Sitting of 20 June 1985

Preamble
The House met at half-past Two o'clock
PRAYERS
[MR. SPEAKER in the Chair]
PRIVATE BUSINESS
  GREATER LONDON COUNCIL (MONEY) BILL
  Read the Third time, and passed.
  LEICESTERSHIRE BILL [LORDS]
  Read the Third time, and passed, with amendments.

  BIRMINGHAM CITY COUNCIL BILL (BY ORDER)
  Order read for consideration of Bill, as amended.
  To be considered upon Monday 24 June at Seven o'clock.

  BRITISH RAILWAYS (TROWSE BRIDGE) BILL [LORDS] (BY ORDER)
  Yorkshire Water Authority Bill (By ORDER)
  Berkshire Bill [LORDS] (By ORDER)
  Orders for Second Reading read.
  To be read a Second time upon Thursday 27 June.

Oral Answers to Questions
  AGRICULTURE, FISHERIES AND FOOD

    Milk Quotas (Tenant Farmers)
    Mr. Ashdownasked the Minister of Agriculture, Fisheries and Food if he will list the steps he has taken to protect tenant farmers from the effects of the imposition of milk quotas.
    The Minister of Agriculture, Fisheries and Food (Mr. Michael Jopling): Tenant farmers were given the same rights as owner-occupiers to apply to the quota tribunal for extra quota. Tenant farmers will also benefit, like other milk producers, from the increased flexibility which I negotiated for the management of quotas, and from the recently announced allocation of extra quota to small producers.
    Mr. Ashdown: Does the Minister recognise that tenant farmers and small and family farmers have had to bear the major burden of the milk quota scheme? Does he think it right that the tenant farmer should have no rights over the milk quota, which his investment and hard work have helped to create, and that it should be completely at the disposal of the landlord? Does the Minister see the injustice of the position, and will he think of further steps to correct it?
    Mr. Jopling: Under the Community's regulations, quota is not owned by either the tenant or the landlord, but attaches to the land for the use of the occupier of that land. The hon. Gentleman will understand that while tenant farmers may have contributed to the build-up of production on the farm, they will have benefited from the resultant increase in income. I acknowledge that tenants have an interest in the quota, but so do landlords.
    Mr. Maxwell-Hyslop: I am grateful to my right hon. Friend for saying that tenants, as occupiers, will now be able to take advantage of the outgoers scheme, rather than landlords who are not occupiers. It is good of him to clarify that point.
    Mr. Jopling: With respect to my hon. Friend, I did not say that. He may be interested to know that until recently the percentage of dairy farmers who were tenants who took advantage of the outgoers scheme was no less than 28 per cent.
    Mr. Home Robertson: The dairy quota scheme has been a botched job from the start. In view of the fact that it is particularly difficult for tenant dairy farmers to buy in transfer quota at the inflated prices which now apply, will the Minister offer special help to them by giving reasonable priority to them in the allocation of the latest tranche of outgoers quota?
    Mr. Jopling: We take all applicants for the outgoers scheme in the order in which they come. As the hon. Gentleman knows, the scheme has been reopened, and that is the basis on which we are at present working.

    Dairy Industry
    Mr. Penhaligonasked the Minister of Agriculture, Fisheries and Food if he is satisfied with the present state of the dairy industry; and if he will make a statement.
    Mr. Jopling: In spite of the effective implementation of quotas, there is still a substantial surplus of milk production, and significant shifts in consumer demand are taking place. I am confident that there is the enterprise and flexibility for this efficient and successful industry to adapt to changing circumstances.
    Mr. Penhaligon: Does the Minister recall the correspondence that we have had about leucomycin? It was the result of infected food being supplied by Dalgetys to more than 150 dairy farmers in Devon and Cornwall, which seriously affected their milk production. The company has honourably faced its responsibility to make compensation. The panels recognise that the production loss is genuine, yet the rules do not allow any extra quota to be given. Will the Minister tell the House precisely what he has done so far to correct that obvious injustice?
    Mr. Jopling: I am aware that several cases fell outside the rules—they were cases of hardship—and that they could not be dealt with by the tribunal and the panels. I am aware of those difficult cases, and I shall be meeting Lord Grantchester later this afternoon to discuss them.
    Mr. Michael McNair-Wilson: Despite the many vicissitudes through which the dairy industry has passed in recent months, does my right hon. Friend believe that doorstep deliveries are safe for the time being?
    Mr. Jopling: How nice it is to see my hon. Friend in the Chamber. I hope that the doorstep delivery is safe for

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    the time being, but the continuance of that excellent service depends upon the support of housewives. If housewives buy their milk in other places, the doorstep delivery system will be in jeopardy.
    Mr. Home Robertson: Is the Minister aware that last year milk production in England and Wales was 215 million litres below quota? Is he further aware that there is still a colossal surplus of milk production in the EC? Does he accept that last year he caused the maximum disruption of the industry in Britain, for the minimum benefit in Europe? May we now have a proper, long-term review of the dairy industry? That might be a useful chapter in a possible White Paper on agriculture.
    Mr. Jopling: The hon. Gentleman has bowled me a full toss here. I refer him to a recent press release from the Milk Marketing Board on the "Milkminder" dairy costing service, which demonstrated that, for the 1,931 herds surveyed in 1983–84 and 1984–85, margins over purchased feed increased by £53 a cow in the first year of quotas, from £511 to £564.
    Mr. Jim Spicer: Will my right hon. Friend comment on the effect of the payment of levy on an annual basis? Has he received representations from the farmers' unions of England or Wales on the result of the recent price fixing in Brussels?
    Mr. Jopling: I was able to get agreement that the payment of levies which might become due will be made on an annual basis. That has been welcomed by the NFUs, and it will be helpful to farmers who are changing the seasonal pattern of their production. I was especially pleased that a Welsh farming organisation warmly welcomed the livestock part of the price fixing settlement.
    Mr. Harris: Without minimising the real hardship caused to some dairy farmers, does my right hon. Friend agree that the figures from the Milk Marketing Board survey show that there has been a real overall increase in profits for the dairy industry during the first year of quotas? Will he reject completely the hypocrisy of the junior Opposition spokesman on agriculture, the hon. Member for East Lothian (Mr. Home Robertson)?
    Mr. Jopling: I am grateful for my hon. Friend's comments. The Milk Marketing Board's survey referred to margins over purchased feed, not to profits. Of course, the two are related.
    Mr. Maclean: Is my right hon. Friend aware of the consternation in the dairy industry about the Government's attitude towards delays in payment for butter taken into intervention? Although EC countries have reduced the minimum delay from 120 days to 90 days, Britain is sticking to 120 days. Does he accept that not only will that cost the Dairy Crest £1·25 million in extra interest payments, but, more damagingly, it implies to British farmers that the Government will not treat them on equal terms with other EC farmers?
    Mr. Jopling: Member states can use their discretion on those matters. I do not have the information on what other countries are doing. It is doubtful whether we should make intervention more attractive and increase the already heavy burden that it imposes on public funds or reduce the incentive for production to find the real market outlets.

    Agricultural and Food Research Council
    Mr. Dalyellasked the Minister of Agriculture, Fisheries and Food if he will make a statement on the level of his Department's funding of the Agriculture Research Council compared to previous years.
    Mr. Jopling: My Department's expenditure with the Agricultural and Food Research Council in the current year is likely to be very similar in cash terms to that in 1984–85.
    Mr. Dalyell: Does the Minister envisage the research and development services coping with — whether the right hon. Gentleman hides it or not — something approaching a cut in real terms in the time that they have been given? Will that not injure the totality of their work?
    Mr. Jopling: The total expenditure on agriculture, fisheries and food from all sources is likely to amount to £204 million in 1983–84. The total spent on agricultural research and development amounts to £160 million. That is an enormous amount of money being spent on that important endeavour. I have no reason to believe that it is likely to be inadequate.
    Sir John Wells: Is my right hon. Friend aware of the grave anxiety of the horticultural sector of the industry about reputed reductions in research and development? Horticulture gets little general support from the Government and taxpayers' funds, so the support for research and development is of particular value.
    Mr. Jopling: I hear what my hon. Friend says. He will know that those matters are being considered by the Priorities Board. It would be a mistake to pre-empt what it might decide. Those concerned are experts in this area, and the AFRC is represented on the board. No doubt those people will note what my hon. Friend has said.
    Mr. Donald Stewart: Is the right hon. Gentleman aware that the slashing of funds for the research and advisory functions of his Ministry will have a serious effect on the industry as a whole? Unfortunately, through his right hon. Friend the Secretary of State for Scotland following his example in Scotland, it has meant a cut of 41 per cent. Will the right hon. Gentleman take on board the point, which has already been made, that expenditure on those services is well worth while and that the loss from cutting them might be severe?
    Mr. Jopling: The right hon. Gentleman will recall that this question is about research and development, not necessarily about the advisory service. He will also recall that we are now having discussions with the industry with regard to both research and development and the advisory service, so that the industry as a whole will be able to make a larger contribution in the place of cuts in public expenditure that are necessarily having to take place.
    Mr. Alan Howarth: Will my right hon. Friend assure the House that the Government are doing everything they can to mobilise private sector support to make up the shortfall in funding that will arise from the Government's reductions? Is not that the least that the Government could do in the present circumstances? Does my right hon. Friend acknowledge that unless funding is maintained we shall lose research capabilities—as an example, I cite aspects of the work of the National Vegetable Research Station at Wellsbourne—which are not only of proven

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    and continuing value to our economy, but, through our aid programme, would enable us at minimum cost to confer immeasurable benefits on some of the poorest people in the world?
    Mr. Jopling: My hon. Friend will remember the announcement that I made on 24 May, that consultations would be held with the industry, and that it would be invited to consider a system of sectoral contributions. Those consultations are now in progress. It is valuable that the Priorities Board is in being. It is looking at the whole realm of agricultural research. My hon. Friend may like to read the Select Committee's report of two years ago and the Joint Consultative Organisation's report on the same subject, which were critical of certain aspects of the structure and organisation of research and development.
    Mr. John: Will the Minister tell us when the institutes concerned will know about the effect of these reviews on staff numbers and, in particular, where the cuts will fall? Not the least hardship is the uncertainty that they all feel by reason of these cuts.
    Mr. Jopling: Responsibility for the reseach councils falls upon my right hon. Friend the Secretary of State for Education and Science. However, I appreciate the current uncertainties. Our aim is to provide clear guidance as soon as possible.

    Agricultural Production
    Mr. Phillip Oppenheimasked the Minister of Agriculture, Fisheries and Food if he will estimate the effect that the recent price cuts proposed at Brussels on agricultural produce will have on agricultural production.
    Mr. Jopling: It is impossible to make precise estimates of what agricultural production will be in any year, as much will depend upon unpredictable factors, such as the weather. But if prices are reduced, the production of a commodity over a period will be lower than it would otherwise have been.
    Mr. Oppenheim: Does my right hon. Friend realise that the figures produced by his Department show that during the past 10 years farm gate prices have fallen by an average of 20 per cent., but that during the same period production in some sectors has risen by as much as 200 per cent.? Bearing that in mind, can he have any confidence that this price-cutting policy will reduce food production?
    Mr. Jopling: Those who are against nominal price cuts have always used the argument that if prices are cut production is increased. I reject that argument. There is a great difference between cutting prices in real terms and cutting prices in nominal terms. My hon. Friend should remember that so far in the history of agricultural support, either in this country before we joined the European Community or within the common agricultural policy, there has not been a period when a real attempt has been made to control production by reducing prices. My view is that in this sector the market will work, as it works in other sectors.
    Mr. Freud: If the agreement results in a cut in prices, will the Minister think of my small farmer constituents who have already had their sugar beet and potato quotas cut and to whom CALs make all the difference between a profit and a loss? Will he tell the House what he thinks will happen to them?
    Mr. Jopling: During the past few years the larger farmers on the eastern side of the country have had a far better deal than have farmers on the western side of the country. That has caused me to say continually that the imbalance between grain and livestock needs further to be redressed.
    Sir Peter Mills: Will my right hon. Friend bear in mind that in this changing scene for British agriculture there are some very real problems, particularly for small farmers? Will he also bear in mind that prices now for calves, heifers and store cattle are the highest they have ever been and that grass sales are running at £125 per acre? All is not, therefore, gloom and doom under this Government.
    Mr. Jopling: I am glad to hear that the farming industry in Devon has confidence in the Government's policies. That is the only lesson that one can derive from the most interesting figures that my hon. Friend has presented to the House.
    Mr. Andy Stewart:Farmers were delighted by the retention of the beef variable premium scheme, but they now find that the Commission is implementing that scheme in a quite different way from that which was outlined by my right hon. Friend in the House. For example, it is limiting the pay-out on certain weights of carcases.
    Mr. Jopling: Last week I had a meeting with the Commissioner and told him that this proposal was totally unacceptable.
    Mr. Hardy: Is it not astonishing that the Minister of Agriculture, Fisheries and Food appears to be unaware that he is responsible for the direction of British agriculture? It is not good enough for the right hon. Gentleman to stand at the Dispatch Box and airily appear to diagnose the problem without beginning to perceive that he is responsible for providing some of the answers.
    Mr. Jopling: The hon. Gentleman must understand that, because this country is part of the Community and of the common agricultural policy, it is not always possible immediately to get exactly 100 per cent. of one's own way. That was certainly the case when the Labour party was in power. I remember seven or eight years ago the then Minister standing at the Dispatch Box wondering what on earth to do about the pig crisis.
    Mr. Latham: On the proposed cereal price cuts by the Commission two days ago, will my right hon. Friend say what on earth is going on in this chaotic organisation? Do we, or do we not, have a veto? What will be the price?
    Mr. Jopling: I remind my hon. Friend that there is a later question on this matter on the Order Paper. I have read the reports of the Commission's intentions, although I have not yet received formal notification. Clearly, the Commission cannot simply overrule the Council of Ministers, but, in the absence of Council decisions, the Commission's desire to maintain an orderly market is understandable. I do not rule out the possibility of the Council reaching a satisfactory agreement on cereal prices before 1 August.
    Mr. John: What effect will the proposed cereal price changes have on agricultural produce? Should not the answer be that there will be no diminution of cereal harvesting, production and surpluses in Europe during the coming season? Will the right hon. Gentleman pledge that

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    none of the extra VAT devoted to own resources in the legislation introduced last Friday will be spent on agricultural produce?
    Mr. Jopling: The hon. Gentleman knows as well as I do that the position agreed with regard to the increase in own resources was that spending on CAP would increase at a slower rate than the rate at which resources were increasing in total.
    Mr. Heathcoat-Amory: Is my right hon. Friend aware that this feeble attempt to cut surpluses is resented by those farmers who receive no price support of any type? Does he realise that early strawberry growers, especially around Cheddar, are suffering because dumped foreign fruit has been brought in at below the cost of production? What will my right hon. Friend do to help them? Will he support the British horticulture industry as vigorously as other countries protect their industries?
    Mr. Jopling: If my hon. Friend reads Hansard, he will know that on many occasions my hon. Friend the Minister of State and I have raised this matter in the Council of Ministers. Two years ago we were getting little support from other member states in resisting the importation of soft fruits of this type from eastern European countries. I am glad to say that many other countries which are facing similar difficulties are moving in behind us to get something done about these damaging imports.

    Farming Industry (Young Entrants)
    Mr. Colin Shepherdasked the Minister of Agriculture, Fisheries and Food if he is satisfied with the prospects for young people wishing to enter the farming industry.
    The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mrs. Peggy Fenner): I am satisfied that opportunities continue to exist for keen and resourceful young people wishing to enter the farming industry as farmers or as agricultural workers. Although the industry is currently facing a period of readjustment, in the longer term the prospects for those engaged in farming are good as home food production will continue to make a vital contribution to the country's economy.
    Mr. Shepherd: Is my hon. Friend aware that her confidence in the fact that there are adequate opportunities is not fully shared by young people in the fanning sector? Does she agree that, to sustain confidence among those people, it is essential that there are first-class career opportunities? It is important to ensure that those opportunities are visibly sustained and that the Government are seen to take that fact on board. Will my hon. Friend and my right hon. Friend the Minister once again examine the European legislation to ascertain how it might be adapted to our needs to create confidence among young people who are thinking of entering the agriculture industry?
    Mrs. Fenner: We have received a number of representations about the provisions in the new EC structures regulation relating to young farmers. We are studying these carefully and shall reach a decision in the context of the new capital grant arrangement. Legislation on those new arrangements will be presented to Parliament shortly.
    Mr. Geraint Howells: I am sure the Minister will agree that we must retain our county council smallholdings
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    if we are to help young people entering the farming community. What advice has she or the Government given to county councils which are now selling off their smallholdings?
    Mrs. Fenner: We regard local authorities as being in the best position to judge how best to manage their estates. Unfortunately, smallholdings have not generally proved effective in providing that first rung of the ladder, largely because of the absence of further rungs and the difficulty in building up sufficient capital from a relatively small holding.
    Mr. Forth: Why should young people be given more encouragement to enter farming than any other industry?
    Mrs. Fenner: I hope that my hon. Friend will accept that in the agriculture industry we are giving the possibility of apprenticeships and what I regard as opportunities—no more and no less.
    Mr. Bermingham: Does the Minister agree that, no matter how we do it, we must encourage an increased number of young people to go in to, and stay in, the agriculture industry? Could this not be best effected by assisting in the creation of more small tenanted farms? Has not the time come to look again at tenancies and how to encourage their creation?
    Mrs. Fenner: One of the principal objectives of our Agricultural Holdings Act, which will be familiar to the hon. Gentleman, was to encourage landlords to create more new tenancies, but this must be given a little more time. We hope to do this by removing one of the major disincentives to letting, which is the excessive security of tenure created by the family succession provisions in the Agriculture (Miscellaneous Provisions) Act 1976, which was passed by a Labour Government.
    Sir Paul Hawkins: Does my hon. Friend remember that recently we passed the Agricultural Holdings Act to try to put up a ladder to encourage people to take tenancies of farms? Therefore, how can it be sensible to cut away the lowest rung by allowing county councils to sell off smallholdings?
    Mrs. Fenner: I can only reiterate to my hon. Friend that, although the use of those smallholdings as a rung has been much advertised, all the figures show that they have not proved to be effective.
    Mr. Home Robertson: Is the hon. Lady aware that the incentives to landlords, about which she has been speaking, have not achieved an increase in the number of farms to let? Following the consultations that she has just mentioned, will the Government actively support article 7 of the draft European structure directive, which is a measure which could provide a genuinely useful package to help young people set up in the farming industry?
    Mrs. Fenner: I hope that the hon. Gentleman was listening when I said that, yes, we have had many representations on the matter, that we are looking at it in the context of the capital grant arrangements, and that legislation will go through Parliament. I hope that, as a landlord, the hon. Gentleman will set a good example by offering tenancies.

    Pressure Stock Licensing
    Mr. Kennedyasked the Minister of Agriculture, Fisheries and Food what representations he has received on the question of pressure stock licensing; and if he will make a statement.
    The Minister of State, Ministry of Agriculture, Fisheries and Food(Mr. John MacGregor): I have had representations for some easement of the pressure stock licensing rules from fishermen and vessel owners excluded from the pressure stocks. I have also received a number of representations for the tightening-up of the scheme. I have already announced a review of the arrangements for the pelagic fisheries in advance of the full review due next year.
    Mr. Kennedy: Does the Minister accept that the decision, which he announced through a written answer on Monday of this week, whereby the three vessels from the Nethelands could gain their licences by means that are in total contravention of the rules—the Minister has confirmed that—is disgraceful? On top of that, they have been allowed respective catches of almost 3,500 tonnes per vessel. Will the Minister confirm that the review that he has announced will try to correct what is clearly a thoroughly shambolic, unfair and discriminatory state of affairs, which he has described as a regrettable misunderstanding and which, in any Minister's language, is fairly strong?
    Mr. MacGregor: It is important to recognise that there have been sizeable changes since 1980 in the structure of the pelagic fleet and in the nature of the fishing opportunities available. Therefore, our review is timely. In particular, the number of freezer trawlers has dropped from 26 in 1980 to only one last year. Many of them came out of fishing without the benefit of decommissioning grants. It is doubtful whether the number was expected to drop so fast when the original decision was taken in 1980. It is doubtful, too, whether we should have such a low freezer trawler capacity. That is why we should have a review and why that issue should be considered within the review. The quota amounts for the three trawlers—which are not Netherlands-owned, but British-owned—are the same as purse-seiners would get.
    Mr. Harris: Can my hon. Friend give an estimate of how long the review of pelagic licensing arrangements will take? Can he explain how the mistake of granting licences to what are, in effect, foreign vessels came about?
    Mr. MacGregor: At this stage I cannot say how long the review will take. I must repeat that the trawlers are not now foreign vessels. I have been given assurances by the owner of two of them that it is intended increasingly to employ British crews. In regard to the error, it is a complicated matter. We are considering it at the moment, but we have made it clear that the licences that have been granted are provisional, pending the outcome of the review.
    Mr. Donald Stewart: While these may not be foreign vessels, they have no historic right to the licences. Fishermen understand that mistakes can occur, and they respect the way in which the mistake was acknowledged. What they find intolerable is that the trawlers will be allowed to continue fishing. Will the Minister revoke the licences immediately?
    Mr. MacGregor: No. On the last point. I have nothing to add to the written answer to my hon. Friend the Member for Ryedale (Mr. Spence) on Monday. It is important for us all to reflect on whether there have been changes since 1980 and, therefore, whether it is desirable to make changes in our own arrangements. I am not prejudging that issue. Obviously there have been changes since 1980. Therefore, a review is now sensible.

    Grain Storage
    Mr. Tom Coxasked the Minister of Agriculture, Fisheries and Food what is the present tonnage of grain in storage in the United Kingdom.
    Mr. MacGregor: There were 3·23 million tonnes of wheat and 0·95 million tonnes of barley in intervention stores in the United Kingdom on 15 June 1985. Comparable information is not available on stocks held on farms or in private stores.
    Mr. Cox: I note the reply, but I am sure the Minister is aware of the problems caused by the storage of this vast amount of surplus grain and of the cost of storage. As we shall shortly have this year's harvest to add to the existing surplus, what is the thinking of the Government about the long-term production of grain in the United Kingdom? For example, will quotas be introduced?
    Mr. MacGregor: It is important to recognise that the industry found sufficient storage for the record harvest of last year. The Intervention Board for Agricultural Produce has had a very encouraging response so far to the recent tenders for new storage for the early part of the new season. In regard to the general policy on cereals, there are a host of reasons why, if it can be achieved, the policy that we have been pursuing in the Community for price reduction on a longer-term basis for cereals is correct. We are considering all the alternatives. Nevertheless, it remains the case that severe price restraint on support prices for cereals must remain an important part of any policy for some time.
    Mr. BudgenWill my hon. Friend confirm that the reduction in price of 1·8 per cent. may well lead to extra production and that the only way to use the price mechanism to reduce production is to reduce prices much more substantially?
    Mr. MacGregor: My hon. Friend will know that we argued, without in the end enough support, for full application of the guaranteed threshold this year, which would have led to a reduction of 5 per cent. I understand my hon. Friend's concern about the cost of dealing with the disposal of surpluses in the Community. He will know that a policy of price reduction in cereal support prices helps to bring down the cost of the regime.
    Mr. J. Enoch Powell: What proportion of this grain is stored in Northern Ireland, and are the Government taking steps to increase that proportion?
    Mr. MacGregor: I do not have the figures showing the proportion stored in Northern Ireland. I shall write to the right hon. Gentleman about the matter.

    Food Labelling
    Mrs. McCurleyasked the Minister of Agriculture, Fisheries and Food when he expects to conclude the

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    consultation on voluntary nutritional labelling; and when he expects to receive the surveys carried out by the consumer organisations.
    Mrs. Fenner: Comments from many interested parties on the draft guidelines for the voluntary nutrition labelling of food have been received and are being considered. The Consumers Association, the National Consumer Council and my Department expect to have the results of the consumer survey available shortly.
    Mrs. McCurley: I thank my hon. Friend for that reply. How much emphasis will be placed on the results of the survey? If the survey shows the need for better nutritional labelling and for fat information, will she take note of that, and will it affect legislation?
    Mrs. Fenner: I assure my hon. Friend that comments arising from the draft nutritional guidelines, together with the results of the consumer survey and points that have arisen in consultations with manufacturers and retailers, will be taken into account in producing revised guidelines.
    Mr. John: One of the most important aspects of nutritional labelling is the sugar content of any food. As the Department does not propose to show that separately, will the Minister undertake that, if the survey provides evidence that such labelling would be valuable, the Department will change its mind?
    Mrs. Fenner: The question of the labelling of fibre, sugar and salt content has particularly been brought to our attention. The labelling of those foods is allowed in the present draft, but we shall consider, in the light of comments, whether they need to be part of the basic list.

    Agricultural Chemicals
    Mr. Kenneth Carlisleasked the Minister of Agriculture, Fisheries and Food whether he is satisfied with progress in the development of safer techniques for the application of agricultural chemicals.
    Mrs. Fenner: It is our aim to ensure a continuous transition to a higher level of safety in pesticides application. My Department, together with the Agriculture and Food Research Council, is continuing to develop and evaluate various techniques designed to control spray composition and deposition and improve application safety and efficiency. These include rotary atomisation, electrostatic charging, metering devices, the use of air deflection and droplet sizing.
    Mr. Carlisle: Does my hon. Friend agree that the massive increase in the use of agricultural chemicals in recent years has had the severest effect on wildlife? While I welcome all the research that she has announced, may I ask whether she is aware that we have a duty to see that this research is carried through to success and is applied rapidly?
    Mrs. Fenner: My hon. Friend will be aware that the passage of the Food and Environment Protection Bill will be a major step forward in that it will provide powers to control the use of pesticides. That will be done through regulations, codes of practice and information provided with each pesticide. I am confident that we can develop a procedure for assessing the safety of alternative application systems.
    Mr. Home Robertson: Is the Minister aware that safer techniques are of no earthly use unless they are put into
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    effect? Will she accept the need for appropriate training for farm workers and others in the industry? Will the new regulations on pesticides cover a proper training programme for the people concerned?
    Mrs. Fenner: In Committee on the Bill we have reached a good agreement on training and certification. During the continued passage of the measure—we hope next week—those matters will become even more evident.

    Food Labelling
    Mr. Sumbergasked the Minister of Agriculture, Fisheries and Food what further consultations he plans and with whom before issuing regulations on the fat labelling of foods.
    Mrs. Fenner: We shall consult widely on any proposals for legislation on food labelling, as required by section 118 of the Food Act 1984.
    Mr. Sumberg: Bearing in mind the wide variety of fat blends used by the food industry, does my hon. Friend agree that the balance to be struck with these regulations is that of informing the consumer without imposing unnecessary burdens on the food industry?
    Mrs. Fenner: Yes, of course, and we are, in relation to labelling, responding to the recommendations of the Committee on Medical Aspects of Food.
    Mr. Meadowcroft: Has the Minister seen the well-researched article in The Observer of 26 May, which suggests that the Government's proposals are totally inadequate in relation to food labelling and will not distinguish between the nutritional value of a Mars bar, with 67 per cent. sugar, and puffed wheat, with 1·7 per cent.? Surely, in addition to fat labelling, it is important to issue details of sugar content.
    Mrs. Fenner: I have just said in answer to a question that in the nutritional labelling, which is to be voluntary, we shall look at whether fibre, sugar and salt content should be part of the basic list—that which we require if nutritional labelling is to be done at all.

  PRIME MINISTER

    Engagements
    Mr. Barronasked the Prime Minister if she will list her official engagements for Thursday 20 June.
    The Prime Minister(Mrs. Margaret Thatcher): This morning I presided at a meeting of the Cabinet and had meetings with ministerial colleagues and others. In addition to my duties in this House, I shall be having further meetings later today.
    Mr. Barron: Will the Prime Minister, or one of her Ministers, instruct the National Coal Board to accept the recommendations of the report of the all-party Committee on Employment on the dismissal of National Coal Board employees, and if not, why not?
    The Prime Minister: I have read the full report of the Select Committee on Employment. Nowhere in that report does the Select Committee condemn the tactics of violence and intimidation used against working miners. The National Coal Board has just issued a statement—
    An Hon. Member: Shabby.
    The Prime Minister: Yes, I agree that it was shabby that the Select Committee did not in any way condemn the tactics of violence and intimidation used against working miners.
    The National Coal Board has just issued a statement:
    "The board will, of course, consider with care the comments and recommendations of the Committee, which they note were not unanimous. Area management have continued the board's policy of reviewing dismissal cases. At the time the board gave evidence to the Committee 1,013 miners had been dismissed, of whom 414 have been re-employed as a result of this policy, including 41 re-employed since the board gave evidence. This policy will continue. Any action the board might take as a consequence will, of course, in no way diminish the right of any person who has been dismissed to put forward his case to an industrial tribunal."
    Mr. Gregoryasked the Prime Minister if she will list her official engagements for Thursday 20 June.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. Gregory: Will my right hon. Friend hold discussions about the £150 million which it has been estimated by the Audit Commission has been wasted by bad management in polytechnics and higher education, so that some 75,000 students may enrol in the future?
    The Prime Minister: I noted that report this morning, with its very severe strictures. My right hon. Friend the Secretary of State for Education and Science has invited the local authority associations to join the Department in an urgent study of efficiency in non-advanced further education. If we can save this money it can be used to better the further education or other needs of local authorities. I hope that local authorities will take this matter very seriously indeed, because it is a waste of ratepayers' money.
    Mr. Kinnock: This week the Government announced changes which will reduce child benefit by £250 million and take housing benefit away from 500,000 households. Is this the kind of policy that the Prime Minister had in mind when she said almost exactly two years ago that this was
    "evidence of our commitment to the family" — [Official Report, 28 June 1983; Vol. 44. c. 49.]
    The Prime Minister: As the hon. Gentleman is aware, we have put great emphasis on raising the tax thresholds, which are of particular benefit to families, and have raised income tax thresholds far more than his Government ever did. May I also point out that housing benefit, which cost £4·2 billion this next year, will go up after my right hon. Friend's announcement to £4·5 billion next year.
    Mr. Kinnock: Does all that not occur merely because of the way in which the Government have pushed up unemployment and the rate of inflation? Does the answer that the Prime Minister gave offer any comfort to the wife of an employed man with two children who has had a significant loss as a result of the Government's refusal to uprate child benefit in line with inflation? Which households will benefit from 500,000 households losing their housing benefit?
    The Prime Minister: The right hon. Gentleman is aware that the working population will have to find some £2 billion extra as a result of the uprating that my right hon. Friend announced. The right hon. Gentleman never thinks of where the money is to come from. With regard to child
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    benefit, extra amounts will be going to working families on low incomes. I should have thought that he would welcome that.
    Mr. Kinnock: When the Prime Minister is taking £250 million away from families and giving only £29 million back to them, it is clear that her targeting is not working well. We wonder where the money is coming from. We also wonder where it is going. Will it go again in tax cuts to the richest in our society?
    The Prime Minister: An extra £2 billion is being taken out of the national income away from contributors and taxpayers to give extra social security benefits to people, many of whom are in need. Having read what the right hon. Gentleman said about SERPS, I do not believe that he is in any position to put accurate questions about social services.
    Mr. Ashby: Is my right hon. Friend aware that, at a time when an aircraft has been hijacked by Shi'ite Moslems, a demonstration was taking place on the streets of London by supporters of those hijackers? When will we ban such obscene demonstrations?
    The Prime Minister: As my hon. Friend is aw are, a new Public Order Bill will be presented to Parliament in the next Session. We must weigh the right of people to demonstrate with the fact that it is a criminal offence to incite to violence. That, as my hon. Friend is aware, is a matter for the police. We condemn all those who incite others to violence on the streets of London and hope that the police will find sufficient evidence on which to prosecute.
    Mr. Hickmet: Is my right hon. Friend aware of the growing anxiety over Japan's trading policies with this country, Europe and the United States? At the forthcoming conference in Milan, what steps will she be asking her European partners to take to deal with non-tariff barriers, Japan's policy of hijacking international contracts by the dumping of credit and predatory pricing, and by keeping the yen artificially low?
    The Prime Minister: As my hon. Friend is aware, we have condemned all those matters. It would help most immediately if Japan did not keep the yen artificially low, thereby helping its competitiveness in other markets. We shall be raising the matter at Milan. My hon. Friend is aware of how seriously I take those issues. We are taking action against dumping. We have taken action against some Japanese dumping. I shall be raising the wider question at the Milan European Council.
    Dr. Owen: Does the Prime Minister accept that family support has been a social policy that has gone across the income levels for many decades? We are in danger of losing sight of the importance of the family if we concentrate family support only on those most in need. Family costs are high for the average taxpayer.
    The Prime Minister: The right hon. Gentleman cannot have been listening to my right hon. Friend the Secretary of State for Social Services. Everyone with a family will continue to receive child benefit. The standard rate is £7 per child per week. It partly compensates for the removal of the child allowance. Every family will continue to receive it, but worse-off families will receive more. We cannot give more to some families without looking at child benefit over the whole scheme. The policy that my right

