convention.
Lord Glenarthur: My Lords, the terms are set out quite clearly in the handbook on procedures and criteria for determining refugee status. Yes, it has to be determined, but as I understand it they are not refugees within the terms of the convention. Furthermore, the United Nations High Commissioner for Refugees accepts that. So the notification requirements of the convention do not apparently apply in this case.
The noble Lord asked me whether or not the Secretary-General is aware of the new procedures. As I understand it, that really is covered by the answer I have just given him. With regard to severe hardship, it is important that every case is discussed on its merits. There will be differences in many cases and it is important that it is severe hardship that is established as the reason for the person coming here or staying here. I cannot, I am afraid, give the noble Lord an answer now about whether or not it does comply with Article 31 but I should like to study that article and the point that he makes. I have answered the point about the Tamils who, according to the noble Lord, Lord Avebury, arrived over the weekend, and I shall examine the other points and details that he raised.
Lastly, the noble Lord, Lord Mishcon, asked me whether or not we would continue to look compassionately upon those who may be faced with the dilemma over here. Of course we will look compassionately upon them, but I hope that the noble Lord and indeed the noble Lord, Lord Avebury, will understand that there are occasions when the book, if one likes, does not cater for a particular set of circumstances. That is what happened here. We were faced with a huge influx over the month of May, so sensible precautions for the welfare not so much of ourselves but of them in particular had to be taken so that they would be adequately looked after. The fact is that if they were to come here and were to clog up the centres where they are looked after and accommodation was not available for them, they would not be in the sort of position in which I am sure both noble Lords would like to see them. That is why it was necessary to take the steps which were taken. That is why my right honourable friend said that he imposed this restriction with great reluctance and that he will keep it under review and hopes that it can be lifted again in due course.
Lord Ennals: My Lords, as chairman of the Asian Committee of the British Refugee Council, supported by the Government, which has been following this situation very closely over the past few weeks, may I ask why the Government have not considered it appropriate to consult with the voluntary organisations who have been dealing with this issue? Will the Minister accept further that the rules that have now been adopted by the British Government are more stringent than those of any of our partners in Europe? The noble Lord referred to the question of the United Nations High Commision for Refugees, but the United Nations High Commisioner is extremely concerned about the way in which the British Government have handled this situation. The High Commissioner himself will be in London on
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Wednesday and this is one of the issues that he will be raising.
The noble Lord referred also to the problem of accommodation. A number of organisations are meeting this weekend in my presence to examine the accommodation facilities that we can provide for people who otherwise might have no accommodation available to them. Of course there is accommodation available; that is what the British Refugee Council and the voluntary organisations are there to help provide, but they have not been consulted.
Finally, would the Minister not accept that there is a great deal of difference between permission to stay—which, so far as I know, no one is suggesting—and the other alternative, which is either deportation or a refusal for admission even for a temporary period? Surely the Minister recognises that there is a fundamental difference between the two.
Lord Glenarthur: My Lords, the noble Lord, Lord Ennals, asks why consultation—as he addresses the issue—did not take place. We were faced with very substantial increases, as I indicated. I do not know whether the noble Lord is aware of the figures.
Lord Ennals: Yes, my Lords.
Lord Glenarthur: My Lords, perhaps I may start by giving some indication of the figures to the noble Lord, because I did not give detailed figures before. In the period commencing Wednesday, 22nd May, there were 175 arrivals. On 23rd May, the figure was 38; on 24th May, 115; on 25th May, 22 and on the 26th May, there were 144 arrivals. The next big increase was on Wednesday, 29th May. Between the 21st May and 27th May, 532 Tamils arrived.
When it became quite clear that the position was becoming untenable from our point of view and would lead to very unsatisfactory circumstances for those Tamils who came here, it was necessary to take an exceptional measure. I am certain that representations will be made as a result of it from all sorts of people. Indeed, representations are being made today and I am sure that my right honourable friend will note them most carefully. The fact is, as I have indicated, that one cannot just allow a problem to increase without taking some kind of action to try to stem it; sensible action which, in the end, will benefit those who are trying to come to this country.
So far as concerns the difference between permission to stay and deportation, I accept that there is a world of difference—but again it comes back to the fact that not every person who is coming here from Sri Lanka claiming to be the possible victim of the kind of measure which the noble Lord, Lord Avebury, described is in fact in that particular boat. That is why it is mportant that every single case is considered carefully on its merits. I draw the attention of the noble Lord, Lord Ennals, to the fact that on 31st May the President of Sri Lanka gave our High Commissioner a formal and personal assurance that no Tamils returned to Sri Lanka would be harassed or persecuted in any way.

Social Security Bill
6.13 p.m.
Second Reading debate resumed.
Lord Banks: My Lords, after two and a quarter hours of Statements, we return now to the Social Security Bill. I should like to thank the noble Baroness, Lady Trumpington, for the speech that she made some time ago, when she gave a very comprehensive exposition of the contents of this Bill. As the noble Lord, Lord Stallard, suggested, this Bill will perhaps seem somewhat old hat after the publication today of the Green Paper, and it may be a little difficult to concentrate on the contents of the Bill when more interesting and controversial matters are being widely discussed.
The Bill is inevitably something of a rag bag, as so many social security Bills which come before us are, but we on these Benches give it our general support with some important reservations. Since the Bill deals with occupational pensions among other matters, perhaps I should declare an interest, in that I am a director of a firm of insurance brokers specialising in pensions and life assurance.
I should like to concentrate on four main features of the Bill; the position of the early leavers, the restoration of the abatement of invalidity pension, the extension of statutory sick pay from eight weeks to 28 weeks, and the restructuring of national insurance contributions. Perhaps I may say a few words about each of those in turn.
Taking first the case of early leavers, the principal feature so far as they are concerned—and as the noble Baroness made clear—is that their preserved pensions are to be revalued by 5 per cent. per annum compound to retirement date, or by the rise in prices if that should be less. This is to apply to all who leave after 1st January 1986 and is to apply to all benefits accruing after 1st January 1985.
I believe that we are all familiar with the problems which face early leavers—particularly those who are in final salary occupational schemes. It is right that something should be done to tip the balance in their favour. The figure of 5 per cent. recommended by the Occupational Pensions Board is probably about right. Nevertheless, the cost cannot be ignored. The Occupational Pensions Board says that the cost will be from 1 to 2 per cent. of payroll; that that will be the cost to employers. If one has an occupational scheme where the employer is paying 10 per cent. of payroll to the scheme (which, if it is an ordinary final salary scheme, might well be the figure he is paying), then an increase of 2 per cent. will mean a 20 per cent. increase of cost—if it is all met by the employer. That is not an inconsiderable sum.
As the noble Baroness pointed out, the employer can share the cost with the employees, or he can reduce the overall benefits of the scheme, or he can reduce the benefits of those who stay and who do not become early leavers. But that latter course is one which employers would be reluctant to take.
Since the proposal in the Bill applies only to those leaving after 1st January 1986 and to benefits accruing after 1st January 1985, there will be a very slow
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introduction of benefit. There will be virtually no immediate impact. There will be minimal benefit to be derived by those leaving in the 1980s. But ultimately, as we have seen, there will be quite a considerable cost. In occupational schemes, the future costs will have to be met by funding in advance. In occupational schemes, however, there are different ways of funding—some of which would take up the full cost sooner than others.
I should like to ask the noble Baroness what the Government estimate the immediate overall cost will be. Do the Government foresee a rising cost from this proposal over the years ahead? I should also like to know the position with regard to individual pension contracts, where an employer effects a single policy for the benefit of his employees at retirement. No more premiums would normally be paid after the pension is preserved, as things are at the moment. I can see that in the case of new entrants the premium could be increased to take account of the increase in the cost of the contingency, but what about individual contracts already in existence with a fixed premium but on which a preserved pension is taken after 1st January 1986? How will the increased cost be funded in that case?
Another factor affecting preservation is transfer value. Most funds provide the option of taking a transfer value, and most individual pension contracts effected by employers provide either for a transfer value or for the individual policy to be assigned to a new employer. Nevertheless, I support the introduction of an obligation to provide a transfer value. That provision is made more significant by the increasing popularity of Section 32 policies; that is to say, where a transfer value is transferred to an individual single premium policy with a life office. That can be on a with-profits or unit-linked basis and offers the possibility of a much better rate of increase than 5 per cent. per annum. The transfer value is to be the equivalent cash value of the preserved pension. Can the noble Baroness say how the discussions with the actuarial profession are progressing and whether the Government are well advanced with the provision of the necessary regulations determining the equivalent cash value?
Turning now to the restoration of the 5 per cent. abatement of invalidity pension, the noble Lord, Lord Stallard, pointed out that this was a temporary measure introduced in 1980 pending the application of taxation to the invalidity pension. We on these Benches opposed it at the time and now we find that, in fact, this benefit is not to be taxed. Therefore, it would seem that the measure was originally introduced for no ultimate purpose. Of course, we welcome the restoration of the abatement but regret that nothing is done to compensate for losses sustained in the years 1980 to 1985. I think it is right to say—no doubt the noble Baroness will correct me if I am wrong—that by November 1985 a single person will have lost a cumulative total of £354 and a married couple a total of £569 as a result of this temporary abatement which was imposed for no good reason, as it turned out in the long run, unless a Government saving is so regarded in this connection. Do the Government feel that there is a moral obligation to replace that loss?

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On the extension of the statutory sick pay from eight weeks to 28 weeks I must say that I felt the Government went ahead rather quickly when they put this provision into the Bill now before us; which, of course, has been before Parliament for some time, though it only now comes before your Lordships' House. I do not feel that at the time they decided to embark on it they had full information as to how their original eight-week period was working out in practice. According to the noble Baroness—and I believe this is so—it has gone into operation reasonably smoothly. Nevertheless, the Public Accounts Committee in another place said in March that one in three sickness payments made to staff under the statutory sick pay scheme were found to be wrong. That figure is disturbing.
As a result of the extension to 28 weeks most employees will no longer be entitled to state sickness benefit at any time because at the end of 28 weeks they pass, if they are still sick, to invalidity pension. It is only the self-employed, the unemployed and a small proportion of employees who are excluded from statutory sick pay, but the rate of national insurance sickness benefit compares favourably with the rates paid under statutory sick pay, particularly so far as low paid workers are concerned. For example, a married man on £60 per week would get a sickness benefit, if he were on that, of £44·5 but a statutory sick pay benefit of only £32·26. That is nearly £12 per week less.
We on these Benches are not happy about these different rates. As I understand it, the Government are making a saving of £200 million on the move to the 28-day period. There are offsetting expenses and I believe that, in the end, because they are going to compensate employers in a particular way, the Government lose more than they gain. But the Government are making a saving on this particular operation of £200 million, which would seem to be £200 million at the expense of the poorest; but perhaps the noble Baroness can show me whether I am wrong.
There is also the question of protection for the employee. The employee can take his employer to the county court if he feels that he is not getting the correct amount. However, would it not be right to give power to the Department of Health and Social Security to force a reluctant employer to pay the correct amount?
Finally, I should like to say a few words about restructuring of national insurance contributions. This, as has been pointed out, was not in the original Bill but was introduced following the Budget. We support the extension of payment by the employer to earnings about £265 per week. Indeed, I have advocated that in this House in the past. The objection is made that this means additional cost for employers, but it is important to emphasise that the case for payment by employers—and employees, I would say—on earnings over £265 per week is quite separate from the question of the rate of contributions. For example, if the Government wish to receive the same revenue into the National Insurance Fund, they could apply the percentage contribution by employers and employees to all earnings above the present upper limit and reduce the rate of contributions. I think that would be a fairer system.
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Of course, we on these Benches want to see employees' national insurance contributions integrated with income tax. I have suggested that that income tax should be divided between two accounts: one going to projects which involve the Government in the consumption of resources and the other to transfers of income. We should like to see the employer's contribution become a payroll tax. We appreciate very much the intention to ease the national insurance burden on the lowest paid, but it raises certain problems. It replaces one major poverty trap with a series of lesser traps at £35·50 per week, £55 per week and £130 per week. It may lock groups of workers into wage bands just below one of these points to avoid the poverty trap, on the one hand, and higher national insurance contributions for the employer, on the other. To avoid these difficulties it might have been better—I say no more than that—to exclude, say, the first £10 of earnings and pay the full 9 per cent. rate on earnings above that. I say 9 per cent. which is, of course, the rate for employees, and the appropriate rate for employers is 10·45 per cent. It will cost about the same as the Government's changes. Admittedly, it gives some benefit to all, but it will be of greater proportionate benefit to the lowest paid contributors, though to a slightly lesser extent than the Government changes.
There are many other proposals in the Bill to which I have made no reference. No doubt other speakers will deal with them, or we shall discuss them in Committee. But in dealing with the four areas of early leavers, invalidity pension, statutory sick pay and national insurance contributions I have shown that while we do not oppose the Bill—indeed, we welcome much that is in it—nevertheless we have some significant reservations.
6.29 p.m.
Lord Boyd-Carpenter: My Lords, your Lordships' House is in rather an odd situation on the Second Reading of this very important Bill. First, for the past few weeks we have had not so much leaks as the equivalent of a burst water main of information about the forthcoming Statement, including wholly accurate forecasts in the press on the treatment of the state earnings related pension. Then, after two speeches on the Second Reading, from my noble friend and the noble Baroness on the Front Bench opposite, we had one of the most important Statements this House has heard for a long time on the same subject as the Bill. Although I am too old a hand to start trying to pronounce on the Statement without having read it carefully, it seems possible that it makes a part of the Bill out of date.
I would say to my noble friends on the Front Bench in all seriousness that this kind of procedure is not quite fair to the House. I do not think that it does the House very much good to have broken-up debates of this kind. I suggest that if the Statement were to be made this afternoon, the Second Reading of the Bill ought to have been taken on another day and other business substituted for it. With all due respect, I should like to make a protest along those lines.
The Bill itself, as the noble Lord, Lord Stallard, said, is in the circumstances made to seem a little unreal, which is a pity in view of the fact that, if one omits

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contrast with the contents of the Statement, it is of very considerable importance. I am bound to say that I had a good deal of what I might almost describe as professional sympathy with my noble friend. I was Minister of Pensions and National Insurance, as some of your Lordships may recall, for six-and-a-half years, and it fell to me to introduce the Second Reading of quite a number of national insurance Bills. I am bound to say that I never allowed my colleagues to interpose a Statement on the same subject in the middle of them.
Baroness Trumpington: My Lords, may I intervene very rudely to say that that was in another place?
Lord Boyd-Carpenter: My Lords, I would hope that my noble friend is not suggesting that another place conducts its business better than this House. That would be a remarkable observation. However, she is perfectly right in saying that I had the task of doing that in another place, and that made me admire all the more the way that she introduced the Bill and then indulged in considerable exertions in reply to criticisms of the Statement. I am not, as I said, going to seek to comment at this stage on the Statement. With the noble Lord on the Liberal Benches, I hope and believe that we shall be debating that before very long. It is of such great importance that this House would not be fulfilling its proper role if the Government did not find time for a debate upon it.
But I shall comment, if I may, briefly on one or two aspects of the Bill. I come first to the provision in Clause 2 about early leavers. Everyone has sympathy with the position of early leavers, but I wonder whether your Lordships have reflected on certain aspects of the provision under which an early leaver, if other arrangements are not made, is to have his or her preserved pension uprated by either 5 per cent. or the rate of inflation, whichever is the lower.
In the first place, there is no obligation on an employer to have a private scheme at all, and it is therefore perhaps rather odd, if some employer decides to operate one, to impose an additional and quite expensive obligation upon him. Then there is the fact that there is no provision in law to compel an employer to uprate or update the pensions being earned by those of his employees who stay with him. Not many employers outside the public sector grant full indexation. Some do not feel able to afford even a modest increase in the pensions earned by those who stay with them. Therefore one of the possibly odd consequences of the Bill and this provision could be that those who leave an employer and go to work elsewhere will get a better deal in respect of their preserved pension than would be obtained by way of uprating by those who stay with that employer. That could create considerable anomalies, and I wonder whether it has been seriously considered by the department.
Then Clauses 3 and 5 impose additional burdens on those employers who operate employers' occupational pension schemes. I again remind your Lordships that there is no obligation on an employer to operate such a scheme at all. It would seem to me that those provisions in Clauses 3 and 5, on top of that which I have already referred to in Clause 2, could well operate as a discouragement to employers. They would
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certainly discourage employers who do not have a scheme at the moment from operating one and discourage employers who have a scheme from improving it.
Comment was made, and rightly, that if not one of the consequences then one of the sequels of the Labour Government's 1975 Act was to check the flow of development of private occupational schemes. In that context I am sorry that the noble Lord, Lord Ennals, is not in his place. He is of course quite wrong in saying that the 1975 Act introduced earnings-related pensions into the national insurance scheme. They were in fact introduced by the Act of 1959. That Act, with its contracting-out provisions—and this is the relevance of this point—was deliberately designed to encourage the development of schemes in the private sector. It did in fact have that effect, and for the years following 1959 there was a substantial growth in those schemes.
I am very much afraid that those provisions in the current Bill will certainly do nothing to revive the tendency of employers to introduce schemes and may indeed have a discouraging effect. I hope that my noble friend when she replies will be able to say something by way of encouragement to employers to proceed with the development of schemes and to encourage those employers who do not have them—and there are still a considerable number—to introduce them.
The next point to which I want to refer is in Clause 7, with its enormous uprating of the employers' contribution in national insurance carried without limit to the limit of salaries. When I was responsible for national insurance the contributory principle which Beveridge had enunciated held sway. Most people made their national insurance contribution with a feeling, and a right feeling, that they were getting a jolly good bargain. Their employers were compelled to make the employers' contribution, the Exchequer put in a contribution and in fact people felt that they were getting a very good bargain from a favourable contributory scheme.
With the abolition of the card and stamp and the move to collection through the Inland Revenue and through PAYE that feeling of the contributory principle—call it, if one likes, emotion—was very much diminished. But when we now proceed to use national insurance contributions as a means of taxation, I think that we are finally putting paid (perhaps that is the appropriate word) to the contributory idea. The late Labour Government were very much to blame for the surcharge which they imposed on employers' national insurance contributions, and they were very properly and rightly criticised for that by my noble friends. But to carry the employers' contribution up to the limit of whatever salary there may be is surely to throw any idea of the contributory principle out of the window.
More important than that could be its practical effects. The changes being made in contributions both by employer and employees are going, and rightly, to give considerable relief in respect of the lower paid—their own contributions and those of their employers. But for certain types of company, particularly in the service industries, carrying the 10.45 per cent. charge on salaries right up to the limit of salaries will involve a very considerable additional charge.