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    hon. Friend is pursuing is right. The right hon. Gentleman is trying to give the impression that child benefit is not going to every family. He is wrong.
    Mr. Haynesasked the Prime Minister if she will list her official engagements for Thursday 20 June 1985.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Haynes: Is the Prime Minister aware that in the pre-election period of 1979 she said that if her party was elected to power it would deal with law and order? Is she further aware that this Government have dramatically increased — [Interruption.] — the number of police officers, their earnings and their equipment — [HON. MEMBERS: "Hear, hear."]
    Mr. Speaker: Order. I, too, want to hear the question.
    Mr. Haynes: Is the Prime Minister aware that crime figures are reaching a disgraceful level? I, my constituents and my party, want to know what this Government intend to do about the present crime levels.
    The Prime Minister: The hon. Gentleman has given some very good examples of what this Government have been doing and will continue to do. I only wish that his party would give its support to the police in the performance of their duties, as this party does.
    Sir Edward Gardner: Is my right hon. Friend aware of the warning by the chief agent of the United States drug enforcement administration—who is currently in this country, having come from Bogota in Columbia—that about 20 tonnes of cocaine are believed to be on their way to this country from South America and that Columbian drug gangs are already established here? Will she give the firmest assurance that neither manpower nor money will be spared to meet and defeat this threat to the health and wellbeing of the people of this country?
    The Prime Minister: I am grateful for the support of my hon. and learned Friend in this matter. We are aware of that special cocaine danger. A special team was established last autumn and another team will be formed shortly. We are also taking steps to strengthen international co-operation with both producer and transit countries to reduce trafficking in cocaine and other controlled drugs. Both police and Customs officers will respond promptly to any specific information that they receive about cocaine trafficking. Both services will continue to give drug misuse the highest priority and, if need be, we shall spend more money to track down those responsible for these terrible offences.
    Mr. Cohenasked the Prime Minister if she will list her official engagements for Thursday 20 June 1985.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Cohen: When will the Government put up the money to settle the teachers' pay dispute? Does not the right hon. Lady not realise that she will not get away with underpaying them or with the sleight-of-hand deal made for the nurses, where the service actually suffered? The teachers are determined not to be done down. Are not the Government to blame for the disruption in our schools?
    The Prime Minister: I do not accept in any way what the hon. Gentleman has said. The striking teachers are
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    taking it out on the children in their desire to pursue claims for increased pay. Most of us, and many, many teachers, totally and utterly condemn that. I repeat what I have said to the hon. Gentleman, that we do not think that we can ask the taxpayer to pay any more towards teachers' salaries this year in total. If the teachers will consider a proper contract and appraisal of performance and restructuring next year, we shall be prepared to consider it. I urge them to get into negotiations. Alternatively, they have been offered arbitration.
    Mr. Neil Hamilton: Notwithstanding the tiny legal difficulty that has arisen in the past week, will my right hon. Friend confirm that the Government will press ahead with the privatisation of British Airways and not be distracted by sideshows in foreign courts.
    The Prime Minister: I can say nothing about court actions. It is our intention to privatise British Airways as soon as we can.
    Mr. Alex Carlileasked the Prime Minister if she will list her official engagements for Thursday 20 June 1985.
    The Prime Minister: I refer the hon. and learned Gentleman to the reply that I gave some moments ago.
    Mr. Carlile: Why has the county of Powys been singled out and punished as the only county in Wales not entitled to money from the European social fund?
    The Prime Minister: That is a matter for the European social fund. If the hon. and learned Gentleman is correct in what he says, I am sure that he will have taken the matter up in the appropriate quarter.
    Mr. Dixon: On a point of order, Mr. Speaker. I know that you always try to be fair, but at Prime Minister's Question Time today only one Labour Back Bencher was called to ask a supplementary on any main question and on Question 2 two Tory Members were brought in one after the other, followed by the right hon. Member for Plymouth Devonport (Dr. Owen).
    Mr. Speaker: I am glad that the hon. Gentleman has mentioned that. I think that the whole House agrees that I have an obligation to keep a balance. If the Leader of the Opposition gets up more than once, as is his right, I take that into account in calling the other side.
    Mr. Kinnock: Further to that point of order, Mr. Speaker. I naturally recognise and completely respect your authority, Mr. Speaker. It might have been useful if I had been informed earlier that the number of interventions that my hon. Friends would be permitted to make would vary according to the number that I made. [Interruption.] I am aware that you, Mr. Speaker, have no control over the Prime Minister's evasions. It is because of her continual taste for dodging that I am obliged from time to time to get in more than once. [Interruption.] I hope that it will be noted that the right hon. Lady has now taken to heckling as well as evasion.
    Mr. Speaker: The whole House will understand that Front Benchers have their rights, but, equally, I am here to look after the interests of Back Benchers. In answer to the hon. Member for Jarrow (Mr. Dixon), who raised the matter first, it depends to a very large extent on how the questions fall on the Order Paper. I hope that the House

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    does not think it unfair that Members with an early place in Prime Minister's questions should have some preference to be called.
    Mr. Willie W. Hamilton: Further to that point of order, Mr. Speaker. I have been in the House a long time, but I have never known a Speaker to make the kind of ruling that you have made today. I stand corrected if that is not so, but I believe that it is true. Last week, or the week before when two Tory Members were in the first six or seven places or just missed, you made a point of calling them for earlier supplementaries. The same has happened today with another Tory Member. The impression is being created that there is a bias — [HON. MEMBERS: "Withdraw!"] If we count the time taken in the 15 minutes available for Prime Minister's questions, I believe we shall find that the Prime Minister takes up 10 minutes.
    Several Hon. Members rose—
    Mr. Speaker: Order. I will take all the points of order together.
    Mr. Faulds: Further to that point of order, Mr. Speaker—
    An Hon. Member: The hon. Gentleman has forgotten his lines.
    Mr. Faulds: There is no risk of that, boyo. I was pausing so that I could employ careful phraseology, so as not to upset you, Mr. Speaker. Under your unlamented predecessor, when the right hon. Lady was the Leader of the Opposition, she frequently, in the phrase that I used to your unlamented predecessor, took three bites at the cherry, and that made absolutely no difference to the number of her supporters who were called in Prime Minister's Question Time.
    Mr. Heifer: On another point of order, Mr. Speaker.
    Mr. Speaker: Will the hon. Gentleman wait? It is easier to take points of order on the same subject together.
    Mr. Hayward: Further to that point of order, Mr. Speaker. A few months ago I said that the Leader of the Opposition uses four times as many words as did the Prime Minister when she was Leader of the Opposition. Is that not the direct cause of the complaint of the hon. Member for Jarrow (Mr. Dixon)?
    Dr. M. S. Miller: Further to that point of order, Mr. Speaker. May I express the hope that you will not stick to the ruling that you gave in regard to the battle between the Prime Minister and my right hon. Friend the Leader of the Opposition? It is a one-to-one battle. They are equal, at least in numbers—my right hon. Friend is well ahead in terms of content. In view of the equality of numbers, surely other supplementary questions should be divided equally between the Government and the Opposition.
    Mr. Speaker: Perhaps I can clear the matter up. It is a matter of judgment. There are more Conservative Members than Opposition Members — [Interruption.] Order. As for the accusation of bias, which is unworthy of the hon. Member for Fife, Central (Mr. Hamilton), Prime Minister's Question Time is an opportunity for Back Benchers, as well as Front Benchers, to put their questions to the Prime Minister twice a week. I do not think that it is biased or unfair if I take account of the balance of numbers in the House at Prime Minister's Question Time.
    Mr. Shore: Further to that point of order, Mr. Speaker. With respect, we understand that the handling of questions entails matters of judgment, which you properly exercise. However, you have today laid down what are regarded by many right hon. and hon. Members as two precedents. One is that you are guided by the distribution of seats in the House as between Government and Opposition. I have never heard that stated before. I believe that it is a precedent. If I am wrong, I hope that you will correct me.
    The other precedent, which I think has been announced during this exchange, is that if my right hon. Friend the Leader of the Opposition asks the Prime Minister several supplementary questions—that is by no means unusual and happened when the Prime Minister was Leader of the Opposition—the right hon. Lady, having had the opportunity to reply to those questions and, admittedly, time having been taken by them, time should be taken from the Opposition and the Government side should be compensated in terms of being able to ask more supplementary questions. Surely that, too, is a precedent and not just a matter of judgment.
    Mr. Speaker: Order. There is no precedent in this. I am approaching my second anniversary and I have not changed my practice since I began. As I have said, it all depends on how the questions fall on the Order Paper. There have been days when those on the Opposition Benches have been called for more supplementary questions because the primary questions have emanated from the Government side. I assure the House that there is no question of a change in practice. The House will accept that my practice at Prime Minister's questions is not the same as questions to a departmental Minister, when I tend to call one for one. But even that can vary, as it did today during agriculture questions, when there were more Government Members rising to ask questions than Opposition Members. I take that into account, too, as I did during Scottish questions yesterday, when I did the reverse.
    Mr. Williams: Further to that point of order, Mr. Speaker. Could you help the House by saying when that principle has previously been put before the House?
    Mr. Speaker: I do not think that it has. It is the first time that I have been asked about the principle.
    Mr. Maxwell-Hyslop: Further to that point of order, Mr. Speaker. It is obvious that Opposition Back-Bench Members are dissatisfied with the extent to which the Leader of the Opposition monopolises Prime Minister's Question Time. Surely that is a matter which the Opposition should resolve at their private party meetings, and not under the spurious guise of points of order.
    Mr. Speaker: Order. We have business questions to follow, which is an opportunity for Back-Bench Members to ask questions. We also have a statement to deal with and an important debate in which many hon. Members wish to take part. I am prepared to continue to answer this matter, but I assure the House that I have not changed my practice from the beginning. [Interruption.] I ask the House to allow me to finish. At Prime Minister's questions, the Speaker must balance the rights of Front Benchers to ask questions against those of Back Benchers. That is what I have done, and what I think the House would expect me to do.
    Several Hon. Members rose—
    Mr. Williams: Further to that point of order, Mr. Speaker. You said in response to an earlier intervention that you had not changed anything. In response to me, you said that you had never stated the practice to the House before because you had never been asked before. Since you have never stated it to the House before, will you tell us when a previous Speaker has?
    Mr. Speaker: It is just possible that no previous Speaker has been asked, either.
    Mr. Hardy: Further to that point of order, Mr. Speaker. In the context of your earlier ruling, will you explain to the House why the Social Democratic party is called as often as it is?
    Mr. Speaker: Yes, I can explain that. Prime Minister's questions provide an opportunity for the minority parties to have their say. [Interruption.] I have an obligation to look after minorities as well as majorities.
    Mr. Anderson: Further to that point of order, Mr. Speaker. Are we not running into the danger that the two propositions mentioned by my right hon. Friend the Member for Bethnal Green and Stepney (Mr. Shore) may gell into precedents, unless there is cooler reflection on what has happened today? If, for example, the first of the two propositions — that hon. Members are called according to the balance of parties in the House—were extended to Welsh and Scottish Question Times, when the Tory party is in the minority, it may lead to consequences which the Opposition would not want. We would still want a balance. Before there is a firm gelling of these precedents, can the matter be considered rather more coolly?
    Mr. Speaker: I shall consider the matter coolly. The hon. Gentleman, who is present at Welsh questions, will find that more Welsh Members from the Opposition side are called than from the Government side because there are more of them. I shall, however, reflect on the matter.
    Mr. Leighton: Further to that point of order, Mr. Speaker. Would you help the House by explaining a little more the doctrine of hon. Members being called pro-rata to representation in the House.
    Mr. Speaker: Order. I have said that I will reflect on this.
    Mr. Heifer: On a different point of order, Mr. Speaker. During Prime Minister's Question Time the hon. Member for Leicestershire, North-West (Mr. Ashby) said that Shi'ites were marching in our streets today. I wish to point out to the hon. Gentleman—I am sure that you will agree with me, Mr. Speaker—that the rights of all people in Britain must be protected. The Moslems who were marching today were Iranians protesting at the Ayatollah's regime and demanding freedom and democracy in that country. Have we reached the stage—
    Mr. Speaker: Order. What is the point of order for me?
    Mr. Heifer: I am coming to that, Mr. Speaker. You are the Speaker of the House of Commons and the protector of the rights to democracy in Britain. Will you make it clear to all right hon. and hon. Members that people outside the House have rights, and that they must be protected from those who would wish to ban every organisation with whose aims they do not agree?
    Mr. Speaker: Order. The hon. Gentleman knows that every hon. Member who asks a question or makes a statement in the House must take responsibility for it. It is not a matter for me.
    Mr. Faulds: Further to the earlier point of order, Mr. Speaker. I have think the House is extremely grateful that you are prepared to reflect on what is a disturbing—
    Mr. Speaker: Order. I have said that I shall reflect. I do not believe that any more points of order arise.
    Mr. Faulds: May I make a comment that would help you, Mr. Speaker?
    Hon. Members: No.
    Mr. Speaker: Order. I do not believe that it would help me.

Business of the House
3.46 pm
Mr. Neil Kinnock: May I ask the Leader of the House to state the business for next week?
The Lord Privy Seal and Leader of the House of Commons (Mr. John Biffen): Yes, Sir. The business for next week will be as follows:
MONDAY 24 JUNE—Opposition Day (16th Allotted Day). There will be a debate on an Opposition motion entitled "The failure of Government policies to meet Britain's skill needs."
Motion on the European Communities (Definition of Treaties) (Third ACP-EC Convention of Lomé Order. Relevant EC documents will appear in the Official Report.
The Chairman of Ways and Means has named opposed private business for consideration at seven o'clock.
TUESDAY 25 JUNE—Second Reading of the European Communities (Finance) Bill. Command Papers 9548 and 9549 and EC Document 5046/85 will be relevant.
Consideration of Lords amendments to the Representation of the People Bill.
WEDNESDAY 26 JUNE—Remaining stages of the Food and Environment Protection Bill [Lords].
Motions on the Northern Ireland Act 1974 (Interim Period Extension) Order and the Northern Ireland (Emergency Provisions) Act 1978 (Continuance) Order.
THURSDAY 27 JUNE—Opposition Day (17th Allotted Day). Until about seven o'clock a debate entitled "Cuts in child benefit" followed by a debate entitled "Cuts in housing benefit" Both debates will arise on Opposition motions.
Motion on the Army, Air Force and Naval Discipline Acts (Continuation) Order.
FRIDAY 28 JUNE—There will be a debate on policing in the Metropolis on a motion for the Adjournment of the House.
MONDAY 1 JULY — Until seven o'clock, private Members' motions.
Consideration in Committee of the European Communities (Finance) Bill.
[European Community Documents to be debated: Monday 24 June (Debate on Lomé III Order)

Relevant documents

(a) 9910/82

Commission Memorandum on Community's development policy

(b) 4126/83

Relations with ACP States and the OCT-STABEX 1981

(c) 10505/83

Relations with ACP States; Mining Sector

(d) 7382/84

Commission Communication to the Council on the European Community and Africa

(e) (Unnumbered)

Special Report of the Court of Auditors on the co-ordination of Community aid to third countries

(f) 10677/84

Relations with ACP States and the OCT-STABEX; 1983

(g) 6380/85

Draft Council and Commission Decision on conclusion of the third ACP-EC Convention of Lomé

Relevant Reports of European Legislation Committee

(a) HC 34-iv (1982–83), paragraph 2 and HC 34-xi (1982–83), paragraph 2.

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(b) HC 34-xiii (1982–83), paragraph 3.

(c) HC 78-xiii (1983–84), paragraph 2.

(d) HC 78-xxxiv (1983–84), paragraph 5.

(e) HC 5-ii (1984–85), paragraph 3.

(f) HC 5-ix (1984–85), paragraph 3.

(g) HC 5-xxi (1984–85), paragraph 8.

Tuesday 25 June (Debate on EC (Finance) Bill)

Relevant documents

Cmnd 9548

Inter-Governmental Agreement on payments to finance the 1985 General Budget

(h) Cmnd 9549

Revised text for a Council Decision on Own Resources (previously an unnumbered EC document)

(h) 5046/85

Communication on the calculation of the corrective mechanism applying to the United Kingdom under the Own Resources Decision

Relevant Report of European Legislation Committee
(h) HC 5-xix (1984–85), paragraph 1.]
Mr. Kinnock: I am grateful to the right hon. Gentleman. First, the Government have avoided giving time for a debate on the closure of skillcentres, despite our many requests. Will they now give time for a debate on the youth training scheme in view of the fact that we learnt this week that less than half of the youngsters are now securing jobs when they finish their time in the youth training scheme?
Secondly, the right hon. Gentleman will have seen yesterday's report from the Select Committee on Employment, which calls for a review of the cases of miners who lost their jobs as a consequence of the coal industry dispute. In the interests of natural justice and good industrial relations in the coal mining industry, will the right hon. Gentleman arrange for a debate on that report at the earliest opportunity?
Thirdly, in view of the fact that the European Communities (Finance) Bill is a measure of major constitutional significance, may I ask the right hon. Gentleman to arrange the debate on Third Reading on a separate day so that this important question can be further debated in prime time?
Finally, in the light of the disturbing findings of last week's report from the Government's own adviser, the Advisory Board for the Research Councils, that as a result of the squeeze on the science budget British firms are having to cut back on research that is essential to the creation of new industry, will the right hon. Gentleman arrange for an urgent debate on what the board calls the "serious underfunding" of scientific research in Britain?
Mr. Biffen: We might consider through the usual channels what the right hon. Gentleman raised in respect of the YTS, but I should have thought that at least some of the points could be made in the debate that is proposed for Monday.
Undoubtedly the report of the Select Committee on Employment is highly contentious. It caused a good deal of division in the Committee. At this stage, we should await the Government's response to it as a first step.
With regard to having a Third Reading debate on the European Communities (Finance) Bill, which will be a free-standing matter, I take note of what is suggested by

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the right hon. Gentleman. I very much hope that we can meet him on that point. He will recollect that only last Friday we had a debate on science, which could cover the funding of science. I take note of what he says about that, but I cannot be optimistic about a further debate on that topic.
Mr. T. H. H. Skeet: I hope that my right hon. Friend has read Sir John Kendrew's report on particle physics and CERN. In view of the fact that it will create a substantial precedent, and will also lead to many complications, I hope that my right hon. Friend will arrange a debate in which those issues can be thrashed out.
Mr. Biffen: I know that my hon. Friend has taken an interest in CERN over almost as many years as he and I have been in the House. I cannot be too generous in my response for the same reason that I profered to the Leader of the Opposition, that we debated the topic last Friday. However, I hope that my hon. Friend will have luck in pursuing it through his own free enterprise methods.
Mr. A. J. Beith: Will the Leader of the House do something about the fact that prayers on two major issues in the name of my right hon. and hon. Friends are awaiting debate? They concern the immigration rules affecting the Tamils and rate capping. Is the right hon. Gentleman deterred in any way by the fact that the Labour party has not officially seen fit to add its name to those motions? Does he accept that in a variety of ways Labour Members have said that they, too, wish to see those debates take place?
Mr. Biffen: It is not appropriate for me to comment on the relationship between the hon. Gentleman and Labour Members. However, I am conscious of the fact that the business for next week which I have just announced does not enable debates on the prayers that he mentioned to take place. Perhaps we can keep in touch on the matter.
Mr. Robert Rhodes James: Has my right hon. Friend's attention been drawn to the inordinate length of ministerial and Opposition Front-Bench speeches in the debate last Friday? After two hours on what was a private Members' day only three Back-Bench Members had spoken. A considerable number of hon. Members on both sides of the House were unable to participate in the debate. Will my right hon. Friend take that carefully into account when discussing these matters through the usual channels?
Mr. Biffen: My hon. Friend, I am sure in a good-natured and wholly unintended way, is mildly misleading. In fact, last Friday was a day for Government business, not a private Members' day. I take note of what he says about ministerial answers being longer than he would wish, but I hope that they made up in quality for what they strained in length.
Dr. Jeremy Bray: Is the Leader of the House aware that it was because the Government put down a science policy debate for a Friday that many hon. Members were unable to take part in it, despite the fact that on the previous Friday there had been a very large attendance in the House? Is he further aware that the Kendrew report on particle physics had not been published last Friday, that it contains major recommendations on the
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balance of research funding, and that it makes serious criticism of the inadequacy of the Government's research funding?
Mr. Biffen: I am grateful to the hon. Gentleman for confirming that when important items of business are debated on a Friday the House is very well attended. I have to accept that the report to which he referred was published after the debate took place, but that does not alter the fact that in more general terms the subject has been recently debated. I should be misleading the House if I promised the prospect of an early repeat of that debate.
Mr. John Watson: Can my right hon. Friend confirm that so far this Session we have spent 41 hours talking about Scotland, 18 hours talking about Wales and no hours talking about Yorkshire? Which part of Britain does he believe to have benefited most?
Mr. Biffen: I shall not answer that question, because I know that every hon. Member has already formed his own judgment.
Mr. Dick Douglas: Will the Leader of the House reflect upon the answer that he gave to my right hon. Friend the Leader of the Opposition about the report of the Select Committee on Employment? There was a quick response to the report on drugs by the Select Committee on Home Affairs, so can we expect the sponsoring Minister to come to the House on Monday and give a clear indication of the Government's response to this important report? Many of my constituents have been out of work for over a year because they were dismissed by the National Coal Board. In Scotland, 203 miners have been dismissed, many of them for breach of the peace offences that involved small fines or no fines. May we have an assurance that the Government will make a statement that justice will be done?
Mr. Biffen: As I am sure the hon. Gentleman will have observed, this is a highly contentious report which has sharply divided the Select Committee. None the less, I shall ensure that his request for an early statement is brought to the attention of my right hon. Friend the Secretary of State for Energy.
Mr. Teddy Taylor: In view of the information in last Friday's Hansard that exports of cheap food to Russia have again broken all previous records and that they have increased by 1,000 per cent. since the Government came to power, will my right hon. Friend be willing to postpone next Tuesday's debate on the European Communities (Finance) Bill until we receive an assurance that the huge additional public spending by the European Community will not be used to finance the Soviet war machine?
Mr. Biffen: I am not disposed to rearrange the business that I have just announced. I am certain that my hon. Friend will be only too able to make at great length the very pithy points that he has just presented.
Mrs. Renée Short: May I draw the attention of the Leader of the House to the fact that the Select Committee's report on the misuse of hard drugs was published today? In view of the report in today's edition of The Guardian that the Prime Minister intends to take command of the drugs campaign — [Interruption]. I am very pleased that the Prime Minister is to take an interest in this matter. As she seems to think

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that co-ordinating committees will solve the problem, whereas additional resources ought to be provided in every region of the country so that the skilled advice and care that is needed can be made available, may we have a debate on this important matter before the Secretary of State's response is received, because that may take months?
Mr. Biffen: The hon. Lady will not expect me to comment, either charitably or otherwise, on what appeared in The Guardian, but I shall most certainly draw to the attention of my right hon. Friend the Secretary of State for Social Services the suggestion that the report of her Committee should be debated reasonably soon.
Mr. Tony Marlow: Will my right hon. Friend have a quick and sharp word with my right hon. and learned Friend the Chief Secretary to the Treasury, who is sitting just along the Front Bench from him? Earlier this week, I tabled a priority written question for answer by today about the costs of Community membership for this country. My right hon. Friend the Leader of the House will know that today we are to have a European Community debate. My questions are simple and do not require a great deal of calculation. Will my right hon. Friend ask the Chief Secretary what his problem is — whether he does not understand the questions, whether he does not have the staff to provide the answers or whether he is embarrassed by what the answers might be?
Mr. Biffen: All my representations to Treasury Ministers are couched in both the language and the attitude of total deference. I am delighted that my right hon. and learned Friend the Chief Secretary is in his place and has heard the anxieties of my hon. Friend the Member for Northampton, North (Mr. Marlow) and that I am not, therefore, required to communicate them to him.
Mr. John McWilliam: Is the Leader of the House aware that, under the disastrous organisation of the Health Service that was put in place by the present Secretary of State for Education and Science, a Tory party placeman, who does not even live in my local health authority area, used his casting vote for the closure of the most pleasant geriatric hospital in my constituency? When may we have a debate on the chronic underfunding of the Health Service in the north-west and the mismanagement and misorganisation of the Health Service generally?
Mr. Biffen: I cannot accept the strictures directed at my right hon. Friend the Secretary of State for Education and Science or at Conservative welfare policy generally. I note the hon. Gentleman's point but, as it has direct constituency significance, I suggest that he might like to try his chances with an Adjournment debate.
Mr. Harry Greenway: Because of the continued closure of a number of sub-post offices, may we have a statement at an early date from the Secretary of State for Trade and Industry on his policy?
Mr. Biffen: I shall certainly draw my right hon. Friend's attention to that point.
Mr. James Hamilton: Will a statement be made by the Secretary of State for Trade and Industry, bearing in mind that British Telecom has made a £945 million profit after tax? Will this money be used to retain telephone kiosks, especially in Wales? If the
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money is not used for that purpose, will it be paid to the shareholders? It is imperative that a statement should be made on this matter.
Mr. Biffen: I shall draw that observation to the attention of my right hon. Friend the Secretary of State.
Sir Kenneth Lewis: In view of the obvious controversy surrounding the report of the Select Committee on Employment, does my hon. Friend think that it would be a good idea for the House to debate it as soon as possible?
Mr. Biffen: I am sure that my hon. Friend knows that there is a recognised convention whereby reports are first subject to response by the Government. My hon. Friend is correct in highlighting the great interest in this report, which sharply divides those who served on the Select Committee — in contrast to the way in which Select Committees often purport to operate.
Mr. Kevin Barron: Will the Leader of the House ensure that there is an urgent debate on the report of the Select Committee on Employment? It is not as contentious as the right hon. Gentleman would have us believe. The report was accepted by a vote of five to three. All parties were represented among the five who accepted the report. The report makes only two points—first, that the reviews should accept ACAS procedures, and, secondly, that there should be a national review if people have not been reinstated at area level. The report asks only for justice. It is not clouded with the rhetoric used this afternoon by the Prime Minister about violence in relation to working and striking miners. That has nothing to do with the report.
Mr. Biffen: The hon. Gentleman is doing himself a disservice by trying to appear as a moderate. It is clear that this is a highly contentious report. It was carried by five votes to three. That omits the fact that two hon. Members had already left the Committee Room in high dudgeon. I have said that I shall draw the attention of my right hon. Friend the Secretary of State for Energy to the general interest of hon. Members in debating the matter. I am not trying to go back on that. I am merely observing that there are procedures that are normally observed in these matters. I imagine that the House would wish those procedures to be applied on this occasion.
Mr. Andrew MacKay: In the light of the tragic scenes that are being played out in Beirut, would it not be appropriate for the House to have a debate on international terrorism before the summer recess? This would give some hon. Members an opportunity to express their concern at the Greek Government's attitude and decision to give in to terrorists' demands.
Mr. Biffen: My hon. Friend has raised a highly important and highly topical point, which I agree stands in its own right and is apart from the more general consideration of foreign affairs. I cannot offer an early debate in Government time to debate this matter, although my hon. Friend might like to use the opportunities that private Members have.
Mr. Charles Kennedy: I do not know whether the right hon. Gentleman heard all the exchanges during Question Time today when the Minister of State confirmed that the Government will make a written statement on Monday about the granting

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of three illegal pressure stock licences to vehicles from the Netherlands for mackerel fishing. This is an important issue in my constituency. Since the Government appear to be willing to sanction illegality and ill-gotten gains for the Netherlands at the expense of the British fishing fleet, will the Leader of the House ascertain whether it will be appropriate for the Attorney-General to take a legitimate interest in this matter?
Mr. Biffen: I shall of course respond to that request, although I think it falls rather wide of my role in announcing next week's business. I was present during Question Time. I realise that this matter concerns the hon. Gentleman and his constituents and is also of concern because of the other principles that are involved.
Mr. Spencer Batiste: My right hon. Friend will be aware of the recent publication of the export control order implementing last year's COCOM agreement. He will be aware also of the widespread concern in Britain and Europe about the way in which the United States Government seek to impose their domestic legislation on their allies and the damage that this is causing to high technology industries in Europe and to future co-operation in the manned space station programme and the strategic defence initiative. Will my right hon. Friend be able to find time for a debate on this issue before the order comes into effect at the end of July?
Mr. Biffen: I shall certainly refer that point to my right hon. Friend the Secretary of State for Trade and and Industry. I know that that concern is widely felt.
Mr. Alexander Eadie: When the Leader of the House gives his judgment on the sixth report of the Select Committee on Employment on victimised miners, I hope that he will remember that a majority is a majority and that the Government will not amend it. Will the right hon. Gentleman consider holding a debate on this matter? Will he consider two important factors? First, according to the evidence given to the Select Committee, the NCB chairman was under the impression that only criminals should go before industrial tribunals. Secondly, no victimised miner in Scotland has been re-employed. The number affected is no longer 202; it is 203, because last week a young lad went before the courts and was fined for obstruction. The next day he was given his book by the NCB and was sacked. There is an urgent need for this debate. We want justice.
Mr. Biffen: That was more of a speech than a request for consideration of whether these items should be included for discussion during next week's business. I have suggested that there are procedures that are normally followed in dealing with reports of departmental Select Committees, even when they are as contentious and divisive as this one. I abide by that statement. I shall refer to my right hon. Friend the points that have been made by hon. Members.
Mr. Peter Bruinvels: Does my right hon. Friend accept that too much time has been spent on European Assembly matters? Five days in two weeks is too much. Will my right hon. Friend look instead to the Surrogacy Arrangements Bill, which at the moment is tied up in the other place? As two children have already been born, and two more are due to be born, through surrogacy
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arrangements under commercial contracts, will my hon. Friend change the debate on Monday week, when we are due to debate European Assembly matters? Following discussions with Lord Whitelaw, will my right hon. Friend allow the Surrogacy Arrangements Bill to be brought before the House again so that we can outlaw surrogacy once and for all?
Mr. Biffen: I do not agree with my hon. Friend. In these matters that affect our social, economic and constitutional affairs and derive from our Community relationships, it is vital that the House should assert its continuing presence. If it does not, others will fill the gap.
Mr. Brian Sedgemore: As hon. Members on both sides of the House are bringing miniature portable television sets into the Chamber to relieve themselves of the tedium of Government speeches and as reception was extremely bad during the last test match around the seat occupied by my hon. Friend the Member for Cynon Valley (Mrs. Clwyd), will the Leader of the House arrange for the report of the structural engineer to be debated before the next test match?
Mr. Biffen: I know that, after a while, performing this task leads one to be totally unworldly, but I could not understand any of that.
Mr. Speaker: Nor could I and if what the hon. Gentleman says is correct the matter should have been raised with me.
Mr. Dave Nellist: Is the Leader of the House aware that 1,300 workers in my constituency have been laid off by Talbot because of the failure of the Iranian Government to pay the company for 33,000 car kits in Newport docks? Is he further aware that those workers have been laid off for 32 months in the past six and a half years? Can the right hon. Gentleman arrange for the Secretary of State for Trade and Industry to make a statement to the House, or for an early debate on the topic, so that Labour Members representing Coventry can raise with the Department of Trade and Industry what, if anything, the Government will offer to those workers employed by the car industry in Coventry, which has sadly declined in the past six years.
Mr. Biffen: I shall convey to my right hon. Friend the Secretary of State for Trade and Industry the points that have been made by the hon. Gentleman and his request for a statement.
Mr. Eric Forth: Does my right hon. Friend agree that the proposed enlargement of the EEC to include Spain and Portugal could have the most profound effects both on the Community and on the United Kingdom? Is he aware that this matter has not been debated by the House except in my Adjournment debate before Easter? Therefore, will he allow the House to debate this vital matter before we take the irrevocable step of letting these two countries into the EC?
Mr. Biffen: I shall bear that point in mind. There will be an opportunity for the House to debate the specific issue of the enlargement of the Community to include Spain and Portugal. I should have thought that later today, if my hon. Friend was lucky enough to catch your eye, Mr. Speaker, he could make some of the points that he clearly has in mind.
Mr. Ray Powell: Will the Leader of the House consider, having listened to 15 minutes of points of order on Prime Minister's Question Time, whether he should persuade the Prime Minister to go to Brecon and Radnor so that she can see for herself how her policies are opposed by the electors of Brecon and Radnor, and are now even questioned by the Tory candidate? Will the Leader of the House persuade the Prime Minister to go to Brecon and Radnor on Tuesday and Thursday of next week so that we can have a refreshing change and so that she can learn a long-overdue lesson?
Mr. Biffen: I take account of all the kind remarks made about my right hon. Friend the Prime Minister. As to the parallel point, I should have thought that Mr. Butler, the Conservative candidate in the by-election, was showing the robust independence that will make him feel so at home when he comes to these Benches.
Mr. Roland Boyes: Does the Leader of the House recall that on four occasions recently I have asked whether we can have a debate about the Government's new board and lodgings regulations for under 26-year-olds? Does he recall that on the last occasion he said that the regulation had been implemented for only a short time and that we must wait? In this short time, a number of people have either committed suicide or attempted to do so. How many more deaths do there have to be before the Government will do something about this wicked, vicious, evil and unnecessary regulation?
Mr. Biffen: The welfare policy in its wider sense has been debated already this week. I do not disparage the acute personal problems to which the hon. Gentleman refers, but I cannot offer the likelihood of a Government debate on this matter in the near future.
Mr. Tony Lloyd: I note that next Friday there is to be a debate on the policing of London. Does the Leader of the House recognise that there is concern about the policing of other areas, and in particular of great cities such as Manchester? We have already had the Prime Minister denying her personal responsibility for anything to do with the massive rise in crime in these areas. Is it not about time that we had a debate on policing generally and not simply on London policing?
Mr. Biffen: I take account of the points that the hon. Gentleman makes. He will realise that having the debate on Friday underlines the importance of policing elsewhere, particularly in the large urban conurbations. However, I cannot help him out with the prospect of Government time for such a debate, at least in the near future.
Mr. Robert N. Wareing: What are the Government's intentions about public order legislation? We are only a few weeks away from the summer recess. On our return, are we to be met with another hotchpotch of legislation, of which the intention is more to do with further eroding people's civil liberties than with the real issue of crime, which is mounting under this Tory Government?
Mr. Biffen: The hon. Gentleman will recognise that I cannot anticipate what will be contained in the Queen's Speech, but, if he is interested in this topic, he is not likely to be disappointed.
Mr. Michael Meadowcroft: The hon. Member for Wolverhampton, North-East (Mrs. Short) asked a question earlier. Has the Leader of the House seen early-day motion 714?
[That this House is concerned at the new evidence in Yorkshire of illegal drug trafficking and the involvement of young people in hard drug abuse; congratulates the Yorkshire Post on its detailed investigation into this urgent and serious problem; notes that the Select Committees on Home Affairs and on Social Services are undertaking enquiries into drug abuse; and calls for an early Parliamentary debate on their proposals further to inhibit supply and to rehabilitate addicts.]
Does he accept that the momentum of public concern needs to be kept up, and does he agree that the report of the Select Committee on Social Services on drug abuse provides a good opportunity for an early debate on this subject?
Mr. Biffen: I take note of what the hon. Gentleman says, and I appreciate the good-tempered way in which he has put his question. He will realise that the answer that I give him will be no different from that which I gave the hon. Member for Wolverhampton, North-East (Mrs. Short).
Mr. Robert Parry: Has the right hon. Gentleman seen early-day motion 770?
[That this House condemns the Banbury Coal Company of Northwick for importing domestic coal for the Lancashire area from South Africa through Liverpool Docks; regrets that the company is prepared to put at risk Lancashire mines and Lancashire jobs in favour of supporting economically the evil apartheid regime in South Africa; further regrets the special arrangements made with the company by the Mersey Docks and Harbour Company for handling this cargo which could lead to unrest amongst Liverpool dockers; and calls upon the Secretary of State for Energy to show his much vaunted support for the United Kingdom mining industry by seeking to prevent such unnecessary imports.]
It has been signed by nearly 100 hon. Members. Will the right hon. Gentleman ask the Secretary of State for Energy to make an early statement on why the Government are supporting the evil régime of apartheid and at the same time putting miners' jobs at risk?
Mr. Biffen: It would not be appropriate for me to engage in controversy with the hon. Gentleman about why it is felt prudent to have a second source in the supply of coal. I shall refer to my right hon. Friend the Secretary of State for Energy the request that has been made.
Mr. Gerald Bermingham: Has the Leader of the House read, as I have, the reports in The Times and the Financial Times on Monday this week that the Secretary of State for Energy is to pursue an energy conservation campaign over the next 12 months? Should not this matter be debated at length in this place before the campaign gets under way? Will the right hon. Gentleman be kind enough to tell the Chancellor of the Exchequer, who is sitting on the Government Front Bench, not to interfere with the campaign on this occasion by imposing silly taxes such as VAT on double glazing?
Mr. Biffen: My newspaper reading is not as elevated as that of the hon. Gentleman, so I cannot confirm whether such a campaign is about to be launched. I shall draw the

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attention of my right hon. Friend the Secretary of State for Energy to those points. My right hon. Friend the Chancellor of the Exchequer will have heard, and discounted, the latter remarks made by the hon. Gentleman.
Mr. Laurie Pavitt: The Leader of the House will have studied with his usual care early-day motion 768.
[That this House resents the injustice to nurses and midwives caused by the way in which the Government has phased the recent pay award consequent upon the recommendations of the Review Body; and notes that, although giving the impression that an average of 8½ per cent. had been conceded, the reality is that for the year 1985–86 these dedicated workers will actually get 5·66 per cent. which may well prove less than the rate of inflation.]
Does the right hon. Gentleman recall the exchanges in the House expressing disappointment that the announcement on the pay awards was made by a written answer so that there was no opportunity for hon. Members to discuss it? As the award being arranged is now 1·34 per cent. below current inflation rates, will the Leader of the House arrange for either a statement or a debate at an early opportunity or at least before the recess?
Mr. Biffen: The hon. Gentleman is a well respected Member of the House and an old campaigner. Therefore, it will come as no surprise to him to hear that it is extremely unusual—almost unknown—for nurses' pay awards to be announced orally in the House. I shall refer his remarks to my right hon. Friend.
Mr. Jeremy Corbyn: Has the Leader of the House seen early-day motion 781?
[That this House believes that the policy of Her Majesty's Government towards asylum seekers from Sri Lanka is a serious departure from normal practice in respect of those fleeing from terror; further believes that the method of dealing with applications at Her Majesty's mission in Colombo is one that increases the danger to individual Tamil people; and calls upon Her Majesty's Government to end the visa requirement and to cease the policy of returning Tamil people to Sri Lanka who have expressed a fear of so doing.]
Does he accept that the imposition of visa requirements on people coming from Sri Lanka to Britain exposes Tamil people in particular to great dangers? Will he arrange for an early debate on this subject so that the Home Secretary can explain when the visa requirements will be lifted, and the Prime Minister can explain what went on in the meeting with Mr. Jayawardene in Sri Lanka?
Mr. Biffen: As I understand it, the visa requirements are kept under review, but I shall refer to my right hon. and learned Friend the Home Secretary the anxieties that the hon. Gentleman has just expressed.
Mrs. Ann Clwyd: Has the Leader of the House had an opportunity to read early-day motion 769?
[That this House recognises that the Disabled Persons (Employment) Act provides that employers with 20 or more employees have a duty to employ at least 3 per cent. registered disabled people (standard quota); regrets that only five of 44 Government departments fulfil the quota;
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and calls upon Government Ministers urgently to review their department's employment policy with the objective of reaching the 3 per cent. level as soon as possible.]
It has been signed by 61 Members and deals with the employment of disabled people by Government Departments. He will note that only five out of 44 Government Departments employ the 3 per cent. quota of disabled. Will he please ask Ministers to review their policy and to make a statement to the House
Mr. Biffen: I take note of what the hon. Lady says. I understand that my right hon. Friend the Secretary of State for Employment is currently considering a report from the Manpower Services Commission on ways of making the quota scheme more effective. The implications of that for Government Departments will be give serious study.
Mr. Peter Pike: In view of the recent decision of the European Court of Human Rights which criticised certain aspects of the immigration policy of this country, will the Leader of the House give us an assurance that a statement will be made by the Home Secretary before the summer recess? If the proposal is to be controversial, can he ensure that adequate Government time is provided for a debate on this important subject?
Mr. Biffen: I recognise the clear interest in this topic. I shall certainly draw the attention of my right hon. and learned Friend the Home Secretary to the point that has just been made.
Mr. Don Dixon: Will the Leader of the House ask the Secretary of State for Social Services to make a statement to the House about the position of British civilians who are working in the Falkland Islands and who may be affected by anomalies in the industrial injuries scheme?
One of my constituents took the advice of the Secretary of State for Trade and Industry, got on his bike at the end of last year and went to work in the Falkland Islands. He had a serious accident and came back to this country, only to be told that the industrial injuries scheme did not extend to the Falkland Islands. Is the Leader of the House aware that had that man been working in any EC country, in any Commonwealth country or in America, Austria, Finland, Iceland or numerous other countries with which we have reciprocal arrangements he would have been covered? Because he was working in the Falkland Islands, he is not entitled to benefit under the industrial injuries scheme.
Mr. Biffen: The hon. Gentleman raises a matter of great, even if narrow, significance. I shall pass his request to my right hon. Friend.
Mr. Pavitt: On a point of order, Mr. Speaker. I am sure that the Leader of the House would not wish to be inaccurate. He stated that previous announcements on pay awards to nurses had been made by written answer. May I inform you, Sir, that in 1979 the present Lord Ennals made a statement orally in the House?
Mr. Speaker: I am sure that the Leader of the House has heard that.
Mr. Stuart Bell: On a point of order, Mr. Speaker. I should like your ruling on a case where Members come into the House after the Leader of the House has given the business for the following week and then put questions to him on that.
Mr. Speaker: I cannot control when Members come into the House. I think one hon. Member came into the House somewhat late and was not called, but do not let us get into an argument about it.
Mr. Edward Leigh: With respect, Mr. Speaker, I heard the statement. I had to leave for a second, but I came back. I had heard the statement.
Mr. Bell rose—
Mr. Speaker: Order. I do not think that a point of order can arise. Nothing happened. What is the point of order?
Mr. Bell: I was referring not to the hon. Member for Gainsborough and Horncastle but to the hon. Member for Ross, Cromarty and Skye (Mr. Kennedy).
Mr. Kennedy: Further to that point of order, Mr. Speaker.
Mr. Speaker: Order. It would put an impossible load upon me if I had to note not only who is in the Chamber but who comes in. That would be intolerable.
Mr. Kennedy: I am reluctant to prolong this exchange, but the hon. Member for Middlesbrough (Mr. Bell) is completely wrong. I have been here without a break since 2.30 this afternoon.
Mr. Bell rose—
Mr. Speaker: Order. I think we are getting into the July silly season rather early.

Banking Supervision (Review Committee's Report)
4.23 pm
The Chancellor of the Exchequer (Mr. Nigel Lawson): With permission, I should like to make a statement.
In my statement on 17 December, I told the House that the Johnson Matthey Bankers affair raised important issues about our present procedures of banking supervision, and the legislative framework within which it is conducted. I announced a full review, which would consider whether any early changes in present supervisory procedures were called for in the light of the problems that had arisen in Johnson Matthey Bankers, and whether there was a need to review or amend the Banking Act 1979.
The review committee has now presented its report, which I have arranged to be published as a Command Paper and have laid before the House. I shall be considering the committee's proposals carefully. In the meantime, I have accepted the report as a basis for immediate consultation. Many of the recommendations do not require legislation. Some are already being implemented. But some of the committee's proposals do require fresh legislation. I therefore propose to publish a White Paper later this year, with the intention of bringing a Banking Bill before the House as soon as possible. The group of Treasury and bank officials which I set up under the review committee's terms of reference is continuing its detailed examination of the Banking Act 1979.
I am most grateful to the Governor of the Bank of England, who has chaired the review committee, and to its members, who comprised senior officials of the Bank of England and the Treasury, and a distinguished commercial banker, Mr. Deryk Vander Weyer.
A note by the Bank of England on events leading to the failure of JMB, the subsequent rescue by the bank, and its conduct of JMB's affairs is annexed to the bank's annual report and accounts, which have been laid before the House today.
The bank's account makes it clear that serious shortcomings in the management of JMB led to its collapse — over-rapid expansion of the loan book, heavy concentration of exposures, and lack of adequate control systems. JMB was also guilty of serious misreporting to the supervisory authority.
The circumstances described in the bank's report must inevitably raise questions about the role of the auditors, Arthur Young. The board of JMB, which is a wholly-owned subsidiary of the Bank of England, has today announced that it will be initiating legal action against Arthur Young.
The bank's account also explains its reasons for rescuing JMB. In mounting the rescue, I am satisfied that the Governor was acting properly within his discretion.
The board of JMB now estimates the company's losses at £248 million. Of this, £130 million has been met by JMB's original capital, reserves and provisions, and £50 million by a cash injection from Johnson Matthey plc, the former parent company. The rest of the losses are to be met from the indemnity of £150 million, split pound for pound between the Bank of England and a group of private sector banks and members of the London gold market. Potential claims on the indemnity to date thus amount to £68

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million, of which £34 million falls to the bank. Though in many instances recoveries will be only over the long term, JMB's present board of directors is satisfied that the total eventual calls on the indemnity will fall comfortably within the £150 million ceiling.
Since JMB is now its wholly-owned subsidiary, the Bank of England stands fully behind it. On 22 November the bank placed a deposit of £100 million with JMB, which has since been converted into £100 million of additional capital to strengthen JMB's balance sheet. This will, of course, be fully reflected in the price the Bank of England receives for the sale of JMB back to the private sector, which it plans to conclude as soon as practicable.
The review committee has made 34 specific recommendations. Their implementation will require action by the Bank of England, by supervised institutions, by their auditors and by the Government. The committee proposes two fundamental changes in the present arrangements, and several important modifications. It has taken the view, which I share, that the JMB case exposes major shortcomings in the present legislative framework and supervisory procedures. I shall, in my statement, outline only the committee's main proposals. A full summary of its recommendations is annexed to its report.
The Banking Act 1979 — which was Labour legislation — draws a distinction between recognised banks and licensed deposit-takers. JMB was, and still is, a recognised bank.
Most of the Act's provisions, and of the bank's powers set out in it, relate to licensed deposit-takers. A dual system of supervision has resulted. Licensed deposit-takers have been subject to a more rigorous regime of supervision, whereas the supervisors have relied heavily on the integrity and co-operation of the management of recognised banks. With most banks, this confidence has not been misplaced. But the banking industry has expanded rapidly, and its activities have diversified. Recognised bank status—as we have seen with JMB—has not always guaranteed prudence and responsibility.
The committee recommends that the two-tier system be abolished and that the powers given to the bank under the Act should apply to all authorised institutions. I accept this recommendation. The committee recommends that all authorised institutions should, in consequence, be entitled to use banking names.
I also intend to tighten the criteria for authorisation, including the minimum net assets required.
The second fundamental change recommended by the review committee concerns bank auditors. In this context, I am grateful to the Institutes of Chartered Accountants of England and Wales and of Scotland for the co-operation that they have afforded the committee.
The committee recommends that there should in future be a regular dialogue between the supervisors and banks' auditors. I strongly endorse this proposal.
A bank's auditors are uniquely placed to monitor its control systems and assess its financial prudence. The accountancy profession at present considers itself prevented by a duty of confidentiality to the client from passing information to the supervisors. At the same time, the supervisors are themselves inhibited by the Banking Act from communicating supervisory information to third parties without the institution's consent.
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This is clearly an unsatisfactory state of affairs. It is in cases where consent is not forthcoming that dialogue might be most necessary. That is why I accept the committee's recommendation that the constraints on contact between auditors and supervisors be removed.
I emphasise, however, that it is the directors and senior managers of banks who are responsible for the conduct of their business. They have duties both to depositors and to shareholders. This responsibility cannot be shuffled off to auditors or supervisors. The lesson of the JMB collapse is that banks must have in place adequate management and control systems. I therefore endorse the committee's suggestion that banks should appoint an audit committee and finance director where they do not already have them.
The committee has also made important recommendations on the staffing and organisation of the banking supervision division of the Bank of England.
The work of the supervision division has increased greatly in both complexity and volume in recent years, and the Bank of England now supervises more than 600 institutions. In general, it does a difficult job diligently and well. But in the case of JMB, the supervisors cannot escape criticism for failing to respond more quickly to the danger signals.
The committee has recommended that the staff of the division would benefit from wider commercial experience; that there should be more secondments in both directions between the division and commercial banks; that a significant cadre of experienced long-term banking supervisors must be built up; and that there should be more professionally qualified accountants in the division. It has also been suggested that more staff are needed.
The bank has already begun to implement these recommendations. The division is being strengthened both in numbers and in the range of expertise available. Some rearrangement of responsibilities has taken place within the division and further secondments to and from commercial banks have been arranged. To provide advice at a senior level, Mr. Sidney Proctor, chief executive of the Royal Bank of Scotland group, who retires from that position on 30 September, has accepted the Governor's invitation to serve on a part-time basis as an adviser on banking supervisory issues.
JMB's failure stemmed directly from a number of large, related exposures. The committee recommends—and the Bank of England has accepted — that in future no exposure to a borrower, or to closely related borrowers, should exceed 25 per cent. of the lender's capital base, other than in the most exceptional circumstances.
An effective system of banking supervision is essential, not merely for the protection of depositors but for the financial health of the economy as a whole.
The review committee's report brings out very clearly the lessons to be learnt from the collapse of Johnson Matthey Bankers. But, more than that, it proposes a number of important changes to banking supervision in this country, which I am confident will greatly strengthen the system and make a repetition of the JMB affair very much less likely to occur. I commend it to the House.
Mr. Roy Hattersley: I wish at the outset to make it absolutely clear to the Government that the Opposition expect an early debate on this subject, for it raises the most serious questions about

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the relationship between the banks and the Bank of England, the Bank of England and the Treasury, and the Treasury and the House of Commons.
The Chancellor now proposes a Banking Bill to review the system of statutory regulation. I welcome that, and the Opposition will help its passage—that is, the passage of a Bill which offers adequate safeguards and supervision. I hope, however, that the Chancellor is aware that our co-operation depends on the inclusion of three essential ingredients.
The first is the abolition of the two-tier system of supervision and the extension to the banks of the information requirement now placed on licensed deposit-takers. The second is the power of the Bank of England, when it fears a bank collapse, to provide relevant information to other Government Departments. The third is the duty — not the right, as recommended by the working party — of auditors to warn the Bank of England if they have information about impending collapse.
However, the Chancellor will be aware that that is all in the future. Opposition Members will not agree that the history of this matter can be swept under the Bank of England's carpet. Indeed, unless we fully understand and learn the lessons of this unhappy affair, new legislation will be no more successful than the old; for under present powers, the Bank of England should have detected, and prevented, the JMB collapse.
Why did the Bank of England not appoint an investigator under section 17 of the Banking Act in the autumn of 1983 or in early 1984, when it certainly knew that JMB was moving into desperate difficulties? Indeed, why did the Bank of England not know of the danger earlier? Is it not a fact that every bank must submit Q7 forms to the supervising authority listing the largest depositors, the amount of the loan book and the geographical spread of loans? Does the Chancellor agree that that information gave the Bank of England a most serious warning signal and that the Bank of England did not act on it?
It is not only the Bank of England that has such questions to answer. The Chancellor tells us that when he made his statement to the House on 17 December he did not know of the £100 million loan to JMB. Does he now accept that he should have known and that the Bank of England should have told him? Perhaps more important, does he accept that when he found out he should have corrected the mistaken impression that he inadvertently gave to the House?
The Chancellor cannot hide behind the fiction that the behaviour of the Bank of England is not a matter for him; nor can he take refuge in the pretence that public money was not involved. No one now accepts the arbitrary and artificial distinction which he chooses to make, since the Bank of England dividend is payable to the Treasury, and Bank of England money is, in a real and practical sense, within the public weal.
That raises the fundamental question which I hope the Chancellor will answer. Why, of all the companies that the Government and their agencies might have rescued, has this incompetent bank been singled out for special treatment? In short, why Johnson Matthey and not Cortonwood? Why JMB and not Stone Platt, the textile machinery company which the Bank of England ditched in 1982?
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With such a sorry tale of incompetence and concealment before the Chancellor, does he still retain any confidence in the Governor of the Bank of England, and does he expect us to retain any confidence in him?
Mr. Lawson: The right hon. Gentleman first asked for a debate. That is a matter which, as he knows, can be pursued through the usual channels.
Secondly, the right hon. Gentleman welcomed the proposed Banking Bill, and I am glad of that. He asked for an assurance that it would include the abolition of the two-tier system. I have already indicated in my statement that that will be a most important part of the Bill. I do not think that the right hon. Gentleman was concerned with financial matters at the time, but when the then Labour Government put forward the Banking Bill with the two-tier system that system was opposed by the then Conservative Opposition, particularly by my hon. Friend the Economic Secretary. The two-tier system was put in place by the then Labour Government against the wishes of the Conservative Opposition. It has proved to be a mistake, and we shall certainly be changing it.
The right hon. Gentleman then asked why the Bank of England did not get on to the situation of Johnson Matthey Bankers at an earlier date. I have already made it clear that the Bank of England, despite its excellent record in general of carrying out its supervisory duties, did not on this occasion act as promptly as it should have done. It did, to some extent, fall down on the job. I must say, however, that there was persistent late reporting and misreporting by JMB, so the Bank of England was provided with wholly inadequate information.
The right hon. Gentleman asked if I did not feel that I should have been told at the time about the £100 million loan. Yes, I do think that I should have been told at the time; and that is accepted by the Governor of the Bank of England and, indeed, by the bank generally. I think, however, that the point that the right hon. Gentleman went on to make is false—that I should have revealed this to the House as an additional exposure. It is important to distinguish between loans made by JMB prior to 30 September 1984—which included, as we now know, a large number of very bad and doubtful loans—and the £150 million indemnity to cover them, and the £100 million which was to provide JMB with effective working capital to continue after 30 September 1984 and stands to be recovered in full when JMB is sold back to the private sector.
The right hon. Gentleman then asked why JMB was rescued. I have already indicated quite clearly why the Governor, exercising his responsibilities, decided that, because of the combination of the risk to the London gold market—which is a very important market—and the effect on the banking system, it was right to rescue JMB.
In reply to the question whether I now have confidence in the Governor, I must tell the right hon. Gentleman and the House that I have the fullest confidence in the Governor of the Bank of England.
This is not the first occasion on which a bank has collapsed and a rescue operation has been mounted. Right hon. and hon. Gentlemen on the Opposition Benches and, indeed, the whole House will recall very clearly the secondary banking crisis some 10 years ago and the rescue operations that were mounted by the the then Governor of the Bank of England, backed by the then Chancellor of the Exchequer, the right hon. Member for Leeds, East (Mr.

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Healey). No information of the kind in the Governor's report to the House and in the report that I have given to the House today and no action to tighten up on banking supervision was offered to the House at that time.
Mr. Terence Higgins: Is my right hon. Friend aware that when an event of this size and seriousness occurs it is very important that it should be fully investigated so that the House can take a view on the reforms that need to be made? Therefore, we obviously need to study in detail the information now before us, and it is very important that the lessons should be learned. We are now in a position to do this as a result of the action that my right hon. Friend has taken. His proposals and the other remedies which he may feel to be appropriate are being implemented against the background of a situation in the City of London which is nothing short of a revolution. Therefore, it is important to ensure that we take an overall view of the problems which may arise in that context.
Is my right hon. Friend satisfied that there is sufficient co-ordination between the Treasury and the Department of Trade and Industry, which is responsible for many other aspects of the City's operations? There is some danger, I fear, if there is not sufficient co-ordination and if the interrelationship of the various financial institutions is not taken fully into account when we carry out the reforms which are undoubtedly necessary in the light of this event.
Mr. Lawson: I am grateful to my right hon. Friend for his initial remarks about the particular case which is the subject of my statement today and about the action that the Government have taken.
On the wider issue of the City revolution, I welcome his statement that these reforms are essential if the City of London is to remain a world financial centre, particulrly as far as the securities industry is concerned. It is obviously important that there are adequate regulatory systems and financial protection in place. He will know that the Government will be bringing forward, before very long, I hope, a financial services Bill, when these matters can and should be very fully and rigorously debated.
I am satisfied that there is full co-operation between my Department and the Department of Trade and Industry, as indeed there must be, and not only between those two Departments, but between them and the Bank of England.
Mr. Robert Sheldon: Will the Chancellor bear in mind the clear danger of rushing in with public money before the extent of the problem is realised—and, of course, this should have been realised much earlier? Will he contrast the treatment given to Johnson Matthey Bankers with the failure by a previous Conservative Government to come to the rescue of Rolls-Royce—the most important industrial company in this country, probably in Europe, and even conceivably in the world? They let that company go for sums of money rather less than this. Does that not show the bias of this Conservative Administration towards services in the City of London and away from industrial expenditure, which should be one of our highest priorities?
Mr. Lawson: That is a most extraordinary statement, because, as the right hon. Gentleman should recall, Rolls-Royce was indeed rescued by the previous Conservative
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Government. It is a thriving business. I hope that during the course of this Parliament we shall be able to return it successfully to the private sector.
Sir William Clark: I am sure that everybody in the City and in financial circles generally will appreciate the fact that the Government are going to introduce a new Banking Bill. When will this legislation be brought forward? I have one caveat about such a Bill. In his statement, the Chancellor said that the lending authority—that is, a bank—should not expose itself to a borrower, or a series of borrowers who are connected, to the extent of more than 25 per cent. of its capital. Surely that is far too high a proportion, because a lending authority, such as Johnson Matthey Bankers, for example, could, with four borrowers, commit the whole of its capital. Would my right hon. Friend think again about the recommendations of the review committee and consider whether 25 per cent. is perhaps too high?
Mr. Lawson: On the second point, my hon. Friend has to bear in mind that we have a very flexible discretionary system of banking supervision in this country. I am not proposing, nor is the review committee, that it should be replaced by a system of rigid rules. It is possible to have a system of rigid rules. The United States has such a system, but that does not prevent banks occasionally collapsing in the United States — for example, Continental Illinois, which was, of course, rescued. If there were to be rigid rules, the sort of matters to which my hon. Friend referred would have to be covered by them. This 25 per cent. rule is a general upper limit guideline. It does not mean that circumstances might not arise of the kind that my hon. Friend suggested, in which case, long before that, the supervisory authority would say that that was not in keeping with the supervision rules that it imposed informally and it would require the lending authority to reduce its exposures.
As to my hon. Friend's first question, we hope that we shall be able to bring forward legislation during the 1986–87 Session.
Mr. Brian Sedgemore: For the benefit of those members of the public who are not well versed in matters of high finance, will the Chancellor of the Exchequer distinguish between stupidity, incompetence and greed and fraudulent trading, fraudulent accounting and fraud? Bearing in mind the fact that in any language, other than Tory language, the conduct of Johnson Matthey Bankers, the auditors and the Governor of the Bank of England has coalesced into a fraud on the public, should not the Governor of the Bank of England resign under this Government before he gets the sack under the next Labour Government?
Mr. Lawson: That question is hardly worthy of any answer, although it is worthy of the hon. Gentleman. No prima facie evidence of fraud has so far been uncovered. The Price Waterhouse report turned up no prima facie evidence of fraud. However, if any prima facie evidence of fraud were to be turned up in further investigations, of course the appropriate action would be taken.
Sir Anthony Grant: Will my right hon. Friend confirm that the strictures, rightly levelled at the banking side of Johnson Matthey plc, do not apply to the industrial subsidiary located in my constituency which does some excellent work and gives

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valuable employment to my constituents? Is not the saving of that employment and the industrial side of Johnson Matthey plc a justification of the rescue operation?
Mr. Lawson: My hon. Friend is right in a number of respects. First, the parent company, Johnson Matthey plc, conducts industrial operations successfully and well in a number of constituencies, not just his. It would have been brought down completely had that rescue not been mounted. However, that was not the prime reason for mounting the rescue operation. It was for the reasons that I gave in my statement. The same goes for the bullion business of Johnson Matthey plc, which is a sound business, contrary to the impression given by a long and completely misguided campaign by the right hon. Member for Plymouth, Devonport (Dr. Owen), who is not in his place.
Mr. Ian Wrigglesworth: In view of the comment that the Chancellor of the Exchequer has just made, will he explain why it was necessary to give a massive £150 million indemnity involving substantial public funds to keep the whole of that operation going? If the future of the gold market were not going to be rocked, because the bullion side of the business was viable, why was it necessary to save the whole of the institution?
When he considers future banking supervision, will he take into account the views put forward by a number of people, when the subject was discussed previously? It was then said that the Bank of England is the wrong body to be responsible for the supervision of the banking system, as it is acting as an advocate for and a supervisor of the banking system, and that it should be contained in its role as a central bank and not carry out that supervisory role. Will the Chancellor of the Exchequer also explain why no charges are being brought and the fraud squad is not pursuing the matter further, when there has been such massive misreporting and misleading of the supervisory body by the bank's management?
Mr. Lawson: The answers to the hon. Gentleman's three questions are as follows. First, whether the Bank of England should continue to be the supervisory body was one of the matters considered by the review committee, which unanimously reached the conclusion that it should remain as the supervisory authority.
As to whether there was any danger to the gold market, I hardly think that the members of the gold market would have contributed to the indemnity, as they did, had they not thought that it was important to the London gold market that the bank should be rescued. That was the view of the Governor of the Bank of England and of those from the private sector who contributed to the indemnity.
Misreporting, even on the appalling scale that occurred in this case, does not constitute a fraud. That is a point of law.
Mr. Jonathan Aitken: Although this affair is a most bizarre Alice-in-Cityland fable of unbelievable incompetence by the management of Johnson Matthey Bankers, does my right hon. Friend agree that considerable good may yet come out of it, because of the important reforms and changes to banking supervision in the legislation that he has announced in his statement? Does he further agree that, far from sweeping matters under the carpet, as the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) appeared to be
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claiming, the Governor of the Bank of England deserves some credit for setting new standards of openness in this matter with the full record which has been published today in the Bank of England's annual report? Does not that candour compare favourably with the cover-up operation which the Labour Government carried out throughout the secondary banking crisis when details of the many bank rescues and lifeboat operations were completely concealed from the House of Commons by the then Ministers?
Mr. Lawson: My hon. Friend is correct on each of his points. I hope that good will come from, as he said, the appalling and bizarre record of incompetence and mismanagement by Johnson Matthey Bankers and the collapse. I believe that it will. I believe that we shall have a much better banking supervisory system than we have had hitherto.
Mr. D. N. Campbell-Savours: Is not the truth that there has been far too much socialising between JMB and Bank of England personnel and far too little supervising? If everything is being revealed, why does the Chancellor not publish the Price Waterhouse report? What is in it? Why cannot the public know its contents? Will it reveal the extent of the Bank of England's negligence? Why does everyone resist publishing that crucial document, which would enlighten the British public and reveal the full nature of the negligence of the Government, the Bank of England and JMB?
Mr. Lawson: I recommend to the hon. Gentleman that he reads the account given in the annual report of the Governor of the Bank of England, which was published today. As my hon. Friend the Member for Thanet, South (Mr. Aitken) said, he will see a great deal of information. It contains far more information than was ever provided by the Labour Government. The Price Waterhouse report was commissioned by the Bank of England to assist it in assessing the position in JMB. It contains details of the accounts of the customers of JMB, which, of course, cannot by law be published. To publish it would also undermine to some extent the suit—
Mr. Campbell-Savours: The cover-up.
Mr. Lawson: No, the legal action—that the Bank of England, through Johnson Matthey Bankers, proposes to take against the auditors, Arthur Young McClelland Moores and Co.
Mr. Tim Smith: My right hon. Friend mentioned the tough recommendations made in March to the Governor's committee by the English and Scottish Institutes of Chartered Accountants. Many of those have been incorporated in the committee's report. Does my right hon. Friend agree that the opening up of the relationship between the Bank of England and individual banks' auditors lies at the heart of any improvement in banking supervision? Will he ensure that those recommendations are implemented as soon as possible — even ahead of any legislation — if necessary, voluntarily?
Mr. Lawson: I agree with my hon. Friend. Those points are at the heart of the matter. Some require legislation, because at the moment there is an iron curtain both ways between auditors and supervisors. The auditors, by their code of professional confidentiality, feel that they cannot reveal to the supervisors what they learn about a