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This is not perhaps serious in the case of the old fashioned type of heavy industry where the great majority of people are on moderate levels of pay. But when you are dealing with advertising, public relations, and types of banking and insurance, there are often, proportionately, a very substantial number of people on very high rates of salary. Those companies will find themselves exposed to a substantial additional tax. I received only this afternoon a letter pointing this out from a firm, which I do not know, engaged, I understand, in the advertising industry. I really think that my noble friend should look at this to see whether, inadvertently, some harm may be done to these very important service industries which today contribute so substantially to our favourable balance of payments.
My final point relates to statutory sick pay and the extension of it to 28 weeks. The figure of 28 weeks is an odd one. It almost has a touch of "Think of a number". If it had been 26, I could have understood it as representing half a year. But 28 has an arbitrary look about it. I wonder whether it has been very fully and carefully considered in regard to its effects. What about the small employer? What about the person who goes sick within a few weeks of retirement? Is his employer, if he goes sick perhaps four or five weeks before he is due to retire, to be responsible for operating the statutory sickness pay for another 21 or 22 weeks after he would normally have finished his job? I wonder again whether this has been thought out. I wonder very much how the particular figure—if there was to be an increase at all—of 28 weeks was arrived at.
While there is much in the Bill that I feel is excellent—the reduction in the Class 2 contribution is a real contribution to social justice and to good sense—I am inclined, as your Lordships may have guessed, to regard it as being something in the nature of what used to be called the curate's egg but which, with inflation, perhaps we should now call the bishop's theology.
6.42 p.m.
Baroness Faithfull: My Lords, this Bill, in the main, is to be welcomed. However, like other noble Lords, I wonder why it is separate from the Bill that we are to consider later. I should like to make four brief points. On the question of the transfer of pension rights, I think that, from a practical point of view and from the point of view of the workforce, the possibility of transferring one's pension from one firm to another has enormous merits. I have had personal experience of this. I was able to transfer from central to local government. I believe that I was enriched in both my jobs by having had experience in another sphere. Like my noble friend Lord Boyd-Carpenter, I am worried about the fiscal side of the transfer and the transferred pensions. I am therefore in some difficulty. While agreeing in principle, I share with my noble friend Lord Boyd-Carpenter the view that it presents real difficulties.
The invalidity pension has been mentioned by the noble Lords, Lord Stallard and Lord Banks, and by my noble friend Lord Boyd-Carpenter. The restoration of the 5 per cent. abatement of invalidity pension
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gives cause for concern that many invalidity pensioners will not gain the full benefit because of other changes to the payment of invalidity pension proposed in the Bill. This was a point made by the noble Lord, Lord Banks. Invalidity pensioners deserve compensation for the five years during which their pension will have been abated. The original justification for the abatement was that it was in lieu of taxation. It would appear that taxation has now proved impracticable. Should the invalidity pensioners have to hear the cost of this mistake?
Will not the extension of the duration of statutory sick pay to 28 weeks mean lower benefits for the low paid, who are subject to a wage stop under the statutory sick pay scheme, and for those with adult dependants? Now that the statutory sick pay scheme will have been replaced by sickness benefit for most people, must there not be improvements to give these two groups a fairer deal?
The position of those employed by small businesses should also be examined closely, as a recent survey by the National Federation of Self-Employed and Small Businesses suggested that nearly one in four of small businesses are making errors in the payment of statutory sick pay.
Finally, on the question of housing benefits, a new clause to the Bill was tabled just before Report stage in the other place to amend the housing benefit subsidy provisions of the Social Security and Housing Benefits Act 1982. This now appears as Clause 20(1)(b), which has the effect of giving the Secretary of State power not to pay subsidy on any amount which he considers it unreasonable to meet in in any particular case. During the passage of the Social Security and Housing Benefits Act through Parliament many of us were concerned to ensure that satisfactory arrangements were made to protect the undertaking which has been given by the Government to the effect that there would be no additional costs to local authorities arising from the housing benefits scheme.
I imagine that this leads to the prevention of the exploitation of the subsidy arrangements by one or two local authorities which have sought to do so without the Government having to devise a solution by amending the subsidy order to meet each new ploy. This is fully appreciated. Nevertheless, is not the proposed new power unnecessarily wide, since it is left entirely to the Secretary of State to decide what is unreasonable? Furthermore, he could apparently make any reduction in the subsidy otherwise payable to any authority without reference to anyone. Perhaps my noble friend the Minister can comment on this matter in her reply.
6.47 p.m.
Lord Mottistone: My Lords, like other noble Lords, I, too, welcome the broad principle of the intentions behind the Bill. I should like to congratulate my noble friend the Minister on the clear manner in which she explained the Bill to us. I have to declare an interest in that I am advised by the Cake and Biscuit Alliance and by the Confederation of British Industry to whom I am formally a parliamentary adviser. I have also been advised by the Engineering Employers' Federation and by other bodies. I wish to mention three particular matters of concern, all of which have been touched

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upon by other noble Lords, though perhaps not in the detail with which I hope to mention them to your Lordships. I do not want however, to take too long in doing so.
The Cake and Biscuit Alliance points out to me the anomalies potentially introduced by the brackets created in Clause 7(2) of the Bill to which the noble Lord, Lord Banks, referred in some detail. The concept of wage/earnings bands with percentage levies rising as earnings increase seems fair and quite elegant, but it fails to take cognisance of problems induced at the thresholds of each band as it is traversed by the employees' wage or earnings increasing. Having studied the matter, one sees that a movement from one band to another imposes a penalty upon the employee and the employer by the increased national insurance contribution, particularly at the margin. This penalty could be a continuing penalty or a one-off penalty, depending on whether earnings fluctuate across bands regularly or whether, when wages are increased from time to time, the actual increase is devalued by the extra national insurance contribution involved. There may also be an effect of income tax. But for the purposes of the example that I shall give your Lordships, that is ignored.
One can imagine a wage bargaining situation where employees and their trade unions say that a wage increase which takes a person from a wage or earnings level just below a threshold to just above a threshold is devalued by the extent of the new contribution, which increases by 2 per cent. For example, a wage increase of, say, 5 per cent. can be reduced in this way to 3 per cent., and employees will certainly react quite strenuously to such a situation. What is more, this phenomenon can be almost a continuing one where wages and/or earnings fluctuate across thresholds week by week.
One effect of that might be to persuade employees that they should decline extra work or work on shifts or decline to earn small weekly bonuses if that means a loss of net pay. In addition, wages offices, supervisors and managers could have a hard time from employees whose wages and/or earnings cross thresholds, particularly if the numbers involved are a high proportion of the workforce—and in many companies that will be that case.
Another effect from this point of view will be that the employers will be the subject of both employee and union pressures to add the national insurance loss to the wage increase for employees caught by the band thresholds. For example, a 5 per cent. wage increase, devalued by 2 per cent. because it crosses a threshold, may be compensated wholly by a 7 per cent. increase for those employees affected. Wage structures for the whole workforce would then have gaps in them corresponding to the penalty areas. With each year's changes in the bands arising from the Budget, this could become an annual pain in the neck for negotiations, as the same people would get caught in the trap each year, particularly if the bands discretely move in accord with the RPI or the level of average wage increases.
The point of telling you Lordships this at some length is that I rather suspect that the Treasury and perhaps the DHSS are not as familiar with the problems of industrial relations and wage negotiations
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as perhaps are their colleagues in the Department of Employment, who I think have had nothing to do with the preparation of this Bill. I believe that it would be very wise if my noble friend, if I may put it this way, invited her colleagues to get in touch with the department that understands about wage negotiations, because the value of what is suggested in these brackets may be nullified for the kind of reasons that I have endeavoured to spell out. I believe that that needs to be dealt with fairly quickly before we come to the next stage of the Bill. In fact, as I see it, it will be very difficult to produce suitable amendments to make the necessary changes without upsetting the whole principle of what the Government are clearly trying to achieve.
I think I gathered that the noble Lord, Lord Banks, had some form of a solution, and if he has I should be delighted to talk to him about it afterwards because this is what is needed. But perhaps he too was looking at it—and he will forgive me if I am wrong—from the point of view of pension management and that sort of thing rather than from the point of view of the industrial relations problems that will stem from this particular anomaly. I should be most interested if my noble friend the Minister has anything to say about that aspect of this particular problem when she winds up the debate. If not, perhaps we might discuss it at some stage so as to make sure that the Bill is workable, which I suspect in its present form in this particular area it is not.
My second point is raised by the CBI. It concerns the potential effect of the abolition of the upper earnings limit, especially in the larger and principal export-earning companies and in the newly-emerging and very important so-called high-tech companies. The abolition of the upper earnings limit for employers' contributions is, I understand, estimated by the Treasury to yield £820 million in a full year. The alterations of the rates at the lower end are estimated, again by the Treasury, to save employers enough to leave them better off by £80 million in a full year and £30 million in 1985–86.
The problem with those figures is that they are global, and in the Treasury's calculations "employers" covers the full range of both the private and the public sectors. Given the distribution of employees within different income bands in each sector, it is likely that the benefits to the private sector are less—probably considerably so—than the figure offered by the Treasury.
As the noble Lord, Lord Marsh, said earlier when my noble friend prevented him from developing his theme, there are many companies, particularly large ones and not necessarily high-tech companies—the service industries also fall into these brackets—which have calculated that they will lose several million pounds because of the way in which this abolition of the earnings limit has been worked out. To cope with their increased costs many of those firms may well choose an option which could produce the very opposite results from the Chancellor's point of view than that which he intended. Rather than lose employees at the upper end of the income scale, who are very often the most important employees for the company's development, firms will shed labour at the lower end.

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In addition, there is the question of the dynamic impact of the new system. If firms have to cover the costs of the new charges out of profits, investment may suffer and the overall level of activity may fall. This will be particularly so if the firms most affected are those enterprises operating in the high value added areas of the economy.
I shall be tabling an amendment to enable advantage to be taken of the beneficial aspects of the scheme at the lower end of the scale while correcting the adverse impact at the higher end. It will seek to amend paragraph 17 of Schedule 5, which the Government amended at the last stages of the Bill's passage in another place, but they did not do it well enough to solve the problem for the companies concerned.
Thirdly, the Engineering Employers' Federation has pointed out that there are certain aspects of the revised rules for occupational pensions which cause concern. That was spoken to very thoroughly by the noble Lord, Lord Banks, and indeed by my noble friend Lord Boyd-Carpenter, and I shall not detain your Lordships long on this particular point. The federation has strong reservations about the changes for the revaluation of pension rights of early leavers and for the disclosure of pension scheme information. Its members are firmly committed to good practice in both fields. But the Government's proposals go far beyond what is reasonable to impose on employers whose schemes are, after all—and my noble friend Lord Boyd-Carpenter made this point very thoroughly at least twice—voluntary in nature.
The essence of their anxieties is, first, that the proposed 5 per cent. per annum maximum revaluation figure for early leavers is excessive and should be reduced to 3 per cent. I noticed that the noble Lord, Lord Banks, thought that 5 per cent. was about right, but they definitely and for other reasons—and I shall not waste your Lordships' time now in explaining—thought that 3 per cent. seemed more reasonable. This is because deferred pensioners should not be given preferential treatment over active pensioners. This was again a point made by my noble friend Lord Boyd-Carpenter. Also other revaluation should be calculated on a year-by-year basis and not over the period of deferment as a whole.
It so happens that my occupational pension revaluation figure is 3 per cent. I should like to suggest that this is a good reason why I support the present Government, because I believe that they are the only Government who could possibly get the inflation rate down to 3 per cent. They have not succeeded, but no other Government have a chance of doing that with their policies.
The second point is that the proposal for a public deposit register of pension schemes is quite unnecessary and should be discarded. It also trespasses on the ground of investigating private information. I was pleased to note that my noble friend the Minister said that she was open minded on this point. I hope that this means there will not be much trouble when we put down an amendment to try to get it swept away.
Those are my main points which will give cause to amendments of various sorts as we take the Bill
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through its later stages. There are two main points in all these matters of detail in this complicated Bill which I believe require emphasis. First, the proposals almost certainly hit seriously at the competitive ability of our most important export-earning companies. Secondly, in those and other efficient companies they will probably have the reverse effect to that intended by causing companies to dispose of their lower-paid employees rather than hold on to them in order to ensure the retention of their higher paid vital experts and capable managers. I trust that the Government will listen and endeavour to accept changes to the Bill which will safeguard the competitive ability of all our companies on which the wellbeing of us all absolutely depends.
7.3 p.m.
Lord Kilmarnock: My Lords, as my noble friend Lord Banks has already said, there are parts of this Bill that we can welcome and others which cause us some misgivings. The noble Baroness, when introducing the Bill, referred to her speech as a "magical mystery tour". It might perhaps have been less so if the Bill had not been at least partly overtaken by the Statement which she repeated this afternoon.
As regards Part I, dealing with the rights of early leavers in occupational pension schemes, I believe that this represents a step in the right direction. The phrase "early leaver" has always struck me as slightly unfortunate, with its pejorative ring conveying the impression of someone who drops out and does not stick to his last, whereas the people we are really talking about are those affected by takeovers and involuntary redundancies as well as those who voluntarily change jobs in order to improve their prospects in a rapidly changing labour market.
The measures proposed by the Government in the Bill, and not least the obligation to provide a transfer value, represent a gain in fairness and a contribution to job mobility. Both the noble Lord, Lord Boyd-Carpenter, and the noble Lord, Lord Mottistone, said that there was no obligation on employers to have a scheme at all at present, but after the Statement today it appears likely that such schemes will become obligatory in future. I think that that gives an added point to these proposals.
There can of course be arguments about the precise percentage of revaluation of deferred pensions. As the noble Lord, Lord Mottistone, said, some employers have complained that a ceiling of 5 per cent. is too high and that 3 per cent. would be more appropraite. We as a party, as an alliance, are very much against unduly increasing employers' costs. However, certain commentators have pointed out that many pension funds are actually revaluing by as much as 8 per cent. per annum and have suggested that a 5 per cent. ceiling is too low. This might seem to suggest that on this occasion at least the Government have got it about right.
However, I hope that the Government will keep the ceiling figure under review. If pension fund managers and trustees have a good case for revision downwards after a year or so, the Government will no doubt listen to them. Equally, if inflation continues to edge upwards and the RPI rises significantly above 5 per cent. over any extended period of time, members of

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pension schemes affected by the Bill are going to look increasingly askance at indexation in the public sector and contrast this with their own more precarious position. On all these counts, then, the 5 per cent. ceiling should be kept under review.
On the proposal to set up a register I must say that I disagree with the noble Lord, Lord Mottistone, here. It seems to me that this is right, particularly in view of the Government's intention, announced earlier today, to shift more of the responsibility for income protection in retirement into the private sector. No respectable scheme has anything to fear from it, and it will provide a significant safeguard for employees in a field with many thousands of schemes, not all of equal quality. I hope therefore that the Government will not weaken in this resolve. The noble Baroness spoke of "open mindedness and flexibility", but I hope there will not be too much flexibility here.
It is of course open to debate whether a new body is required for this or whether it could not be done by the existing Occupational Pensions Board. That is certainly a debatable point. But however the register is administered, I have for a long time believed that the greatest possible transparency of operations should be a requirement on the pensions industry. The Company Pensions Information Centre has been doing some valuable work over a considerable number of years in this respect, and there are many instances of good practice. But these are not universal. It is, for example, well known that there is considerable misuse of the tax provisions relating to occupational schemes by some corporate treasurers who use them to park surplus funds so that they will increase without taxation.
It was suggested in another place by Sir Brandon Rhys Williams and others that the register could perform a useful function if, among other things, it required schemes to declare the element that is funded on behalf of individual beneficiaries separately from that part of the fund held by the trustees but not allocated to individuals, the income of which it might then not be unreasonable to tax. This, it was suggested, would influence managers and trustees to allocate the maximum to individuals with a corresponding improvement to employees' entitlements. I would be interested to hear the Government's comments on this suggestion.
A further point is that Schedule 2 appears to be only permissive. Can the noble Baroness say whether the register will definitely be set up and, if so, when? I am afraid I have to tell the noble Lord, Lord Mottistone, that if he tables an amendment, I, at any rate, shall oppose it.
As regards Part II, concerning the new method of calculation of national insurance contributions, apart from the problems my noble friend Lord Banks mentioned in relation to the poverty trap in that new minitraps are introduced at £55, £90, and £130, I think it is important to consider the likely general effect of the proposals. According to Simon and Coates, the City analysts, there is in fact going to be little aggregate effect on labour costs, because in a full year firms will save about £900 million on the national insurance contributions of those earning below £130 a week and pay out £800 million more on those earning above £265 a week.
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The danger is surely that when these large sums are disaggregated we could have a situation in which firms employing high-skilled operatives are disproportionately penalised and may then be tempted to cut back on hiring high-skilled employees. This, I think, was the point which the noble Lord, Lord Marsh, was trying to make when he clashed swords with the noble Baroness earlier in the debate. There is in fact a general tendency in much of the Government's legislation to promote a low wage, low-skilled economy, whereas the national interest surely demands a high-wage, high-skilled, high-value added economy.
I think it has been calculated that these proposals may have the effect of creating 100,000 low-paid and mainly part-time jobs. In the present climate this is not to be sniffed at. But it would be a great pity if there were a corresponding decline in jobs in high-technology industries, and some service industries, as the noble Lord, Lord Boyd-Carpenter, mentioned. A close watch should therefore be kept on the overall effect of this restructuring of national insurance contributions.
My noble friend has welcomed—and I fully agree with him—the decision to restore the abatement of the invalidity pension which was made by the Social Security (No. 2) Act 1980. But I have to say that I have heard from RADAR—the Royal Association for Disability and Rehabilitation—that their joy is tempered by the counter-effects, in their view, of Clauses 9 and 12. The Explanatory and Financial Memorandum tells us that in the first full year, 1986–87, the cost of restoring the abatement of invalidity pension in Clause 15 is £65 million, but according to RADAR the Government will save £70 million under Clause 9 and £20 million under Clause 12. They therefore contend that the overall effect will be to reduce the income of the long-term sick and their families by £25 million. I shall not go to the stake on these figures, but they appear in the brief and I should like to check them. I think the noble Baroness referred to duplication of cover and said that the combined effect of the Government's proposals would be cost-neutral. But if the figures that I have been quoting are anything like correct the provision does not seem to be cost-neutral at the receiving end. This is something we shall want to address at the Committee stage.
On Part III of the Bill, extending statutory sick pay from eight weeks to 28 weeks, I have some serious reservations and a number of queries to put to the Government. The likely effect on employers' costs of this measure is worrying, and this applies particularly to small businesses—that was a point made by the noble Lord, Lord Boyd-Carpenter—for which the scheme will involve extra paperwork, to say nothing of cash flow problems. The absence of one or two members of staff for a lengthy period could create serious cash difficulties. We may therefore want at Committee stage to move an amendment to exempt businesses with, for example, fewer than 20 employees, unless the Government can offer some alleviation of these problems. I shall listen with interest to what the noble Baroness has to say on this point.
More generally, I should like the Government to explain with greater clarity the financial reasoning behind this measure. In the Explanatory and Financial Memorandum, on page viii, the Government say that