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bank. Equally, under the Banking Act 1979, supervisors are not empowered to reveal what they discover to a bank's auditors. The iron curtain must be removed in both ways.
Mr. John McWilliam: Will the Chancellor tell the House whether the Governor of the Bank of England was aware of his intention to make a statement to this House on 17 December at any time before he made that statement?
Mr. Lawson: Yes, Sir.
Mr. Gerald Howarth: Will my right hon. Friend confirm that those who made the ill-judged banking decisions have now been dismissed from Johnson Matthey and have nothing further to do with it?
Does my right hon. Friend agree with the report's assertions that it is the flexible nature of the supervisory regime in London that has made it the centre of the financial world, with the Bank of England now supervising more than 600 institutions, most of which are not British? Will he ensure that nothing is done to imperil the City's standing in that respect?
Mr. Lawson: I agree with my hon. Friend. The chairman, deputy chairman, managing director, deputy managing director and two other directors who had responsibility for the banking operations have resigned. I am, of course, referring to the old board.
Mr. James Lamond: Will the Chancellor answer a question which, rather surprisingly, has not been asked by his hon. Friends who allege that they are very interested in the taxpayers of this country? Will he tell me—in round figures, if necessary—exactly how much my constituents, as taxpayers, will have to find to meet the provisions in this statement?
Mr. Lawson: Nothing.
Sir Kenneth Lewis: Is my right hon. Friend aware that I support the package that he has put before the House to deal with this matter? However, I have a feeling that if this company had been wholly industrial and approached its bankers, they would have said that it was lost and, therefore, should get lost. The company would not have received support. It is a privileged community.
Will my right hon. Friend say to the banks generally that it would be a good thing if they could support industry in return for the support that they obviously receive?
Mr. Lawson: If my hon. Friend is under the impression that any bank that gets into difficulties will automatically be rescued, I am happy to take this opportunity to say that that is certainly not the case. The banking community should be well aware of that. In this particular case, for the reasons that I have already given, the Governor felt that it was right to mount a rescue.
Mr. Max Madden: The Chancellor appears to be unduly nervous today about his statement, which may in part be due to his anxiety about the whereabouts of my hon. Friend the Member for Bolsover (Mr. Skinner), who has taken a great interest in these matters. I can tell him that, like so many other hon. Members, he is campaigning in the Brecon and Radnor by-election. I am sure that the right hon. Gentleman's
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statement will do nothing to answer the very serious questions that my hon. Friend and others have been asking.
Are we not told that people like the Chancellor take the view that all uneconomic units should die—that that which cannot create a profit should die? In view of that, why on earth was this bank propped up with public money? Will the Chancellor give a clear assurance that not a single penny piece of public money has been used to shore up that uneconomic bank?
Mr. Lawson: I have already made the position on public money very clear—not only on this occasion, but on a previous occasion. Currently, the exposure of the Bank of the England in terms of money that may be lost looks like being £34 million. However, we must take into account what the bank will receive when it sells Johnson Matthey Bankers back to the private sector. There is also the question of what it might receive as a result of the legal action it proposes to take against the auditors Arthur Young.
On the hon. Gentleman's first point, I think that he is confusing my demeanour. It is not nervousness, but deep disappointment at the absence of the hon. Member for Bolsover (Mr. Skinner) from our proceedings.
Viscount Cranborne: Does my right hon. Friend accept that his remarks about fraud will be widely welcomed, especially in view of recent events at Lloyds and in other parts of the City, which have far too often led to the clear indication in certain parts of the press that people who perpetrate white-collar fraud get away with it while blue-collar fraudsters and criminals do not?
Mr. Lawson: I have considerable sympathy with my hon. Friend's sentiments. I hope that nothing that is said in this House will give the impression outside that the appalling conduct of those responsible for the happenings at Johnson Matthey Bankers is in any way typical of British banking.
Mr. Stuart Bell: In response to the question asked by my right hon. Friend the Member for Ashton-under-Lyne (Mr. Sheldon) on 17 December, the right hon. Gentleman said that only £1 was invested in Johnson Matthey by the banking department of the Bank of England together with an indemnity of £75 million from the banking sector. He told my hon. Friend the Member for Sedgefield (Mr. Blair) that he was informed the following day that there was a £100 million deposit with Johnson Matthey. Why has he waited six months to give the House that information? Does he agree that he should have given a full personal statement to rectify that error once it had been brought to his attention? Does he not owe the House an apology?
Mr. Lawson: I do not accept any of that. I have been open with the House since December last year when I made a statement, although I was under no pressure to do so. There was certainly no request for a statement from the Opposition. Opposition Members have not asked a single question about Johnson Matthey or banking supervision—
Mr. Madden: What about my hon. Friend the Member for Bolsover?
Mr. Lawson: I accept that there were one or two questions from the hon. Member for Bolsover, but there has been no question from the Labour Front Bench. As for the hon. Member for Bolsover, he is not even here.
I made that statement and also set in motion the review of the supervisory system. As a result, we shall get a better supervisory system—not only through legislation, but because of the changes that the Bank of England is introducing. I should have thought that the hon. Gentleman would welcome that.
Mr. Eric Deakins: Is the Chancellor satisfied that resignation is a suitable punishment for directors responsible for such financial mismanagement and incompetence? What sort of example will that set for people in the rest of the economy?
Mr. Lawson: It is not just a matter of resignation. The shareholders in the Johnson Matthey parent company have lost 70 per cent. of their money — well over £200 million. Of all the money that has been put behind the staggering losses of bad debts, 86 per cent. is private sector money.
Mr. Jack Straw: Just who was the Chancellor trying to kid when he told my hon. Friend the Member for Oldham, Central and Royton (Mr. Lamond) that not a penny piece was at risk for the taxpayer? On our reading of his statement, it is likely to cost up to £134 million from the public purse. That is the extent of the risk. It is well over half the amount of money that was taken from beneficiaries of child benefit. If no public money is at risk, why is the Chancellor making this statement in his capacity as Chancellor, and where will the £134 million come from?
Mr. Lawson: The hon. Gentleman has got his figures completely wrong. The £34 million is indeed money that is lost in the sense of recovering bad debts; but, as I said earlier, against that must be set the money that will be recovered when Johnson Matthey is sold. The money that is then recovered will, as I said in my statement, include the £100 million additional capital that has been put in. That will be paid first. Therefore, currently £34 million is the risk, but money will be recovered from the sale of Johnson Matthey Bankers, and money may also be recovered from the legal action against the auditors.

European Community
5.10 pm
The Minister of State, Foreign and Commonwealth Office (Mr. Malcolm Rifkind): I beg to move,
That this House takes note of the White Paper on Developments in the European Community, July to December 1984 (Cmnd. 9485), of the Report to the European Council of the Ad Hoc Committee for Institutional Affairs (the Dooge Report), and of European Community Documents Nos. 11911/1/81 on a conciliation procedure between the European Parliament, the Council and the Commission, 10350/82 on stronger action in the cultural sector, 8667/82 and 4469/85 on the easing of controls and formalities applicable to nationals of member states at Community internal borders; and welcomes the Government's determination to seek early progress towards completion of the Common Market and to ensure that the easing of checks at frontiers is compatible with the fight against drug trafficking, terrorism and illegal immigration.
Mr. Speaker: I have selected the amendment in the name of the Leader of the Opposition.
Mr. Rifkind: The Government welcome this opportunity for the House to consider not only the report of the Ad Hoc Committee for Institutional Affairs and the other documents mentioned in the motion but the important questions to be dealt with at the Milan summit later this month. No one will dispute that that summit will be discussing issues and perhaps reaching conclusions which may chart the whole future of the Community in the next few years. It is therefore right and proper that the House should have the opportunity to condsider the issues as the Scrutiny Committee has suggested.
I intend to concentrate on the Dooge committee and other matters to be dealt with at the Milan summit. My hon. Friend the Parliamentary Under-Secretary of State will comment on the Frontier proposals, on questions of culture and on matters raised in the debate when he replies. As the House will shortly have an opportunity to consider important budgetary and own resources questions, I shall not comment on those matters today apart from some brief observations on one point referred to in the White Paper regarding budgetary discipline.
In the recent disagreement among Agriculture Ministers, the German Government used their veto in relation to cereal prices. It has been suggested that that was clear evidence of the Community's inability to consider proper budgetary discipline. Two simple points should be borne in mind by those who make such accusations.
First, this was one of the increasingly frequent but still all too rare occasions when the dispute was not about a price increase but about the appropriate size of cuts. The Agriculture Ministers had already agreed cuts throughout the whole range of agriculture prices apart from cereal and rapeseed. Even on the latter two commodities all the Community Governments, including the Germans, accepted the principle of cuts but disagreed about the appropiate size. That is substantially different from the type of debate that used to take place just a few years ago.
Secondly, in the past the United Kingdom was always in a minority of one to nine on these matters. On this occasion the voting was nine to one but we were in the majority. All member states, including the United Kingdom, supported the principle of reduction so that instead of arguing a lonely case we were in the company of the French, the Italians and the vast majority of other member states.
Mr. Tony Marlow: My hon. Friend seems to be suggesting that sense and reason have suddenly broken out in relation to the common agricultural policy, but can he say by how many percentage points the proportion of the total Community budget taken up by the common agricultural policy will be lower this year than it was last year?
Mr. Rifkind: Under the provisional draft budget proposed by the Commission agricultural expenditure would be about 64 per cent. of total Community expenditure compared with 71 per cent. in the current year. Those are the latest figures available.
Mr. Nicholas Budgen: What assumptions are made about the value of the dollar?
Mr. Rifkind: The Commission has to work on the basis of the information available to it. It is no more able than any national Government to speculate about future trends in exchange rate. No one can suggest that the Commission, the Community or the Council of Ministers should be blamed for exchange rates over which they have no control.
Mr. Budgen: What are the assumptions?
Mr. Rifkind: The Commission works on the facts available to it at this stage, not on vague assumptions of the kind to which my hon. Friend the Member for Wolverhampton, South-West (Mr. Budgen) seems to be addicted.
Mr. Teddy Taylor: Is there not a danger of the Minister inadvertently misleading the House by suggesting that price levels relate to budgetary discipline? In fact, the consumers pay the food prices. The Common Market pays the dumping and storage costs. Does my hon. Friend agree that £7,000 million per year or £20 million per day is spent on the storage, dumping and destruction of food surpluses and that there is no suggestion in next year's budget or anywhere else that that expenditure will be reduced?
Mr. Rifkind: My hon. Friend may be surprised to know that the Government share his desire for important reforms in relation not just to the dumping of surpluses but to their creation in the first place. I believe that the whole House is united on that.
Mr. Budgen: Will my hon. Friend give way?
Mr. Rifkind: My hon. Friend will forgive me if I do not give way to him again. I am sure that he will have an opportunity to participate in due course.
Mr. George Foulkes: This is the official Opposition rather than the unofficial opposition. Will the Minister confirm that the EEC budget has been drawn up on the basis of a 3 per cent. cut in cereal prices? If that is not achieved, will there be a request to member states for a loan or some kind of reimbursable advance?
Mr. Rifkind: The Commission has said that in the absence of an agreement on cereal prices it is taking certain administrative actions on the basis of a 1·8 per cent. reduction in cereal prices. Those proposals could be changed if a decision is reached by the Council of Ministers on a different level of reduction.
Mr. Foulkes: That is exactly my point. If the operation is based on 1·8 per cent. and the budget on 3 per cent.,
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there will be a shortfall. How will that shortfall be made up? Will it be made up by means of a further loan or what is known as a reimbursable advance requested from member states? In other words, will we be asked for more money?
Mr. Rifkind: The Commission proposals for a 1·8 per cent. reduction in cereal prices are entirely consistent with the permitted framework for agriculture expenditure arising from the Fontainebleau mechanism. I hope that that will reassure the hon. Gentleman and his colleagues.
On the Dooge report and the Milan summit, since the Fontainebleau agreement the British Government have been able to concentrate their activities on putting forward major improvements in the working of the Community across a wide range of issues. A significant factor in the past 12 months has been the extent to which, for the first time in many years, the Community has ceased to be obsessed with the single dominant issue of United Kingdom relations with other member states. That is a matter of great satisfaction to the Community as a whole as well as to the United Kingdom. As a result, the British Government can now take on the role in the Community that many people believed that we could take from the moment of joining some 10 years ago.
In the Dooge committee, in the informal meeting of Ministers at Stresa and in relation to the forthcoming Milan summit, the United Kingdom has taken the initiative on a wide range of issues including political co-operation, completion of the internal market, improved decision-making, political co-operation on other aspects of foreign policy, and other important subjects. Our approach to these questions is to be progressive and idealistic but to insist on a hefty dose of realism in the various reforms put forward for consideration within the Community.
Sir Russell Johnston: Do I understand that the Minister said that the Government are progressive and idealistic?
Mr. Rifkind: I most certainly did say that. It is sensible for the Government and for the United Kingdom to be idealistic in their attitude towards the European Community. I also emphasised that we believe, unlike the hon. Gentleman and his colleagues, that idealism should always be balanced by sound common sense. Indeed, that is the basis of our approach. We are often sceptical about the various initiatives that are proposed in some quarters, but we are never cynical about the need for change and progress in the European Community. Traditionally and rightly, the country is cautious when serious and radical proposals are put forward to change institutions. I do not believe that such caution is a matter of shame, nor should it be a source of embarrassment. A policy based on realism, common sense and caution is quite consistent with the original ideas of the European Community. Jean Monet, one of its founders, said that Europe would be built one step at a time. That is also the view of the Government.
Some of the specific proposals that are discussed in the report of the Ad Hoc Committee for Institutional Affairs will undoubtedly be considered at the forthcoming summit in Milan. There are three main issues on which the Government hope there will be progress at Milan—the completion of the internal market, the improvement of political co-operation and improvements in decision-making in the Community.

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With regard to the internal market, the United Kingdom is probably one of the first countries in the Community to emphasise the extent to which the Community has failed to implement one of the obligations under the treaty of Rome.
For some time we have emphasised the need for steps that will result in the completion of the internal market. Such steps should be greater than the simple declarations of intent and should involve practical measures and form a timetable for these matters to be implemented. Those proposals, which I in my capacity as the Britsh representative on the Dooge committee put forward, were unanimously endorsed by that committee in its recommendation to the European Council. We were delighted when Mr. Delors, the new President of the Commission, said, in his opening speech, that he also regards as a priority the completion of the internal market by 1992. It is a target to which he and the Commission are firmly committed and for which they intend to press with all the strength at their disposal.
Earlier this week we published the White Paper of Lord Cockfield, the Senior British Commissioner in the European Commission, which makes many proposals for harmonisation and approximation of laws which the Commission argues are necessary and desirable for the completion of the internal market. The Government welcome that document and the broad thrust of its proposals, especially the target date of 1992 and the detailed way in which it states that it hopes that the proposals will be implemented.
There are some 300 proposals for harmonisation in that White Paper and we shall examine each in close detail. It might be helpful for me to give the Government's attitude about harmonisation. We do not believe in harmonisation for its own sake. When harmonisation or approximation of laws assist, the improvement of competition in the Community and benefits consumers and the public generally, the advance is desirable. However, if it is not possible to demonstrate such advantages for people, the Community or the economic interests of member states, harmonisation is unnecessary and undesirable.
Mr. Marlow: As my hon. Friend knows, in Brussels, many of these things are put together in a batch—"We scratch your back and you scratch ours." Can he give a commitment to the House that, if faced with three measures, two of which are good and one of which is bad, he will still decline the bad one?
Mr. Rifkind: I am sure that my hon. Friend realises that the Government would never wish to accept or agree to a proposal that they believed was contrary to the interests of the United Kingdom, whether it be one out of three or one out of 53.
Most of the proposals in Lord Cockfield's White Paper seem highly sensible and attractive at first glance but in one example—tax harmonisation or approximation—the case has not been proved. The case has been put forward by the committee and we shall consider the proposals in close detail and in a constructive spirit. However, we do not believe at this stage that the case has been argued with sufficient conviction that, to achieve an internal market which will encourage competition and benefit trade and economic development such as we would like, we must achieve tax harmonisation.
The United States has 50 separate states, many of which have their own direct and indirect taxes. We have not yet
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heard a convincing argument that those differences have led to inadequate competition or an inadequate internal market there. That factor is of interest to the United Kingdom, but the United Kingdom is not alone in having strong views on the matter. Some member states would have to make even more substantial changes than the United Kingdom if tax harmonisation were adopted in the Community.
If we take the example of excise duties, for example, we find that if France were to harmonise its wine duty there would be an increase in excise duty of no less than 229 per cent. which is unlikely to be popular in France. In Germany, approximation of excise duty on beer would require an increase of 223 per cent. In Italy, approximation of tax on diesel would require an increase of not less than 886 per cent. In Greece, the approximation of excise duty on spirits would require an increase of over 2,500 per cent. This is clearly a matter of controversy in the Community and the Government will consider such evidence as may exist on how tax harmonisation or approximation would assist the objective of the internal market and improvement of the prosperity of the Community as a whole.
Mr. Teddy Taylor: Although I welcome what my hon. Friend said about one of the points in Lord Cockfield's White Paper which was considered vital for the completion of the Community, will my hon. Friend make it abundantly clear that the Government are not prepared to depart from their consistent, oft-repeated policy that they will not impose value added tax on food, gas or electricity?
Mr. Rifkind: My hon. Friend is aware that that is a matter for my right hon. Friend the Chancellor of the Exchequer. My hon. Friend will not expect me to speak on such matters. However, I am aware of no proposal to do anything of that kind.
Mr. Nigel Spearing: Before the hon. Gentleman leaves Lord Cockfield's White Paper, can he put us in the picture procedurally? Is it not a fact that this is not a White Paper but a communication from the Commission? Secondly, has that communication been officially received by the Government and will it be presented to the House? Will it be discussed formally or informally at the Milan summit?
Mr. Rifkind: I confirm that the White Paper is a communication from the Commission as a whole and not from an individual commissioner, though the noble Lord has taken a leading role in its preparation. I hope that the document is currently available in the Library. The Government have received it in the last few days. There will undoubtedly be a general discussion about the internal market at the Milan summit, and the subject will be raised by some of those present. Given that this is a series of proposals from the Commission, I would not expect a decision on tax approximation either to be reached or sought as early as the Milan summit.
Mr. Budgen: I should be grateful if my hon. Friend would take the opportunity of commenting on the proposal on page 15 of the Dooge report called
"Gradual establishment of a homogeneous judicial area"
because it suggests that the European Court of Justice may play an even more important role in future. That may show that the Government are in favour of encouraging people, such as Myra Hindley, further to undermine the supremacy of Parliament by appealing against—[Interruption.] The

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European Court of Justice is referred to in the document as part of the European family of institutions. Would my hon. Friend be good enough to descend to detail, to look at page 15 and to say what the Government's position is?
Mr. Rifkind: I am sorry to say that my hon. Friend seems, somewhat unusually, confused. As I understand it, Miss Hindley's potential application is to the European Court of Human Rights. I am not aware of a suggestion, either in the Dooge report or elsewhere, that people in her position would be able to appeal to the European Court of Justice. Certainly, the European Court of Justice's present terms of reference and its likely competence in the foreseeable future make it improbable that such an application would be competent for it.
Mr. Eric Forth: This is an important point, and there should be no confusion about it. On page 15 of the Dooge document it states that the establishment of a homogenous judicial area means
"increasing protection of fundamental freedoms and rights as they derive from common basic principles and the European Convention on Human Rights."
Therefore, the convention is mentioned in the Dooge document and forms the basis for the activities of the Court of Human Rights in Strasbourg.
Mr. Rifkind: I thank my hon. Friend for his question, which was intended to be helpful. I am not sure whom it was intended to help, and perhaps I should have asked him before I gave way. Neither the British Government nor other Governments intend to contemplate giving to the European Court of Justice competence for dealing with such matters. I am not aware of a proposal to that effect from any member state, nor do I believe that it is likely.
I shall now deal with the second main issue, which will be of considerable importance at the Milan summit—the question of political co-operation. In many respects political co-operation is one of the success stories of the Community. During the past 15 years a substantial habit of close co-operation and consultation has developed between the member states on matters of foreign policy. Indeed, political co-operation is an excellent example of how, without any amendments to the treaty, it is possible for member states to develop and achieve close co-operation and consultation on matters of mutual interest. The United Kingdom benefited considerably from the strong unanimous support given by member states when the Falkland Islands were initially invaded. The European Community, through the Venice declaration, made a substantial impact on the thinking on matters affecting the middle east.
The Government's proposals at the Stresa meeting of Foreign Ministers are intended to improve political co-operation. First, we believe that it is highly desirable that at this stage in the development of political co-operation a small secretariat should be established to assist the Presidency of the Council of Ministers at any given time. Because the Presidency changes every six months, there is insufficient continuity, which causes problems. It is widely recognised that there should be a small secretariat. No one, and certainly not the British Government, wants an unwieldy bureaucracy or anything other than the minimum required to assist Community Foreign Ministers.
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Secondly, it is desirable to see progress made to enable the Council of Ministers to discuss issues affecting other parts of the world, and to involve themselves in questions of security. Clearly, there is an important distinction between security and defence. Given the fundamental commitment of most member states to the NATO Alliance, it would not be appropriate for the 10 Foreign Ministers to involve themselves with issues of defence. Clearly, there are political implications to matters such as East-West relations, the attitude of Western Europe to the countries of Eastern Europe, and the consequences of development in NATO and elsewhere. In the view of the British Government and most of the Community Governments, it is desirable that such matters should be available for discussion by the Council of Ministers when they meet in session.
Mr. George Robertson: In what way would that complement or conflict with Western European Union?
Mr. Rifkind: As the hon. Gentleman will know, Western European Union is primarily concerned with defence, as is the North Atlantic Alliance. The Community should be primarily concerned with political implications rather than defence implications, especially as countries such as Ireland are not members of the Alliance, and other countries in NATO are not members of the Community. Therefore, it is necessary to make a distinction. I concede that there is no neat and easy line of demarcation. However, it is helpful and sensible for EC countries to be able to consider East-West relations and attitudes, and other such matters.
The third main question, which the House will consider to be the most important, relates to decision-making within the Community, the national veto, and the objective of majority voting. Some people suggest that in recent years the Community has been experiencing a form of paralysis in its inability to make progress on matters of supreme importance. The British Government do not accept that. Although progress has been slow, the agreement at Fontainebleau, the success of enlargement negotiations and other recent important developments show that the Community is able to reach decisions.
With 10 member states it is not suprising that the Community takes a considerable time to reconcile the often different traditions and interests of member states, and to reach agreement. We believe that, although progress has been made, it is sensible to consider ways in which quicker, more effective progress can be achieved, especially in the light of the imminent enlargement of the Community to include Spain and Portugal. Clearly, a Community of 12 member states will find it even more difficult to reach agreement on a wide range of issues.
The Government believe that it is desirable to encourage more majority voting within the Community. We should like to see more majority voting under those clauses of the treaty that already provide for majority voting, and where the practice has grown up for the Presidency not to ask the Council to reach a decision, unless the Presidency is already assured of a unanimous response. We do not wish to see a change in the treaty, nor do we see a need to consider amendments to the existing treaty. However, on a wide range of issues where there is an overwhelming and qualifying majority, it should be normal to proceed to a vote, and for the Council to come

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to a decision. I must emphasis that our support for more majority voting within the Community can be forthcoming only on the basis of a continuation of the right of national veto when matters of important national interest are at stake.
The Government believe that it is right to keep a balance between a general increase in majority voting in the Community and those occasions when important national interests are at stake and the member state will wish to continue to have a fundamental right to insist that discussions should continue until agreement is reached. We do not wish the veto to be abused. We wish to ensure as far as possible that member states are discouraged from using the veto in matters that are not of vital national interest. Ultimately, that must be left to the discretion of the national Government. We cannot accept the suggestion that any member state would be able to determine what was, or was not, of vital national interest to another member state.
Mr. Hugh Dykes: Would my hon. Friend agree that, because Governments have far too frequently emphasised the importance of the veto and suggested that it should be applied to matters of less than grave and profound national interest, they have not been able to condemn, for example, Germany's selfish refusal to agree to increased cereal prices? if there had been a more positive attitude towards the importance of majority voting, that action could have been condemned, as it should have been, by other member states. Indeed, the Germans might have hesitated before taking that drastic action.
Mr. Rifkind: I must emphasise that, although we disagreed with the German Government about the desirability of their action, we were emphatic that they had the absolute right to take the action if, in their judgment, a matter of vital national interest was at stake. That was the view not only of the British Government but of all the member states, apart from the Benelux countries and Italy.
Mr. William Cash: The Dooge report states at page 26:
"When a Member State considers that its very important interests are at stake, the discussion should continue until unanimous agreement is reached."
The footnote states that my hon. Friend the Minister considers that,
"in order to prevent abuse, a member of the Council insisting that discussion should continue in this way should, through a special procedure of the Council, explain fully and formally why his Government considers that a very important interest is at stake."
In other words, reasons should be given. Could my hon. Friend explain more about that?
Mr. RifkindI had intended to do so, before the interventions. Although we believe that the national veto should remain, we should attempt to discourage its use for relatively trivial matters. The British Government have put forward proposals that will help towards that end.
There is rarely a vote in the Council. Those who wish to block progress sometimes need not publicly identify themselves and need never produce public justification for their actions. They must merely show their inability or unwillingness to support a proposal. The matter is put off until another day in the hope that their view might change. We believe, as do many member states, that if it is clear that a majority of the Community wishes to move in a particular direction, the normal procedure should be that
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the Presidency calls for a vote. Those who wish to block progress by invoking the veto should be required to do so publicly and, if necessary, produce a public explanation as to why they believe that there is a vital national interest at stake, instead of being able to do so privately and without revealing themselves. That would not prevent a member state using the veto procedure whenever it chooses but it would ensure that a Government would have to balance the domestic political advantages of using the veto against the political disadvantages in terms of their relationship with the Community and their objectives in other areas.
Mr. J. Enoch Powell: When the Minister uses the expression "publicly", is it now envisaged, as many of us have long thought should be the case, that the proceedings of the Council should be public and reported, since the Council is the legislature of the Community? How, otherwise, can the declaration be public?
Mr. Rifkind: No such specific proposal is being considered, but the British Government have said that they would positively welcome the introduction of a procedure whereby, when the veto was invoked, the reasons given to the Council of Ministers as to why a vital national interest was at stake are subsequently made public knowledge. We have put forward that proposal, and we are willing to consider modifications to it to help to achieve the objective that we have identified.
Another matter that we would wish to encourage, as was suggested by my right hon. Friend the Prime Minister and by the Dutch Prime Minister at the Dublin summit, at the beginning of this year, was that, in some areas where unanimity is presently required, if a member state wished to abstain rather than to oppose a measure, it would be possible for progress to be made notwithstanding the unanimity provisions of the treaty. Clearly, that would be at the discretion of the Government concerned, who would not be bound to act in that way.
The completion of the internal market, the improvement of political co-operation and the improvement of decision-making would, if agreed to by member states, represent a substantial and healthy package which would be of significant importance to the future of the Community. However, other matters are likely to be considered at the Milan summit, and I wish to speak briefly on some of those. First, we welcome the French proposal for EUREKA—for co-operation on European high technology—because we recognise the desirability of Europe achieving true competitiveness with the United States and Japan. But, as President Mitterrand has already said, the present problem is not inadequate expenditure on research. Indeed, Europe spends more on research than does either the United States or Japan. Therefore, the objective must be to achieve better value for the expenditure that is already being incurred by closer co-operation and co-ordination of our efforts.
Some people would like major changes to be made in the powers of the European Parliament. The British Government believe that the European Parliament has significant powers and that it should concentrate its efforts on the responsible use of its existing powers, not on considering whether they should be changed or increased. However, we are willing for the European Parliament to try more effectively to influence the Council of Ministers