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there will be a manpower saving of between 300 and 400 in the DHSS, which leads one to suppose that an equivalent cost, or something like that, will be unloaded on to employers. In fact, I think the noble Lord, Lord Stallard, implied that it would cost employers more because they would not have the benefit of the same economies of scale. On page vii, in the section headed, "Financial Effects of the Bill", we learn that the National Insurance Fund will lose about £285 million in a full year as a result of reimbursement of employers under the extended scheme, but will gain £200 million in savings on sickness benefit which will no longer be paid out, and a further £40 million, mainly from employees' contributions on SSP. At the same time the Consolidated Fund will gain from income tax on SSP to an unspecified amount; and the overall effect, the Government estimate, will be to save about £200 million in public expenditure terms. That seems to coincide neatly with the loss to recipients of £200 million in sickness benefit, which reinforces the point made by my noble friend Lord Banks that this will hit people at the lower end of the scale.
Finally, can the noble Baroness say whether these figures take into account the manpower savings? At first sight it would appear that they do not. I am not trying at this stage to pass any final judgment on these figures. I simply believe it would be helpful if we had a clearer picture of what net overall savings the Government expect to make out of this extension of statutory sick pay. Only then can we form a clear view of the real cost to employers and employees, both of which groups, it seems to me, are likely to be adversely affected by the scheme.
I have one final point to make, which concerns Clause 20. It is essentially the same point as that made by the noble Baroness, Lady Faithfull. The Association of District Councils, of which I have the honour to be a vice-president, is extremely worried that the effects of this clause will be to breach the undertaking which was given by the Government that there would be no additional costs to local authorities arising from their new responsibilities for the housing benefits scheme. It was as a result of ADC representtions that Section 32(3) was written into the 1982 Act. One of the planks of this agreement, it will be remembered, was that local authorities would be subsidised to the full extent of the costs of administration of the scheme, and also would not incur more than 10 per cent. of the rebate costs.
They fear now that Clause 20(1)(b) of the present Bill could undermine the 90 per cent. subsidy principle, in that it is too unfettered and too wide-ranging, as deductions made under it would be entirely within the Secretary of State's discretion and would not be subject to affirmative or negative resolutions in Parliament, nor any statutory requirement to consult bodies representing local authorities. While appreciating the Government's wish to prevent exploitation of the scheme by a few authorities (which was mentioned by Lady Faithfull) the association considers that the existing powers of the Secretary of State are adequate for this purpose and that the proposed powers in subsection (1)(b) are unnecessary and undesirable.
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I shall listen with interest to what the noble Baroness has to say, and if she cannot satisfy me on this point then I shall want to move an amendment at Committee stage to ensure that local authorities are left in no worse a position than they are at present in relation to housing benefit. If that is possible it is something that the noble Baroness, Lady Faithfull, and I might talk about.
As my noble friend has said, there is a good deal in this Bill that we support, but we have significant reservations. We believe that there is room for considerable improvement in Committee. The Government may therefore expect, and I give the noble Baroness notice, that we shall table quite a number of amendments from these Benches.
7.16 p.m.
Baroness Jeger: My Lords, I feel there is an air of unreality in this Chamber as we try to return to the Social Security Bill after the important and far-reaching Statement that we listened to earlier on the same subject. In view of that news, this debate is largely a grotesque irrelevance. The Bill is also grotesque in its form and purpose. This is, I regret to say, true to recent tendencies in the DHSS to send to Parliament Bills which are a ragbag of disparate ingredients, of what are called in the Long Title "connected purposes" but which are manifestly disconnected. In this one measure we are to deal with occupational pensions, gratuities to members of the Horserace Totalisator Board, statutory sick pay, pensions for members of the Gaming Board, changes in pneumoconiosis benefit and subsidies in housing benefits. I welcome the inclusion of the fact that married women entitled to the over-80s pension at the lower rate will qualify for the standard rate paid to men and other women over 80. This is no way for legislation to be drafted and brought to this House. It makes it difficult to have a coherent discussion at Second Reading. When we look at the details we shall be raising many more points in Committee, but I feel I want to register my protest because we have had several social security Bills which have been unsatisfactory in their form.
I join with other noble Lords who have welcomed the restoration of the 5 per cent. abatement in invalidity pensions, but it seems that there is to be no back-payment compensation for this deprivation. I hope that the noble Baroness will be able to confirm whether these people are to receive any compensation for their five year's deprivation. Discussion in another place suggested that only half of them would benefit.
I was interested in what the noble Lord, Lord Kilmarnock, said about the unsatisfactory aspects of other clauses, particularly Clauses 12 and 14. If we are to reinstate the 5 per cent. invalidity benefit it seems to me that the Government are saving £70 million by the provisions of Clause 9, which I shall not weary your Lordships by reading, and that about £20 million will be clawed back under Clause 12. It may be that I am wrong because I am totally innumerate, but these are the figures I have been given, and it is worrying in what seems to be a generous part of the Bill to find, if one reads further, that that generosity is dissolved.

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I share the feelings of the noble Lord, Lord Stallard, that there was absolutely no need to put these upratings into the Bill. I wish that I could understand why. There is no need for primary legislation to uprate benefits. Surely this could have come in the annual upratings. Why could not these restorations be paid immediately instead of having to wait for the tedious processes of this massive Bill? This is a carelessly-thrown-together Bill and it takes on board substantial provisions which were born in the Budget and which should have been included in the Finance Bill. This is much more a Treasury Bill than it is a Social Security Bill. It is such a shoddy Bill that after Committee stage in the other place the Government themselves introduced at Report stage 41 amendments and new clauses. I cannot remember in all my years in the other place a Bill coming to Report stage with so many amendments which had not been considered in Committee. I think that that alone is evidence of the poor drafting and of the uselessness of this Bill. Many of those amendments were very substantial changes to the Bill as it was committed after Second Reading and during Committee stage.
This House is a revising Chamber, so we shall endeavour somehow to do our duty; but improving this Bill would make the labours of Sisyphus, as he rolled his heavy stone eternally uphill, look like a rest cure. But the greater part of the Bill, as other noble Lords have said, is concerned with occupational pension schemes, and your Lordships will be relieved to hear that I do not propose to take up your time with a great dissertation on that. Of course the proposition which we heard earlier about the abolition of the state earnings-related pension scheme means vast changes in the whole field of occupational pensions and we cannot discuss these things separately. There will be a transfer of thousands of workers from the state scheme to private schemes, so that today, to a large extent, we are wasting our time. We appreciate the need for occupational pensions to be portable; we deplore the losses of early leavers, especially when the present economic climate increases the necessity for frequent job changes; but we have to ask why the revaluation arrangements omit all pensions deferred before 1st January 1985. Would it not be fairer to backdate changes to the publication of the Occupational Pensions Board report of 1981?
Surely pension funds have been building up substantial, actuarial surpluses. I do not have any evidence but I shall wait to hear that occupational pension funds are very hard up at the present time. As far as we can see—and I think that on Second Reading it is fair to make this point—the intention seems to be towards privatising pension schemes and to moving the earnings-related part of state pensions into private schemes. I think that that is not to the advantage of the majority of our people.
I understand also that the Bill provides that indexation applies only to early leavers after January 1985. Perhaps that could be confirmed. We previously expressed our anxieties about the statutory sick pay policy. This was introduced, as other noble Lords have reminded us, to cover the first eight weeks of sickness. It means that for the first eight weeks of sickness the employer has to pay the worker a sum related to his earnings and then reclaim the payment. The difference
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between that worker receiving statutory sick pay and national insurance sick pay is that national insurance payments take account of family responsibilities, a franked national insurance contributions card, and they are not chargeable to tax. Now, from April 1986, I understand that the period is to be extended to 28 weeks. I agree with the noble Lord, Lord Boyd-Carpenter, when he asks, "Why 28?" I tried to work it out in months. It comes, I think, to seven months. I cannot think what is the particular relevance of seven months. Why not 12 months or six months? I am sure that both the noble Lord, Lord Boyd-Carpenter, and I will be interested to hear the reasoning behind the 28 weeks.
Then of course we are not altogether happy about Clause 17 of the Bill, which reimburses employers for national insurance contributions in respect of workers for whom they are paying statutory sick pay. I understand that this will cost £60 million. This means £60 million taken out of the national insurance fund and paid to the employers. If I am wrong, I shall gladly defer to those who can count better than I can. I should be interested to know what saving the Government expect to bring about by making this change and whether the impetus for all this change, for the extension from eight weeks to 28 weeks, is one of Treasury saving.
On housing benefits, in Clause 20, I share the anxieties that have been expressed by other noble Lords. I have read very carefully the debates in another place and I now understand the anxieties which prompted the insertion of this clause into the Bill. But it does seem to me that because one or two local authorities did not seem to be behaving as the Minister thought that they should, we now have a clause which penalises all local authorities because, as the Association of District Councils has very clearly said, and as the noble Lord, Lord Kilmarnock, has emphasised, it is giving total power to the Secretary of State to decide not to pay subsidy on any amount that he considers unreasonable in a particular case.
We had an undertaking that local authorities, with all the rate capping and all the other problems that they are having to put up with at present, would not be impoverished or penalised financially in any way by the housing benefit arrangements. Now, if we are to get into a situation where a Secretary of State, entirely by himself, can decide that a local authority is behaving unreasonably, apparently he could make a reduction in the subsidy otherwise payable. This seems to me not only to be financially difficult for many local councils—and certainly the Association of District Councils thinks it would be difficult—but to be one more step towards central Government interference in local council decisions.
It seems to me that the Secretary of State is being given more and more power in very many directions and this is just one more case of bringing these decisions to Whitehall. I remember that we used to be derided by the Conservatives because one Labour Minister was heard once to say in an unguarded moment, "The man in Whitehall knows best". Certainly this Government are standing up for that principle in many directions, and in this case for the principle that the man in Whitehall knows best. I very much regret that part of the Bill.

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The noble Baroness also spent some time (and I shall spend just a moment or so) on the question of contribution changes creating new jobs. This I cannot understand. Nobody has ever proved to me that changes in national insurance contributions create jobs, especially when one considers the point that the noble Lord, Lord Marsh, tried to make: that it might result in top-paid people losing their jobs because their national insurance contribution had gone up. When looking at the salary of what I would call a top person—perhaps the chairman of ICI or somebody like that—I would describe his national insurance contributions as peanuts. If a man is worth employing because of his skill and ability, I should be very surprised if any firm were to say, "Sorry, but you must go because your national insurance contribution that we have to pay has gone up". At the lower end of the scale I have never seen any convincing proof that there is a connection between national insurance and job opportunities. Certainly, there is a lot of talk about the surcharge being taken off as an incentive to employment; but employment has not improved—or should I say unemployment has not improved—as a result of that. I honestly think that there has been some muddied thought in this connection.
My Lords, we have had a long day, and some of us have to last a bit longer, so I shall not give this Bill the blessing of my noble friends; I shall threaten the Government with a few amendments at Committee stage and hope that we can make some progress after that.
7.31 p.m.
Baroness Trumpington: My Lords, we have had quite an afternoon full of variety and interest, and we have had a very thoughtful and constructive debate on this Bill. I shall do my best to respond to the points that have been made and to reply to the questions that have been asked.
Perhaps I can say first to my noble friend Lord Boyd-Carpenter and to the noble Lord, Lord Kilmarnock, that I think it would be very unwise of me to try to cover any of the points that have come up about the social security reviews and the timing of today's debate and the Green Paper. As I said at the beginning of the debate, there is really nothing to be gained by going over that ground now. The Government's proposals on the Green Paper will be a subject for consultation.
I might just add, in reply to the noble Lord, Lord Stallard, to my noble friend Lord Boyd-Carpenter, and to the noble Baroness, Lady Jeger, who said that the debate appeared in an unreal light, that there is nothing in the Green Paper which invalidates or puts in question the wisdom or usefulness of the proposals in this Bill. The Green Paper builds on the improvements being made in this Bill.
Let me now attempt to answer your Lordships' searching questions. If I omit to reply to any noble Lord, of course I shall write to him if he lets me know that I have erred in this way.
The noble Lord, Lord Stallard, first asked: why extend the SSP to 28 weeks now when this was resisted when the Bill was introduced? My answer is: because
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SSP was a completely new concept for employers. It was considered advisable to restrict their involvement to the shortest spells of sickness first and then to look at the position again after the scheme had been running for some time. This was a sensible approach to take, and has led to the Government making the change now rather than at the outset.
The next question that the noble Lord asked me was: why are occupational pensions changes urgent? We have brought forward the changes in two main areas on occupational pensions, both of which, we think, are needed urgently. When the noble Lord, Lord Stallard, has been able to study the proposals in our Green Paper he will see that we shall build on the success of the occupational pensions schemes to provide decent levels of income in retirement. It is clear from the many representations that we have had that this action is needed as soon as possible to help early leavers. I can see no reason for delaying taking that action. I am sure that many early leavers in the country would agree with me. We should remember here that up to 90 per cent. of all workers may at some time be early leavers. Similarly, we believe that no matter what the future plans it must be right to give people basic information about their often most important asset, as I said in my speech. There are major improvements that many people will want to see come into effect as soon as possible. We can see no reason at all for delaying.
On the subject of the abolition of the earnings rule raised by the noble Lord, Lord Stallard—and some other noble Lords raised similar points, in which case I hope my replies to the noble Lord, Lord Stallard, will cover the other noble Lords as well—he was talking about the retired pensioners' earnings rule which it is the Government's intention to abolish when resources permit, but the earnings rules here relate to adult dependants. It is surely right that people should only get additional benefit for someone who is really dependent upon them, and that such a test of dependency should be the same for both men and women.
The noble Lord, Lord Stallard, and the noble Lord, Lord Banks, both stated that primary legislation is not needed to restore the 5 per cent. abatement in invalidity benefit. The noble Lords are quite right. The restoration could be done in the up-rating order, but by giving backing in primary legislation the Government were able to give an early earnest of their intention to restore the abatement and so to reassure invalidity beneficiaries.
The noble Lord, Lord Stallard, asked me: why the need for so many new clauses put down at Report stage in the other place? The new clauses on national insurance contributions were introduced at Report stage in order that the measures announced in the Budget could be introduced as quickly as possible. The measures benefit 8½ million people by reducing the cost of employment, and improve the job prospects of young people who are looking for their first job, usually at a wage of less than £90 a week. The cost to the Government of these measures, including those for the self-employed, amounts to £575 million in a full year.
The noble Lord, Lord Stallard, asked me why the Bill does not contain provision for married women to

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receive invalid care allowance. The ICA was introduced in 1976 by a Labour Government. It was intended as an income replacement benefit for men and single women who had given up their main source of livelihood. The cost of extending ICA to married women would be prohibitively expensive—a new extra cost of £85 million.
Again, Lord Stallard asked me why Clause 22 was necessary, and various other Members of your Lordships' House have asked me why pensions for members of certain boards should be provided. This clause will provide occupational pensions for the chairmen of those boards. Successive governments since at least 1978 have agreed that it is unfair for someone to take on the chairmanship of these boards without any prospect of receiving a pension. We have taken the opportunity to put this straight, and I hope the House will agree that it was the right thing to do this in the Bill, it being the most suitable vehicle to meet the commitment.
The noble Lord, Lord Stallard, asked what evidence the Government can produce to show the statutory sick pay scheme was welcomed. Let me take employees first. The Department's own social security policy inspectorate recently carried out an inquiry into employees' attitudes to SSP. Their report has been published and is placed in the Library of your Lordships' House. The general conclusion of the report is that most of the employees interviewed considered that SSP was an improvement on the previous sickness benefit scheme. Indeed, 63 per cent. who could make the comparison considered that SSP was positively better than sickness benefit. I assume the noble Lord has seen this report, but I would be happy to send him a copy if he wishes.
Turning now to employers, there can be no doubt that the vast majority of employers have very success-fully taken the SSP scheme on board. The CBI welcomed its introduction, and there have been few queries. It is true that a minority of organisations were opposed to the principle of SSP, but such organisations are very much in the minority. This is not just the Government's view; I draw noble Lords' attention to the independent survey carried out by Income Data Services Limited.
The extension of SSP leading to increased overheads and costs for employers was the next point raised. I agree that the extension of SSP liability will cause some extra work for employers, but now that SSP has become a routine part of employers' payment arrangements, and because of the limited number of extra cases involved, we do not expect the ongoing administrative costs of the extension to be large. We are very conscious of the need to keep procedures as simple and as flexible as possible; but in recognition of the extra work involved in the extension of SSP liability it has been decided that, as well as continuing to allow the recovery of 100 per cent. of the SSP paid out, employers will also be relieved of their share of the national insurance contributions paid on all SSP. This will mean to employers the saving of up to £60 million a year. That is a significant concession, and it will operate retrospectively from the 6th April 1985—a full year before the extension comes into operation.
The noble Lord, Lord Stallard, in his wide-ranging speech, also mentioned the error rates of SSP. The
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noble Lord referred to mistakes. I must emphasise that the mistakes which have been made have generally been of a minor nature, and they should reduce as employers become more familiar with the operation of SSP.
The noble Lords, Lord Stallard and Lord Banks, and my noble friend Lady Faithfull commented on the rates of SSP having an adverse effect on families and the lower paid. They referred to the rate of SSP and, in particular, related this to a family man The noble Lord, Lord Stallard, quoted a man earning £60 a week. Such an employee would be entitled to SSP of £37·20 a week, and not £32·60 a week, as I believe both noble Lords said. This compares with a state sickness benefit rate of £27·25 sickness benefit for single people and for married men with no entitlement to an increase for their wives. Nearly 80 per cent. of claims for sickness benefit do not include an increase for a wife. SSP is therefore significantly better for these people. The married person's rate of sickness benefit, as the noble Lord said, is £44·05. It is true, therefore, that the SSP rate is lower in these circumstances, but of course the claimant would be able to claim supplementary benefit if appropriate. A claimant may also be entitled to help with his housing costs. Also, it should be borne in mind that many employees will receive occupational sick pay from their employers over and above SSP when they are sick.
Finally, the noble Lord, Lord Stallard, compared SSP rates and sickness benefit rates for persons with children. I should make it clear that there is no difference in this respect, as increases for children are not paid either with sickness benefit or SSP.
The noble Lord, Lord Banks, together with the noble Lord, Lord Stallard, referred to the rates of SSP for the lower paid. As I have said, I think they got their figures wrong, and I hope I have corrected that. The noble Lord, Lord Stallard, asked: why restore 5 per cent. abatement on invalidity pension when benefit is not taxed? I have to tell him that it remains the Government's intention to bring invalidity benefit into tax as soon as this becomes operationally possible. Successive Governments have agreed that such benefits should be taxed, as are other income replacement benefits such as retirement pension. No date has yet been fixed for taxation but I would have thought the noble Lord would have been pleased that the Government have found it possible to restore the abatement before then.
As we know, the noble Lord, Lord Banks, is a very great expert on the subject of social security, and is to be treated with great caution by those who reply to his questions. He asked about PAC comments on error rates. The comment is that one in three cases that have been checked showed some error. I have already touched on this in replying to the noble Lord, Lord Stallard, but I should make it clear that since September 1984 the DHSS have been concentrating their checks on those employers who are thought to be most at risk. These are employers which the DHSS inspector noted as having made a mistake during the first phase of the visits made between April 1983 and August 1984 and new employers who may not have had any experience of operating SSP. It is true that these have shown an error rate of just over 30 per cent.—17 per cent. overpayments and 14 per cent.