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when matters are being considered, for the simple reason that, at present, the European Parliament's view is often made known only when the Council of Ministers has already made up its mind. That is unlikely to lead to its views being taken into account. We have introduced proposals that would enable the European Parliament's view on any proposals of the Commission to be considered at a much earlier stage, so that when the Council of Ministers is reaching its conclusions on such matters it is aware of the views of the European Parliament and can take them into account in a sensible and constructive way. We do not believe in joint decision-making between the Council of Ministers and the European Parliament, as some have advocated. The decision-making right rests with the Council of Ministers, as it has done for many years. But we should welcome the opportunity for the Parliament to let its views be known in the way that I have suggested.
Mr. Dykes: Further to the interesting suggestion of the right hon. Member for South Down (Mr. Powell) about the Council of Ministers—being a legislative body, not a policy body—being susceptible to public hearings, does my hon. Friend believe that the committees of the European Parliament should hold all sessions in public, or more sessions in public, rather than excluding the public and the press, as they now do?
Mr. Rifkind: That is for the European Parliament to determine, but we would welcome anything that might lead to an improvement in the reputation of the Parliament and its ability to influence developments constructively. However, it must be for the Parliament to decide whether that proposal would enhance its objectives in the desired way.
The last matter on which I wish to comment is the proposal made by the majority of the Dooge committee, and which we have heard from some other quarters, that we should convene an intergovernmental conference to consider the future of the Community and to make recommendations to the Heads of Government on any changes that may be forthcoming. The Government, and a substantial number of other member Governments, do not see any necessity for an intergovernmental conference such as is proposed. One could say with some justification that the best intergovernmental conference is the European Council itself, being the body of Heads of Government whom we hope will be able to reach decisions at Milan on the matters that are to be considered. Those who wish to see an intergovernmental conference of the kind recommended by the majority in the Dooge committee, with a view to amending the treaty, are misguided about the best way of making progress in the Community.
Once one embarks on the road of treaty amendment, one must bear in mind that, in whatever area it is amended, it will require not only the unanimous agreement of all 12 member Governments but the unanimous ratification of all 12 national Parliaments. Even if any proposals were considered to be acceptable, at the least we would be contemplating a delay of one, two or possibly even three years before such a process would be complete. Her Majesty's Government believe that major progress can be made at the present time without amending the treaty and we would wish to see discussion focused on the particular issues that I have discussed.
Mr. Eric Deakins: Will the Minister confirm that the discussion on the documents that we are considering this afternoon is taking place on a motion to take note? Will he confirm that Her Majesty's Government will not, therefore, deduce from today's discussion that the House approves of any or all of the recommendations in the documents?
Mr. Rifkind: I happily accept that. As the hon. Gentleman correctly says, the motion is a take-note motion and in any event it would have been the intention of Her Majesty's Government to report to the House after the Milan summit. If any significant decisions are reached at Milan, it would be right and proper for the House to have an opportunity to consider them and express its views on them. Any position taken by member Governments at Milan will be subject to the proper opportunity of their national Parliaments to consider any decisions that have been reached.
I look forward to the contribution that the Opposition will make to the debate. I regret that their amendment incorporates none of their ideas on the overall future of the Community. I can understand the reasons for that and I appreciate the difficulty for the hon. Member for Hamilton (Mr. Robertson). The only significant development made by the Opposition in the past year has been to sack Mrs. Barbara Castle as the leader of the Labour Members of the European Parliament. I hope that the hon. Member for Hamilton will join me in saying how much he regrets the sacking of Mrs. Castle by her colleagues and that he will recognise her as a person of considerable experience. Although we disagree with many of her views, she is able to make a serious contribution to the work of the European Parliament. We note that her successor seeks to see Britain withdraw from the Community and that his views are totally at variance with those of virtually the entire Socialist group in the European Parliament. I look forward to the hon. Gentleman's comments on that matter.
Her Majesty's Government believe that Britain is making an important and constructive contribution towards the vital debate about the future of the Community. We have had considerable discussions about the sort of harmonisation that is appropriate in the European Community. The Government do not believe in harmonisation for its own sake or that every member state should be encouraged to lose its own national identity. We believe that we should seek to bring together the countries of the Community where closer co-operation makes obvious sense.
Perhaps our objective and our attitude were best summed up in a remark made by G. K. Chesterton many years ago, before the European Community was ever conceived of, when he said:
"The golden age of the good European is like the heaven of the Christian: it is a place where people will love each other; not like the heaven of the Hindu, a place where they will be each other."
That is not an unreasonable approach to take in our overall attitude towards the European Community. We seek to see the member states of the Community coming together in ever closer co-operation. We seek to see them join together where joint action makes sense and is beneficial to the citizens of our respective countries. It is on that basis that I ask the House to take note of the documents referred to on the Order Paper.
5.55 pm
Mr. George Robertson: I beg to move, to leave out from "House" to the end of the Question and to add instead thereof:
"calls on the Government to ensure that proper control is exercised over the Common Agricultural Policy; expects the Government to take all possible steps to ensure that expenditure is made subject to effective limits and urges the Government to use the British veto as necessary to protect very important national interests; urges the Government to ensure that areas in Britain with special needs receive a proper share of the regional aid budget; believes that the European Council should be fully engaged in planning jobs and giving particular attention to youth employment and should not dilute its energy by focusing on less important goals; urges the European Council to cut the burden of bureaucracy and to reduce the number of Community rules and regulations; and urges the Government to resist any proposals to dismantle border controls which would interfere with its ability to combat terrorism and drug trafficking.".
We in the Opposition are extremely glad that, even late in the day, the Government are debating in the House the major issues which will come before the Heads of Government conference at the European Council next weekend in Milan. It is not before time that the House of Commons had its opportunity to have a say on the great issues that preoccupy those who run the affairs of state in the European Community. A mere eight days before the summit, it would be fair to say that it is somewhat late for the House to have such a discussion. However, the Opposition have tabled an amendment in reasonable terms sufficiently criticising those aspects of the Community that we consider worth criticising. We hope that, in the light of the spirit in which it is moved, the Government will join us in a common approach to these problems.
Mr. Marlow: The hon. Gentleman mentioned the Opposition. Perhaps he would like to take the opportunity to explain to the House where the Opposition are today.
Mr. Robertson: If such remarks are going to characterise the comments made by the hon. Gentleman, I shall not give way to him again.
From the Minister's point of view, it is interesting that the vast majority of Conservative Back Benchers are here to attack rather than support the Minister. That will become apparent as the debate progresses.
The Minister rightly said that we need to pay special attention to the conclusions and proposals of the Ad Hoc Committee for Institutional Affairs, the Dooge committee, on which the hon. Gentleman sat as the Prime Minister's personal representative. The Dooge committee was set up to look at the problems that are presently afflicting Europe. It was intended to scythe through the tomes of paper, the miles of minutes and mountains of speeches, and to establish a blueprint for the new Community. Yet that committee was to turn out a mouse. It is destined to be a mouse of the wrong breed, colour and generation, and as a result to be thrown out of the litter. It is peppered with caveats and surrounded by reservations; notes of exception and explanation are all about; and now even the most acceptable recommendations look threadbare only a few months since its presentation. Lord Wilson once said:
"A week is a long time in politics."
Two months in the European Community is an eternity.
There has been talk of European union, of new treaties, of majority voting, and of the outlawing of the veto. There have been dreams of an intergovernmental conference, of a dynamic, thrusting, reinvigorated European Parliament, of a shining new external identity for the Community; and
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they all lie in the dust of a couple of months of the real European world. More than anything they lie in the wake of the cloud of high phrases, lofty ideals and naive aspirations, which were to founder significantly on a 1 per cent. increase in cereal prices.
Mr. Robert Jackson: Is the hon. Gentleman by any chance referring to the Leader of the Opposition's call for a new Messina conference some years ago?
Mr. Robertson: The hon. Gentleman refers to the call for that conference, but not to the context in which it was called for.
I shall deal with the Opposition's proposals and our positive ideas for using the Community for the betterment of all citizens in the Community. The only support for the more extreme and full-blooded approach of the Dooge committee comes from the Members of the European Parliament who represent the British Conservative party. The hon. Member for Edinburgh, Pentlands (Mr. Rifkind) makes great play of the internal machinery of the British Labour group, but he would be wise to look at the voting record of the Conservative group. It has accepted a number of the radical suggestions that the Minister this afternoon dismissed as unreal and not fitting the context of the idealism epitomised by the Prime Minister and her Government.
Mr. Rifkind: Would the hon. Gentleman use this opportunity to say whether he agrees that the dismissal of Mrs. Castle is greatly to be regretted and that it is most unfortunate that the Labour group at Strasbourg is now led by someone who is committed to taking Britain out of the European Community? We are entitled to know the views of the official Opposition.
Mr. Robertson: I do not know what on earth that has to do with this House. Mrs. Castle was not dismissed. She stood in an election and somebody else won it. She has served with great distinction this House, the country, and the Labour party and she accepted with dignity the decision that was taken by the Members of the European Parliament who serve on behalf of the Labour party.
All that we are promised at the Milan summit next weekend are cosmetic formulas about majority voting, palliatives for the European parliamentarians and yet another vision, this time from the reborn Lord Cockfield, of a Europe without lorry queues, passports and tax differences. It is small wonder that the meeting of the Foreign Affairs Council this week turned from a two-day event to a one-day event that had security at Athens airport at the top of its very thin agenda. The lesson of this latest attempt to drag up yet again the roots of the European Community to examine whether they are growing is that one is looking at the wrong plant.
What is the European Community today? It is a conglomeration of 12 countries, all of them in the teeth of a recession; all of them with high and static unemployment levels and with worrying levels of young people out of work; all of them agonising in the face of competition from Japan, the low-wage economies of the far east and the expansion-led boom in the United States of America; all of them practising different economic policies; all of them part of the European Community, with all of them paying lip service to its objectives but all of them, this nation included, doing their own thing whenever the common rules do not suit them.

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One stark fact stands out above all others: 14 million citizens of the European community of nations are without jobs, and two out of every five of them are under the age of 25. I am sure that the British people will notice that during the Minister's 50-minute speech this afternoon he did not utter one word about unemployment, or express one degree of sympathy for the unemployed millions across Europe, and that he did not offer a single suggestion about how the European Community could reform itself so that some of the 14 million might find work.
That issue should be concentrating the minds of the Heads of Government next weekend. It should be galvanising action for growth and employment among the leaders of the European Community. That fact alone should be at the top of the agenda of every meeting of every committee. The fact that it is not and that it remains the great unmentionable, both in Brussels and in the Minister's speech, signifies the paralysis that affects the European Community today. It underlines the cynical betrayal of the jobless generation who seek work, a future and hope but who see the councils of this immense community of nations playing, even tinkering, with institutions when what is missing is the political will to act. Without that political will and an agreed commitment to take joint action for growth, all the institutional tinkering in the world will be seen as an irrelevant and distracting sideshow in the face of the plight of these people.
The sad, bitter truth of the exercise that was the Dooge committee was that it followed the path of the dreamers and idealists whose vision ignored present problems and imagined that by institutional devices—some new and some reworked—a new direction would be discovered. The French veto, whether official or unofficial, on a new round of GATT talks and the spectacular German veto on grain prices was all that was needed to dispel the clouds of emotional rhetoric which curtained off the genuine dilemma facing the people of Europe.
I concede that there is a place for dreamers and visionaries, but I give my voice—and I know that my party would give its voice — to those who dream of work, of secure incomes and of no poverty, whose vision is of a prosperous, growing European economy that is able to deliver the goods to its people.
Sir Russell Johnston: Does that mean that the Labour party has ditched idealism for pragmatism?
Mr. Robertson: I should like to take this opportunity of congratulating the hon. Member for Inverness, Nairn and Lochaber (Sir R. Johnston) upon his elevation to the knighthood. I do not know whether that signifies anything about his idealism, but I know that the House will warmly welcome his elevation to the Establishment. The answer to his question is no, it does not mean anything of the sort. The Labour party is as committed to the ideal of full employment as it ever was, but the idealism that we envisage for the European Community relates to what it can do for the people of Europe, not to the kind of institutions that it can erect as memorials to great statesmen.
Mr. Dykes: Does that mean that the Labour party is also officially committed to Mr. Lomas's manifesto objective of taking Britain out of the European Community?
Mr. Robertson: The Labour party is committed to the manifesto of the Labour party, not to the individual views of either that spokesman or the spokesman in the European Parliament.
The Dooge committee made no precondition about co-ordinated expansion, or research programmes, or any protection for areas that are likely to be casualties because of the envisaged new competition; nor, more importantly, did it look at the absurdity and the irony of the uncontrollable, unreformable common agricultural policy. How, in all conscience, can we look to a revamped, reorganised, freshly committed European Community without facing the contradictions of the CAP? It swallows the Community's cash. Its appetite for resources leaves all the other spending programmes savaged. The CAP stocks up obscene mountains of food as we watch every night on television millions of starving people, yet it cannot efficiently move the stockpiles to the places where the food would be useful.
The CAP is becoming the common market, and it is the obstacle to real action. It is the obstacle to research projects and to progress on energy, industry and even reorganisation. Its pre-emption of over 74 per cent. of Community resources, however the Minister of State may choose to interpret the figures for the coming year's budget, reduces all other programmes to a joke, yet the Dooge committee ignored it and in the process devalued the purpose of the exercise. The CAP has made a mockery of budget discipline. The eternal promise from each summit and the Bill that we shall be debating next Tuesday demonstrates what budgetary discipline really means—the football hooliganism of European accountancy.
May I now deal with the central, specific recommendations of the Dooge committee: the abolition of the veto in meetings of the European Council, increased powers for the European Parliament, and reform of the internal common market. First, nobody minimises the frustrations of the European Members of Parliament who are denied any real role in the European Assembly. They are caught up in the web of bureaucracy and the lost direction of the Community. However, that alone is not a reason for increasing the powers of the European Parliament. There appears to be a degree of unanimity between the Government and the Opposition on that point.
The committee's suggestion with respect to new powers over revenue raising is a move into dangerously uncharted territory and towards a form of federal union that would not be acceptable to most of Europe's national Parliaments. The idea floated in this document is not backed up with any full measurement of the move's significance and consequences, and it has little future. The European Parliament does not need an increase in its competence to be more effective. It must use its existing competence more efficiently. Given the political inertia of other Community institutions, it is both desirable and within the European Parliament's existing powers to put forward more positive initiatives. I strongly endorse the point made by the hon. Member for Harrow, East (Mr. Dykes): the fact that the European Parliament's committees are not open to the public is not something of which it should be proud.
Mr. Marlow: If the hon. Gentleman does not want to increase this institution's influence and competence, would it not be better to refer to it as the European Assembly? It is not a parliament. It does not have

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legislative powers. If people increasingly refer to it as a parliament, they will give it ideas beyond its station and it will want to increase its influence and competence. If, like me, the hon. Gentleman would like to keep that institution in the position for which it was designed, will he refer to it as the European Assembly?
Mr. Robertson: I am always willing to take advice from my betters, but I think that the courtesy title of "Parliament" will be sufficient, although it is an Assembly, as I have said.
With the abolition of the veto we are moving into an apparently much more radical idea where pie in the sky has been elevated to a political ideal. The past few weeks have seen the first use since 1967 by the Germans of the veto. That was over a modest—one might even say feeble—attempt to restrict agricultural spending this year. The past few weeks have also seen the threatened veto by France in another GATT round. Today's newspapers show that Germany is again willing to exercise its negative power over the recent agreement to curb vehicle exhaust fumes. This is the reality behind the rhetoric.
Everyone says that he wants majority voting—as if that panacea alone would answer all the unanswered problems—but no one is willing to give up the veto. Hans Dietrich Genscher, the German Foreign Minister, was quoted in yesterday's newspapers as saying that he disagreed with the German Government's use of the veto. I am tempted to suggest that the degree of unity in the German coalition is almost as close as the unity in the Conservative coalition in Britain — and just as successful, judging by recent election results. One newspaper article stated:
"Mr. Genscher indicated in the interview that he had disapproved of the German veto, and said it underlined how vital it was to make changes so that similar conflicts could not recur."
We have the dramatic situation in which the Germans are strongly and enthusiastically in favour of eliminating the veto so that the German Government will not feel tempted to use it and all the threats that follow its use. Although the Minister of State has advocated greater use of majority voting, he has not spelt out where and when that will happen.
One must of course make the reservation that individual states will always protect their national view. It is inconceivable in a community of sovereign states that the right of each nation to define its national interests should not be integral to the Community's structure. That right cannot simply be wished away. The European Community is not a federation, even if some pretend that it is or would like it to be one. It would be more honest if the Government were to rely less on vague pronouncements of "more majority voting" and instead spelt out the precise areas where they would wish to reserve the right to protect the nation's interest. The Government have not done that so far. Are they to save this remarkable formula for Milan, or is it all part of the general Europe ideology which seems to be bound up with the general debate on this summit?
I turn to the question of the internal market, the sweeping away of frontiers, border controls and barriers to trade, both visible and invisible. Just in time for the summit, along comes this true-blue blueprint in the somewhat improbable shape of the exported Lord Cockfield, who has shot to fame with a vast report, which became available only today, demanding an immediate full Common Market.
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I draw the attention of the House to an article in the Financial Times on Tuesday this week in which, remarkably and unusually, the headline told more than the text. The headline stated:
"Lord Cockfield: Little to lose and he knows it …"
The article went on to eulogise his ideas. It stated:
"When Lord Cockfield stood before the Press on Saturday to present his White Paper on Completing the Internal Market to the public, he waxed positively lyrical. His presentation was delivered in the same slow, almost pedantic way which must have infuriated his British Cabinet colleagues. But the content was thunderous rhetoric… 'it will fundamentally alter the face of Europe for the rest of our lifetimes'—and even a few well-placed jokes. His Lordship was in his element."
Later this glowing tribute to Lord Cockfield—he was peremptorily dismissed from the Prime Minister's Cabinet without any election—stated:
"When it became clear that he was determined to press ahead with the idea of fiscal reform—bringing the indirect tax rates of member states roughly into line, so that frontier tax checks would prove superfluous—the idea caused consternation to the Treasury. Lord Cockfield was summoned back to Downing Street to explain himself."
The independent commissioner was hauled back by the Prime Minister to explain his revolutionary concept for Europe. Today, the Minister of State put the final seal on Lord Cockfield's report by telling us that harmonisation of tax levels is not on.
In this context, both Dooge and Lord Cockfield again missed the central point of today's Euro-economic-sclerosis — the problem is one of a deficiency of demand, idle people and idle factories, overcapacity and unused resources. To break down the barriers and to make competition more equal throughout the Community is not to facilitate the sharing of prosperity; it is to facilitate the sharing of misery.
The Dooge committee referred to
"the dynamic effects of a single market with immense purchasing power. This would mean more jobs, more prosperity and faster growth and would thus make the Community a reality for its citizens."
This is pure hogwash. Rightly, these words are not supported with the intellectual justification that is necessary to justify such grandiose promises.
Twelve countries with 12 very different GDPs and vastly differing economic conditions and policies will not be magically transformed into an engine of growth simply by removing Lord Cockfield's barriers. It is a foolish, and even wicked, delusion to peddle the fiction that they will.
On Monday, the Financial Times—the great European newspaper—quoted the chairman of the Italian-based company Olivetti as saying that the barriers identified by Lord Cockfield were secondary issues. The article stated:
"The real problem, he says, is that too many managements lack entrepreneurial verve: 'in many cases, they are looking for alibis. I am not convinced that they really want to eliminate the obstacles … Too many Europeans just want additional guarantees that they'll keep what they already have.'."
That is the voice of industrial experience in the Community.
For Britain, the changes envisaged by Lord Cockfield and knocked on the head by the Minister would have serious implications. Harmonisation of VAT would see its imposition on food, children's clothing, books and other commodities such as gas and electricity that are now zero rated. If the VAT level were to be raised to continental levels, it would mean a substantial increase in the cost of living. In Denmark, VAT is 22 per cent., in France 18·5

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per cent., and in Italy 18 per cent. In this country and in Ireland, VAT affects only 40 per cent. of consumption, as against 90 per cent. in the rest of the Community.
Mr. Dykes: Is not the hon. Gentleman being somewhat irrelevant and illogical to address these complaints to Lord Cockfield, who after all has the Commission portfolio responsibility of promoting the internal market? Would it not be more logical if the hon. Gentleman were to address his strictures about the deficiency of demand and so on to the Council of Finance Ministers, which, if it were able to operate more frequently on the basis of qualified majority voting, would begin to make joint collective financial decisions to revamp the European economy?
Mr. Robertson: It would be nice to think, along with the hon. Gentleman, that that would be likely to happen. However, he should look not at the words and aspirations of those who would like to take majority voting decisions but at the speech made by the Minister this afternoon. He said not a word about the economy of Europe or unemployment, and gave not a word of hope or encouragement for the millions out of work. There is not a lack of decision making in the councils of Europe but a paralysis of political will to deal with the problem. If there were such political will, there are already institutions that would transform the position. In some sectors, Europe is beginning to turn towards that, without any great encouragement from the British Government.
Lord Cockfield's blueprint for the future, or what remains of it after the Minister's running down this afternoon, would see also the abandonment of our traditional and effective measures of border posts and entry controls, with all that that would mean for preventing traffic in drugs and terrorism.
After the diversions of the Dooge committee, and before it of Spinelli, the draft treaty, the Genscher-Colombo plan and the others, what can the Community do to revive its potential and start providing hope for its citizens? It can first relegate the fancifully packaged people's Europe report to what it is — a series of gimmicks and novelties, some of them valuable, most of them trivial, but all of them inconsequential to the central issues for our people. However, the potential of the Community is still there, but only if we have the political will to act, and act together.
Co-ordinated expansion is urgently required, and it can be done if further priority is given to jobs, especially for the young. The power and influence of multinational companies can be controlled only at European Community level, but the present craven capitulation to their arbitrary and unaccountable activities allows them to mould our future rather than we theirs.
Co-operation on high technology, which the Minister dismissively mentioned in a few sentences towards the end of his speech, is possible and the EUREKA project should be a more tangible subject on the Milan agenda than all the dreams of new institutions. EUREKA could transform what the Financial Times called the
"lip service paid to the idea of the EEC spending programmes to improve European technology."
It might balance the drain of brains and funds to America's strategic defence initiative programme.
Genuine action at European Community level on the growing problem of acid rain and environmental pollution
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is possible, but only if the British Government can open their eyes to what everybody in Europe knows is going on. Co-operation need not be confined to the European Community. Euratom involves, in addition to the Community countries, both Switzerland and Spain. The Esprit programme and airbus projects are based on more than just the Community, and they work. Much more co-ordination with the Nordic countries is possible, and the development of an external identity is also welcome when it represents a common agreed position of the member nations. Useful initiatives in the middle east, on central America, South Africa and in the past on the Siberian pipeline show what can be done.
The present obsession with institutional changes means that we continually miss the vital point that national interest need not be devolved from the common interest of all 12 nations if we care enough about what is wrong. We are faced with one major reality. It is a common disappointment with the European Community today. Even for those—I was one—who believed in the vision of a closer union among European nations, and who still take comfort from the successes so far—arguments over milk quotas and cereal prices are infinitely better than arguments over Alsace-Lorraine and the Oder-Neisse line—must still be dismally disappointed by the failures to grasp the real opportunities of all-Europe action to expand, grow, compete, invest, research and provide a secure future for the European peoples.
That sadness can only be compounded as the summit next week surveys the ruins of yet another still-born institutional reform and then goes on pretending that gimmicks such as common passports, postage stamps, European national anthems and even harmonised taxes and the diversions of remodelled institutions can still play a major part in a European revival. Dooge is dead, and it will be buried in Milan, but out of the ashes had better come a genuine recognition of the scale of the crisis before us, and with it the common determination to deal with it across the Community. If that happens, Senator Dooge's exercise may not have been in vain.
6.27 pm
Mr. David Howell: I listened with care to the speech made by the hon. Member for Hamilton (Mr Robertson) to try to pick up the code words showing where the Labour party has got to in its thinking on the European Community, and whether it is against or for it. However, it would be impossible to divine what stage its cogitations have reached. All that one can say is that, when it comes to the EEC, the Labour Front Bench is eager to wound but afraid to strike.
I congratulate my hon. Friend the Minister not merely on his speech but on the brisk and practical manner that he brings to matters affecting the development of the European Community. I hope that that compliment does not do him too much damage. He has a touch in these matters that we all value and for which we are grateful.
I shall pursue one of the practical matters with which I hope that my hon. Friend will be concerned, although he did not mention it in his speech. It is referred to in the Dooge report and in the Government's White Paper. I shall not pursue the dreams in the Dooge report about revising treaties, or the golden Europeanism to which my hon. Friend referred. I wish to deal only with one practical matter that involves no revision of any treaties, no

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agonising debates in 12 national Parliaments, but a simple practical decision to improve our interests within the Community.
I refer to European monetary integration and the EMS. I shall ask a series of questions and I hope that my hon. Friend the Under-Secretary will be able to enlighten us a little. My basic question is: what now is our policy towards joining the exchange rate mechanism and becoming full members of the European monetary system? Is it our policy to aim to join, not to join or just to hang about and wait and see, in the hope that we will arrive in the lift at the right floor in the department store? These are questions that it would be nicer to put aside, like so many difficult questions, but we may be reaching a point—even as soon as the Milan summit next week—when we have to be more precise in our views, for several reasons.
The reasons are concerned, first, with our specific national interests. Whether we like it or not—I know that some of my hon. Friends do not like it—we have a policy towards the exchange rate. In effect, we have politicised sterling. My view is that this was inevitable and does not clash at all with sensible management of monetary policy. We may do rather better with an exchange rate target than we did with our notoriously and ever unreliable friend, sterling M3. For better or worse, we now have that policy.
The argument against our involvement in the ERM always used to be that this would politicise the exchange rate and that we wanted to stay clear of that sort of thing. But we have not stayed clear of it. We have developed objectives and we have found extreme difficulty in trying to influence the sterling exchange rate. The question that has to be addressed from the practical point of view of the nation is whether we might not improve our own ability to influence the exchange rate and include it as a target within our monetary policy, if we were in the ERM. That is a question for ourselves; it is perhaps not a European question. I do not think that question can wait much longer.
We can see big financial storms ahead. No one knows whether the dollar will drop dramatically, drop slowly or rise again. However, we know that we are in for a big upheaval. It would not be happy for the country or for the Government if we had to go through the gyrations of January again, with bank interest rates jumping 4·5 points in a desperate effort to fight the lone battle on sterling's behalf.
That is the national scene. Then there is the European question about the EMS, which relates closely to almost everything that my hon. Friend the Minister of State said in his excellent speech. He said a great deal about completing the internal market. Ministers have devoted much energy to identifying the barriers and urging that they be removed. I am not sure that they meant to go quite so far as Lord Cockfield decided to go in his heroic list of measures, but in general this has been the thrust and emphasis of policy. Indeed, that was repeated and emphasised at Fontainebleau.
If that is so, there can be no doubt that one of the most considerable barriers to the completion of the internal market is the volatility and variation in the currencies, particularly between sterling and the currencies in the exchange rate mechanism. It would not be unreasonable for our European allies to say, "If you in London are really serious about removing barriers to the internal market, should this not include addressing yourselves to, and
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reaching a decision on, the exchange rate mechanism?" Perhaps a decision would be reached that we should never join, in which case sterling should leave the ecu basket altogether. That might be the right thing to do. On the other hand, it might make more sense to be within the EMS; then the drive to remove barriers and compete in the internal market would carry greater credibility and realism. There is a major question there.
Mr. Dykes: What is also interesting and a little strange is that the Government's policy is to join the ERM. I think the formula of words is that we should join when the time is right or appropriate. Has my right hon. Friend a distinct understanding of what that formula means?
Mr. Howell: I have lived long enough to understand all about the doctrine of unripe time. It is a most wonderful formula to avoid reaching an undoubtedly difficult decision. I realise the need to get the negotiation and the entry point right, but in my view the rightness of time would have been before the upsets of January. If it was right then, it is much more right and ripe now to move during, shall we say, a momentary lull, when sterling is strengthening and before the next storm strikes. It is hopeless to make such decisions at times of weakness.
The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Tim Renton): My right hon. Friend is expert on these matters. He has asked me a question. May I pose two questions to him in turn on the exchange rate mechanism? Why, out of his expertise, does he think that if we could have been in the exchange rate mechanism over the past five years or so fluctuations in sterling would have been any the less, if he does think that? Secondly, given the great quantity of sterling that is held internationally—greater than any continental currency—and given the fluctuations, is he certain that our presence in the ERM would be much welcomed by our European partners?
Mr. Howell: On the second point, I have only the evidence of the welcome extended by the governor of the Bundesbank and of almost every Government with currencies already in the ERM. They are extending an invitation; it may not stay that way. I agree that the invitation may be withdrawn, but for the moment the invitation is very strong. Among those making the invitation are the people from Bundesbank of West Germany, who have always been the conservative and cautious people in the development of European monetary integration.
As to the past, I do not think it would have been right to have been in the ERM over the last five years. I hope I did not give that impression. I suggested that if we had been in over the Christmas 1984 period it might have been clearer to currency markets just what the British aims were for the sterling exchange rate. We might have avoided the enormous pressure that built up on sterling and the very sharp increase in interest rates that was necessary to stabilise the position. I think that view is shared outside the House, even by the Governor of the Bank of England; I hope I am not misinterpreting his view.
If we are serious about the completion of the internal market, about putting emphasis on more competition and about creating the vigour in the European Community to go forward, we must address ourselves to the question of where we stand on full membership of the EMS.

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The third problem that now confronts the Government rather sharply is that in the monetary area there will be a two-tier development in the Community. We often hear it muttered about in other areas—the convoy theory, the inner group agreeing to this, that or the other, and the outer group not doing so. Nothing much has happened on that front. We have now reached a point in the monetary area where something of this kind is bound to happen for the simple reason that there is no conceivable way in which the forthcoming members, Spain and Portugal, or even some of the existing members, could hope to participate in the ERM. They could participate in the ecu basket of currencies as sterling does, but in no way could they participate in the exchange rate mechanism.
If, as is clearly the intention, the inner core of members wish to press ahead with further developments in the European monetary system—some idealistic and some more practical—they will have to do this with an inner nucleus of members. The question for the Government is, do we wish to be a member of that nucleus? At this stage it is a difficult question because we indicated at Fontainebleau that we wished to be positive in contributing to the development of the European Community politically and in other ways.
Now that question comes back to Britain in the form of another question. If that is the case, do we wish to participate in the inner nucleus of countries that will develop a degree of European monetary integration, or do we wish to stay outside?
Mr. Forth: Does my right hon. Friend agree that the concept of a two-speed Europe may not be as bad as has always been assumed, provided there is proper customs union throughout the Community and provided that those who wish to progress—as it is usually put—are prepared themselves to bear the burdens that they are imposing and to leave the others to enjoy the benefit of the customs union and those other bits they choose? Does my right hon. Friend agree that this is a possibility and need not necessarily be dismissed out of hand?
Mr. Howell: If it could be so engineered, obviously it would have benefits, but in the area that I am discussing it is difficult to see that choice emerging. The real choice is not between staying out of the exchange rate mechanism or joining with the other countries that will form a nucleus; it is between completing the present stage of the European monetary system—as the West Germans argue and as I would favour—or going on to the more ambitious and, frankly, unrealistic aims of forming a European monetary co-operation fund, so moving into areas of monetary union for which I do not think Europe is ready. Indeed, I question — in a world in which we want to see more decentralisation—whether we ever want to see such a centralisation of monetary control as some of the idealists of EMS-building are proposing.
We must examine the present stage of the European monetary system and decide whether we, the West Germans and others wish to complete that. That means British participation, a reduction in the capital controls in place in France and in exchange controls in Italy. It means, in other words, the completion of the present stage. No new stage is needed, nor would I advocate that. That is the choice before us.
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There are those who say that we could not contemplate that now because we would find ourselves with impossible tensions vis-a-vis the deutschmark. I question whether that is the right way to look at the matter. If the West German and our economies are converging in terms of policy—they are converging closely at present—the two great trading currencies, sterling and the deutschmark, together in the European exchange rate mechanism would strengthen the mechanism.
However, it would undoubtedly—this message will be indigestible and unwelcome to Labour Members—impose disciplines on the pound so as to maintain the policies towards convergence that have been absent in the past and from which Labour policy-makers from time to time demand that we escape by reflation, expansion or whatever they want to do that will, they believe, solve the problem of unemployment.
Those options would be limited in the exchange rate mechanism. I believe that that would be a good thing, and if there ever were a future Labour Government in Britain who felt that it was all very terrible, then, as they would undoubtedly make a mess of things, they could use that as an excuse and alibi. Labour Members would certainly need excuses and alibis were they ever to put through the sort of policies that they are proposing.
I have put the questions that the Government now face and may have to address at Milan because issues of a European nature are closely related to the European monetary system. I do not disguise my view. It is that if we truly want to reduce barriers and complete the internal market, in so far as it is practicable to do so, if we want to be prepared for the enormous financial storms that are ahead, and if we want to influence the Japanese situation—it was said in earlier exchanges in the House that the yen is ridiculously low; we want to see the whole of Japanese financial policy liberalised—we must reach a decision at Milan. The British will have to indicate their view there of the strengthening of the European monetary system and say whether they are really serious about preparing for negotiations to enter the exchange rate system.
At the time of the last currency upheaval the European leaders were miserably ill-prepared. They will not be lightly forgiven if they are equally ill-prepared when the next upheaval comes—which will be soon.
6.44 pm
Sir Russell Johnston: When I spoke in the foreign affairs debate on 27 April, I devoted a considerable part of my speech to the Dooge report. A few days earlier, on 23 April, an early-day motion was tabled by the Liberal and Social Democratic parties. I shall read that motion into the record because it summed up succinctly the alliance view of the next stage in the evolution of the Community. The words also provide a clear marker to which my subsequent comments may be related. The motion stated:
"That this House recognises that without genuine European co-operation and integrated decision-making no single European country can achieve the technological development or exercise the political and economic influence effectively to overcome the problems of unemployment and inadequate social provision in a world at peace; therefore welcomes the visit to the United Kingdom of a delegation from the European Parliament to discuss the draft of a new Treaty to establish a united Europe; notes the support given to this by the Socialist group, the Conservative group and the Liberal group in the European

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Parliament; and urges Her Majesty's Government to advocate at the European Council in Milan the establishment of an intergovernmental conference to achieve this."
Since then, as a variety of hon. Members have said, the most significant and, in our view, most regrettable development has been the exercise of its first veto by the Federal Republic of Germany over cereal prices.
I have no doubt that that has adversely affected the sense of momentum towards better decision-making processes, built up in the first instance, to his great credit, by Altiero Spinelli and subsequently commented on by the admittedly cautious but positive response of the majority of the Dooge committee.
Mr. Forth: The hon. Gentleman has made play of the support that was given in the European Parliament to the proposals to which he is referring. Does he agree that there is a large element of vested interest on the part of politicians in that institution in favouring proposals which appear to give them greater influence in decision-making? Is the hon. Gentleman unsurprised, therefore, that they should have given wide support to such a series of proposals?
Sir Russell Johnston: I am never incapable of surprise, and I shall be dealing with the point that the hon. Gentleman has raised.
Mr. Cash: The hon. Gentleman referred to alliance policy. He may recall that not long ago the right hon. Member for Plymouth, Devonport (Dr. Owen), referring to the use of the veto, urged the Prime Minister to give an assurance that in no circumstances would the Government ever get into a position in which they failed to use it when to do so was necessary. Against that background, how does the hon. Gentleman equate his position within the alliance with the position of federalism adopted by the leader of his party?
Sir Russell Johnston: The motion that I read was in the names of the leader of the Liberal party and the right hon. Member for Plymouth, Devonport (Dr. Owen), the leader of the Social Democratic party. In relation to the veto, the Dooge report, on page 25, stated:
"The majority of the Committee favour the adoption of the new general principle that decisions must be taken by a qualified or simple majority. Unanimity will still be required in certain exceptional cases"—
Dooge did not, contrary to what I think the hon. Member for Hamilton (Mr. Robertson) suggested, suggest doing away with the veto—
"which will have to be distinctly fewer in number in relation to the present Treaties, the list of such cases being restrictive."
On page 26, the Rifkind reservation, which was supported by Denmark and Greece, stated:
"When a Member State considers that its very important interests are at stake, the discussion should continue until unanimous agreement is reached."
The same form of words is adopted in the Labour party amendment, which
"urges the Government to use the British veto as necessary to protect very important national interests."
The Luxembourg compromise refers not to "very important national interests", but to "vital national interests"
I do not want to be pedantic or legalistic, because I find that rather a bore, but I suspect that in these matters one has to be a bit legalistic as to what people actually mean. It seems to me that wishing to be able to use the veto on a "very important national issue" goes further than wishing
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to be able to use it on a "vital national issue". I suspect that the Government are bringing more issues into the net than were previously affected by their view on the veto. I should like the Minister to respond to this. If the answer is yes, it is very bad indeed and a very nationalistic step backward; but if the answer is no, presumably the status quo obtains. From the alliance's position, the status quo is very unsatisfactory and not in the interest of this country or of the Community as a whole.
Mr. Forth rose—
Sir Russell Johnston: I have a number of points to make, but I will give way.
Mr. Forth: I am most grateful. I remind the hon. Gentleman that in his opening speech the Minister quite specifically said that Her Majesty's Government wanted to see a combination of more votes and a greater use of majority voting to make progress where it could reasonably and productively be made and the retention of the veto for each country to safeguard its national interests. Those are the proposals that the Government are making. Would not the hon. Gentleman be able to go a very long way with those proposals?
Sir Russell Johnston: I do not see any reason why the Government should have introduced a reservation. It seems to me that what Dooge sets out is perfectly reasonable. The Minister referred to majority voting, but he did not make clear whether, if the decision under discussion was unfortunately likely to go against us, we would take a different view from that which we take now. If we do not, the whole thing is totally meaningless—all words, as so many of these things are.
The German position has been referred to by the hon. Member for Hamilton. There is no doubt that it has produced a great deal of stress within the coalition in the Federal Republic. Our Liberal colleagues, the Free Democrats, are very unhappy about it. The hon. Member for Hamilton quoted Herr Genscher in The Guardian yesterday. But what is the Government's view of the German veto? I think that it is extraordinarily equivocal, and the hon. Member for Edinburgh, Pentlands (Mr. Rifkind) did not make it any clearer when he spoke. They obviously did not approve of the veto. What is a 1 per cent. difference in cereal prices? It is a marginal price difference in a crisis situation in which everybody agrees that even the Commission position is nowhere near radical enough to control. On the other hand, they felt obliged—and the hon. Member for Pentlands said so in a ringing fashion—to support the German right to use the veto. Indeed, many press leaks showed that the Government seemed quite pleased that they did so, because it meant that any post-Milan conference would effectively be scuppered. I find that a very difficult position to follow, and I do not think that the Government have faced the logic of it.
What are the difficulties on which the Government are laying stress? The hon. Member for Pentlands mentioned them: control of the runaway agriculture budget, obviously, and extensions of the internal market. Those are the two principal targets, but to them can be added three other major areas: technological co-operation, including—as the hon. Member for Hamilton said—EUREKA; monetary co-operation, as the right hon. Member for Guildford (Mr. Howell) mentioned in respect of EMS and the like; and, lastly, a common line on security. All those are important.

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How do the Government see the possibility of introducing financial discipline into the CAP if they support the right of the Germans to have a veto on cereal prices? If they support that right, does that not also remove their capacity to persuade the Germans not to use their veto? I really do not see any sense in that. As far as I can see, the Government are prepared to cut off their nose in order to have the right to spite someone else's face later, and that makes no sense at all.
Mr. Marlow rose—
Sir Russell Johnston: The hon. Gentleman has been less than sharp in his interventions, and I do not want to expose myself to one of them.
Vested interests will always block if they have the chance, and the Government are accepting that they have the right to do that. In my view, that is where they are wrong. The Labour party too is wrong in its alliance here with the Conservative Right wing in the shape of the white knight, the hon. Member for Northampton, North (Mr. Marlow), with whom it is nationalistically in accord.
I do not think that one can in logic pour condemnation—as the Labour party does, as the hon. Member for Southend, East (Mr. Taylor) and others do, and as many other hon. Members from a much less entrenched position do—on a lack of financial discipline and inadequate operation of the internal market and simultaneously deny the opportunity institutionally to solve those problems. That is where the hon. Member for Hamilton is wrong. It is not true to say that institutional change is irrelevant. It is relevant because it will enable decisions to be made which currently are not being made.
Mr. Marlow rose—
Mr. Dykes rose—
Sir Russell Johnston: I shall give way once more to the hon. Gentleman.
Mr. Marlow: The hon. Gentleman did not see that I rose first.
Mr. Dykes: He cannot take it. The hon. Gentleman will understand that this is a difficult moment for my colleague, and therefore he will need time to recover. Indeed, it is not easy; it needs a Liberal knight rather than the white knight. I apologise for interrupting, because the new knight is being extremely persuasive in his arguments.
Mr. Marlow: No he is not. He will not allow any arguments.
Mr. Dykes: Does the hon. Gentleman agree with this continuation of his thesis — that the tragedy of that whole episode is that undoubtedly when no veto should have been imposed by the Germans on a matter that was not of vital national survival and was merely the product of a party split between the CSU in Bavaria and the CDU, if "vetoitis" is further encouraged by various member states, that will be quoted again and again as a good example of when the veto can be used legitimately, because not a single formal protestation was made by any other member state?
Sir Russell Johnston: The hon. Gentleman supports my argument very felicitously, as I knew he would when I gave way to him.
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The Minister referred to Lord Cockfield's paper and to the fact that it contained 300 points on the internal market. How do the Government—who favour this paper, as the Minister made clear—expect it to be implemented if simultaneously they support the right of every individual country with an important interest to say that it will do nothing? That is contradictory, and it is nonsense.
In my view, we have three options. First, we can stay put. That would not be in our interest or in the Community's interest. Secondly, we can proceed on some sort of gentleman's agreement. That is what the Government would really like to see. Where are the gentlemen? That is a good question. Not even our own Prime Minister, literally or metaphorically, falls properly into such a category. Thirdly, we can have institutional change, either modest, as Dooge proposes, or radical, as Spinelli argues.
I believe that the third choice is the only one, and I very much regret the Minister's peremptory rejection of an inter-governmental conference after Milan before Milan takes place.
I refer back to the early-day motion that I quoted at the beginning of my speech. We can only overcome our employment problems, social challenges and technological inadequacies together, and if we want to have a say in political and security matters in the world it has to be together as well. I have said before, and I repeat, that the enlargement—which the Minister rightly conceded makes decision—making processes worse—which brings in Spain and Portugal and gives them political support in the changes which they have undergone, will fail and thus have the consequences of political failure if this political good will is not matched by economic generosity. That is not going to be possible in present circumstances, and that has consequences equally for NATO and all the rest of it as well.
It is the fashion for anti-Marketeers in the House and for some others who should know better to behave in a superior way towards the European Parliament. They pour scorn on it, talk about what those little people want and ask what relevance they have. I have always found that sad in an elected Parliament such as ours. I was glad when this country accepted the go-ahead for direct elections. It was at the time of the Lib-Lab pact, as hon. Members may remember. It enabled the Community to have the largest free election in the world. I thought that that was good, even if this country operated an inappropriate and unfair electoral system.
Hon. Members and the Government must face the fact that the less scope the European Parliament has to contribute effectively and realistically to legislation and to have a significant say in the budget, the less will be the likelihood that it will behave constructively and responsibly. The less power we give to people, the more irresponsible they are likely to become.
Mr. Forth rose—
Sir Russell Johnston: I shall give way when I have finished this point. I notice that the hon. Gentleman has cleverly moved from one place to another. He seems to believe that, because I am short-sighted, I shall think that he is someone else.
It is equally a fallacy to believe, as many hon. Members do, that keeping the European Parliament weak will strengthen parliamentary sovereignty in respect of

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European Community legislation. It will only strengthen the Government and compound the perceived remoteness — often, indeed, the real remoteness — of European Community legislation from democratic accountability.
Mr. Forth: Does the hon. Gentleman agree that there is an alternative way of looking at the European Parliament? The European Parliament has considerable powers which, if its Members chose to exercise them responsibly and carefully, could greatly enhance their participation in Community decision-making. The problem has been that in too many cases Members of the European Parliament want to go on to the world stage and participate in a wide political arena, but they fail to use their considerable existing powers in a detailed, consistent and responsible way. We can reasonably look to them to give a lead and show us how they propose to exercise their considerable existing powers before we give them any more.
Sir Russell Johnston: I do not want to argue in detail, because I could go on for a long time. I was merely talking about the unfair attitude that hon. Members have towards the European Parliament. The hon. Gentleman's remarks were unfair. It is not true to say that Members of the European Parliament are always irresponsible. They do a great deal of constructive work in the committees, for example, even if they are held in secret. Sometimes that is not all that had. That is against Liberal policy, but never mind.
A fortnight ago, the European federation of Liberals and Democrats in the Community met in Groningen in the Netherlands. A resolution on institutional reform was passed unanimously. I should like to end by quoting from it, because it was a congress of 11 Liberal parties—to some degree, a spectrum of views—clearly united about some matters and trying hard, as I think we should all be trying, to find common ways forward within the Community. The resolution stated:
"We want the present Community to develop into a free European Union of equally respected states and peoples within which national, regional and local powers of decision-making are placed in the context of the new European dimension and thereby given added significance. The task of the Union will be to complete the Community process of integration and unification, on the twin foundations of liberal democracy and human and civil rights. Furthermore, it must assume its role in ensuring European security and in the world at large, it must stand for the principles on which it itself is founded: peace, freedom, equal rights, individual responsibility and social justice."
That is the right way forward — not the cautious, hesitant one put forward by the Government and Labour Front Benches. If ever there was a time for idealism, it is now.
7.4 pm
Mr. George Gardiner: My hon. Friend the Minister was right to concentrate on the Dooge report, and he was also right not to underestimate the supreme importance of the decisions that face the forthcoming summit in Milan. The aim expressed in the Dooge report is to secure a single, fully integrated internal market in the Community by 1992. I should like to consider that, and the institutional development of the Community in that light. A call for completion of the internal market has become rather commonplace in the House. We frequently point to those areas where the United Kingdom might expect to benefit. There has been little recognition of how
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sweeping are the changes needed and there has not been a great recognition of the overriding necessity to this country and to our partners in Europe of completing the internal market.
I shall give an example that relates to jobs. The hon. Member for Hamilton (Mr. Robertson) spoke of hew vital employment issues are. I agree with him on that, although he would not expect me to agree with the solutions that he put forward. Since 1973, the United States of America has created a net total of 15 million new jobs by exploiting a home market of 226 million people. Over the same period, Japan has created 3 million net new jobs by exploiting a home market of 118 million people. What has the European Community done? Over that period, it has built up a home market of 270 million people—much greater than that of the United States—and yet we have lost 2 million jobs in western Europe. A substantial reason for that must be that we have failed properly to use our home market. The European Community still in many respects consists of 10 related but separate markets. By continuing with that pattern, we cause injury to ourselves and to the employment prospects of our people.
Mr. George Robertson: I am grateful for the hon. Gentleman's interest in employment, although I am sure that we shall disagree on the diagnosis. Will he bear in mind that the United States of America has created jobs through what has been an expansion-led boom and that Japan's increase in employment has been advanced by exploiting Europe's home market?
Mr. Gardiner: There are many elements to the issue. The thrust to deregulation has also played an important mentpart in the United States experience. I am merely seeking to contrast how, with those not completely dissimilar home markets, our performance has been so different.
Our experience in Europe has been that internal tariff barriers have gone but that too many other barriers remain and some have even been increased. We can rattle off examples with ease. Frontier delays alone cost European industry and commerce some £500 million a year. That often adds as much as 20 per cent. to the cost of goods crossing our internal frontiers.
We have conflicting national standards that are doggedly maintained. Research is duplicated among countries. It takes us five years to get even a modest joint research programme off the ground. We have rigid barriers to the sale of services across frontiers; British life insurance cannot be sold in West Germany. We have no common transport system that remotely compares with that of the United States or Japan. The growth of our air services is choked by restrictive cartels. Public works contracts are still nationally based.
The result of all that is, first, that the industry and commerce of western Europe cannot achieve the economies of scale that such a large home market can offer, and they have to sell overseas and at home against United States and Japanese competitors whose own home markets confer upon them just that advantage. Secondly, European research and development costs, once incurred, must be covered and recouped from a narrow national market and far too rarely from that of the European Community as a whole.
If we want an example of how that has afflicted us, we need look only at information technology. European

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Community IT industries have only 10 per cent. of the world market and only 40 per cent. of their own home market. That story is repeated in one form or another in one advanced industrial and commerical area after another.
There was that chilling piece of speculation by Lawrence Eagleburger not so long ago, that unless it is careful, in 40 years western Europe could find itself in the top tier of Third world countries. After enlargement, Europe will have a home market of 320 million, which is 100 million more than the United States. In terms of population and combined gross national product, the European Community will be the biggest commercial power in the world—or, more accurately, it could be.
Will we draw on that power or will we continue to try to compete not just with one hand tied behind our backs, but with both feet tied together, too? Unless a genuine free, total common market in all goods and services is created quickly, we had better forget all our hopes for a better economic future and for more jobs, and concede eternal superiority to nations with smaller home markets than the one potentially available to us. The completion of the internal market in western Europe is not just a possible option; it is a matter of our survival. It is a measure of the challenge facing the Prime Minister and her colleagues at the coming Milan summit. The proposals are in the Dooge report. We also have the detailed programme put forward by Lord Cockfield on behalf of the Commission. The future of every family in Europe hangs on that.
Therefore, the question we must ask about the Community's institutional development is not what blueprints accord most closely with our personal notion of what the Community or European union could mean, but rather what institutional changes are necessary to speed the decisions that bring that total internal common market into being as quickly as possible.
I believe that my hon. Friend the Minister was right to express strong reservations about some of the proposals—some of which were mentioned by the hon. Member for Inverness, Nairn and Lochaber (Sir R. Johnston). For example, my hon. Friend was right to express strong reservations about the proposal in the Spinelli draft treaty to make the European Parliament a joint legislative authority with the Council, and requiring a unanimous vote in Council if European Parliament legislation is to be rejected.
I can think of nothing more likely to lead to friction and to a reduction in the Community's effectiveness than a constitutional arrangement such as that. Our need is not for a mechanism of fine checks and balances; it is for an engine to power the changes that we know are so essential. I am convinced that that engine must still be located within the Council, working within the relationship that has already been established with the European Parliament and the Commission, and with the Council reconciling the national policies of 12 different states. For the same reason, I believe that my hon. Friend is right to record reservations about the more vague suggestion in the Dooge report for joint decision-making by the European Parliament and Council.
Following that logic, we see that the need is to strengthen the decision-making process within the Council. The need for rapid progress to the full internal
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market that is so essential makes much more frequent qualified majority voting imperative, with the right of ultimate veto retained, but very strictly defined.
We are realistic to recognise that no member state will accept being overruled on a matter of crucial and vital national importance. But that is very different from using the veto or from putting a proposed reform into permanent suspense simply to shield some internal interest group.
My final point concerns a matter that has been raised by a number of Members of the European Parliament and has been referred to in this debate. It is the possibility of what is often called a two-speed Europe. I have heard the fear expressed by colleagues in my party in the European Parliament that unless we accept some of the more radical institutional proposals, Britain will be left behind, travelling in the slow lane, while our partners go full steam ahead in the fast lane. That fear has been focused by the proposal in the Spinelli draft treaty that it should enter into force when ratified by a majority of members of the Community which together represent two-thirds of the total population.
That fear of an institutional two-speed Europe is I believe without foundation. As my hon. Friend the Minister said, article 236 of the Rome treaty provides that amendment can take place only after unanimous acceptance by all signatories. Therefore, I do not believe that there is any real danger of a two-speed Europe developing in respect of institutional and constitutional mechanisms.
But, of course, a variety of practical arrangements can be reached between a limited number of member states to their mutual advantage. I do not see why those should necessarily be unwelcome. Nor is it the case that in these matters Britain is invariably travelling in the slow lane. I shall cite two examples.
Recently, France, Germany and Benelux agreed to scrap all border formalities. It is recognised that it is impossible for an island such as ours to join in that sort of arrangement, for reasons that we well know, such as immigration and drug control, rabies prevention, and so on. Therefore, it was perfectly reasonable and commendable that those states should travel in the fast lane and that Britain should find itself in the slow one.
However, Britain and the Netherlands have set the pace in another area — that of liberalising and thereby cheapening air services in Europe. We are in the fast lane and many others who are fond of lecturing us within the Community are sticking doggedly in the slow one. I hope that there will be more areas in which Britain can set the pace. I hope that in moving towards a full common market, the Milan Council will set a fast pace. That is vital to all our futures, but the time at our disposal is fast running out.
7.20 pm
Mr. Eric Deakins: I agree with the hon. Member for Reigate (Mr. Gardiner) on major institutional reform in the EEC, although I take issue with one point in his interesting speech. It is a common misconception that the United States is somehow one vast internal market. In fact, it is at least four or five major internal markets, and British exporters and American manufacturers agree that they have to tailor their products and services to the needs of those individual markets within the vast continental United States.

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I thank the Minister of State for his reassuring statement that this is a take-note motion and that any proposals at the Milan summit which the Government might consider accepting, especially the Dooge proposals, will come back to the House for debate and, if necessary, subsequent approval.
I wish to concentrate on three subjects—the common agricultural policy, politial co-operation and the Dooge recommendations.
On agriculture, the Community is in great difficulty, given the statements on budget discipline set out in the White Paper. When we debated the budgetary discipline arrangements earlier this year, I expressed a great deal of scepticism but, like many other hon. Members, I said that we should wait and see what happened. We have now seen what has happened in terms of discussions of the Council of Agriculture Ministers. It has failed to agree a package which would ensure that the costs of the common agricultural policy continue to fall as a proportion of total EEC expenditure, and it has failed to reach agreement on cereal prices. I make no comment on the German veto as I support the use of the veto and must accept the consequences that flow from it. It is also, of course, a factor which must be taken into account in considering the impact and influence of the new procedures for budgetary discipline and financial control, especially in common agricultural policy expenditure.
Expenditure in the 1985–86 agriculture year is likely to exceed what the Commission originally intended. The key question that no one — not even the Minister of Agriculture, Fisheries and Food—can yet answer is by how much the latest European Community budget, which was based on an assumption about cereal price cuts, will be exceeded in 1985–86. To the extent that it is exceeded — it certainly will be — it will call into question the whole issue of budgetary discipline arrangements within the Community. As we know from the White Paper and from earlier debates on the subject, those arrangements will apply to expenditure in 1986, which is the subject of decisions taken in 1985, and that must also apply to common agricultural policy price determination.
Mr. Marlow: The hon. Gentleman says that the German veto on cereal prices will have serious implications. Does he accept that if the House does not agree to increase the own resources of the Community the implications of that might, unlike the German veto, have positive consequences for the common agricultural policy?
Mr. Deakins: I did not intend to mention the 1·4 per cent. as I understand that we shall have a full day's debate on that next week and shall be able to go into the subject of own resources in detail in Committee the following week. I was thus deliberately avoiding that important and highly relevant topic.
The costs of the common agricultural policy are still not under control despite the budgetary discipline agreement. If agricultural expenditure in 1985–86 exceeds the guideline, there will be a sense of crisis in the Community. Certainly many hon. Members who favour continued membership of the EEC will look askance at its latest effort to get agricultural spending under control.
We all know that the entry of Spain and Portugal is bound to raise the total cost of the common agricultural policy. That is one reason, though not the only reason, for
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the attempt to increase own resources. There are also other factors. Failure to agree on cereal prices means that still greater cereal surpluses will pile up. The gap between EEC and world cereal prices will become greater, so export restitutions will cost more. Competition in world agriculture markets could drive world agricultural prices even further down, leading to even greater export restitutions and a greater burden on the common agricultural policy budget and thus on the Community budget as a whole.
I believe that we are now entitled to call into question the whole budgetary discipline agreement. Will it really stick? In the next few months it will undergo its first major test. I am sceptical, but we shall have to wait and see.
Mr. Spearing: My hon. Friend has referred to the White Paper. Paragraph 4.2 refers to the mechanism on which he casts doubt. It states that
"the Council has bound itself to observe"
various disciplinary matters. Is my hon. Friend aware, however, that the Council has reached a conclusion which is not, as I understand it, binding upon itself, so the phrase that I have quoted is open to question?
Mr. Deakins: I am as sceptical as my hon. Friend, but we shall have to wait and see. I believe that the budgetary discipline agreement will be broken, although there will no doubt be a diplomatic attempt to patch it up.
On agricultural expenditure, paragraph 4.13 of the White Paper refers to a decision made by the European Assembly in November last year which proposed
"a number of amendments and modifications to the 1985 draft budget, including a substantial increase to agricultural expenditure".
No one in his right mind would look to the European Assembly to exercise financial discipline on agricultural expenditure in the EEC as it is clearly dominated by parties which, like many national Governments, depend on the farm vote. The only way in which financial discipline can be enforced is through national Parliaments such as this one. It is up to us to take on that task and to exert much more pressure on the Government when Ministers go to Brussels.
If we are not careful, there is a serious risk of an agricultural trade war between the United States and the EEC, which would drive down world agricultural prices and raise the cost of the common agricultural policy. My colleagues may not agree, but in my view the cause of that war is basically the EEC export restitution system which has taken away traditional export markets for United States agricultural produce. I speak with some knowledge and feeling on this, having just returned from a conference with members of Congress, the State Department and the Defense Department at which these matters were discussed.
The Americans are very worked up indeed about this. That applies both to the Administration and to Congress. It is unusual for the two to work together in the same direction, but they are at one on the need to restore those traditional agricultural markets. I believe that Congress has the bit between its teeth even more than the Administration has and is determined to pursue a policy of subsidising United States agricultural exports with a fund of about $2 billion in direct competition with EEC exports. I believe that the recent sale at very low prices of 1 million tonnes of grain to Algeria, a traditional EEC

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market for cereals and grain, was a warning shot across the bows of the common agricultural policy and it should give us all cause to think very carefully.
The Americans are getting so worked up about this not just because of EEC export restitution and the strength of the dollar but because the United States farm belt is suffering a great deal more than farmers are suffering in western Europe despite the cuts in dairy quotas. At least one third of United States agricultural assets are considered to be at risk and we were told that 300 rural banks might collapse in the next year or so, all of which puts pressure on legislators in the United States as similar circumstances would put pressure on legislators in western Europe.
That might be resolved by our having GATT negotiations, but as the French have blocked them for the time being and do not want agriculture or the CAP to be at risk in those international negotiations the only way out is something that the Americans will suggest to the EEC, which I hope that the Minster will bear in mind in further discussions. I refer to an international conference of the major agricultural exporters — Australia, Argentina, Canada, the United States, the EEC, India and Thailand. Those countries should get together and work out some ground rules to avoid what might be an extremely damaging trade war.
Section XI of the White Paper deals with political co-operation. Everybody pays lip service to political co-operation. The White Paper has a succession of little paragraphs of bland communiqués and declarations. A great deal of faith is put in them. I wonder why so much emphasis is put on political co-operation. A basic reason is economic imperialism in the Common Market, by which I mean the protectionism of the CAP and trade policies with the rest of the world in terms of dumped and subsidised agricultural products, the network of client states in the Lomé convention and association agreements. That great economic power has not brought compensating political power, so there is an effort to go in another direction to try to restore western European influence in the world to what people—mainly older politicians—think it ought to be and perhaps what it once was.
We have a series of virtually meaningless declarations and communiqués at almost every summit and often at Council meetings which, perhaps in the Government's view, are a temporary substitute for much closer union or for federalism. The communiqués and declarations are often trite. The Minister said that they have some impact. I remain to be convinced. I have seen no evidence of any declaration of political co-operation by the EEC having any influence outside western Europe. The most notable example was the Venice declaration on the middle east. It has had no impact on the course of events in the middle east. It was a worthwhile declaration in that many people agreed with its sentiments. I do not want to pursue that subject, however, although it is covered in the White Paper. The point is that the declarations are hardly worth the paper that they are written on and pander to the political vanity of the politicians who attend the meetings.
There have been joint stands in the United Nations Organisation, but even they and speeches by the Presidency on behalf of all 10 Community members have only papered over the cracks of political disunity on major items of policy, as was seen in two recent and important
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instances. First, we and West Germany are to follow the United States' line and withdraw from UNESCO because we have not been able to get our way on reform internally. Secondly, the Community is completely split on the United Nations convention on the law of the sea. Several members have signed the convention and treaty, but we, the United States and West Germany have gone out of our way to emphasise our differences with the rest of the world.
There is no political future for Britain in a bloc of rather tired western European nations whose relative political and economic influence in the world is in decline, and rightly so. Western Europe has dominated the world for the past five centuries. I do not know what God-given or any other right we have to consider that we have a right to continue to exercise such influence and power. We should let other nations take over and concentrate a little more on trying to unify rather than dominate the world. There is no future for a party with a Socialist vision of the world and Britain's place in it.
The Minister was kind enough to dwell at some length on the Dooge committee and its recommendations. The Government are not accepting the committee's recommendations because they are basically federalist—they try to make the way clearer and smoother for a federal union in western Europe. That is a perfectly honourable intention, provided that it is made explicit. The federalism is implicit. The Minister said that there was some reference to security, but that it would be only the political implications of defence policy. However, page 20 of the Dooge report contains recommendations that go further than that and talk of joint weapons procurement and the standardisation of weapons. Those are defence issues, not security issues. They are defence decisions, not the political implications of defence decisions. Dooge is pressing in every direction.
Like most right hon. and hon. Members, with the exception of the federalists, I am glad that the Government have entered caveats, but once Britain's budget problem was disposed of satisfactorily, according to most member states, the impetus to get the dynamism of federalism going re-emerged. The Government are in a dilemma. They want to placate the federalists in western Europe and in Britain. There are some of them. I disagree with them, but their view is perfectly honourable provided that it is declared openly. We must always bear it in mind, however, that the British public is generally dead set against any further loss of sovereignty, and certainly against the concept of a federal state of western Europe.
The White Paper refers to completing the internal market to
"promote a more united Europe".
Those are beautiful words because they can be taken both ways. Federalists can take them to be a description of a future united states of western Europe, and they can be taken by non-federalists as meaning just closer co-operation. The Dooge committee goes further and wants to give more power to the European Assembly.
Some right hon. and hon. Members will agree that the European Assembly is a pathetic institution, but that it is potentially extremely dangerous when it is flattered with the prospect of more power and influence over Community business and, ultimately, against the power of all Parliaments. As long as we stay in the EEC, there is an increasing risk of a major conflict between the requirements of this House and our responsibility to the

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people who elected us and the responsibilities of the European Assembly, especially if responsibilities and powers are extended without our amending the treaty of Rome. That is the new path. It is a path of creeping federalism. Federalism is not faced head on but sought in roundabout ways which do not draw public or national parliamentary attention.
The value of a debate such as this is that it enables us to put on the record our fears and doubts and our warning to the Government, and any Opposition who care to go along with the type of thinking that we are debating today.
7.37 pm
Mr. Robert Jackson: We will all take more seriously the credentials of the hon. Member for Walthamstow (Mr. Deakins) in seeking to unify the world when we see more signs of a positive attitude to the unification of Europe or even more signs of unity in the Labour party.
For some months now, although there has been some evidence of wavering determination recently, the Milan meeting of the European Council has been billed as the "institutional" council—as the meeting at which, at last, the Heads of Government will take stock and reach decisions about the Community's institutions and how they can be improved.
The central purpose of today's debate must therefore be to express the view of the House before those discussions take place. But this is not at all easy, because nobody can pretend that the discussions in Britain about European institutional issues have been especially lively or well informed. There has been a great wave of political argument about these matters on the continent. But this has been one of those movements of opinion among our nearest neighbours which so frequently seem to pass us by. There has been a plethora of resolutions, declarations and reports engaging all sections of the political classes and public opinion on the continent—but this is our first debate on the subject, and all that we have to guide us is seven admirable pages in the most recent report of the Select Committee on European Legislation, sandwiched between four pages on air transport policy and three pages on Community immigration policy. In short, this is yet another example of the proverbial newspaper headline, "Fog in the Channel, continent isolated."
I propose, however, to take advantage of the fact that the argument on these matters in Britain is still so undeveloped to consider not the complex technicalities of the various proposals which are now before the Community and for which the House is perhaps not yet ready, but rather the frame of mind in which we in Britain address these proposals. Let us try for a moment to stand outside ourselves—in General de Gaulle's phrase,
"To gain height and distance"
—and to consider the strengths and weaknesses of the way in which we in Britain characteristically approach this argument.
The British approach to the institutional organisation of Europe is governed by instinct, not by reason or logic. We are not inclined to ask ourselves questions such as, "What are we trying to do?" and, "How can we best do it?". Rather, we look at European institutions in terms of our very special natural history and experience. The consequence is that our judgment about how those institutions should develop is based mainly on an instinctive assimilation of the European constitution with
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our own constitution, and of the principles of its development with the principles of British constitutional development.
That instinctual and historical approach informs the prejudices which we characteristically exhibit when European institutional questions are discussed. We have, for example, an instinctive preference for proceeding by conventions rather than by formal legal texts. That is how our own constitution works, and we find it easy to take it for granted that that must be the best way for the European constitution to work. Similarly, we hold that constitutions develop by evolutionary process rather than by a process of rational deliberation which relates means to ends. Somehow we have acquired from our history a notion that those things which happen without our knowing it are more enduring and substantial than those which we consciously choose to do. We also have an instinctive preference in Community affairs for machinery which gives the greatest possible freedom of manoeuvre to the Governments of the member states — as opposed to machinery which obliges them to take account of the will of supranational institutions or to follow prescribed legal procedures, or even to be bound by their previous undertakings.
I hope that no hon. Member will think that what I am saying is a disparagement of our characteristic British way of looking at these matters. In any historical perspective the British polity has been remarkably successful. Although that success has been due at least as much to geography as to our political institutions, the values that our experience secretes deserve to be taken seriously.
The British approach to the question of European organisation certainly has many virtues. For a start, it is solid. We say what we mean, and we mean what we say. In the British approach, head and heart are closely united—in contrast to the approach of other political traditions in Europe, when the heart may go faster than the head, as is the case with the Germans, or the head may go faster than the heart, as is the case with France.
The British approach also has the virtue of realism, or, at least, of that type of realism which reflects an accurate appreciation of the material, and perhaps sordid, interests that sometimes motivate, and more often oppose, the progress of ideas. There is little danger of Britain ever finding herself in the extraordinary position into which the Federal Republic recently found itself propelled by the agricultural lobby in Germany — and I hope that our German friends will forgive us on this side of the Channel for the small exhibition of Schadenfreude which we allowed ourselves on that occasion.
Solidity and realism are the virtues of the British approach to European politics. Let us now consider our vices. The first must be that we are remarkably slow moving and unimaginative in our approach to Europe. The danger of our instinctual approach to politics is that it clings to the familiar, and finds it difficult to assimilate novelties. For example, in the 1950s we failed to recognise the speed with which Britain's historic position in world affairs was being eroded, and the dynamism of the Europan movement on the continent.
Mr. Deakins: The hon. Gentleman is making an interesting philosophical speech. He criticises our general philosophical approach to change. Surely his allegation of our lack of imagination is disproved by the experience of the transformation of the British empire, first into the