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underpayments. That is high, but, as I have said, the level should reduce as employers become more familiar with the operation of SSP. Mistakes have generally been of a minor nature, and the situation is being very closely monitored.
Now we come to the big question which was touched upon by the noble Lord, Lord Marsh, when he intervened during my opening remarks. It was also referred to by the noble Lord, Lord Banks, and my noble friends Lord Boyd-Carpenter and Lord Mottistone: that is, the point about the Government considering the financial effect on firms of abolishing the upper earnings limit. Some cases erred to the extent of £2·3 million a year extra. As a result of abolishing the upper earnings limit on employers' contributions, I accept there will be increases in the cost of employing the highest paid workers. Quite simply, this was necessary to finance the reduced contributions for the lower paid, but it has also removed what has always been an unwarranted distortion in employer contributions in favour of the higher paid.
Employers' contributions do not confer benefit rights, and therefore there is not the same technical constraint on removing the upper earnings limit that exists for employees' contributions. By getting rid of this distortion we will have a more sensible and progressive structure of contributions. Employers' costs will be reduced in respect of over 8,500,000 lower paid workers. Against this, abolition of the upper earning level means increased costs on behalf of only 1·7 million higher paid workers. By focusing the benefit of these changes at the lower end of the wage-scale we will secure the maximum impact on total employment, and overall the burden of national insurance contributions will still be reduced by £80 million.
It must be remembered, too, that the Government have already substantially reduced employers' costs by abolishing the national insurance surcharge, which was introduced by the last Labour Government, by bringing down employer contributions from 13·5 per cent in 1979 to 10·45 per cent. at the highest level now. In the majority of cases where there are extra employer contributions they will at worst amount to only about 2 or 3 per cent. of gross salary. The evidence we have suggests that earnings for the employees concerned have been rising at the rate of some 2 or 3 per cent. a year in real terms for several years, suggesting that costs of that order can be absorbed without too much difficulty. Many of the employers concerned are in firms which stand to gain in some cases overall from the reduction in contributions for the lower paid, or in firms where the extra contributions represent only a small fraction of the total profits. I imagine we shall come back to this on another day if your Lordships are not satisfied with my explanation.
The noble Lord, Lord Banks, referred to early leavers. I am very pleased that our proposals for early leavers find support from such an acknowledged expert in the field. The noble Lord also raised several detailed questions, but of course we shall have the chance to go into greater detail at a later stage of the Bill. We realise that our early leaver revaluation
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proposals will involve extra costs, but clearly we could not allow the unfair treatment for early leavers to continue.
There is, of course, one other way of financing these improvements which the noble Lord did not mention. That is by meeting them from the investment yields that have been obtainable over the last few years. Cost will, of course, vary from scheme to scheme. It is difficult to be precise about costs, but providing the early leaver protection that we propose will add between 1 and 2 per cent. to the payroll for all benefit rights that accrue from 1st January, 1985. In other words, schemes will have to find funds for these increases immediately. As for schemes with fixed premiums, I believe the noble Lord was talking primarily about money purchase schemes. If that is not the case, then if the noble Lord will let me know, I will write to him. But money purchase schemes will not be subject to 5 per cent. revaluation. They will need only to give the same treatment to leavers and stayers subject to a deduction for reasonable administration costs for leavers. We hope within the next few weeks to publish our proposals for calculating transfer values. We shall consult fully on these and I hope the noble Lord will bear with me and await these proposals.
The noble Lord, Lord Banks, spoke about SSP saving £200 million and said that we will save £200 million on sickness benefit, but SSP paid out by employers will total £285 million for which they will be fully reimbursed. There is no question of saving £200 million on the low paid. This figure simply refers to the reduction in public expenditure.
The noble Lord, Lord Banks, asked whether there is protection if the employer fails to pay SSP. There is an existing procedure that an employee can use if he has not been paid SSP or thinks the amount paid is wrong and he cannot sort out the matter with his employer. The employee can ask the DHSS for an adjudication officers's decision on his SSP entitlement. A copy of the officer's decision goes to the employee and to the employer and either can appeal against it in the usual way. This procedure will continue. It is explained to employees in the leaflet Check your Right to Statutory Sick Pay, MI244, and to the employer in the Employers Guide to SSP, MI227.
The noble Lord, Lord Banks, advocated integration of income tax and national insurance contributions. As mentioned in my right honourable friend's Green Paper, there are significant differences between PAYE and national insurance contributions. Contributions are calculated on weekly or monthly earnings; income tax on annual income including unearned income and pensions. There are allowances against income for tax purposes but not for contributions. Complete alignment would be operationally very difficult indeed, but some differences may be more easily removable to the benefit of employers. This subject will receive further consideration in the forthcoming Green Paper by my right honourable friend the Chancellor in the consultation period.
The noble Lord, Lord Banks, referred to the replacement of one poverty trap or cliff edge at the lower earnings limit at each of the boundaries between the new reduced national insurance contribution rates. It is true that there will still be a cliff edge, when an

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increase in pay causes an increased liability for national insurance contributions, but the cliff edge effects will be smaller than presently seen at the lower earnings limit, both in absolute terms and relative to each other. We will need to look more closely in Committee at the noble Lord's particular proposals for the kind of earnings above the LEL which is exempt from contributions.
My noble friend Lord Boyd-Carpenter, whose expertise is so daunting that I feel positively impertinent to interrupt him during his remarks, asked about early leavers and other burdens on occupational pension schemes. He emphasised that the occupational pension schemes were set up voluntarily and that imposing too heavy a burden on them could result in many winding up. This is all a matter of judgment and of balance. It is no good encouraging schemes if they do not provide reasonable benefits and information to all members. Our judgment is that we have struck a fair balance between the needs of early leavers and the ability of employers to fund benefits.
We must not forget that our economic well-being depends upon a mobile workforce. We are determined to remove all artificial barriers to job mobility. Here the noble Baroness, Lady Jeger, might listen when I refer to job mobility, because she said that these measures were not helping to reduce unemployment. There can be no doubt that occupational pension schemes can at present make such a barrier because of the treament of early leavers. We cannot allow that to continue.
So far as the difference between leavers and stayers is concerned, I have to say that we believe in schemes being free to make improvements without legislation wherever possible. Experience shows that voluntary increases for stayers are already common, but there is no incentive for schemes to look after early leavers and so we are legislating in the area where we believe a firm Government lead is necessary.
My noble friend Lord Boyd-Carpenter spoke of the demise of the contributory principle, because of the abolition of the upper earnings limit for employers' national insurance contributions. My noble friend's obituary for the contributory principle was premature; reports of its death have been exaggerated. There continues to be a link between contributions paid in and benefits received, but a commitment to the contributory principle does not entail a particular structure of contributions carved in stone. Adjustment to the employers' contribution in respect of the higher paid has made possible valuable changes to benefit the lower paid and their employers.
My noble friend said there was no obligation on employers to provide occupational pension schemes. He asked: what will the Government do to ensure that employers are encouraged to provide schemes? I agree with my noble friend that there is currently no obligation on employers to provide occupational pension schemes, but I am sure he would agree that this is not preventing, and should not have prevented, successive governments from ensuring fair treatment.
This Bill makes a number of important improvements to the way such schemes will operate. But we also acknowledge the importance of encouraging the spread of schemes. Indeed, we go
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further, because we should like everyone to have his own pension, either a personal pension or an occupational pension, on top of the basic state pension. The proposal that I outlined earlier today in a Statement seeks to build on this and achieve that under coverage of schemes. The House will have an opportunity to debate these wider proposals in detail.
My noble friend Lord Boyd-Carpenter and the noble Baroness, Lady Jeger, asked why the period of 28 weeks was chosen for the extension of SSP. Twenty-eight weeks was chosen because that is the period covered by the state scheme of sickness benefit, which is designed generally to cover short-term sickness. After 28 weeks of sickness state invalidity benefit, which is a long-term benefit, comes into payment instead. This means people will go straight from SSP to invalidity benefit with no intervening payment of sickness benefit. In the example given by my noble friend Lord Boyd-Carpenter the employer would no longer be required to pay SSP once the employee had claimed retirement pension.
My noble friend Lady Faithfull and the noble Lord, Lord Kilmarnock, wished to know about the housing benefit scheme. The Bill will not alter the existing arrangements whereby the Secretary of State will pay benefit subsidy on the basis of rebates and allowances granted by authorities under the housing benefit scheme. We shall continue to list the items which will always be excluded from benefit subsidy, such as rent-free weeks awarded to tenants in the subsidy order, so that authorities know where they stand. We have, in fact, taken the opportunity to enable the subsidy order to be drafted in a much more straightforward way, so far as these exclusions are concerned, than at present.
Although the new power to make an order will have exactly the same effect as the existing power, it should mean that the subsidy order will be more comprehendsible. However, the amendment will also give the Secretary of State a new power to exclude items which it is clearly not reasonable to meet out of money voted by Parliament for the housing benefit scheme, This power will not be used lightly but it will be used to prevent blatant attempts at exploitation of the subsidy arrangements from succeeding.
My noble friend Lady Faithfull talked about transfers. She was concerned about the financial burden imposed on schemes by the transfer requirement. In fact, the transfer value will reflect the benefit rights held in the scheme, so it will not impose any additional burden upon schemes. My noble friend also asked whether all invalidity pensioners will get the full advantage of the restoration of the 5 per cent. abatement, in view of the other changes in the Bill. I think that she is referring to Clause 9 which deals with the overlap of invalidity allowance and additional component.
It is true that where the amount of the overlap between invalidity allowance and additional component is equal to or higher than the amount of the 5 per cent. increase, a pensioner will not gain from the restoration. But I should make it clear that many beneficiaries will be unaffected, because they currently do not get both additions to invalidity pension, For example, over 50 per cent. of invalidity pensioners do not get the additional component at all, while others who have gone on to invalidity pension only in later

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life are not entitled to any invalidity allowance. It is estimated that about 375,000 beneficiaries, receiving both the invalidity allowance and the additional component, will be affected in November 1985 and for many of these the overlap will be small. I should also emphasise that the transitional provisions will ensure that no one's existing benefit is reduced.
My noble friend Lord Mottistone and the noble Lord, Lord Kilmarnock, expressed totally different reactions to the register of pension schemes, so I would repeat to them both that I emphasise we are open-minded about the pension scheme register. But I must also emphasise our determination to make the proposals for disclosure of reasonable information to scheme members work. My noble friend Lord Mottistone criticised the multiple cliff-edge effects created by the graduated structure of reduced national insurance contributions, and I have already answered a similar question from the noble Lord, Lord Banks. My noble friend asked about occupational pensions and the burdens which the legislation will impose for early leavers. On early leavers, we believe that we have the right balance. The Engineering Employers' Federation believes that we have gone too far, but many others believe that we have not gone far enough. That shows that you cannot please everyone at the same time.
The noble Lord, Lord Kilmarnock, asked me about SSP and the financial effects. The figures are very complicated and I think it would be best if I wrote to the noble Lord. In fact, I apologise to other noble Lords and to the noble Baroness, Lady Jeger. Coming last, I am afraid that I have already answered some of the points that she raised. But despite some of your Lordships' criticisms, I really feel that this is a Bill which contains good news for many people, particularly those who are at the lower end of the financial scale. It opens up doors for the young, it helps the very old and it simplifies procedures for those who are ill. These are all positive improvements and I commend the Bill to your Lordships.
Lord Kilmarnock: My Lords, before the noble Baroness sits down, she has given a very full answer for which we are very grateful. But will she write to me about the queries which I put to her on Clauses 9, 12 and 14?
Baroness Trumpington: Yes, my Lords.
On Question, Bill read a second time, and committed to a Committee of the Whole House.

Ports (Finance) Bill
8.5 p.m.
Lord Brabazon of Tara: My Lords, I beg to move that this Bill be now read a second time.
This is a short but important Bill which deals with three separate aspects of ports finance. I shall deal with them in turn starting with Clauses 1 and 2 which it may be convenient to consider together.
A major landmark in the history of British ports was the Rochdale committee of inquiry into the major
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ports in 1962, under the distinguished chairmanship of my noble friend Lord Rochdale. It was a long overdue examination of Britain's ports, which resulted in important changes in the structure, development and financing of the industry. But what neither the committee nor the Government of the day could foresee was that shortly afterwards our ports began to embark on a period of transformation unprecedented in history in its scale and rapidity.
The reasons for this are, I believe, well-known. The development of bigger ships which could not use old upriver enclosed docks; the effect on trade patterns of North Sea oil and joining the EC; better inland communications, making it less essential to ship goods to or from the seaport nearest to the manufacturing site; the container revolution, which not only transformed port handling methods but resulted in rationalisation of shipping services, with fewer port calls; and the tremendous growth in roll-on/roll-off traffic, both freight and passenger.
These changes have had their impact on the physical appearance of our ports and on the numbers and skills of the people who work in them. In particular, there has been a drastic reduction in labour. At the time of Rochdale, virtually all ports of significance were in the Dock Labour Scheme and between them employed some 70,000 registered dock workers. Today, a quarter or more of our non-oil trade is handled in non-scheme ports, and the number of registered dock workers in the traditional ports is just over 12,000. This enormous reduction has been achieved mainly by voluntary severances. That of course has put a heavy cost on the ports, particularly London and Liverpool which had traditionally had the lion's share of the labour intensive break-bulk cargo and were therefore especially hard-hit by the switch to containers.
The Government therefore decided to assist the industry in two ways. We recognised the exceptional problems that London and Liverpool faced in rationalising their facilities and organisation. To help them reduce manpower and continue in business while this reduction was being completed, we promoted the Ports (Financial Assistance) Act 1981, which empowered us to make available to the two ports up to £160 million by way of grants, loans and guarantees. That figure was subsequently raised to £360 million. Much of this money was intended for severance pay for registered dock workers.
Then in 1982 we decided to help the industry as a whole to meet the cost of severing registered dock workers. The employers of registered dock workers—port authorities and some private port employers—operate a national voluntary severance scheme, administered by the National Dock Labour Board. The NDLB makes severance payments from a fund that it administers for the employers and which is paid for ultimately by a levy on the employers, although it has been substantially helped by Government loans. In 1982, we agreed to a three-year moratorium on the servicing of those outstanding loans, provided that the employers paid to the NDLB a levy of £12 million annually to meet the cost of new severances.
It had been our, and everyone's, hope that these two measures—the special aid to London and Liverpool