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British Commonwealth and then into the Commonwealth by a process of evolutionary change over a short period of time without major institutional reform.
Mr. Jackson: That was a most remarkable historical process. It took place in the same way as the empire was created, largely "in a fit of absence of mind", and to some extent it happened because of a lack of institutional innovation in the empire. Indeed, that may be a reason why in the end the attempts to run the Commonwealth as a world force came to nothing. We failed to institutionalise it. I would indeed say that the experience to which the hon. Gentleman referred demonstrated a certain, lack of imagination, which goes to prove my point. For, just as we failed to understand the dynamism of the European movement in the 1950s, similarly, today in the 1980s, it seems that we are failing to take the full measure of the challenge which all of us in western Europe face from the superior technological and economic performance of the United States and the far east.
Mr. Marlow: Could my hon. Friend let us into the recesses of his mind by passing judgment on a specific case rather than on the general points, which he is making so eloquently? Immigration rules, for example, are highly political and sensitive issues. Does he feel that they should be decided one way or the other by this Parliament and institution, which is democratically accountable, or by a foreign institution which is accountable to nobody?
Mr. Jackson: We should embody the concept of human rights in our domestic legislation. So long as we fail to do that, it is inevitable that our citizens will resort to the European Court to get rulings on matters of human rights—matters which I agree should rather be settled under our own constitution.
Returning to my argument, if slowness and a certain lack of imagination are the defects of our characteristic political approach, so also is a certain insensitiveness. Often we fail to understand the power of the emotional and idealistic factors in the continental attitude to the organisation of Europe. In this House, for example, we affect a manly derision for the desire of our partners for symbols of European unity, while forgetting our own remarkable attachment to the symbolic and emotional side of politics. Moreover, it must also be admitted that there is a trace of arrogance in our attitude to the "European" aspirations of the continentals. We sometimes allow ourselves to see a certain fancifulness and extravagance in those aspirations, believing that it is the part of more sober, responsible, mature elements, such as ourselves, to temper and correct those exaggerations. So often we have declared that this or that European project is unrealistic or "not on", only to find that the continentals have found a way. Indeed, I have often felt that we carry our lack of sensitivity so far that we fail even to notice the extent to which our assumptions of superiority are resented by our partners.
What practical conclusions do I draw from this examination of the strengths and weaknesses of our approach to the organisation of Europe? First, we should not deceive ourselves about the sincerity and determination of the continental drive to give stronger institutional expression to the idea of European union.
Mr. Forth: I well understand the direction of my hon. Friend's argument, but would he care to comment on the attitude of the Italians to rulings of the European Court of Justice? We are lectured constantly by the Italians on all the great and good European matters, and castigated by them for our dog-in-the-manger attitude, but the Italians have the worst record of flouting the rulings of the European Court of Justice, to which they pay so much lip service.
Mr. Jackson: My hon. Friend is right. I said earlier that our commitment to Europe, although more cautious, was perhaps more solid than that of some other member states. Perhaps we should introduce proposals for institutional developments that might improve the Community's processes for enforcing and supervising the implementation of Community law.
To return to my thread, we must not deceive ourselves about the sincerity and determination of the continentals with regard to the idea of European union. I hope that no one in the House will mistake the significance of Germany's embarrassment over its recent veto at Luxembourg. If anything, that episode, and the shame and guilt which I believe that it evokes in Germany, will strengthen the determination of the German Government to prove their European credentials. That may become a serious diplomatic problem for us.
My second conclusion is that we should re-examine our aversion to proceeding in the Community by legally binding instruments rather than by the evolution of conventions. The main lesson that most continentals will draw from the German experience is that which is now being drawn by Mr. Genscher — that it proves that conventions are not enough. After all, the German Government entered into a strong moral commitment on the so-called veto at Stuttgart only 18 months ago, so that many will say that the latest episode proves that the veto will constitute permanent temptation as long as it exists. I have no quarrel with the Government's position on majority voting, nor do I doubt that it, or something like it, will be adopted by the Community at the Milan summit, or later. But we should keep an open mind about the way in which that position is expressed in Community law.
My third conclusion is that we should beware that our instincts do not lead us to undervalue the role and importance of the supranational as opposed to the intergovernmental elements in the Community system. If we will the end of a completely unified internal market, must we not also will the means of strong central institutions for initiative, decision-making and enforcement? That point was made by my hon. Friend the Member for Mid-Worcestershire (Mr. Forth). If we will the objective of a more effective European role in world affairs, must we not also will the means of strong central institutions that are capable of defining and expressing that role? The Government have taken a tiny but significant step in that direction in their proposals for a small secretariat for political co-operation. But I hope that my hon. Friend the Minister will forgive me if I predict that the secretariat will, as was said by the hon. Member for Walthamstow, turn out to be an inadequate instrument for developing any serious European role in foreign policy.
Finally, we must overcome the instinctive resistance which leads us to underestimate the force of the logic underlying the development of the Community's institutions. Let me cite only one example—that of the

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European Parliament. It is probably true to say that the sentiment of the House on this matter can be expressed in one sentence: the more power the European Parliament has, the less we have. But the truth is that the key institution in the Community is the Council of Ministers, and the House is in the process of losing whatever power it may have had over the Council. No doubt that will be graphically illustrated in the debate and vote next week.
For years, we have been accustomed to Ministers reminding us, when they come under fire in the House, that they must have a free hand in Brussels to negotiate in the national interest. In the future, when the ideas for majority voting put forward by the British Government and reported to the House today are implemented, Ministers will return from Brussels with an even more dampening message—"Sorry, but we were outvoted."
Neither the House nor the Community is ready for it, but I have little doubt that, within a few years, we shall recognise that the logic of majority voting in the Council leads inevitably to giving the European Parliament the power of co-decision with the Council.
If what I have said today, and once or twice on previous occasions, may seem critical of my hon. Friend the Minister of State, may I end with a word in his praise, which I hope will be passed on to him. Today, as always, he made a lucid, forceful and elegant presentation. During the past year, he has been fighting a difficult brief, and we all know that he has a demanding client. I hope that he will appreciate my remarks about the instinctive bias of the British mind in these matters, for there is certainly no one better capable than he of blending that bias with the rational will that is from time to time required.
7.55 pm
Mr. Nigel Spearing: We have heard excellent speeches from the hon. Member for Wantage (Mr. Jackson) and from my hon. Friend the Member for Walthamstow (Mr. Deakins). The hon. Member for Wantage may be surprised to know that I agree with many of his perceptions, although I disagree with his conclusions for precisely the same reason as I disagree, curiously, with the conclusions of my hon. Friend the Member for Walthamstow. I hope that I do so on the basis of objective observation rather than of personal preference, although it may be the latter, too.
The hon. Member for Wantage said that to achieve the common market that he and the hon. Member for Reigate (Mr. Gardiner) want so much we must have strong central institutions with legislative and financial power. My hon. Friend the Member for Walthamstow also mentioned that, but he called it a federal movement. As we know from the treaty of Rome, and from any objective analysis, the movement which the hon. Member for Wantage vividly described in his closing remarks is not federal, but unitary. That is why the attitudes and aspirations of the British people will not be towards the form of unitarism to which he aspires. It is not practical, for reasons that he perceived.
The two speeches to which we have just listened underline the problem of British Governments, of whatever party, now and in the future. The problem is whether we are talking about a "union" or about European unity, and the Government had to face the problem in their response to the Dooge report.
Mr. Jackson: I cannot allow the hon. Gentleman to leave the impression that I believe that the future
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constitution of Europe should be a unitary one. I believe that we must have much stronger central institutions in Europe, which will, of course, be balanced by the institutions on the periphery. The present problem in Europe is a lack of energy, power and drive at the centre. We should give it that energy, power and drive, but that does not necessarily mean a unitary state.
Mr. Spearing: I am not sure that the hon. Gentleman has reached the right conclusion in that respect. As I understand it, the treaty of Rome does not allow for national Parliaments to have any role at all, except where it occasionally uses the phrase "in accordance with national procedures." We shall discuss that principle next Tuesday, as the hon. Gentleman said. Indeed, he made a prophecy with regard to the outcome of the vote. His closing remarks were the answer to the point that he has just made. There is an inevitability about that, provided that the financial controls and authorisations continue, as no doubt they will—although with some dissent—next Tuesday.
The Scrutiny Committee, of which I have the privilege to be Chairman, devoted eight pages of its 21st report to the Dooge proposals. In that, we were helped by the Minister of State, with whom we had a long session on 15 May. To that report we have attached the Government's memorandum to the House of Lords Select Committee, which was examining the same matter. Paragraph 15 of the memorandum states:
"HMG is committed by the Treaty of Rome to ever closer union among the peoples of Europe. We are equally committed to the Solemn Declaration of European Union to review progress towards European unification no later than five years from signature (ie by June 1988)".
Paragraph 16 states:
"The United Kingdom wants to see greater European unity. Within the European Community this means Europe united as a single market."
In both those quotations we can see the Government's dilemma and the way in which they are approaching the Dooge report, while trying to resolve the problems. As we know from the Minister's evidence to the Committee, the Government have several reservations about the report. In our report we say that the Dooge committee was established
"'to make suggestions for the improvement of the operation of European Co-operation in both the Community field and that of political, or any other co-operation."
There will be a considerable impact even if not all the proposals are made. The balance of power of the institutions will be changed. We say in paragraph 5 of our report that the proposals
"If implemented … would have major consequences for the scope and impact of the Community and for the balance of power between its institutions."
In other words, the dynamism that the hon. Member for Wantage wanted may be strengthened by the adoption of at least some of those proposals.
My hon. Friend the Member for Waltham stow mentioned defence. The Minister made a distinction between defence and security. That is true in terms of Whitehall Departments, but we have seen from the events of the past two or three years that security—which may be a matter for the Foreign Office—and defence are often two sides of the same coin. As the Dooge report said, the design and purchasing of armaments should be considered together. The Minister says no. That matter needs to be kept under review because it affects not only EEC policy but our policy at home and the whole of our

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foreign policy and defence policy throughout the world as well as our relations with partners, particularly across the Atlantic.
I should like to refer to voting. The Luxembourg non-agreement has been the subject of quite a lot of comment during the debate, but we must remember that it is not part of the treaty. An increase in qualified majority voting, which the Minister mentioned, will raise the question of the basis on which it can be legitimately used. That matter has been raised by hon. Members on both sides of the House. It must be a gentleman's agreement if only because the present agreement is extra-treaty. Therefore, if a country is to declare its use, as the Minister suggested, on what grounds should it do so? When is it legitimate to say that that procedure will be used? The Minister said that a country could use the procedure if necessary. Who is to judge whether it is necessary?
If the procedure is adopted, which Her Majesty's Government agree with to a point, it is clear that there will be some form of practice, custom, development and convention inside the Council as to when the Luxembourg arrangement will be used and when it will not be used. If that is so, as I suspect it will be, I commend it to the attention of the hon. Member for Wantage because it is the sort of procedure that we have in the House. We have Standing Orders, but we also have arrangements through the usual channels and occasionally even behind the Chair. In other words, if the Luxembourg arrangement continues on the lines suggested by the Minister, we shall be adopting the procedures which, in the House, we have found to be convenient and for the benefit of all. Whether that will be ultimately to the benefit of the country or the Community, I shall not venture to say, because that is not my object.
I should like to refer to a matter which is in the motion as well as in Dooge but which so far has attracted no attention. Quite a lot in the motion has not yet attracted attention in the debate, the scope of which is wide. It has been said that Parliament can pick up an elephant or a pin in its procedures, but I am not sure whether we can do both at the same time. I have a sense of unease at the amount of material in the motion, and indeed in our amendment, with which we are not able to deal.
I refer to the conciliation procedure between Community institutions, which was reported on by the Select Committee on European Legislation, &c in its 19th report. The document on that procedure was published by the Commission, and deals with the developing procedures for agreements and discussions between the Council and the Assembly. That point has been discussed by hon. Members.
In our report, we said that the proposal which, no doubt, will be debated at Milan, and which forms part of the Dooge package,
"extends the time limits for discussion, and widens the range of subjects to include all important Community measures, whether or not these have appreciable financial implications."
The Minister did not refer to that directly, but he did refer to Her Majesty's Government's view that it would be appropriate for the Assembly to have greater powers in that respect, and that the views of the Assembly should be made known at an earlier date so that the Council could take account of them and thus be more realistic in its decisions. That sounds practical, but it means that
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representatives of both bodies will meet. As Chairman of the Scrutiny Committee, I have to tell the House that we have received reports from Ministers saying that that is pending a meeting between representatives of the Council and representatives of the Assembly. That means that the House is more in competition with the Assembly in terms of getting the ear of the Council because members of the Assembly and the Council are meeting in conciliation, meetings that are redolent of industrial relations bargaining.
Mr. Deakins: My hon. Friend is referring to an important matter. Perhaps I can convey a message to the Parliamentary Under-Secretary of State that the Minister of State was a little vague about the new forms of consultation between the Assembly and the Council as an aid to improved decision-making. As I recall, the hon. Gentleman was not specific on the matters to be raised between the Council and the Assembly. Like my hon. Friend, and probably the House as a whole, I had assumed that they were matters within the treaty competence of the Assembly—in other words, where it had some advisory or practical power with regard to the budget. If my hon. Friend is right, and if the area of consultation is to be widened so that the Assembly will be consulted on many matters on which it has no power to be consulted at the moment, that needs to be made clear in the winding-up speech.
Mr. Spearing: I am grateful to my hon. Friend. I emphasise that I was quoting the report of the Select Committee; it is not only my view. We know only too well, because of the lack of the 1985 budget until recently, that if one has power over finance, one can use that control. In certain circumstances, however, one loses control. No doubt that theme will be pursued on Tuesday. It is clear that in exercising financial control the Assembly has indirectly gained the conciliation that I mentioned.
The Minister of State did not refer to one matter that is relevant to the European Assembly that is contained in the Dooge report. It was reported on by our Committee. We said:
"With regard to the standardisation of voting procedures, Mr. Rifkind indicated that the Government would support a single standardised system of elections to the European Parliament."
I am surprised that in technically an excellent speech the Minister did not refer to that matter, for it is of constitutional consequence. The European Assembly Elections Act 1978 does not specify a system that is consistent with those used in other countries. I take it that the Minister's statement to the Committee, and our reporting of it, is a sign of future legislation on this matter. If that is so, I hope that the Under-Secretary of State who is to reply to the debate will let us know.
Mr. Forth: Does the hon. Gentleman agree that in his evidence to the Committee the Minister made it absolutely clear that the Government would be prepared to consider a genuinely uniform system of election throughout Europe but that they would not be interested in a number of variations of proportional representation on the continent, with Britain having to give up the system that it preferred, and does he agree that the Minister said that he would look at the position before legislation was introduced?
Mr. Spearing: I am grateful to the hon. Gentleman. I cannot immediately look up the answer to question 67. Perhaps I should have done so and included it in the

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quotation. We need to pay attention to that point. It demonstrates that the Government are considering some change, or at least that they are open to suggestions.
May I refer to previous reports of the Committee that have relevance to the amendment. We do not know what the Government's attitude to it will be. They may accept it. The amendment
"calls on the Government to ensure that proper control is exercised over the Common Agricultural policy; expects the Government to take all possible steps to ensure that expenditure is made subject to effective limits".
That theme has underlined this debate. The Scrutiny Committee followed up this matter, as it was bound to do, during the last two years. Referring to the preparedness of the United Kingdom to consider an increase in own resources, the Foreign Secretary said that we would be so prepared, provided
"first, that agreement was reached on an effective control of the rate of increase of agricultural and other expenditure; and, secondly, that it was accompanied by an arrangement to ensure a fair sharing of the financial burden."—[Official Report, 14 November 1983; Vol. 48, c. 611.]
The legislation that now takes the form of the European Communities (Finance) Bill incorporates that proposal. The Bill contains no proposal, however, for control of the money that is to be raised. I am not sure that control is provided for anywhere in terms of legal enforcement. In our report on the disciplinary mechanism to which my hon. Friend the Member for Walthamstow referred we concluded:
"The Committee do not perceive any legal implications in the Conclusions as presented in this document but have already commented on the unusual nature of its status, and the fact that it does not have legislative form."
That conclusion is contained in our second report: House of Commons 5, II, of the 1984–85 Session. It appears, therefore, that the legislation now before us contains a provision for the expenditure of money, but it does not contain any balancing provision concerning its control. According to the Foreign Secretary, this was one of the two conditions upon which extra payments were to be made.
The Scrutiny Committee will endeavour to keep the House informed upon these matters of fact and constitution and upon the extent to which European legislation has an impact in law or political importance upon the House, in particular upon its powers to raise money and control expenditure and upon the laws which determine the lives of British subjects.
8.15 pm
Mr. Christopher Murphy: I shall confine my remarks to one document, as yet almost ignored in this debate,
"Stronger Community Action in the Cultural Sector",
and express certain reservations about the European Community setting itself guidelines for greater involvement in the arts and heritage.
Whatever the arguments about the merits and demerits of the Community, it should be noted that there is a growing tendency to move away from referring to it as the European Economic Community towards the simpler European Community. This must be recognised as a movement to involve the Community in a greater part of European life. The particular document to which I refer is evidence of that. Although it has no impact on United Kingdom law and no financial implication, it is understood
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that the Commission intends to submit formal proposals which could have a legislative consequence and increase expenditure.
I believe it is appropriate in this debate to make clear to our European partners the importance attached to the arts and heritage by the people and Government of the United Kingdom. It has long been recognised that Britain, because of its historic and contemporary position in the world, has a unique contribution to make in cultural matters. That responsibility is taken both thoughtfully and carefully. It is also highly relevant to draw to the attention of other Community members the Conservative belief, being put into practice, that much of the action in cultural matters should be left in the hands of private individuals and of organisations which have shown their dedication to the arts and heritage, the Government being there for assistance and support, if and when necessary.
The Council of Europe already provides on a wider scale a proven forum for ensuring that greater attention is paid by its 21 member states to the difficulties encountered in safeguarding the arts and heritage. Much of our culture has a common foundation with interconnected European themes, and this we hold in trust together for the generations yet to come. But many problems do not even need the Council of Europe's direct intervention; they need the co-operation and good will of nations on a bilateral basis, so that must add to the query about the necessity for a Community initiative potentially involving more laws and more cash. The Council of Europe itself represents that spirit of co-operation and good will among the democratic nations of this continent, and it is advantageous that it concentrates upon the general rather than the specific aspects of protecting and promoting the cultural benefit so evident in Europe.
The EEC document envisages that, although the treaty of Rome is not specifically concerned with cultural affairs, its social, economic and fiscal provisions should nevertheless be implemented in the cultural sector. The Commission also disavows any intention to direct or co-ordinate national cultural policies. The first would surely create a conflict of sovereignty. The latter would equally create an overlap with the Council of Europe. However, the net result of seeking to complement could become a recipe to duplicate. The dangers of additional bureaucracy and political antagonism in decision making must be avoided with all determination.
The Select Committee on European Legislation felt that this document,
"Strong Community Action in the Cultural Sector,"
raised questions of political importance. I urge my right hon. and hon. Friends on the Treasury Bench to be circumspect in the interests of the arts and heritage as well as in the interests of our national law and national expenditure.
8.20 pm
Mr. Jeremy Corbyn: Unfortunately, this debate is not well attended. It contains much of great significance because there are considerable long-term implications for political life in Britain and Europe in what the Minister of State said and the Dooge report proposed. I support what my hon. Friend the Member for Walthamstow (Mr. Deakins) said about the way that Europe treats Third world countries and the way in which Europe treats and throws out people who have come to Europe in search of work after Europe has grossly

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exploited their Third world countries. [Interruption.] The hon. Member for Northampton, North (Mr. Marlow), who is mouthing his usual platitudes from a sedentary position, might have the sense to tell what he believes, or is he still as obsessed with his continual attack on divided black families as he has been for the past few weeks since the welcome court decision in their favour? I hope that the House will for once give some attention to the plight of migrant workers throughout Europe
Mr. Marlow: Does the hon. Gentleman accept the competence and jurisdiction of the European Court of Human Rights, or would he rather that these decisions were made here?
Mr. Corbyn: I accept that a decision made by that court is legally binding in this country. If the hon. Gentleman preaches law and order, as he frequently does, he should accept that decision rather than mouth the racist platitudes he has uttered for the past few weeks.
In March 1985 I tabled early-day motion No. 537 on a refugee charter for Europe. It was supported by 45 other hon. Members. I asked that migrant people working in Europe be given political rights similar to those given to people already resident in Europe. I said that migrant workers should not be discriminated against continuously and systematically or be ignored by all the European institutions and, above all, by this Government. That early-day motion sought to explain the way in which asylum-seekers and migrant workers are badly treated and systematically excluded from political life and political consideration. Indeed, they have become an expendable part of the European work force. These serious matters affect 15 million people throughout Europe and should be properly investigated.
Recently, I attended a conference in France of the European Committee for the Defence of Refugees and Immigrants. That is not a Common Market body but a voluntary organisation. About 35 countries, most of which were European, attended the conference, but representatives from Africa, Asia and Latin America attended also. A daily bulletin was produced during the conference, reporting on the session and on the feelings and treatment of migrant workers in Europe. One bulletin contained a cartoon juxtaposing a car factory in the early 1960s with one in the early 1980s. During the early 1960s, this factory rapidly produced cars and employed migrant workers from all parts of the world. Those migrants came from poor communities, which were often impoverished by European policies — for example, countries in west Africa. The same company made a great deal of money during the 20 years to 1985. It then went bust and the workers were thrown out of the factory, their homes and Europe. I believe that the plight of migrant workers and refugees deserves serious consideratiion. They need political rights.
It is to President Mitterrand's credit that he has proposed that migrant workers in France should be given the vote in local elections. I believe that that right should be extended to national elections. Indeed, all migrant workers in Europe should be able to vote in all elections. In that way, their case could be properly considered and the discrimination practised against them would end.
Recently, there has been a number of discussions on these matters in the European Parliament. Two significant
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motions have been passed and a commission has been set up to combat the ever-growing threat of racism and fascism in Europe. Government Members might choose to ignore that threat, but it is a serious and growing menace. Fascism and racism thrive on economic stagnation, poverty, unemployment and zenophobia. They are led and promoted by zenophobic politicians, such as some Conservative Members, judging by their remarks when I began to speak. They are the sort of people who promote the horrors faced by many people in Europe. They are similar to the sort of people who turned a blind eye to the growth of fascism in Germany and other European countries during the 1920s and 1930s.
Mr. Forth: Will the hon. Gentleman give way?
Mr. Corbyn: I give way.
Mr. Forth: I am grateful to the hon. Gentleman for his unfailing courtesy. When talking about a committee such as this, will the hon. Gentleman help the House by distinguishing between the Right and the Left of politics? What does he find so objectionable about what he calls "fascism"—which is undefined—and what does he find so acceptable about the extreme Left? Will the hon. Gentleman assist the House by identifying what he means?
Mr. Corbyn: This is not a debate on political science. If the hon. Gentleman does not know what fascism or racism are, their basis or what they thrive on, he has no right to represent anyone. If he cannot recognise the evil of fascism, I fail to understand what he is doing here. He knows perfectly well what it is. Far too many people in Europe died because of fascism and the lack of opposition to what went on before the last war in Germany and other countries.
Mr. Richard Body rose—
Mr. Corbyn: The situation is serious. One can only welcome the fact that some European Parliament Members have been prepared to take up this issue and investigate the financing and sources of the fascist propaganda that is promoted throughout Europe.
Two other motions were recently passed by the European Parliament. One concerned the plight of Tamil refugees arriving in Europe because of the fear of intimidation in Sri Lanka. The other concerned the specific case of a migrant couple in Britain. The communal divide in Sri Lanka is great. The systematic exclusion of Tamil political leaders from Sri Lankan political life has led to an ever-widening gulf and serious violence. Many Tamil families have left their homes and either gone to India or sought to come to Europe to seek asylum. It is important to recognise that refugees and asylum-seekers have rights, whatever the country from which they come or the country to which they are going. If we turn our backs on them, we shall turn our backs on the basic humanitarian policies that should be enforced in every European country. The European Parliament was saying that the removal of Tamil refugees, and sending them back to Sri Lanka and the considerable dangers that they will face, is a serious matter, and that it was opposed to it.
However, a decision has been taken by the British and Dutch Governments, following the visits by the British Prime Minister and by a delegation of Dutch parliamentarians to Sri Lanka, which claims that it is safe for Tamil refugees to return, although there is no evidence to support that. Because those Governments are not

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prepared to consider the plight of the Tamil asylum-seekers whether they are in the Netherlands or here, who are trying to get out of the fear and terror of Sri Lanka, they have introduced a system of exclusion.
On 29 May, the Home Secretary introduced a visa requirement for any Sri Lankan national wishing to leave Sri Lanka and come to Britain. It is the first time that that has happened to a Commonwealth country, and it has serious implications. It is also, I believe deliberately, confusing refugees and asylum-seekers with the other issue of migrant law. The popular newspapers, and many of the less popular Tory Members, have sought to add to that confusion.
The United Nations High Commissioner for Refugees has addressed this problem of Europe and how it reacts to the influx of people from Third world countries. It is significant that a special session was held by Mr. Poul Hartling to discuss the large-scale influx from developing countries. He says that this has been
"a prominent feature of the world refugee situation."
The report compares the large number of economic or political refugees taken in by countries in the Horn of Africa, central America and Asia with the position in Europe. There:
"Negative public attitudes and in some cases xenophobic reactions have tended to focus on asylum-seekers largely because of inadequate appreciation of their special status and needs as a group distinct from the much larger category of alien economic migrants, but also for reasons such as their limited prospects for successful integration in the prevailing economic climate."
The report continues:
"the High Commissioner would like to suggest two guiding principles for co-operation between European Governments:

(a) that international obligations regarding the admission of the refugee/asylum-seeker arriving directly from his country of origin should be clearly reaffirmed,

(b) that practical arrangements for the reception and treatment of refugees/asylum-seekers should be in conformity with the particularly liberal and humanitarian spirit in relation to persons who seek asylum on their territory, which is part of the common tradition of countries in Western Europe."

Those are important statements, and the Government would do well to listen carefully to what Mr. Hartling has said, and the way in which he has put his case to the European Governments. They cannot go on treating people from the Third world countries as they do.
There is a large catalogue of cases of individuals who have been badly treated by either the British or other Governments with regard to migrant law or migrant status. I have already mentioned the recent European Court decision on divided families and one must hope—it is perhaps a faint hope—that the British Government will accept that decision, not in the grudging, miserable way that they have so far, but in its entirety and spirit. I hope that they will introduce the necessary regulations and changes to ensure that the judgment is carried out to the letter and in the spirit in which it was proposed.
I now move to a specific case, which was the subject of a motion carried through the European Parliament last week by 135 votes in favour with 28 against and three abstentions. The case concerns a Cypriot couple, Katerina and Vassilis Nicola, who unfortunately fell just outside the terms of the 1982 special arrangements that the Home Office made for political refugees from Cyprus. Tory Members may laugh and say that that is a good thing, but they have not seen the misery that those regulations cause to people and the honor and fear felt by many families because of the way in which our immigration laws operate.
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This couple lost their home in the northern part of Cyprus in the war there in 1974, when the Turkish army invaded. They spent some time in a refugee camp and eventually made their way to Britain. They have worked consistently since their arrival here in 1976 and have made a good contribution to our society. However, they are treated as illegal immigrants and they have been threatened with removal. They have sought refuge in a church in Euston, and have already spent over 100 days there.
It is significant that newspapers and the media on the continent treat the story with far more seriousness and greater coverage than newspapers here. They see it as an indictment of what we would call a civilised society that a young couple should be forced to take refuge in a church to avoid being removed to a house that does not exist and to a country to which they cannot go. It is important that these issues be raised, and one must thank those Members of the European Parliament who are prepared to do so.
I fear that a debate on the prospects for European co-operation in the future and the proposals of the Dooge report ignore many things—the status of migrants and refugees, specifically — and deliberately ignore the economic relationship between Europe and many Third world countries. Such relationships tend to perpetuate the sort of economic neo-colonialism that was a feature of European prosperity in the past and some people intend it to be the case in the future.
If that is not serious enough, there is an even more serious aspect, which is the proposal implicit in the Dooge report, and other reports, of greater European defence reliance on NATO. The threat of a nuclear war in Europe is far greater, and is worse as a result of the proposals for the integration of some countries in Western Europe as part of NATO. I do not see any peaceful intention in those proposals, but merely an aggressive proposal that can only bring greater danger to the people of western Europe, and greater expense. That money could be much better used on many socially useful things.
8.37 pm
Mr. Tony Marlow: I am sorry that the hon. Member for Hamilton (Mr. Robertson) is not present and that, as a red herring in the debate, he sought to attack the Government on unemployment. Goodness knows how much and how deeply the Government care about the tragic problem of unemployment. Goodness knows how much the Government have done and achieved in fighting the evil of unemployment. Massive resources have been given to the Manpower Services Commission, imaginative programmes have been set up for young people, and there has been a freeing of business so that commerce and industry can provide real jobs for our people.
The hon. Member for Hamilton put the problem of unemployment into the European context, but he did not have the honesty to mention the fact that, of our population of working age, a bigger proportion of people is in work than in any other major western European country. I can see in my constituency the deep and worrying problems of unemployment. The level of unemployment in Northampton, North is lower than the level of unemployment in north Rhine Westphalia, the area in Germany in which the Ruhr valley is situated. If we have problems here, does the hon. Gentleman not recognise that

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other people have problems? All this simplistic, heart-on-the-sleeve concern, this throwing of other people's money at the problem without any thought about it, is something that we should deprecate.
Mr. Foulkes: Will the hon. Gentleman concede that they have problems in Germany, because Chancellor Kohl is following the same stupid, deflationary monetary policy of our Prime Minister and Government?
Mr. Marlow: I believe that the hon. Gentleman feels that he has made a cogent and devastating point. However, if he looked a little further, to France and Italy, which follow the Socialist policies that he would like here, he will see that they have the same problems as us. In Italy, they are rather worse.
Those who follow these debates in the House and outside, like Gaul, divide themselves in three parts. First, there are the nationalists. I have sympathy with them, but I am not a nationalist on this subject. They believe that we should have nothing to do with Europe. They believe that we are different, that we should have our own laws, that we should trade internally, that we should put up barriers and frontiers and that we should be self-sufficient. I have sympathy, but that I do not agree with.
Then there are the extremists, the Euro-fanatics, the federalists. They divide into two groups. There are those who want a united Europe by stealth — two steps forward, one step backward. Then we are in a position of no return—locked in with the chains around us. We are in a federal Europe and there is no way out of it.
They do this in several ways. In today's Daily Telegraph—and I dare say in other papers as well—there was a reference to a European organisation that calls itself the People's Committee, headed by a Signor Pietro Andolino, an Italian professor. The committee has suggested that there should be a European flag, a European anthem and a European sports team. I have not had a single letter from any of my constituents demanding these things, yet this is supposed to be a People's Committee.
These federalists try to insinuate policies in areas in which they have no competence. I have before me a draft conclusion on the European dimension in education. According to this, there is to be a European dimension in relevant subjects of the school curriculum and in teacher training courses. So Europeanism, federalism, is to be taught in schools—at the expense of what? Is it to be at the expense of religious education? I hope not. Is it to be at the expense of peace studies? The GLC should survive to see that.
There is also a draft directive on illegal immigration. What has that got to do with the European Economic Community? We discover that some of these European organisations suggest that we should have an immigrants day. Perhaps we should, but not as a result of a European request.
The next one is good. It is suggested that we should have a declaration against racism. Ken Livingstone should be here to enjoy that.
Then there are those who are more direct and even more extreme in the way that they try to achieve a federal or—as they would call it—unified Europe. At the top of that list are the Members of the European Assembly.
Another document kindly provided by the Commission arises from a draft protocol put forward by European
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Members of the Assembly. The Commission suggests that in the territory of member states—that is, throughout the whole of the EEC — a Member of the European Assembly—no doubt a very important person—should have immunity from any measure of detention and from legal proceedings at any time, not just during a session. So the Member could commit any crime or felony; he could go to a hotel or restaurant, refuse to pay the bill, and storm out. I suppose he might have droit du seigneur if he wanted it. Adolf Hitler should be here this very day; he would be queuing up to join the European Assembly so that he could breed his master race without let or hindrance.
As well as the nationalists and the Euro-fanatics, there are the vast majority like myself—the moderates—who believe that we are European and that we belong to western Europe. We always have done; it is just across the sea. We need Europe. We have interests in common with Europe. We want to trade and work with Europe. We have many common ideals. We want to work together, but only in free association on those ideals that we hold in common, as my hon. Friend the Minister of State said from the Front Bench at the beginning of the debate.
We must watch out for this creeping European federalism. There are two watchwords that we should bear in mind. We must watch the funds and we must watch those areas where people are trying to extend their competence. Above all, we must watch the European Assembly. At the moment it lacks power, but its only motivation is to achieve and acquire more power for itself.
We have said for a long time that the time would come when the common agricultural policy would cost so much that it would bump up against the ceiling of European own resources and that this would force a change in the common agricultural policy and bring about necessary reform. As we see, the opposite has happened.
I have before me an answer from my right hon. Friend the Minister of Agriculture, Fisheries and Food which sets out the cost of the common agricultural policy. For every £55 that was spent in 1981, in 1982 £63 was spent; in 1983 £80 was spent; in 1984 £92 was spent; and the budget estimate for this year is £100. On the basis of estimates alone, that expenditure has almost doubled over the short period of four years. When my hon. Friend introduced the debate, he tried to indicate that agricultural expenditure was under control. Even on the budget, it is 8 per cent. greater this year than it was last year. Heaven knows, the budget will be overrun, as it always is. One can rest secure on that.
Mr. Foulkes: It is guaranteed.
Mr. Marlow: It is guaranteed, as the hon. Gentleman says.
In European agriculture we are increasing production at the rate of 2 per cent. per year, and we are not increasing consumption. There are parts of the world, such as north Africa, which are desperately short of food. There are other black holes. Russia? Perhaps, but for how long?
We have an increasing surplus of agricultural production in Europe. There are problems in agriculture in the United States. In most of the world, competence in agricultural self-sufficiency is increasing. My hon. Friend said that the matter is under control and that we have got a grip on agricultural expenditure, but that has been said