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and the moratorium on servicing the debt in the national voluntary severance scheme—would have been sufficient. But I am afraid it has not. In three years, the number of registered dock workers has fallen by a further one-third (about 6,000) more than had been expected. The Port of London Authority and the Mersey Docks and Harbour Company are still not fully back on their own feet and the £360 million aid which Parliament agreed for them has been fully committed.
It is against this background of continuing and expensive rundown in manpower that we have brought forward Clauses 1 and 2. To take first Clause 1, it proposes an entirely new power to pay grants of up to £10 million to the National Dock Labour Board as a contribution towards the cost of severing registered dock workers. The clause includes provision for that amount to be increased in future years by order up to a maximum of £40 million, subject to affirmative resolution in another place.
The reason for this new power is that we are clear that the employers in the Dock Labour Scheme ports cannot both service and repay the outstanding debt in the national voluntary severance scheme and meet the full cost of future severance needs. Just how we propose to use this power I cannot at present say. The Secretaries of State for Employment and Transport are engaged in discussions with the National Association of Port Employers on appropriate arrangements for the future financing of RDW severances. There has been a succession of stop-gap measures. It is unsatisfactory to continue in that way. We are searching for a basis that will bring a greater measure of stability and equity into the arrangements. But in taking this new power we have recognised the likelihood that some special Government assistance will be necessary.
Clause 2 raises from £360 million to £500 million the ceiling on the amount of financial assistance that the Government may give to the PLA and the MDHC. That money is available, in the terms of the 1981 Act which the clause amends, for measures to reduce the manpower in their ports with a view to restoring their profitability and for carrying on their undertakings while such measures are being taken. As I have already mentioned, the existing £360 million has either been spent or is committed. Both the PLA and the MDHC have carried through massive, indeed traumatic, changes in the past few years, rationalising and concentrating their activities downriver and building up their containerised and bulk cargo traffics as their traditional break-bulk activities continue to decline. Despite the Government assistance that they have received, however, neither is yet in a position to carry on entirely unaided. So we are seeking power to continue that aid until the job is done and both ports are restored to health and independence. We shall commit only such extra money as is absolutely necessary. We hope it will be far short of the extra £140 million for which Clause 2 provides, but we have thought it only prudent to allow for various contingencies over the next few years. Not to increase the £360 million ceiling would jeopardise the restoration of the PLA and MDHC to viability and risk nullifying the heavy investment of public money that has been made in both ports.
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I turn now to the second part of the Bill. Clauses 3 to 5 are useful reforming provisions to remove a range of unnecessary ministerial controls, mostly relating to borrowing by trust ports. These controls have grown up in a rather haphazard fashion in trust ports' local legislation going back over many decades. They take no regular pattern as between one port and another. The Government have concluded that they are no longer necessary.
The British Ports Association and those ports which are affected have welcomed the reforms. In practice, the powers of many ports are already framed so that they can borrow all they need within the basic limit specified in their local enactments without needing the Minister's consent to borrow under certain circumstances or sometimes indeed at all. The reform will put all trust ports on a similar footing, as well as removing a number of other obscure provisions relating to minor matters, such as rates of interest, loan repayment periods and so on which currently require a Minister's consent.
Placing responsibility for all these matters fully and universally on the ports themselves reflects the Government's general policy that the industry should manage its own affairs. It also follows naturally from the Government's decision, confirmed in the last public expenditure White Paper, to transfer trust ports' capital investment expenditure to the private sector from 1st April 1985. This decision, in turn, reflects the fact that most ports, including the trust ports, now obtain capital for new projects from the private sector.
I turn finally to the third part of the Bill. Clause 6 repeals Section 9 of the Harbours Act 1964 and directly consequential legislation. Under Section 9, and the control of harbour development orders that were made under it, no scheme of harbour development costing more than £3 million could go ahead without the approval of the Secretary of State for Transport. This was part of the philosophy on ports that stemmed from the Rochdale Committee's report that I mentioned earlier.
In April 1984 my right honourable friend the Secretary of State announced his intention to revoke that control as being no longer appropriate in a commercial and competitive industry. Immediate effect was given to that decision in the Control of Harbour Development (Revocation) Order 1984 made in May of last year. That order was fully debated in another place on 19th June last year. Clause 6 of this Bill completes the process by repealing the relevant primary legislation.
Repealing Section 9 is an integral element of our view that in a competitive industry the Government should not attempt to lay down where port development should and should not take place. It should be left to the ports themselves and those who use them to decide where new facilities are needed. Initiative should be rewarded, not stifled. If ports can provide the capital themselves or find commercial sponsors willing to put it up, there is no reason why they should not be free to take the risk and back their judgment. That way lies the greatest efficiency and the best prospects for our industry, our trade, and for jobs. I commend this Bill to your Lordships' House.
Moved, That the Bill be now read a second time.—(Lord Brabazon of Tara.)
8.15 p.m.
Lord Carmichael of Kelvingrove: My Lords this is a Bill on which we shall not wish to divide the House. The Bill is helpful in the first part at least as it gives us an opportunity to examine the position of our ports and the Government's policy—more the present Secretary of State's policy—towards the ports. Perhaps we can ask for some guidance on the future policy of the Government in an area which everyone agrees is of major concern to any trading nation; but to a nation such as our own, an island nation, it is absolutely vital because of the importance of trade and ports combined.
It appears to me that while we undoubtedly have an over-capacity of port facilities the Government are still happy—in fact they are anxious—to encourage yet more facilities, provided they are privately owned and privately financed. The abolition of the registered dock worker is one of the ways the Government see as being necessary to—as I am sure the Secretary of State will say—free the ports industry. As long as one had registered dockers and a demand for work at certain ports it was more difficult to privatise or expand the private ports.
In another place when the Bill was going through, the reason for the problems of the registered dock labour force was discussed fairly forcefully. One Member with great experience of the docks gave some descriptions of the casual system that pertained in the docks before the Dock Labour Scheme. I myself saw it frequently on the Clyde in Glasgow, particularly over at Govan where the men met every morning and gang bosses threw "checks" into the air for them to grab. If they were lucky enough they got a job; if they were not lucky enough they did not. There were always favourites who fairly regularly got jobs, but many went twice a day to try to get a job but could not get one because they were not favourites or were not lucky enough to catch one of the checks that were thrown in the air.
This memory takes a long time to die in a dockland area and a tight community. It is a nightmare of many dockland areas. This is why people are very anxious that there should be control and understanding and a regular system in dock work. This is one of the reasons why there is always a worry about non-scheme ports. It is a lovely way to run a dock system. You totally ignore the wishes of the people and the lives of the people. If trade is good even on a day-to-day basis you blow a whistle and you get more workers in to help unload the ship. If trade is bad you do not send for anyone. That is a very economic system in the short term but of course it causes all sorts of problems in dock areas. Many of those problems are still with us because of the attitude of the old shipowners and the stevedore companies.
Obviously we welcome the fact that those who are no longer going to be employed will be given reasonable redundancy payments. We regret, however, that the two once great ports which we are particularly dealing with in the Bill—one in London and the other in Liverpool—have fallen into such a state that the London registered dock labour force has fallen to a figure of 4,000 from a total of 25,000 only 20 years ago. In Liverpool over a longer period the
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registered dock labour force has fallen from 15,000 to 2,000.
I congratulate the noble Lord the Minister on his introduction of this Bill. It was a much more reasonable and gentle explanation than that given by his right honourable friend the Secretary of State in another place when introducing the same Bill. I accept of course the arguments which the Minister put: that there are new methods of working ships and of working cargo which require fewer people. But it is doubted by a great many people in different areas of shipping—and I have spoken to many people in shipping over the years—whether there are sufficient skilled people within the dock industry to allow for potential growth in traffic at both London and Liverpool if the economic situation should improve—which we all hope it will.
What concerns me and a growing number of electors is the general simplistic view which the Government seem to take towards competition. The Minister himself—unusually for him—began to explore this avenue towards the end of his speech. For example, it was said in another place—and the Minister himself suggested this without naming the places—that although the expansion of Felixstowe may be financed privately, the infrastructure will soon be found to be inadequate and a cry will go up for more roads, better access and other action which will be a charge on the public purse. This is undoubtedly the case with the motorway programme. One of the priorities for the motorway programme was that the ports had to be served. The ports concerned were London, Liverpool, Hull, and Greenock in Scotland. Those were the places which the motorways had to serve; this was because the ports were there and they were a lifeline. If we kill off Liverpool and, to some extent, London, we shall soon find that we need to have a better infrastructure serving Felixstowe and—if we ever get the private money and the go-ahead—into Falmouth. It will be a massive job constructing a road system to serve those places.
I am trying to say that, taken as a whole, Great Britain Limited (or perhaps it should be Great Britain plc) cannot solve its problems by isolated, one-off bouts of competitiveness. An apparently simple solution in one area of industry can have repercussions in other areas which any Government will be forced to deal with—often at a greater cost than the benefits given by the first apparent solution.
I should like to give as an example the river that I know best; that is, the Clyde. This Bill does not deal specifically with that river except that the repercussions of the repeal of Section 9 would obviously affect the Clyde, which is one of the great ports of the world and the greatest shipbuilding river of the world. I have had meetings with colleagues, with the Scottish Chamber of Commerce, with the Scottish CBI, with trade unions and with local authorities—and I can assure the Minister that across the whole spectrum of Scottish industrial life there is great concern about what is happening to the ports of Clyde and Leith—and, to some extent, the port of Grangemouth. This is not the occasion, but perhaps we will have an opportunity some time to discuss the effects of the grid system and how it affects Scotland and some of the northern ports. It is certainly something that is causing great concern and considerable trouble.

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One of the most disturbing aspects concerns the Clyde, which used to have something like 23 shipyards. I accept the fact that one can only bring a 27,000-tonne vessel up the Clyde and that no one will be going around the world with a 27,000-tonne vessel. Therefore it does have limitations. The Clyde as a whole is a good example of the fact that one can solve certain problems in order to make economies but one can then bring down the whole house of cards.
In the Scottish industrial press, the example is given of the problems concerning Ravenscraig steel plant. This is dependent upon supplies of iron ore and coal from Hunterston ore terminal. If Ravenscraig were taken away for some reason or another, it would affect the very large granary which is right opposite my house and which has a capacity of something like 100,000 tonnes. I believe it was suggested by the Member for Shettleston in another place that the possibility is that this granary might be used as a store for EC surplus grain. But if anything went wrong and that granary were to go, there would then be little need for the river to be dredged, which costs the Clyde Port Authority about £1½ million a year.
If the river were not dredged, there would be a saving. But if the river were not dredged, then one would find that Govan Shipbuilders, who are beginning to do rather well and become competitive, and also the Yarrow warship yard, would need to take on the job of dredging. Obviously they would need to have the river dredged or else they would go out of business. If they had to dredge the river, then the cost to those two yards together would be something in the region of £1½million per year.
I appreciate that all that is being rather parochial, but the point I am trying to make applies, I am sure, to the whole ports policy of the Government, if only I knew more about some of the other ports. I know a little about the Clyde but would not say that I am by any means an expert. Still, I know enough to say that there is fear felt not only by people like myself but also by people in Scottish shipping and industry generally. The Government's philosophy seems to be that one should make savings on individual items without considering the problems as a whole. We are all praying that the Government will ultimately change their mind and get away from the narrow accounting view which they seem to take on topics such as this. I only hope that there will be a sea change—if that is the right phrase to use in context such as this—for the sake of the future of Britain's ports.
A little planning must be accepted as a necessity in an industry as important as that with which this small Bill deals. When we reach the Committee stage, I hope that the Minister will give thought to some of the points I have made and to some of the points which his right honourable friend the Secretary of State did not deal with in Committee in another place.
8.28 p.m.
Lord Brabazon of Tara: My Lords, I shall try to answer some of the points which the noble Lord, Lord Carmichael, has raised. First, this Bill is certainly not trying to return to the bad old days of registered dock workers. It is a question of a changing world. I believe that the noble Lord recognises that that is so. One
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cannot make ships go up the Clyde, especially if they are too big to do so.
The pattern of trade has changed completely. Shipping now goes along the south coast, up the east coast, and off to Rotterdam. It might drop off a few containers on the way and pick up a few others on the way back. That is not part of a simplistic view which the Government hold in respect of their ports policy. The fact is that if we want, as Great Britain plc, to compete, then we have to provide facilities to which the ships will go. We must not hinder our exporters by adding to their costs by making ships go somewhere else.
I think that is all I can say on this Bill. It is an expensive Bill. We are providing a lot of extra money. As to the repeal of Section 9, in Clause 6 of the Bill, which the noble Lord mentioned, I can perhaps dispel any misapprehension that there may be in respect of the Secretary of State's control of major port investments under the Harbours Act. The repeal will not mean the abandonment of any planning control over port developments. It will not be possible for anyone who wishes to build and run a port to do so where he chooses. He will still have to obtain statutory powers by a Private Bill to carry out works in tidal waters. He may still need development planning permission for landside activities. He will still need the Secretary of State's consent under the Coast Protection Act to any work that he may carry on at or adjacent to the coastline. So other interests are still being adequately protected and there are still adequate opportunities for the local authority, the Government and Parliament to consider new proposals.
I hope I have managed if not to satisfy the noble Lord, at least to answer some of his questions. This is a short, simple and essential Bill and I ask y our Lordships to approve it.
On Question, Bill read a second time, and committed to a Committee of the Whole House.

Prohibition of Female Circumcision Bill
8.32 p.m.
Baroness Masham of Ilton: My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, That the House do now resolve itself into Committee.—(Baroness Masham of Eton.)
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD RENTON in the Chair.]
Clause 1 agreed to.
Clause 2 [Saving for necessary surgical operations]:
The Deputy Chairman of Committees (Lord Renton): I have to point out that if either the first or the second amendment is agreed to, I shall not be able to call the third or the fourth amendments.
Lord Kennet Lord Kennet moved Amendment No. 1:
Page 2, line 3, leave out paragraph (a) and insert—

("(a) is necessary for the physical health of the person on whom it is performed; or

(aa) is a minor cosmetic operation and is performed by a registered medical practitioner, or").

The noble Lord said: This Bill has been so often before us that I shall be very brief in introducing this amendment. There is only one substantial point which still troubles the House, and that is the matter of "custom and ritual". The Government have put the words in the Bill as a roundabout way of ensuring that the Royal College of Gynaecologists has the freedom that it needs to carry on practising in its traditional manner. This is in the Bill and most of the amendments now before us have the effect of taking it out of the Bill.
It is a narrow, departmental point; it is a DHSS point. The Bill as drafted by the Government undoubtedly prohibits what we all want to prohibit, but it does so in a way which I believe may cause the Bill to fail of its purpose. If the words stand I believe it will cause the people concerned to gather round to protect the custom and ritual which is attacked by the wording in the Bill. I believe that when the day comes and the first person is accused in court of an offence under the Bill and when the press takes note of it, as it will, the people concerned may feel even more wounded and afraid than they do now by the existence of these words. It would, therefore, be wise, if we can possibly find a way to do so, to get rid of the words at this stage.
I hope that the noble Baroness, Lady Trumpington, can give us some news about this, although I do not expect that she will be able to do so. Unfortunately the Government show all the signs of having dug in. Over the past months—nearly a year—the Government have refused to attend meetings for consultations with interested parties. They have refused to meet the friends of the earlier Bill for consultations on the details. They have ridden roughshod over the representations of the Commission for Racial Equality, their own statutory advisory body. I must say that I am surprised the Home Office, and Home Office Ministers, have gone along with this form of wording. The old Colonial Office, if we had been in another country, would not have tolerated this approach for a moment. It would have been wiser than to lay down a formula like this. Are we to do worse in this day and age than would have been done by the Colonial Office before the Second World War?
I read out at Second Reading the protests from the organisations of black women in London who will be concerned by this Bill. I read out the protests by the Commission for Racial Equality. Have the Government, since Second Reading, been able to find time to see representatives of the communities who will be hurt by this wording? Has the sponsor of the Bill been able to find time to see representatives of those communities? If not, I do not believe that the Committee should let this wording go through.
Five of the seven amendments before the Committee aim to remove this wording. With the leave of the Committee, I shall say something about all of these amendments because three of them are alternative ways of making it possible. For myself I recommend to the Committee, and will happily agree
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to, any of those three which would have the effect of making it possible safely to remove the offending words—whichever amendment does that best. The amendments are Amendments Nos. 1, 3 and 4. They all take different routes to enable Amendment No. 5 to be accepted. Amendment No. 5 is the amendment which proposes to leave out the offending subsection.
Amendment No. 3: Page 2, line 3, leave out ("physical or mental").
Amendment No. 4: Page 2, line 3, leave out ("or mental").
Amendment No. 5: Page 2, line 14, leave out subsection (2).
Amendment No. 1, which I commend to the Committee, removes mental health as a reason for doing these operations altogether and leaves only physical health and minor cosmetic operations as permissible reasons. Not so long ago the noble Baroness, Lady Trumpington, answered a Question for Written Answer which touched on this very subject. She said in the Written Answer that the Royal College of Obstetricians and Gynaecologists,
"point out that there are some surgical operations that are necessary for the physical and mental health of women which have nothing whatsoever to do with circumcision performed for traditional or cultural reasons. The college would be opposed to any statutory limitations on these legitimate operations".—[Official Report, 23/5/85; col. 475.]
In a letter which she recently wrote to the Government Chief Whip, which she was courteous enough to circulate to those who had spoken in earlier debates, the noble Baroness said that,
"examples of these operations would include cases in which a woman became anxious and depressed because her external genitalia, although functionally normal, are of unusually large size or unusual in shape. The purpose of surgery in that case would be to change the size or shape to an acceptable appearance which no longer caused the woman distress".
I submit that that is a definition of a cosmetic operation—to change the size or shape to an acceptable appearance. It is for that reason that we propose in the amendment in the name of my noble friend Lady Seear and myself that minor cosmetic operations should be permitted without any reference to health at all, whether physical or mental. Such operations to the external genitalia of women should be permitted just as freely as they are permitted to the external genitalia of men, or, come to that, to noses or chins.
That formula may still ban something that the Royal College wants the freedom to do, and I want at this point to ask a precise question. If the Government hold that it bans something that the Royal College wants to do, what is that thing? Will the noble Baroness please tell the Committee what it is that the formula bans if it bans something that it should not? If, on the other hand, the word "cosmetic" is found to be too vague—and I agree that it is not very precise—I should like a rather precise answer from the Government. "Cosmetic" is vague, we agree. Are not "health", "custom" and "ritual" equally vague, and is not the word "required" equally vague? Many of the words in the Bill are vague and often many words in good law are vague, too. If one word is more vague than others, I agree that we should try to do better, but if it is about equal with the others in vagueness, there can be no objection.
Exactly what case is it that the Government fear would be let through? I have asked already what case they fear would be banned which should not be

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banned. If they hold that there is a loophole, what case is it that would be let through which should not be let through? On Second Reading the noble Baroness informed the House of her strong conviction that certain things would be let through and the wording would not do. It is not enough for the Government simply to inform Parliament of their strong conviction about something. They have to tell us why it will not do. What injustice or cruelty would result from the adoption of those words? We are the deciders here and we must not be stampeded by any outside opinion, even that of a highly qualified Government department.
It may be that in the amendment that my noble friend and I have put down we have inadvertently fallen into confusion, and I should like to raise this at this point. I am not quite sure that I understand the wishes of the Government and the sponsors about what sorts of operation shall be permitted to be performed by persons holding what qualifications. In this matter—and I am sure that I speak for all of us—we should be happy to be guided by the Government. It may be that if something has gone wrong in the wording on that score, we should have an opportunity to put it right at a later stage.
With the leave of the Committee, I now turn briefly to the amendments which are coming up. Amendment No. 2, from the noble Lord, Lord Coleraine, is open to the objection that it does not remove the worrying words. "Custom and ritual" are still there as large as life at the end of the amended text.
Amendment No. 2: Page 2, line 3, leave out paragraph (a) and insert—
("(a) is performed by a registered medical practitioner, and—

(i) is necessary for the physical health of the person on whom it is performed; or

(ii) in the case of an operation performed on a person over the age of sixteen, is either a minor operation of a cosmetic nature or an operation necessary for the rectification of substantial physical abnormality of that person;

and is not an operation required, whether by the person on whom it is performed or by any other person, as a matter of custom or ritual;").
Amendment No. 3, from the noble Lord, Lord Hatch, appears to me to open a wide loophole in that by leaving the word "health" unqualified it will be quite open for people to plead mental health without any further ado. Amendment No. 4 from the noble Lord, Lord Hatch, seems to me admirable, and if the Government and other noble Lords were able to accept it, I should be quite happy to withdraw my amendment in favour of it. Taken together with Amendment No. 5, it would restore the present Bill to the original shape of the Bill that I twice introduced into the House over the past two years. Amendment No. 5 is the main point of this whole discussion, and is the one to leave out the offending subsection.
Amendment No. 6 seems to me to be another ingenious way to achieve the effect that we desire and has, I believe, much to commend it.
Amendment No. 6: Page 2, line 16, leave out from ("any") to the end of line 18 and insert ("non-medical factors").
Amendment No. 7, in the name of the noble Lord, Lord McNair, I must say I do not fully understand and I await his explanation of the purpose that he desires to achieve by it.
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Amendment No. 7: Page 2, line 18, leave out from ("required") to end of line and insert ("for traditional or cultural reasons").
Perhaps I may take the opportunity to make one more general point. I believe that, although there is no amendment down today providing for the possible delay in coming into force of the Bill, there will have to be one on Report. Unless the Government are able to say here and now that they have already voted the money and the help to those voluntary organisations already working in the field in educating the women and men concerned in the effect of the Bill and the merits and demerits of the practice, it would be quite wrong for the Bill to come into effect before a great deal of education had been carried out. That can be ensured by an amendment at a later stage, though I regret to say that on Second Reading the noble Baroness, Lady Trumpington, set her face against it. I beg to move Amendment No. 1.
8.45 p.m.
Lord Hatch of Lusby: It may be for the convenience of the Committee, and I hope it will be of some assistance to the noble Baroness who is to reply and who I know has had a long day, if I follow the example of the noble Lord, Lord Kennet, and add my remarks about the various amendments in his name, my name and our joint names. I make it plain that there is no intention in any of the amendments to allow female circumcision to continue by a side door. On Second Reading there seemed to be some impression that that was the intention of those of us who objected to Clause 2(2). That has never been the case. Those of us who have been trying to remove that subsection are just as fervent in our desire to abolish female circumcision in this country as are those who sponsored the Bill. That is surely self-evident, as it was the noble Lord. Lord Kennet, who twice took the initiative to introduce a Bill to abolish female circumcision.
Once the phrase "custom or ritual" was introduced into the Bill it brought in another dimension. As I say, the removal of that phrase was never intended, and is not intended in any way, to allow the continuation of female circumcision. But once mental health was associated with the phrase "custom or ritual" a new situation occurred, and side by side in the Bill were, on the one hand, operations of what might be called a cosmetic nature and, on the other, female circumcision for the purposes of custom or ritual. I believe that that is a fatal flaw in the Bill, particularly when it is seen by the public outside. For that reason I have tabled a number of alternative amendments which I hope will assist the Committee and the Government to find another means, if they so wish, to preserve the cosmetic form of operation, which I believe the Association of Obstetricians is anxious to preserve, without at the same time including the phrase which has been defined as racist.
Indeed, the Committee will remember that during the Second Reading debate, the noble Lady, Lady Kinloss, pointed out that the nurses were opposed to mental health being a reason for the operation. They believed that if there is mental stress, it should be dealt with by counselling and psychiatry rather than by surgery, in complete opposition to what the noble Baroness had to say on that occasion. I would stress again, both to the Government and to the noble

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Baroness, Lady Masham, who has played such a wide and deep part in all our deliberations, the danger of destroying the salutary effects of the Bill by the introduction of unnecessary racialist overtones.
On Second Reading, the noble Baroness, Lady Trumpington, assured the House that the Government were of the opinion that there was nothing racialist in the phrase "custom and ritual". But this House has stated and has voted that this phrase is racialist and obnoxious, and has rejected it. Moreover, the Government's own statutory body, the CRE, has also stated that this phrase is racialist and that therefore the Bill is racialist. The assertion, publicly made by the CRE, was never answered by the noble Baroness in her winding up speech on Second Reading. Moreover, as the noble Lord, Lord Kennet, has pointed out, the London Black Women's Health Action Project has equally stated that if this Bill is passed in its present form it will be considered racialist. As the noble Lord, Lord Kennet, has pointed out, this is bound to consolidate opposition to the Bill among those communities in which female circumcision is a tradition, and a cultural tradition, and may very well, as we have been warned, drive the operation underground into the back streets in the same way that abortions used to be performed.
I would ask the noble Baroness, Lady Trumpington, whether she is again going to risk, or whether the Government are going to risk, a Bill from this Parliament being tested before the European Court of Human Rights. We have seen only this week a judgment against the Government's immigration policy. Will this Bill now have to be defended? Are we again, as a country, to be dragged in front of the European Court because of the inclusion of a totally unnecessary but highly discriminatory phrase?
Finally, may I say to the noble Baroness, Lady Trumpington, that when she got rather angry with me on Second Reading, all that I was pointing out to her was that when this very clause was debated and voted on in this House the votes that the Government collected were votes from people who had not taken part in the debate and who had never heard the debate. Is that the Government's conception of a free vote? When a free vote is held on capital punishment, members of the Government vote on different sides. I would ask the noble Baroness this question. Is the noble Baroness, Lady Cox, who I believe voted against this clause during the passage of the Bill introduced by the noble Lord, Lord Kennet, to be allowed to vote as her conscience dictated then? Will she be allowed to vote, if a Division is held, against what is now being put forward as a Government case? Why a Government case? Is this not a free vote which all of us should be able to cast according to our consciences and according to our assessment of the situation?
I have one last word for the noble Baroness, Lady Masham. The noble Baroness knows that I value very highly the enthusiasm with which she has sponsored this Bill and the part that she played in the two Bills introduced by the noble Lord, Lord Kennet. I was a little sad that in her winding up speech on Second Reading she seemed to indicate that it was the men, the males, in this House who were concerned about the racial discriminatory feature of the Bill. There was
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also a suggestion during that debate that this is a new issue. No, it is not. It is now some 40 years since I argued personally with Jomo Kenyatta about this issue on the basis of his book Facing Mount Kenya; it is well over 30 years since I participated in a discussion with a team from the World Health Organisation set up to examine the very question of female circumcision; and it is over 20 years ago that I myself was deported from one African country for writing about female circumcision.
I may say that the male Members of your Lordships' House have as much fervour to outlaw this barbarous practice in this country as have the females. Indeed, I would go further. I imagine that I am the only Member of your Lordships' House who has actually seen this operation take place. It used to take place 50 yards below my garden at a university in West Africa. I saw it and heard it. I heard the screams every year. I was deported from that West African country for writing about female circumcision. Three years before that, I had been declared a prohibited immigrant of South Africa on the grounds that I was advocating abolition of racial discrimination. I consider that both those issues are equally important.
When it comes to this Bill, I am just as anxious that racial discrimination shall not have any place in it as I am that female circumcision should be outlawed from this country. I beg the noble Baroness, Lady Masham, and the noble Baroness, Lady Trumpington, not to ruin what all of us want to see done in this Bill: that is, to abolish female circumcision and to assist and support those brave men and women in this country and in other countries who, in their own communities, are leading the battle against this abhorrence. If, however, this racialist phrase is included, I am afraid that it will damage the effect that all of us want to see. You are going to shut people's minds. You are going to weaken the leadership now being given by those brave men and women because they will be told by their own people, as they are being told by the Government's statutory body, that this is a racialist Bill.
All I am saying to the Government tonight in supporting the noble Lord, Lord Kennet, on Amendment No. 1 and including with it my Amendments Nos. 3 and 4, and also in supporting the joint Amendment No. 5, is, "Please tell us that between now and Report stage you will talk with doctors, with the legal advisers to the Government and with the CRE, and find a form of words that does not in any way hint at racial discrimination."
9 p.m.
Baroness Seear: In supporting this amendment, very briefly I want to make three points. As all the previous speakers have said, we are at one in wishing to get rid of this obnoxious operation. There is no question whatever about that. We fully recognise that the Government are as anxious that this operation should cease as we are on these Benches.
However, we take exception to the term "mental health", and this arose last time when the previous Bill was before this House. We take exception to the introduction of "mental health" as it is an exceedingly vague term. What is more, given the kind of pressures that can be put upon young women by a family who

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wish to see operations of this sort carried out, the condition, which could be considered one of mental ill-health, could well be induced in a girl as a result of these pressures. This, combined with the vagueness of the definition of "mental health", in my view is an extremely good reason for excluding those terms.
Finally, I can well appreciate that many people in your Lordships' Committee must wonder why so much anxiety is aroused by the term "custom and ritual" practice. It may be that in rational common sense there is no need to be concerned about those words, and the Government's intention in including them is clear and is entirely respectable. However, the fact remains that the appearance of those words has aroused great anxiety and distress in responsible quarters concerned with relations between ethnic groups. When a body as responsible as the statutory body, the Commission for Racial Equality, writes to say that it very much hopes that these words will be removed, it surely is important when dealing with a matter as sensitive as this, a matter which must arouse very considerable feelings of anxiety and anger in various groups among the ethnic minorities, that we should fall over backwards to ensure that the legislation includes no phraseology to which they can take exception. If for no other reason than the representations made by the CRE, I beg the Government to find some other form of words to bring about the ends which we all wish to see achieved.
Lord Coleraine: I have considerable sympathy with Amendment No. 1 which is in the name of the noble Lord, Lord Kennet, and some of the arguments with which he has presented it. His amendment seeks to obviate the need to introduce the mental health aspect as a cover for the trimming operations which some women may require. On the other hand, I find it very difficult to go much further than this for three reasons. The noble Lord has already referred to the first—the fact that his amendment at present provides that operations required in connection with physical health may be carried out without the assistance of a registered medical practitioner. Secondly, it seems to me that his amendment makes no provision for the case where there may be something substantially wrong with a woman—such as a gross physical abnormality—which cannot be dealt with by a minor cosmetic operation, however widely you interpret those words, but is a matter which is causing distress and yet it is not a matter of physical health. I believe that that falls through the net provided by the noble Lord's amendment. However, the more serious reservation—
Lord Kennet: If the noble Lord will give way, I think that the noble Lord will agree that the Bill itself makes no mention of abnormality. If at a later stage the noble Lord himself were to seek to carry that into the Bill, I should certainly support him.
Lord Coleraine: I am with the noble Lord on that and I am trying to help him by drawing attention to what he and I would agree is something that ought to be included if it is possible. However, the third and substantial reason why I cannot support him is his antipathy to the use of the words "custom and ritual", and I shall return to that.
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Amendment No. 2, standing in my name, is an alternative amendment in form to the noble Lord's amendment and it cannot be called if his amendment is accepted. Therefore, I think it will be convenient if I speak to Amendment No. 2. However, I view it as a probing amendment and I do not have any fixed intention of moving it formally if and when I have the opportunity to do so.
I propose that only operations required for physical health may be performed on persons under the age of 16. I fully accept that there will be girls of 14, 12 or 10 who will be concerned at the shape or appearance of their external genitalia and no doubt they will be teased and feel badly about it. Nevertheless, if they are to be operated upon for depression, it appears to me—and I stress that I can only speak as a layman—that in some way they ought to be encouraged to wait until they are of moderately mature age before undergoing a serious operation of this nature.
It might he that the enforced wait would see a change of mind. At the same time, it might be that if a girl thinks that in a few years she will be able to have the operation, that will make the distress which she is possibly suffering while she waits for the operation, because she is too young, more tolerable.
I was not present during the debate on the Second Reading of this Bill, but I have read the report very thoroughly and I respect the reasons why the noble Baroness, Lady Masham, now sponsors the Bill, mental health clause and all, and how she came to find that her wish to eradicate female circumcision overrode any other problems. The noble Lord, Lord Hatch, has referred to the mental health amendment tabled during the Committee stage of the previous Bill last year, and I believe that he has referred to it as an anti-racial amendment. He has also referred to the Members of your Lordships' Committee who voted one way and those who voted the other way. As one of the Conservatives who voted against the mental health amendment, may I say at once that it seemed to me last year, and it seems to me now, that the objections to the mental health clause put forward by the Commission for Racial Equality and some of your Lordships, in subsequent repetition in other places, have been so exaggerated as mischievously to endanger the principle behind the Bill.
It is of course a fair question whether we should be seen to be legislating in an apparently uncaring manner, as when we appear to be providing that a female who asked to have one of these operations and is in a severe depression which would be relieved by the operation, cannot have the operation because of what has caused her depression. But having said that, the Bill is intended to outlaw a group of practices which are endemic apparently only among a very small number of ethnic minority groups, and which the great majority of those minority groups or communities deplore.
The Bill is not branded as racialist on this account, but if you brand the use of the words "custom and ritual" as racialist then it seems to me that you are branding the Bill itself. I see this phrase now as central to what we are trying to do, and the words are words which should not be dodged or fudged. The use of

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these words in some way in this Bill is essential to make clear the exact nature of the practice that we are condemning.
Lady Kinloss: May I ask the noble Lord, Lord Kennet, why in his Amendment No. 1, paragraph (a), he leaves out the words,
"and is performed by a registered medical practitioner"?
Surely if an operation is to be performed it should be by a registered medical practictioner.
Lord Kennet: In drafting this amendment my wish on this point was only to please the sponsor of the Bill and the Government. If I have failed to do so they will no doubt tell me in what way, and I shall be only too happy to join with other noble Lords in putting it right.
Lord McNair: All the amendments, except my own No. 7, have one thing in common: that is, they all seek to exclude mental health altogether as a justification for the legitimate operations which we want to leave lawful. On the whole, two reasons have been given for this desire to exclude mental health. The first is that by including it we build a loophole into the Bill through which the wrong people may creep out. The answer to that is that if the Royal College of Obstetricians and Gynaecologists tell us clearly that for them mental health is necessary as a criterion, we have to take their opinion seriously. They are the people who are in touch with the patients, they know better than any of us, and so far as I am concerned if they feel that mental health is an essential criterion then we must provide for it. In that case we must of course block the loophole which otherwise mental health builds into the Bill.
The second reason—which I do not think we have heard tonight but which we did hear at Second Reading—for excluding mental health is that if you are mentally ill the only proper treatment for you is psychotherapy and not surgery. This is terribly out of date. I do not believe that any good doctor today draws this sharp distinction between the mental and physical health of his patient.
Surely the trend, growing with every passing year, is to recognise that nearly all conditions are psychosomatic—some more psycho; some more somatic; but nearly all a bit of both. If sometimes treatment for apparently physical ills can be psychotherapeutic, then I am prepared to believe that some apparently mental ills can sometimes be helped by surgery. Cosmetic surgery, by definition, is a recognition of this fact, is it not? I know it can become a racket, but I cannot believe that this House would dare, or even wish, to prohibit cosmetic surgery ipso facto. Therefore I feel that we have to provide for mental health in this Bill.
It is difficult to keep all these amendments separate, but I shall try to talk about Amendment No. 1. I am
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sure that it would fairly often be impossible to claim that an operation of the type that we wish to permit was necessary for the physical health of a patient. Therefore the surgeon, if he got into trouble, would have to rely on paragraph (aa) and claim that the operation was a "minor cosmetic operation". I ask the Committee to note that it must be both minor and cosmetic; they are not alternatives.
Lord Kennet: Has the noble Lord noticed that the words "necessary for the physical … health" are in the Bill as drafted by the sponsor?
Lord McNair: Yes. As I said, the surgeon will probably be relying on claiming that it is of a minor cosmetic nature. Minor it almost certainly will be, and the practices we are seeking to render illegal are minor surgery. I do not think there is any doubt about that.
What about the word "cosmetic"? What would the courts make of that word? One can throw dictionary definitions around, but none of them is binding or authoritative. But Chambers dictionary defines "cosmetic" as an adjective as,
"purporting to improve beauty, especially that of the complexion. Correcting defects of the face etc. or supplying deficiencies".
I wish among our small number we had a lawyer present, for I wonder what the courts would make of this word "cosmetic". It is so subjective. I would think that a cosmetic operation is one which would make a person think that he looked better and that it is in the eye of the patient rather than being capable of objective definition. Perhaps the surgeon who is in court because he thought he had performed what he thought was a perfectly legitimate operation, will get away with it on the definition of "cosmetic"; but perhaps not. This is where as a laymen, both in medical and legal matters, I hope that we shall have some guidance from Government experts.
What will be the effect if we had in court instead one of the people we are trying to stop? He has performed this female circumcision, he has been caught and has been accused of an offence under this Act (as it may be). He could not claim that it was necessary for the physical health of the patient so he, too, would have to rely on paragraph (aa). If he is not a registered medical practitioner, I take it we could get him for that any way. If he is a registered medical practitioner, he could safely claim that what he did was a minor operation. It was a minor operation. All he would have to claim to get away with it would be that it was "cosmetic". What worries me is that if this word "cosmetic" adequately protects legitimate operations which we wish to allow to continue, is there not a danger that it will also afford a loophole to the people we wish to put out of business? On balance, I feel that I cannot support this amendment; but I shall wait to hear what is said by the noble Baronesses, Lady Trumpington and Lady Masham.
9.15 p.m.
Lord Richardson: We have been talking about the meaning of words. As a doctor, I wish to take up a moment of your Lordships' time in talking about the meaning of words to doctors who will have to deal with these problems. The noble Baroness, Lady Seear, said that "mental health" was a vague term. I assure her it is not a vague term to doctors. They understand it and they use it constantly, although it covers an enormous spectrum from the frankly insane to the sadly anxious. "Cosmetic" means nothing in terms of surgery except for face-lifts and putting straight noses and matters such as that. It is a very ill-defined term to the minds of doctors, and, as the noble Lord has just said, it would be a very vague term in the courts.
I am on firmer ground over "minor" and "major" operations. These terms are not to my knowledge used by surgeons, and have not been for years. What may appear to be a short or small operation can go wrong. The anaesthetic alone can go wrong; so can the surgery. Difficult, prolonged procedures may carry very little mortality and, because they are undertaken by the most highly skilled, carry little morbidity and little chance of things going wrong.
I feel extremely strongly that the words "mental health" must be included in this Bill. If one does not do that one will exclude from treatment a number of patients—I do not wish to overstress that this will be a large number, but it will be a significant number of patients—who could be relieved by surgical procedures. It is naïve and ignorant in the extreme to say that all mental disease can only be treated psychologically. It is not true. Alteration of circumstances, alteration of surgical situations, can indeed play a major part in the relief of psychological symptoms and mental disease. If this term "mental health" is excluded you are going to debar in your legislation a significant number of women of all faiths, of all beliefs and of all colours and of all ethos—nothing racial—from the operation that could help them. To try to disguise that fact by using vague terms such as "cosmetic" and "minor" to my mind is merely partially to diminish the risk of people going without procedures that should be done for their health, including physical and mental.
The argument that any procedure should be delayed until after 16 is not one that I think would find many doctors in sympathy with it. Children are intensely sensitive; they are intensely inquisitive; they love to be normal and the same as everybody else in all their appearances. When it comes to appearances of their genitals they may well discover an abnormality in a circumstance of which their parents would strongly disapprove, and you have a splendid ground in which to plant all sorts of lifelong psychological troubles that can blight a life; whereas calm understanding and, in that instance, minimal surgery could relieve them.
Therefore I feel that if we exclude "mental health" from this Bill we are bowing to a fear of words that I fully understand, at the risk of doing real harm; at the risk of creating a Bill that would obstruct and prevent the proper treatment and management of women in this country. Therefore I hope greatly that your Lordships will reject any amendment that excludes the mental side of health that is so predominant in such a
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number of illnesses and in fact is increasingly so.
Lord Hatch of Lusby: May I ask the noble Lord before he finishes to give the Committee the benefit of his very wide knowledge of the central issue of mental health as it is included in this Bill? Does he recognise that girls who have been brought up in a society in which female circumcision is the practice and the ritual, and indeed in some cases the religion, may very well suffer from mental depression if they are deprived of this operation? We are all agreed that they should be deprived of this operation. Does he not see the difficulty of saying that this form of mental depression must go without an operation, whereas the forms that he has been describing shall be allowed an operation? Does he not see that to many people this appears to be racial discrimination?
Lord Richardson: I certainly see the point which the noble Lord, Lord Hatch, has raised—that women of a certain ethos and belief could become mentally ill if they are not allowed to conform with their beliefs, and that it could lead to tremendous conflict. That situation is bound to arise. I cannot do more than say it might well be that expert opinions, most carefully considered in their giving, could lead to special requests for this operation to be done. I cannot see that there could not be administrative arrangements in order to allow it. It would have to be done by ensuring that impartial opinion of the highest level is obtained so that those who are willing to do these operations for money are not enabled to do so because of the very weight of opinion it would have to support.
As the noble Lord has said, this problem is bound to arise. However, I feel very strongly indeed that if this Bill is to be so phrased as to impair the ability of doctors in their management of patients—and I am not speaking for the Royal College of Obstetricians and Gynaecologists; I am speaking from my own contacts, and I have talked to a lot of doctors in my life—it must be very much questioned. I say that because, as I tried to make clear, I am not talking solely about the white girls of this country; I am talking about all the young female citizens of this country as well as, of course, the others who have to have serious operations on that part of their body.
I accept what the noble Lord has said—that there could be great mental trauma for some women who have been brought up in certain beliefs. I think that that is undoubted; but I feel as strongly as I can that this Bill should not create a situation that impairs proper medical practice as I would see it, as my profession would see it, and as I believe the majority of people would see it, for those who are living in this country, whatever their race.
The Lord Bishop of Gloucester: I wonder whether the Committee will be indulgent to a bishop who finds himself a little lost in the forest of marshalled amendments at this point. I want to make two points, which I hope are not inappropriate at this moment. It goes without saying that, like all other speakers, I am totally against this practice, and hope that we shall legislate against it to assist its inevitable demise, which surely must happen in any case; but we wish to hasten

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it. It seems to me a thousand pities that, so far at least, the wit and wisdom of both politicians and draftsmen have not been able to find a form of words around which we can gather, since we are all so united over the principle which we all seek.
If it is true that the phrase "custom or ritual" is to be seen as racialist by a significant number of people, it seems an aggravation to our dilemma that those who are going to find it perhaps almost more painful than anybody else are precisely those who will in the end be the most effective agents for achieving what we desire. Surely it is not prosecution we want; we want to prevent this practice happening at all. Those who will teach, exhort and persuade most effectively to that end will surely be those who are already members of these ethnic communities and who, having themselves been enlightened, will seek to spread this truth to others. If they are saddled with the additional task of apparently being the advocates of a racialist piece of legislation, it seems to me we are adding to their already considerable burdens. I would wish with all my heart that we could avoid that particular phrase if that is indeed the problem.
9.30 p.m.
Secondly, I have a private quarrel, if I may say so, about the word "ritual" itself in that phrase. It seems to me that the word "ritual" will imply to most people who read it something religious. I have no doubt of course that it can have a secular meaning, and without the benefit of lawyers perhaps I speak out of turn. But certainly in common parlance I believe most people will think that we shall be talking about a religious practice. As I understand it, those people involved in female circumcision and these other operations may have inherited a kind of unspoken tradition that this is something to do with their religious culture. It has, and can find, no backing responsibly in the teachings of, I dare to say, any known religion: certainly not Christianity, certainly not, I understand, Islam and certainly not Judaism. That being so, is it really the right word to use in this context? I wonder whether, even at this late hour, it is possible for the noble Baroness, Lady Trumpington, to make one more effort to get together with other interested people outside this Chamber to see whether some solution cannot be found which would achieve our aim without this provocation.
Lord Rea: Since the Second Reading debate on this Bill, I have been in touch with a number of people and authorities who are directly concerned with this legislation. My remarks, like the remarks of most of the speakers so far, will be directed generally to all the amendments which are on the Marshalled List. I have a lot of sympathy with nearly all of them, although I was not quite able to follow the reasoning of the noble Lord, Lord Coleraine, about different treatments for girls of different ages.
Among the people I have been in touch with are members of the Commission for Racial Equality and I have also spoken with the Government's own legal adviser, who has been advising on the drafting of this Bill. I accept completely that the contentious Clause
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2(2) has been accepted in good faith by the Government to close off a possible loophole which, it has been pointed out to me, might be used by unscrupulous operators. But as regards the use of the words we have been hearing so much about this evening, "custom" and "ritual", whether in Clause 2, as in the Bill, or in Clause 1 at the very beginning of the Bill, as part of the definition of what is prohibited—and that was suggested by the noble Lord, Lord Hunter, two years ago during the Committee stage of an earlier Bill—both ways of inserting the words would be unacceptable to the Commission for Racial Equality and I think we have heard enough about why they feel that these two words are offensive.
I asked them whether they felt the words "traditional or cultural", as in the amendment of the noble Lord, Lord McNair, would be more acceptable to them. I learned that they would not be: the principle of outlawing a tradition or custom as such, even one which is so obnoxious as this one, is one which, if at all possible, should not be embodied in a piece of legislation. This is really why so much trouble was taken by the noble Lord, Lord Kennet, to define this offensive operation when the Bill was first drafted, without using words which might cause offence.
Incidentally, as has been pointed out by other people, the words "ritual" or "custom" are in no way, to my mind, more accurate than the word "cosmetic", which is something that the noble Lord, Lord Kennet, has pointed out already. I feel very much that the Department of Health and the Commission for Racial Equality should get together on this and try to agree a formula which would satisfy both. For me, it seems to be almost impossible, or very difficult, to be a go-between. I think that direct across-the-table discussion between the two bodies most directly concerned would be most valuable and might lead to this solution which seems to elude us. There is still, after all, some time for the Government to introduce the appropriate amendment which would please us all.
Baroness Trumpington: I can well understand the purpose behind this amendment and admire the ingenuity of its drafting. Yet I have to say that it is not acceptable to the Government. If the amendment were carried, then the Bill would interfere with what is now quite ethical and legitimate surgery. The medical advice available to me is that there are some operations that can be judged to be clinically necessary for a patient's mental health that are neither minor nor cosmetic, even by generous interpretations of those terms. It would be quite unacceptable for this Bill to interfere with the patient's right to have that type of operation, even if it is judged to be clinically necessary for her.
In trying to avoid elsewhere in this Bill using the words "custom" or "ritual" we should not in any way interfere with the most sensitive predicament which has nothing whatsoever to do with female circumcision. We must ensure that the scope of the offence created by this Bill is limited to female circumcision and only that. If it is suggested that the Government, by their obstinacy, are preventing the passage of the Bill, it can, with equal or greater justice, be said that the resistance of the noble Lords, Lord

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Hatch and Lord Kennet, to the Bill as currently drafted, on the best legal advice, is now preventing the Bill from proceeding to statute. Their resistance is irrational. If the use of the words "custom" or "ritual" is considered racialist, then it must follow that the intention of the Bill itself is racialist, as my noble friend Lord Coleraine has pointed out, since it is a customary or ritualistic practice that the Bill seeks to prohibit. It is absurd to describe the words as racialist, and we do not accept this.
Incidentally, in answer to the right reverend Prelate the Bishop of Gloucester, female circumcision has nothing to do with religion. The definition of "ritual" goes much wider than its religious concept, according to the Oxford English Dictionary, which states:
"Pertaining or relating to, connected with, rites".
I shall leave the matter there for the moment.
The other drawback to this approach is that surgical procedures do not fall neatly into categories of "minor" and "not minor". There is no clear dividing line that determines what is or what is not minor.
As I have said, before I gave the quotation, there are operations which would involve surgery that is clearly not minor by any definition.
And there are also other legitimate procedures that might well be caught by this amendment. It would raise doubts for doctors and patients about whether or not a given procedure were against the law. There is a quite unnecessary and unacceptable effect. A Bill whose prime purpose is to clarify the law should not of itself raise difficult legal issues in an area in which there is no present difficulty. We should not be jeopardising patients in that way. The amendment in its whole approach, far from helping to clarify the law, would make it more obscure. The noble Lord, Lord McNair, is certainly correct in what he says in this context. The word "cosmetic" is one to which the courts would be reluctant to give effect.
It is awfully boring to repeat things, but I must repeat to the various noble Lords who have spoken the quotation from my letter to the noble Lord, Lord Kennet, which I gave at Second Reading. I said:
"If you introduce the concept of mental health then it is necessary to have a saving clause such as that now in Clause 2(2). Otherwise there is a loophole that would impede successful prosecution. There is no sensible definition of 'cosmetic', 'minor' or 'abnormality' that would prevent difficult questions of law. There are probably forms of quite legitimate surgery that are neither 'cosmetic' nor 'minor'. All of this serves to raise doubts and legal questions about what ought to be straightforward clarification of the law." [Official Report, 15/5/85; col. 1242.]
If I may skip to the penultimate paragraph on that page, I said:
"the prohibition is not in any sense linked to the fact that the practice is a custom or a ritual. It is the practice itself that is being made an offence".
Quite honestly, the noble Lord, Lord Richardson, has answered, with great authority and medical knowledge, the various questions that have been raised far better than I could. However, I have been directly challenged and I must reply to the various challenges. I think that I can speak on behalf of my noble friend Lady Cox when I say that she is fully behind the Bill as
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it stands. The noble Lord, Lord Kennet, suggests that the DHSS has refused to attend meetings to discuss alternative approaches to the Bill. This ground has been well covered in many hours of previous discussion. The Bill as it stands now would work well and would meet all our criteria, and it meets those of the medical profession. Alas!, I must say to the right reverend Prelate that we need no further discussions. We need an effective Bill—this Bill.
The noble Lord, Lord Kennet, asked whether the words "health", "custom" and "ritual" are not also vague. The short answer is that they are sufficiently precise to allow for effective legislation. The terms "cosmetic" and "minor" are not. I said in answer to an earlier question of both the noble Lords, Lord Kennet and Lord Hatch, that we were looking at the applications of those organisations which had approached us for help in the field of education. The noble Lords are premature in asking whether that help will be forthcoming. It would be quite inappropriate for me to give instant decisions on questions such as this at this moment.
What would the amendment of the noble Lord, Lord Kennet, allow? What operations would the amendment ban—female circumcision by doctors, operations justified medically which are neither cosmetic nor minor? Some sex change operations would, for instance, be involved. The noble Lord, Lord Kennet, asked whether this Bill would ban something that the Royal College of Physicians wants to do. No. The word "cosmetic" is vague. Are not the words "custom", "ritual" or "required" equally vague? No. I repeat that the word "cosmetic" could not include those sex change operations.
The noble Lord, Lord Hatch, said that if the Bill passed as it is it would surely end up in the European Court of Human Rights. We would find that it went there only if it discriminated in practice against certain races. They cannot find against us because the phraseology has no practical effect. Quite simply, the Government cannot accept the first amendment.
Baroness Masham of Ilton: As the noble Baroness, Lady Trumpington, has said, this amendment does nothing to clarify the law. If the amendment is carried, the Bill will interfere with legitimate surgery and will leave the legal position in some doubt, as has been stated by the noble Lord, Lord Richardson.
I should like to remind the Committee that this Bill has been through all its stages in another place. It has had legal drafting. If the Bill is wrecked tonight, it will lose the Government's goodwill towards this very serious problem of female circumcision and so may be the grants which are so badly needed to help educate people will also be lost. I have been told by a campaigner who is campaigning not only in Britain but throughout many Commonwealth countries on the prohibition of female circumcision that behind every woman there is a man. Many women who allow female circumcision on their girls do it because they are fearful, they are obedient and they submit to what nearly everyone in Britain feels is the most horrific and cruel operation which has no medical benefit to the person who is operated on.

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9.45 p.m.
Female circumcision is an assault on the person who is circumcised. People have said to me that they cannot understand why we have been so long in prohibiting this practice. We all know that it has been very difficult to come to a satisfactory position. I should like to ask the noble Lord, Lord Hatch, whether the girls whose screams he heard at the end of his garden had been asked. When we legislate for children, as the noble Baroness, Lady David, well knows, the wishes of the children are paramount. I do not think that these children are asked whether or not they want to be circumcised. If they were asked, I am certain what the answer would be.
I should like to say to the right reverend Prelate that I have sympathy when he says that he is not happy about the word "ritual". I would ask him to wait until Amendment No. 7 is moved because that is where this comes in. I would ask your Lordships not to accept this amendment because it might well wreck the whole Bill.
Baroness Jeger: Perhaps I may intervene briefly. I should like to begin by apologising to the Committee. On Second Reading I made a terrible mistake and I grossly misled your Lordships. At column 1244 of the Second Reading debate on 15th May the noble Baroness, Lady Masham, said:
"As a lay person I cannot argue with the Royal College of Obstetricians and Gynaecologists".
Hansard records that I said—and therefore I must have said it—
"My Lords, why not? They are only men".
I was very embarrassed afterwards in case I had made a mistake. That is why I want to put the record straight. I have checked on this statement and I have to inform your Lordships, asking your forgiveness, that the Council of the Royal College of Obstetricians and Gynaecologists is composed of 31 men and one woman. I shall be apologising to the lady concerned that I overlooked her presence.
We have been discussing this matter for a long time and we have to face up to the fact that this is a Bill to outlaw female circumcision on almost any grounds. I stand by that. Therefore I only wish that we could come to agreement on this without having the difficulties which have arisen, purely I feel for verbal reasons. My hesitation consists of these points. We are saying, and rightly saying, to doctors and other people—and I agree with the noble Baroness, Lady Masham—that you cannot plead in aid as a defence that you did the operation for ritual or customary reasons. My problem is that this creates a red light. No doctor will go into court and plead that defence because we have put into the Bill that such is not an acceptable defence. The doctor will read on a little further and then say, "I did it for her mental health". I am very worried that this will leave the way open for these operations to be carried out—operations which are in effect female circumcisions—and not the kind of operations of which the noble Lord, Lord Richardson, has spoken, or sex change operations which I would have thought were part of normal surgery.
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In the same way doctors can operate on a little boy with big ears, and they do not need any legislation to say that they may do so. Operations to correct what, in a sort of shorthand, I may call abnormalities are surely acceptable at the present time. I have no knowledge of their not being possible. I therefore wish that we could achieve some meeting of minds on this point.
I was very offended, as I often am, by the Minister in another place, who stated:
"While I am sure that their Lordships will wish to look at the Bill, I hope that they do not embark on amateur draftsmanship of their own and get the Bill back into complications that might run the risk of frustrating its purpose".—[Official Report, Commons, 19/4/85; col. 585.]
No one wants to frustrate the Bill. We are all amateur draftsmen. Members in another place, including the Minister, are amateur draftsmen. It is our duty to try to see to it that the wording of a Bill, as it passes through this revising Chamber, is made as acceptable as possible.
It is all very well for us to say that we understand what is meant and that there is no difficulty, but we cannot ignore the fact that some of the people most involved are worried about this point. Although the noble Baroness the Minister might say that there has been enough talk already and that there is nothing left to talk about, I very much support my noble friend who wishes that between now and Report stage we can find out whether it is possible to meet all our anxieties. By that I mean not so much our anxieties, but the anxieties of the women and men most concerned.
I want to ask the noble Baroness the Minister, if she can give me an answer, whether there is in the Government's mind an intention to set up any notification procedure. How will we know what the Bill is achieving and whether or not it is effective? How will we know how many circumcisions have been carried out each year under Clause 2(2) or in other ways, because it seems to me that unless there is such notification, policing and following up—
Baroness Trumpington: It is not my Bill.
Baroness Jeger: I apologise. The noble Baroness has been speaking so much today that I cannot think there is any Bill before your Lordships which is not hers.
Baroness Trumpington: I agree.
Baroness Jeger: We feel the same. It really is Ladies' Day at the Lords. I shall direct my question instead to the noble Baroness, Lady Masham, and ask her whether she has in mind any notification process of the kind which there has to be in the case of abortions and so on, so that we will be able to see how the Bill is working out. Meanwhile, I hope that the noble Baroness will not feel that she has to tell the Committee that between now and Report stage there is no hope of a meeting of minds over this particular difficulty.
Baroness Masham of Ilton: I shall try to answer the noble Baroness, Lady Jeger. I know that there are campaigners among the organisations—the Black

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Women's Association, for one—who are trying to get a survey on how many circumcisions are carried out. This is, of course, very difficult and funds are needed to do it. They are asking the Government for those funds and Ministers in another place have made sympathetic noises. Your Lordships may remember that at Second Reading I tried to press the noble Baroness, Lady Trumpington, on that very point. Again, she made encouraging noises. Perhaps she is going to make some now.
Baroness Trumpington: No; I was going to say that it is very difficult for the Government when, at Second Reading, two organisations are said to be asking for help and now three organisations are asking. That is one of the reasons why it would be premature to say how help could be given, if it is given.
Baroness Masham of Ilton: In trying to answer the noble Baroness—
Baroness Jeger: Perhaps I did not make my question clear. I was not asking about help to these organisations, which I hope will be forthcoming, but about whether there is to be a legal obligation, as there is with the termination of pregnancy, for these operations to be registered and recorded, so that we know what is happening; that is, through the legal process and not through any voluntary organisation.
Baroness Masham of Ilton: That is the whole point of having this legislation. It is to clarify the position, because there are some people who now say that it is an assault and is illegal to perform a circumcision, but nobody has taken anyone to court over it. That is the difficulty. The whole point of this Bill is that when it becomes an Act it will clearly be illegal for anyone to perform a circumcision. These cases may then come to light.
The other point I wanted to make to the noble Baroness, Lady Jeger, is that I also picked up what was said by a Minister in another place about the legislation of the House of Lords. I showed that passage to the noble Lord, Lord Denham, the Chief Whip, who took the same view as we did.
Baroness Gardner of Parkes: I have not spoken against these amendments, though I oppose them, because I feel we have said so much at the previous stage of the Bill and on earlier occasions. It seems to me judging from the last few remarks that we are getting slightly confused. I understood that the noble Baroness, Lady Jeger, was asking whether, when circumcision is illegal, there will be any way of notifying what legal operations of a similar nature had been carried out for medical purposes. I thought that was the question the noble Baroness, Lady Jeger, was asking. Obviously, if the Bill goes through, no one will be notifying anything done illegally. That would be more than we could ever expect. It is an interesting point.
I strongly support the Bill and I am convinced that the only way in which it can be effective is to retain the
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words "custom or ritual", and unless some other formula can be produced I would prefer to see the Bill with those words than to lose the Bill.
Lord Kennet: The time has come to decide about Amendment No. 1, although we have been discussing all the amendments. Perhaps I may say, first, to the noble Lord, Lord Richardson, who urged the Committee to reject any amendment that excludes mental health as a ground on which operations may be performed, that Amendment No. 1 does not exclude mental health. Some of the later amendments do.
The noble Lord, Lord Coleraine, said that if you brand the words "custom or ritual", you brand the Bill itself. No, I think not. We wish to ban the operations, not because they are someone's custom or ritual, but because they are cruel and harmful to health. It is quite possible to brand certain words in a Bill as offensive without branding the purpose of the Bill as offensive. Many noble Lords have said that they agree with the Bill and, of course, we all do.
I come to what I think we would all agree is the main point, if I could have the attention of the noble Baroness for a moment. She said, not in her opening remarks but just now, that the amendment would interfere with legitimate surgery and prevent certain operations which are neither minor nor cosmetic and which ought to be done. I was contemplating challenging her, "What operations are they?". They are operations which are not for the physical health of the patient; they are not minor and they are not cosmetic because all those are clearly permitted under the amendment. I was baffled until a moment later she let the cat out of the bag. They are of course sex change operations.
We have to remember at this point that we are talking only of female to male sex change operations, since all that the Bill bans in Clause 1 are operations to the female genitalia. This is a new one. I believe that this is the first mention that we have had in the endless discussions on the Bill of female to male sex change operations as a factor which we ought to take into account, and we have had it from the Government Front Bench.
Many noble Lords—the right reverend Prelate the Bishop of Gloucester, the noble Lord, Lord Rea, and the noble Baroness, Lady Jeger—have asked whether it might be possible for the Government to envisage having conversations in private between now and the next stage of the Bill. Many noble Lords who have spoken know that there has not been enough consultation by the Government with the communities concerned, with the Commission for Racial Equality or with the friends of the amendments in this House. Can the noble Baroness give the Committee any hope that between this stage and the next there will be discussions on the new subject that she introduced of female to male sex change operations between the Government and representatives of the ethnic communities, the Government and the Commission for Racial Equality and the Government and the friends of the amendments in this House? I hope that we shall hear that the Government are prepared to do that before the Report stage.
Baroness Trumpington: Once again I have been challenged. We are discussing this particular amendment. I have no intention of giving reassurances to the noble Lord.
Baroness Masham of Ilton: May I try to answer the noble Lord, Lord Kennet, on one issue, although it would be better answered by the noble Lord, Lord Richardson. An operation may set out to be a minor one but could turn into a major one if something went wrong. That is the difficulty.
Lord Kennet: Accidents can happen to anybody at any time, but the intention of the surgeon of course would be to carry out a minor operation, and I think that the courts would consider the intention.
The noble Baroness has shown complete intransigence about this, if I may say so. She has refused to have any discussions with anybody between now and the next stage of the Bill, which all noble Lords will know is a most unusual proceeding. I regret that she has placed me in a rather difficult position. I believe that Amendment No. 1 is faulty. I gave one reason for thinking that in my opening remarks and asked the noble Baroness to help me discover whether that was true. She has not done so. She did not mention it. I am ready to admit that the word "cosmetic" is a little vague, though I think that it is probably not much more vague than the others, but let that pass.
However, since there is no hope of any movement from the Government on this issue which troubles so many people, and since I believe that I am right in thinking that the amendment, if it were carried, could itself be amended at a later stage, I feel that there is no alternative but to ask the Committee to divide on the amendment.
10.4 p.m.
On Question, Whether the said amendment (No. 1) shall be agreed to?
Their Lordships divided: Contents, 9; Not-Contents, 29.

DIVISION NO. 1

CONTENTS

David, B.

Kennet, L. [Teller.]

Gloucester, Bp.

Kilbracken, L.

Hatch of Lusby, L.

Rea, L.

Jeger, B.

Seear, B. [Teller]

Kagan, L.

NOT-CONTENTS

Ampthill, L.

Lucas of Chilworth, L.

Brabazon of Tara, L.

McNair, L.

Caithness, E.

Masham of Ilton, B. [Teller.]

Coleraine, L.

Monson, L.

Cox, B.

Mottistone, L.

Craigavon, V.

Ponsonby of Shulbrede, L.

Darcy (de Knayth), B.

Renton, L.

Elliot of Harwood, B.

Renwick, L.

Elton, L.

Richardson, L. [Teller.]

Faithfull, B.

Skelmersdale, L.

Fortescue, E.

Swinton, E.

Gardner of Parkes, B.

Trumpington, B.

Hunter of Newington, L.

Vickers, B.

Kinloss, Ly.

Winstanley, L.

Long, V.

Resolved in the negative, and amendment disagreed to accordingly.
10.12 p.m.
[Amendments Nos. 2, 3, 4 and 5 not moved.]
Lord Hatch of Lusby Lord Hatch of Lusby moved Amendment No. 6:
[Printed 3/6/85; col. 573.]
The noble Lord said: I want to say just a few words about this amendment because I deliberately did not include it in the comments that I made on Amendment No. 1. May I take this opportunity, first, to answer the noble Baroness, Lady Masham, when she asked me the direct question: were the children consulted? No, of course, they were not. However, perhaps I may make a point to the Committee. This operation was performed in a women's secret society, so please do not put all the emphasis on male domination. Although there is of course a degree of male domination in the whole syndrome of female circumcision, there is also a very strong female tradition; and it is a female secret society that carries out this operation, certainly in all the communities that I know where it is performed.
The other point which I want to answer has been made both by the noble Baroness, Lady Masham, and by the noble Baroness, Lady Trumpington. They accused those of us who have been tabling amendments of endangering the Bill, of possibly killing the Bill. However, we could have had this Bill 12 months ago and it was the Government who killed the Bill on that occasion. This is very close to blackmail. The Government are saying that we can only have a female circumcision Bill if we have it on their terms—and I ask the Committee to note not on the terms of a free vote, but on the Government's terms.
I would beg the noble Baroness, Lady Masham, to note this—and between now and Report stage take it into her own hands, if the Government will not help her—and to consider what has been said in Committee and to see whether she can find some bridge to those who fear that the Bill itself may be smeared and may have its effect deteriorated because of this clause, and bring us back at Report stage to a formula which can unite the House. I am sure there are lots of us who would help if asked. I would remind those who mentioned the debate in the other place that the hope was expressed at Third Reading stage that this House might improve the Bill. Perhaps we can do that before Report stage.
We still have not had any answer from the Government as to the judgment of their own statutory body, the Commission for Racial Equality. Nobody from the Government side has attempted to answer the assertion which that commission made that this Bill had a racial aspect to it. This amendment is again an attempt to get away from the danger of that racial flavour.
I should like to ask the noble Lord, Lord Richardson, a question on this aspect. I shall read how Clause 2 (2) would read if the amendment were passed:
"In determining for the purposes of this section whether an operation is necessary for the mental health of a person, no account shall he taken of the effect on that person of non-medical factors."
I should like to ask the noble Lord, Lord Richardson, to tell the Committee whether the operations which he described would come under the category of being

593
decided upon for non-medical factors, or if this amendment were passed whether it would still in his opinion inhibit the legitimate operations which he believes that doctors should still be allowed to perform.
While I am on this point, I would draw the attention of the Committee to an important and dangerous implication in the speech of the noble Baroness, Lady Trumpington. The noble Baroness, as I understood it, agreed with the analysis of the noble Lord, Lord Richardson. I hope that he will correct me if I am wrong, but I understood the noble Lord, Lord Richardson, to say to me, when I asked him the question, that if necessary he would be in favour of there being exemptions, exceptions, to the prohibition of female circumcision. Not of the cosmetic operations, or any other operations, but exemptions to the illegality of female circumcision if this were warranted by the mental depression of a girl, or young woman, who was deprived of that operation through this Bill. I was astonished to hear the noble Baroness, Lady Trumpington, agree with this. Are the Government therefore saying that they are prepared to see exemptions from the operation of female circumcision if the mental health of girls who are deprived of that operation is such that the doctor will ask for exemption? Is that what the Government are saying? That is what it sounded to me that the Government are saying. If that is right, this is driving a coach and horses through the Bill.
I come back to Amendment No. 6. All I am asking of the noble Baroness, Lady Masham, is that between now and Report stage she will consider this alternative phraseology, the use of the term "non-medical factors". I should be grateful if the noble Lord, Lord Richardson, would tell us whether that would satisfy the medical profession, but I ask the noble Baroness, Lady Masham, to discuss this between now and Report stage with the authorities concerned to see whether this, something similar or something based on this could not be brought back to us at Report stage to do away with this wasteful quarrel that we are having which may affect the influence of the Bill when it leaves Parliament. I beg to move.
Lord Richardson: I shall answer the question put to me by the noble Lord, Lord Hatch. The answer is that the words proposed would not constitute any barrier to the proper practice of medicine. Those words are such that they should be carefully considered as to whether they provide a clear enough substitute for "custom and ritual". That is what the noble Lord, Lord Hatch, is asking should be done.
Baroness Masham of Ilton: I asked the legal adviser from the DHSS about this amendment, as I did about all the amendments. I was told that "non-medical factors" was too vague and gave rise, or could give rise, to a loophole.
Lord Hatch of Lusby: Can the noble Baroness tell us what loophole? The noble Lord, Lord Richardson, has said that it is not a medical loophole. What is the loophole? Will the noble Baroness find out?
Baroness Masham of Ilton: Maybe the noble Baroness, Lady Trumpington, can say which loopholes; but it was loopholes.
Lord Ponsonby of Shulbrede: It is your Bill, not the Government's.
Baroness Masham of Ilton: One does not know which loopholes until the loopholes happen.
Lord Kennet: While news of the nature of the loophole is being brought to the noble Baroness may I urge the Committee not automatically to continue deferring to the unjustified opinions—I use the word "unjustified" in the strict sense—which are not accompanied by detailed justification of the legal adviser to a Government department. This is the strangest basis for legislation that I have ever heard. Somebody has a bright idea—in this case my noble friend Lord Hatch—and the sponsor of the Bill goes—who does she go to?: to the legal adviser to the Government department. But has it not been clear for months that the view of the department is now set in concrete and nothing—not the Bench of Bishops, not the good-hearted ingenuity of doctors or anybody else—can shake it? Let us make up our own minds for once. I think that the "non-medical factors", in view of what the noble Lord, Lord Richardson, has said about it, is a good plan. Let us ask the Government if they will soften for a moment and consider the possibility that somebody else might have an idea.
Lord Coleraine: I should like to suggest that the sort of non-medical factor that the noble Lord, Lord Hatch, would exclude from the consideration of the doctors is something as simple as abnormality; because if someone is becoming depressed from mere abnormality, that is surely a non-medical factor. Is that the sort of factor that he wishes to stand in the way of the operation?
Lord Richardson: If there is an abnormality which is a significant abnormality in the assessment of a case, it should be dealt with medically.
Baroness Trumpington: Once again I have been challenged. The last time I spoke I said that the noble Lord, Lord Richardson, with great authority and medical knowledge, answered various questions far better than I. That is the only mention I made of the noble Lord, Lord Richardson, and I was most interested to hear his remarks.
I can well understand the purpose of this amendment, to avoid the need to use the term "custom or ritual", but I have to say that it does not work and it would be unacceptable to the Government. If this amendment were carried, we would be introducing a loophole that would allow the practice of female circumcision as such. The term "non-medical factors" is insufficiently explicit to prevent that loophole.
Certainly, female circumcision is non-medical, since it has nothing whatsoever to do with a patient's health. In the same way someone's custom or ritual is a non-medical factor; yet this amendment, by not being explicit, would still allow a doctor to make the

595
claim that he has carried out a female circumcision and that if he had not done so, there would have been psychological distress. It is doubtful whether there could ever be a successful prosecution if that defence is available.
I understand the feelings that have been expressed about the words "custom or ritual". I believe the fears about them to be misplaced. However, over the years we have examined many different formulations and it must be clear now that the Bill in its present form is the only one that has yet appeared that meets all our criteria. This amendment would allow female circumcision to be performed. That goes against all our intent. I must ask noble Lords to reject this amendment.
Baroness Masham of Ilton: I sent to the noble Lord, Lord Hatch, the letter which I received from the president of the Royal College of Obstetricians and Gynaecologists, and they say quite clearly that they want to have the words "custom or ritual". They say:
"the words 'custom or ritual' are necessary. Other forms of words may result in the banning of perfectly legitimate surgical procedures and this would not be acceptable to the College. Indeed, a former Bill appeared to ban 19 legitimate surgical procedures and my predecessor, Sir Rustam Feroze, made this point to the sponsor".
That was in another place. Also the Medical Women's Federation have clearly stated that they are happy with the Bill as it now stands.
Lord Hatch of Lusby: Yes; but last time not just on this side but on all sides there were quoted other authorities to the opposite effect. May I ask the noble Baroness, in view of the advice that we have been given by the noble Lord, Lord Richardson, tonight, whether she will take the words "non-medical factors" back to the College of Obstetricians and Gynaecologists? Will she quote the noble Lord, Lord Richardson, and ask whether this phraseology or something similar would not be acceptable to them? I ask that because we have had it on the authority of the noble Lord, Lord Richardson, that this phrase would not prevent the legitimate operations which they and he are anxious shall be preserved.
Lord Kennet: We enter here the realm which is verging on inadvertent misleading of the Committee. The letter that has been quoted from Sir Rustam Feroze, the former president of the College of Obstetricians and Gynaecologists, was to the sponsor of an earlier Bill. That sponsor was me. I received the letter from Sir Rustam Feroze; I remember it quite well. The letter as quoted stated that the earlier Bill would have made impossible 19 well-known types of surgical procedure. This was a mistake by Sir Rustam Feroze. He was basing his view of the Bill not on its text but on a press report of what it might be likely to contain. I pointed out this mistake to him, and I very much regret that this should surface again this evening. The letter was wrong. Moreover, I think the letter bore no relevance whatever to the amendment before the Committee.
10.30 p.m.
Baroness Masham of Ilton: I can certainly take it back to the Royal College of Obstetricians and
596
Gynaecologists, but I have the letter here and the noble Lord, Lord Hatch, has the letter here. I do not think they are going to change their mind. I cannot argue with the noble Lord, Lord Richardson, who is an eminent doctor.
Lord Hatch of Lusby: In view of the statement just made by the noble Lord, Lord Kennet, and in view of the fact that the Royal College of Obstetricians and Gynaecologists was not aware of this amendment because it had not been tabled at that time, I really find it difficult to accept that a college of that distinction would say that there are three words in the English language, "custom or ritual", which are the only words that can be used in this Bill as protection. I should like to accept the assurance of the noble Baroness that between now and Report stage she will question them, quoting the judgment of the noble Lord, Lord Richardson, on this particular amendment. As she has given me that assurance, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord McNair Lord McNair moved Amendment No. 7:
[Printed 3/6/85; col. 574.]
The noble Lord said: I think I can be quick about this one. First, I have to plead guilty to plagiarism. The words in my amendment are not mine, as I expect all noble Lords have spotted. I lifted them direct from the letter from Mr McNaughton which was read out by the noble Baroness, Lady Masham, at Second Reading, in col. 1244.
I think there are two arguments in favour of this amendment. The first—and, to me, it is the less important argument—is that I hope, just as the noble Lord, Lord Hatch, hoped in the case of the last amendment, that these words may be found less offensive in those circles where they might be found offensive. I must admit I am not all that impressed by this talk of seething discontent, especially among the victims we are seeking to protect. I doubt whether they are worried about the wording of our Bill. The children aged eight are those that I am chiefly thinking about. But if there is this discontent, then I hope that these words will mitigate it and be found less offensive than the notorious words "required as a matter of custom or ritual".
The second and I think more important reason why I would commend this amendment to your Lordships' Committee is that these words are, in fact, more accurate. They say more nearly what I think we are trying to say, especially in that they get rid of the word "ritual". The noble Baroness, Lady Trumpington, threw the Concise Oxford Dictionary at my neighbour, the right reverend Prelate the Bishop of Gloucester. I should like to come to his aid with another authority, Roget's Thesaurus, which is sometimes helpful on these occasions when one is looking for the right word. If you look in the 1966 Penguin edition of Roget under what he calls Head No. 988, you will find that every single word associated with "ritual" has some religious or quasi-religious connotation. Female circumcision has none; so I think the word "ritual" should be avoided if possible.
I am suggesting, or at least Mr. McNaughton has suggested, "for traditional or cultural reasons". However, I am open to suggestions. It may be that the word "cultural" is a little too vague or too wide. Possibly
"for reasons of custom or tradition"
would be better. I do not know, and I wait to hear what others have to say before I decide what my future course of action ought to be. I beg to move.
Baroness Masham of Ilion: If the right reverend Prelate is not going to speak—because I thought he wanted this opportunity but it may be that he has already said what he wanted to say about it—I should like to say that "cultural" would not be acceptable because it is too wide. I personally have sympathy for the word "traditional"; and because I know the noble Lord, Lord McNair, wants to do the very best for this Bill and in no way does he want to damage it, perhaps (although I cannot promise anything, and I believe the noble Baroness, Lady Trumpington, would say the same) this aspect could be taken back and looked at.
Lord McNair: In view of that, I think the simplest reply for me to give is that I shall ask leave to withdraw the Amendment and then bring it back at Report stage. I hope by that time we shall have had further conversations. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 2 agreed to.
Remaining clauses agreed to.
House resumed: Bill reported without amendment.
House adjourned at twenty-two minutes before eleven o'clock.

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