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before. It was said four years ago, and expenditure went up. It was said three years ago, and expenditure went up. It is being said again this year, and expenditure will go up.
There is only one way to crack the problem of agricultural expenditure, and that is to put a ceiling on it. My advice to the House is to take the matter seriously. If we want a sensible agricultural policy and if we want to control the funds that our constituents as taxpayers have to spend on this extravagant area, we must think carefully about increasing European own resources.
I profess to being a good European, but those who have a different instinct and set themselves up in their way as good Europeans should think twice before approving this increase in funds. By approving the increase they will bring about the very horror that they are seeking to prevent. If they want to control European policy and have a sensible agricultural policy, they should not sign the cheque.
Mr. Forth: Does my hon. Friend share my concern that the Government's case for allowing an increase in resources is based on a budgetary disciplinary mechanism that they say will come into effect? Is he aware that the document on which that is based is littered with expressions such as "exceptional circumstances," "other developments" and "changing the reference framework"? Does he believe that the loopholes in the document mean that it is of little or no value in the context of discipline?
Mr. Marlow: The thing is littered with as many holes as Al Capone after he had been machine-gunned. It is like a colander: the cash will run through it. There is no safeguard in that document, as my hon. Friend has so rightly pointed out.
Of course, some people say that we might one day get agriculture under control. They are being totally unrealistic, unless we put a ceiling on funds. If agriculture did take up a decreasing proportion of European expenditure, what would the other money be spent on? Would it be spent on other policies? Do we want Europe to have other policies? If there is money to be spent, is it not better spent by ourselves, in our own countries, such expenditure being decided upon by our national Parliaments rather than by European institutions?
Mr. Corbyn: Is there not something obscene about the EC running up huge agricultural surpluses, in many cases denaturing or destroying crops, while only a couple of thousand miles away, in north Africa, thousands of people are starving for want of that food? Does the hon. Gentleman accept that the best action we could take would be to ensure that that food gets to north Africa as quickly as possible?
Mr. Marlow: I have no brief for the common agricultural policy as it currently exists, and the hon. Gentleman is right to say that there are massive surpluses. To be fair, however, at least 1 million tonnes of grain have been earmarked, and much has already been moved to that unfortunate area of the world. However, that will not solve the problem, because in north Africa there are political, distribution and other difficulties. I am sure that we should all like to solve the problems of that unfortunate area.
I am also worried about the creeping extension of competence in the EEC. Some able and ambitious people go to Brussels as Commissioners, civil servants—
Mr. Forth: As MEPs.
Mr. Marlow: —and as MEPs, as my hon. Friend rightly reminds me. Having arrived, they want to change things. They want power. The result is that in many areas where policies are not needed and where harmonisation is not required, these ambitious people put forward ideas and seek to promote themselves and their reputations. They often do that by bringing about measures which nobody really wants.
I said to the Minister in an intervention that Europe was about barter. Directives come forward thick and fast, in a basket, some of which we want and others we do not. To get those that we want, we must agree to directives that we do not want.
Yesterday we debated fast frozen foods, the debate resulting from a proposed directive that we agreed we did not want. The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food said that the Government were against it, but that if it was changed, it might be found to be acceptable. I suspect that it will be changed, and while the Minister may not, even then, find it acceptable, as a result of the moral blackmail imposed by other European countries which want it—despite the fact that we in this country eat more frozen foods than any other European nation—we will be told that, in the view of the Government, sensible changes have been made and the directive is acceptable.
When that happens, a Government who say that they wish to reduce the amount of legislation will be introducing laws that the country does not want, placing burdens on people and increasing costs on retailers—in this case retailers of frozen foods — and setting up a hierarchy of inspectors and bureaucrats to make sure that the regulations are properly applied.
The Dooge committee wants a judicial area and a new media, a sort of EBC — a European broadcasting corporation. While I have no objection to anybody setting up such an organisation, I say let them do it with their own money. If established, it will not be successful. Indeed, it will probably prove to have an even smaller audience in the United Kingdom than Welsh language Channel 4 television.
The Dooge committee also wants to give the Commission greater executive responsibility. Is that the way in which we in Britain work — by giving more power to the bureaucrats? Should not power be vested in Parliament and Ministers?
The two main points that I have made are that we must watch the money and the power. It is our responsibility, on behalf of the people we represent, to control as much of the power and the money as we possibly can.
8.55 pm
Mrs. Ann Clwyd: The hon. Member for Northampton, North (Mr. Marlow) would benefit from a period in the European Parliament, rubbing shoulders with people of nine other nationalities. It is clear that he knows little about the European Parliament. That was clear from many of the assertions that he made in his 20-minute speech, but more of that later.
I wish at the outset to pay tribute to the retiring member of the British Labour delegation in the European Parliament, Mrs. Barbara Castle. The Minister showed considerable interest earlier in the fate of Mrs. Castle. As one who served under her there for five years, I wish to pay a special tribute to her qualities of leadership. She is still the only British politician of international standing in

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the European Parliament. She is respected by people of all parties for the contribution that she has made to that Parliament in the last five years.
Much has been said in this debate about the old argument of national sovereignty. The longer I am in this House, the more I am amazed that, in particular, Conservative Members still believe that national sovereignty exists. Bernard Crick recently put the concept of national sovereignty in its place when he described it as
"an 18th century Whig doctrine intended to scare the respectable in the smaller nations into believing that if they do not leave the key decisions to London, law and order will break down."
I am surprised that its proponents still believe that national sovereignty could enable us to opt out of what is a highly interdependent economy.
About 65 per cent. of the world's GNP is controlled by 1,000 multinational companies. Those companies have such powers to switch jobs and capital that they can upset Governments and economies. Companies are increasingly planning their corporate strategies on a Europe-wide basis. What influence national sovereignty then?
The hon. Member for Mid-Worcestershire (Mr. Forth), who is always keen to leap to his feet when this subject is discussed, played a key part in defeating an attempt in the European Parliament to control the activities of multinational companies. Those who claim that that Parliament has no powers should ask why the multinational companies spent so much time, when we were attempting to get that legislation through, lobbying Conservative Members in an attempt to frustrate what was a modest step to control their powers.
Mr. Forth: Does the hon. Lady agree that the wealth-creating powers of the multinational companies far exceed any power that we have yet seen from centrally controlled bureaucratic or Socialist systems and that the potential and actual power for good of the multinationals is correspondingly greater? Cannot she see the evidence for that with her own eyes?
Mrs. Clwyd: It is very interesting that the hon. Gentleman was one of the key people in the committees of the European Parliament and in the Parliament itself in frustrating the attempt to control the power of the multinationals. Whatever he may say tonight, that was a very retrograde step and one which many Members on the Government Benches I believe now regret. When, as one of the documents that we are dealing with tonight says, they are continuing to debate the Vredeling directive in an attempt to resurrect it, I hope that hon. Gentlemen realise the error of their ways.
The attempt to introduce the Vredeling proposals provoked a controversy out of all proportion to what was being proposed. Employers' organisations in Europe, individual companies and, above all, American-based multinationals launched a campaign of unprecedented virulence. Members of the European Parliament were lobbied with a persistence and intensity that had never before been experienced. Indeed, some Conservative Members, whose party is of course represented in the European Parliament, were very prominent in the success in frustrating those very modest proposals. If only some of them had come clean and told us quite clearly that they were representing some of those multinational companies,
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perhaps some of the employees' organisations in Europe would have launched a similar campaign in an attempt to get that legislation through the Parliament.
Mr. Corbyn: Does my hon. Friend know roughly how many jobs have been lost in all parts of Britain as a result of multinational companies shifting their investment out of this country into Europe because of the free movement of capital that is explicit within the European Economic Community? Is she aware how many of those jobs would have been lost as a direct result of the activities of Conservative MEPs in opposing the move to try to bring some measure of democratic control over completely undemocratic and ruthless multinational organisations?
Mrs. Clwyd: Yes, and I seem to recollect that the hon. Member for Cheltenham (Mr. Irving), when he found that a multinational company was proposing to move from his constituency to another constituency overseas, also expressed the view at that time that he wished we had something similar to the original Vredeling proposals operating in this country.
Thousands of jobs, certainly in my old European constituency, were lost because multinational companies were not forced to consult and inform their workers about their plans to relocate overseas. I hope that as soon as possible the European Parliament will be able to resurrect the Vredeling proposals.
I want to talk briefly about the powers of the European Parliament, because I believe that they ought to be increased. I do not believe that one should criticise the European Parliament for not being particularly progressive in the past five years. When one considers how long it has taken to win radical reforms at Westminster, it seems unrealistic to suggest that the European Parliament could have delivered a lot in the past five years. The Parliament lacks power to back its sometimes radical proposals with anything except draconian measures, such as sacking the Commission en bloc or throwing out the whole budget. So, in my view, we cannot criticise the European Parliament—it is like hobbling a horse and then expecting it to run — while the major powers rest with the Council of Ministers.
One proposal is coming before the Council of Ministers next week which in my view will have a considerable effect on employment prospects in this country, particularly in Wales, where the steel industry has already been badly affected by the draconian cuts imposed upon it by this Government some years ago. Once again it looks as though the Government are going to sell out on a matter of considerable importance to the Welsh steel industry. Hon. Members on the Government Benches who have been crying crocodile tears tonight over employment will know that Wales, like other regions of the United Kingdom, is suffering from the effects of the policies imposed upon it by this Government, and is particularly badly affected at this time.
Therefore, the EEC directive on containers of liquids for human consumption, which was considered by the Scrutiny Committee yesterday, is a matter of considerable importance to us in Wales. I should like some specific assurances from the Minister tonight that he will ensure that when this directive is implemented—as it appears it will be, because the United Kingdom Government is to agree to it next week—the steel industry in Wales will be protected.
Mr. Marlow: Does not that emphasise the point that I was making? The hon. Lady and Her Majesty's Government know that that is a bad policy and that we do not want it, but because of the bartering—if one wants two reasonable policies one has to put up with one nonsense—we are having that policy. That is one of the problems with the Community.
Mrs. Clwyd: There are many problems in the Community, all of which I cannot address tonight. One which I believe the hon. Member for Northampton, North would agree is of some importance is that in the Council of Ministers next week the United Kingdom Minister will agree that directive. He has assured us that, provided some measures are vigorously applied by the Commission, the directive will provide a defence against the erection of artificial trade barriers. That relates, in particular, to safeguards which will ensure non-discrimination between different types of container and different types of packaging and to the non-obstruction of products in one member state which are legally produced and marketed in another.
It would be helpful to know what criteria and procedures will be instituted by the Commission to ensure that no discriminatory legislation is allowed to be implemented, because the Commission does not have a good record of ensuring that steel quotas, for example, are implemented in all member countries with the same rigour.
The Government are clearly aware of the deep anxiety in south Wales about the discriminatory nature of the deposits systems and the dangers that they hold for the tinplate industry. The long-term future of the beverage container and, therefore, that important sector of the British Steel Corporation's business will now become dependent upon the existence of a proper framework to ensure that the latest qualifications to the directive are properly monitored by the Commission and the rules rigidly applied.
Apparently, the Government look to the Commission to secure the implementation of the promised safeguards for United Kingdom trade and hope that the trade will inform the Commission of any potential infringements. Proper enforcement is clearly a crucial factor in the Government's acceptance of the directive in its present form, but considerable anxiety still exists, and existed within the Scrutiny Committee, as to the Commission's ability to monitor the operation of the directive in the various countries of the Community.
We expect any serious difficulties that occur to be reported by the Government to the House. The Minister told us that a satisfactory programme can be based on voluntary agreements without recourse to legislation. If that proves not to be the case, I hope that the Government will bring forward appropriate subordinate legislation, because this country's tinplate industry must not be penalised by lack of proper scrutiny of the legislation by the Commission.
In the document entitled "Developments in the European Community, July to December 1984", a section is devoted to social affairs, especially to the recommendations on positive action for women and the changes in the European social fund.
I am a member of the European Parliament and of its social affairs and employment committee. We warned the United Kingdom that changes were taking place in the
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social fund-so—called reforms—which would adversely affect the United Kingdom. We said that if those reforms went through there would be less money available in the social fund for the United Kingdom. No notice was taken of those warnings. That shows a serious lack of understanding by the Welsh Office—I am sorry that the Secretary of State for Wales is not present to reply to this point—because Wales has a strong argument to put forward against reforms of the social fund which would mean spreading money more thinly throughout the United Kingdom. I was told by the Welsh Office that it was a matter for the Department of Employment and not for the Welsh Office. The Welsh Office should have been fighting Wales's corner to ensure that it received its fair share of the money available under the social fund.
Those warnings have been borne out because, strangely enough, Powys is the sole area in Wales that will not receive any benefit from European Community assistance for training projects for at least the next three years. That point has already been taken up by Powys county council through representations to the Government and to its representatives in the European Parliament. However, no notice was taken of the particular situation of Powys and other rural areas in Scotland and Cumbria that have also been excluded from that section of the social fund. I am sure that that will not go unnoticed in Brecon and Radnor.
An interesting suggestion in the European social fund directive is to make special allowances for categories of pople who have difficulties in the job market. Those cover vocational training for or recruitment to jobs for women in occupations where they are under-represented. But again, the record of the United Kingdom Government on that aspect of the social fund is very poor. Millions of pounds have already been lost to the United Kingdom and thousands of women have been denied training opportunities because the Government have broken the sex discrimination laws on their application of the European social fund. That is again further evidence of the Government's disregard of women's needs and rights.
Fifty-eight per cent. of money in the European social fund for the training of women has gone to West Germany, while only 3 per cent. went to the United Kingdom The only people we can blame for that are the Government. The fact that the highest proportion of the £16 million in that section of the fund went to West Germany is a measure of the importance that that country gives to the training of women compared with the attitude in the United Kingdom. Training programmes for women have received financial backing from the European social fund and have taught women a wide variety of skills in their countries. They have been trained as mechanical engineers, toolmakers, mechanics and fitters. They have been trained in manual skills as painters and joiners. In electronics, they have been trained as fitters and engineers.
The Government have operated a deliberate policy to conceal that section of the fund. I have had lengthy correspondence with relevant Ministers over several years that emphasises that point. I was told by the Department of Employment that it does not advertise that section of the social fund because it discriminates in favour of women—despite the fact that the sex discrimination laws allow for such discrimination in areas where women were previously discriminated against. I hope that now that that section of the fund is being reintroduced the Government will implement it fully so that women in our country may have the benefit of it.

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The Government have sent the draft directive on parental leave to 30 organisations for consultation. The way that the consultative paper has been framed is clearly designed to put people off the idea. It is crucial that that directive is implemented and that we give it full backing.
Given the need to change the structure of the employment market because of high unemployment, if parental leave applied to both parents men could take time off without loss of identity. The draft directive would help create a much-needed balance between home and work because it applies equally to men and women and would give men the legal right to take time off when their children were born. That is a further example of the work being done in the European Community to achieve equal rights for men and women and of the work that should be done by the United Kingdom Government.
9.15 pm
Mr. George Foulkes: When replying to a debate, it is not uncommon to begin by saying that it has been a wide-ranging debate but few debates are as wide ranging as debates on the European Community and that is even more true of today's debate in view of the large amount of documents before us.
It is a pity that in opening the debate the Minister of State — I see that he has not yet returned—spoilt an otherwise good speech with a cheap jibe about Mrs. Barbara Castle. As my hon. Friend the Member for Cynon Valley (Mrs. Clwyd) pointed out, Mrs. Castle has a great record of service in the European Parliament. Moreover, her successor was elected in almost exactly the same way in which the Minister's heroine, the Prime Minister, displaced her own predecessor, in a democratic election.
The Minister's comment was unfortunate for the Government, but it was fortunate for me as it allows me to mention briefly the serious split within the Conservative group in the European Parliament and between that group and Conservative Members of Parliament in Westminster. As the report produced by Mr. David Curry shows, the split is so severe that the Government have had to employ a redundant Conservative Member of the European Parliament at the taxpayers' expense to try to patch up the differences. The report referred to personal back-biting between Conservative Members of the European Parliament and Conservative Members in Westminster and stated:
"We should stop pretending that we can reform the CAP or even the budget."
That shows the wide gulf between the Government and their representatives in the European Parliament.
Even more seriously, last Wednesday when the European Parliament considered important documents about European union and the recommendations of the Dooge committee, Spinelli and the rest, the British Conservative group—unlike the British Labour group—was split, eight of its members voting against the resolution and the rest voting in favour of it.
In the light of all that, it ill behoves Ministers to talk about proper democratic elections within the group.
Mr. Renton: I should put the record straight about David Curry's report. The report did not say that the CAP could not be reformed. It said that action was required from the Council to reform it. That is what we are doing.
Mr. Foulkes: I have the report here, but that is not what I read.
I am sure that the hon. Member for Northampton, North (Mr. Marlow) does not agree about reform of the CAP. A parliamentary answer to the hon. Gentleman today from the Minister of Agriculture, Fisheries and Food showed that the amount of money being swallowed up by the CAP had effectively doubled in four years. No one could describe that as effective control.
Mr. Norman Buchan: Mr. Curry did not just say that the CAP could not be reformed. He said that we should stop trying to hoodwink people into believing that it could be reformed.
Mr. Foulkes: My hon. Friend is absolutely right.
I hope that the whole House will also deplore the complacent attitude of the Minister to the bankruptcy of the European Community. We hear very little about that. I have attended two or three debates in the past 12 months in which we have discussed ever more loans to the European Community—in Eurospeak they are known as recoverable advances because technically we are not allowed to give loans—involving hundreds of millions of pounds. I gather that the Community has today demanded that £115 million be paid immediately, one month in advance, because it is so bankrupt because, as my hon. Friend the Member for Paisley, South (Mr. Buchan) said, the CAP is out of control.
As my hon. Friend the Member for Hamilton (Mr. Robertson) said, it is regrettable that the Minister of State did not mention unemployment. The hon. Member for Northampton, North took that up. I said in an intervention that deflationary policies in Germany are helping to create the same level of unemployment there. The hon. Gentleman also mentioned France. It is facing difficulties because it is trying to reflate whereas the majority of member states are following deflationary policies. We look forward to there being more Socialist countries, all of which are reflating and creating jobs, wealth and growth in the Community.
My hon. Friend the Member for Hamilton said that unemployment is the great unmentionable. Budgetary discipline is equally unmentionable.
Mr. Spearing: It does not exist.
Mr. Foulkes: Perhaps it is wise not to mention it because, as my hon. Friend the Member for Newham, South (Mr. Spearing) says, it does not exist.
It is unfortunate that the Community seems to concentrate on trivia such as flags, anthems, European passports and more duty-free goods. Extra duty-free goods are fine for those of us who are rich enough to fly backwards and forwards, but for the majority and the 4 million unemployed desperate for an opportunity of a job, such matters are trivia indeed.
The hon. Member for Welwyn Hatfield (Mr. Murphy) mentioned cultural co-operation. The Commission, those great men of experience, are talking about studying the employment implications of new audio-visual technology, which is useful, and closer co-ordination of European media policies to avoid internal competition and to strengthen cultural industries against external competition. In other words, Koronationstrasse is to be protected against the invasion of "Dallas" and "Dynasty". Our highly paid commissioners have more important things to

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discuss. As the hon. Member for Welwyn Hatfield said, the Council of Europe has a remit for considering such matters on a wider front.
When the Commission and the Community talk about such trivia, they also come up with things that are a little more sinister. For example, the Commission recently said in a programme:
"European citizens should be able to travel freely throughout the Community"—
this is the sting—
"without being inconvenienced as consumers by differing VAT rates."
The hon. Member for Edinburgh, Pentlands (Mr. Rifkind) and I can cope with the different VAT rates. Behind such a suggestion is harmonisation upwards. My hon. Friend the Member for Hamilton mentioned other tax rates.
I have said that trivia are being discussed, but what should be being done? We have much poverty in Britain. The first scheme under the poverty programme was highly successful, and £21 million is proposed in the second scheme. Unusually, 70 per cent. of the finance for programmes put up by voluntary organisations to help with research and other activities concerned with poverty comes from public sources. On 21 December 1984, the Secretary of State for Employment told the hon. Member for Manchester, Withington (Mr. Silvester) that the programme would continue. The Government expert from the Department of Health and Social Security said that those programmes can be very important and most effective in countering the effects of poverty.
They will be important and most effective in Wales and England, but not in Scotland. My hon. Friends who represent Scottish constituencies will be especially worried that one of the good helpful schemes from the European Community, which even the critics of the Community would welcome, will not be available in Scotland. The Minister of State who represents a Scottish constituency, which includes Wester Hailes and other areas which could benefit from the scheme, should be particularly ashamed that we are not going ahead with it.
The regional fund can also benefit the United Kingdom. My calculation—I used one of the new demonstration telephones that we are to have in the House, no doubt at enormous expense, which have the advantage of a calculator—
Mr. George Robertson: And being British made.
Mr. Foulkes: As my hon. Friend said, another advantage is that the telephones are British made. With that calculator I worked out that only 5·6 per cent. of the new Community budget would be spent on the regional fund. There will be a decrease in the draft budget. The Government's own review of regional aid shows clearly, as does a reply I received from the Parliamentary Under-Secretary of State for Trade and Industry on 5 March, that vast areas of England, Scotland and Wales will lose out on regional aid because of the reviews of travel-to-work areas and of regional assistance. As a result of that, European aid will be lost to vast areas of the United Kingdom. Therefore, we shall receive less of that 5·6 per cent.
There is the integrated Mediterranean programme. The Greeks are a shrewd lot. In agreeing to the arrangements for the accession of Spain and Portugal, the Greeks extracted three conditions from the EC. The third was a redeployment of budget finance towards Greece. If we
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redeploy 6 billion ecu to Greece — a huge sum—it will mean less for our poor areas. Britain will lose out yet again.
Mr. Deakins: My hon. Friend makes an important point, because the agreement with Greece is merely the first step. It seeks to safeguard the Greek position on Mediterranean agricultural products before the entry of Spain and Portugal to the Community. When Spain and Portugal become member states, there will be increased pressure from Greece, and the Spanish and Portuguese will also ask for more.
Mr. Foulkes: I am grateful to my hon. Friend for that support and amplification.
The social fund is only 4·9 per cent. of the budget because of the huge sums swallowed up by the common agricultural policy. Again, there will be no increase. Yet demand in the social fund has increased by nearly 60 per cent., as my hon. Friend the Member for Cynon Valley pointed out. The social fund is a success story, and more and more people and employers want to take advantage of it.
Mr. Marlow: Why do we have to send money to Europe for regional or social funds so that the Community can allocate priorities and send it back to the United Kingdom? Why do we not keep that money here? The hon. Gentleman says that we are missing out on these schemes. He should realise that under our system of rebates we receive a finite sum and, therefore, if we do not receive it for one policy, we receive it for another policy.
Mr. Foulkes: I understand the circular argument, and it really is a circular argument. One of the ironies is that money is spent on areas, which if it were not for the Community and because the Government are so reactionary, they might not spend money. Although demand has increased by nearly 60 per cent., the supply will increase by only 6 per cent. The rules have been changed, and areas have been excluded. As my hon. Friend the Member for Cynon Valley so eloquently said, one of the areas excluded was Powys, in which is Brecon and Radnor. I hope that that will be shouted loud and clear—I shall be there a week today—from the hills and in the valleys—
Mr. Rifkind: In Welsh.
Mr. Foulkes: Most of the people in Brecon and Radnor speak English, as the Minister of State knows. Indeed, 8 million people in the Community will lose out because of the restrictions on the social fund.
Fourthly, I must mention the importance of food aid. It has been mentioned by several hon. Members, and many of my hon. Friends were especially worried about the cost of the mountains. It is a criminal disgrace, and a blot on the landscape of the Community, that it costs nearly £2 billion to store those huge mountains. My hon. Friend the Member for Paisley, South knows the great work that was done by the MEP for Glasgow, who obtained some frightening figures for the rate of destruction of the food. For example, the Community destroys 5,266 oranges every minute. That is criminal when people in the Third world are starving. Recently, I obtained information about the growth of the mountains. Far from being controlled, they are now out of control. The butter mountain has

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increased by 36 million tonnes, worth £50 million, and the beef mountain trebled between December 1983 and December 1984.
At the same time, the report of the Select Committee on Foreign Affairs—I pay tribute to the Chairman of that Committee, the hon. Member for Stroud (Sir A. Kershaw), and to my hon. Friend the Member for Newham, South, who is a distinguished member of the Committee — entitled "Famine in Africa" points out some of the problems. Its recommendation No. 34 suggests that
"The Government should initiate urgent action to make … intervention stores … readily available for emergency aid."
The report also states that the intervention stocks are owned by the national Governments but that the EC must finance them when they are sold out of intervention. But the EC does not have the money. The limited amount that it has been using has been taken from other areas. Money taken from the Bangladesh budget has gone to sub-Saharan Africa. It is taken from those who are starving and given to those who are dying.
The hon. Member for Northampton, North said that the commitment made at the Dublin summit was to supply 1·2 million tonnes of grain, but only a few thousand tonnes have been delivered. The Ministers who represent us in the Community must put on some pressure to send those disastrously huge stocks to the starving people in the Third world.
I could have mentioned many more matters, but I wish to give the Minister time to reply to all the points that have been made. However, in the time remaining to me, I shall make two final points. First, the report of developments in the EC between July and December 1984 mentions political co-operation. When he introduced the debate, the Minister of State was as selective as usual when speaking about political co-operation. He exaggerated the support that Britain received on the Falklands. Much arm-twisting was done to get some of the reluctant member states into line. However, I share his analysis of the Venice declaration. What he did not mention — I am raising these matters because I have a Front-Bench responsibility for them, as does the Minister who will reply to the debate — was Latin America. The European Parliament has passed an important resolution on Chile, suggesting that Ministers combine to take some action against the vicious, oppressive regime in that country. It is about time that the EC considered a joint political approach to the matter, and I agree that the setting up of a small political secretariat might help in that direction—[HON. MEMBERS: "Oh!"] I have got some Conservative Members worried now.
Secondly, I refer to Central America. There was a useful meeting when the Foreign Ministers of the Community met in San Jose to discuss the joint action by the Community countries towards Central America. I hope that the Minister will say that that will be followed up, and that the British Government support Claude Cheysson's initiative for financial aid to some of the poorer countries of Central America. I hope that, with political co-operation in the Community, there will be scope for the countries of Europe to develop an independent line instead of slavishly following the dangerous American line, particularly on Nicaragua. That would make political co-operation worth while.
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We in the Opposition recognise the importance of the Community as a forum for positive co-operation between the countries of Europe. It is an important forum, but it is not the only forum. Our co-operation has produced the airbus without the need for institutions, which has been good. We have the Council of Europe, as the hon. Member for Welwyn Hatfield said, but we agree that we should use the Community, while we remain members, to promote our common interests. As my hon. Friend the Member for Hamilton rightly said, the national interest need not necessarily be divorced from the common interest. We have seen useful work on the Esprit programme and acid rain, and we hope to see it on EUREKA as well. However, as has been said by many people, we regret how much the Community is dominated by the common agricultural policy.
We recognise the value of a European voice in foreign policy so that we can be more powerful in our criticism of the superpowers, where it is appropriate to do so. Perhaps we can be a greater force for peace in Europe. The Opposition support the increasing awareness among our sister Socialist countries of the need for a policy of co-ordinated expansion to end the common scourge of unemployment. Countries such as West Germany will be Socialist. It is a race between Britain and West Germany to see which returns to Socialism first.
We believe in co-operation in areas such as high technology, which is necessary to counter the increasing domination of the United States and Japan. However, we reject the worship that we see among Conservative Members of the internal market as an end in itself. It may help in the long term, but it will not solve the major problems of unemployment and poverty that face us at the moment. If the Government think that it will, it is a vain hope.
We reject any idea of a united states of Europe. We reject petty harmonisation for the sake of it, for example on the internal temperature of frozen peas, as we saw last night. Nevertheless, we recognise the need for positive co-operation with our neighbours on matters of mutual interest. We look forward to a Labour Government co-operating with other Socialist Governments in the European Community to get Britain and Europe back to work.
9.38 pm
The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Tim Renton): I can agree with the hon. Member for Carrick, Cumnock and Doon Valley (Mr. Foulkes) on one thing: it has been a wide-ranging debate. But I cannot agree with him on very much else.
One thing that I noticed—I am sure that my hon. Friends did too—in the speeches of the hon. Gentleman and of the hon. Member for Hamilton (Mr. Robertson) was that they reminded me of the wolf in the children's story that says, "I'm going to huff and I'm going to puff and I'll blow your house down," to the piglets. The two hon. Members both huff and puff, but they do not quite blow the House down. Why is that? It is because in them both there is a strange sense of worry. On the one hand, they think that they should appease their hard Left, oppose Europe with all their strength and oppose anything that the Conservative Government support. On the other hand, they have a nasty feeling that perhaps the Common Market will succeed, so they should be pressing for more reform

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more quickly. They talk about EUREKA and Esprit and ask why we do not get on with those things more quickly. They try to ride, therefore, two horses at the same time and, like Barbara Castle who did the same thing, they do the splits. That comes out in their speeches.
The Opposition will adopt the same ambivalent position when I tell them that the Government propose to accept their amendment. The hon. Member for Hamilton said how important it was to have a debate on these documents, so it is a great pity that nowhere does the Opposition amendment mention the documents. Although we accept the amendment, I have reservations about its wording.
First, it refers to "planning jobs." We do not believe that the job of the European Council is to plan jobs. Nevertheless, it is of very great importance to it. The hon. Member for Carrick, Cumnock and Doon Valley referred to unemployment in the European Community as the "great unmentionable", but he perhaps forgot that at the European Council in March it was reaffirmed that it is of prime importance that each Government in the European Community should combat unemployment. Therefore, the Government do not accept those words, although we accept the importance of tackling unemployment.
Secondly, the Government do not believe that the reference to the European Council diluting its energies by focusing on less important goals is right. The goals upon which we have focused — improvements in decision-taking, the internal market and political co-operation — are very important.
In a well thought out and philosophical speech, my hon. Friend the Member for Wantage (Mr. Jackson) referred to the British as "slow-moving, unimaginative, insensitive and arrogant." All of these words referred to our failure to work more quickly and speedily towards taking the European Community more seriously. I would say to him, in the words of Clemenceau, "Pour commencer, il faut commencer." In the last 12 months since the Fontainebleau summit there has been a sea change in Community affairs. I say this with some pride because it has a great deal to do with the leadership that Britain has given. At Fontainebleau, the long, enervating struggle for budgetary reform came to an end. The policy was established of budgetary discipline through agreed financial guidelines. From the not very easy position of demanding difficult and unpopular reform the United Kingdom has moved smoothly and far from unnoticed to a position of constructive leadership in Community affairs. Our hands are at last off the brake and on to the steering wheel.
Mr. Forth: My hon. Friend has just touched upon one of the keystones of the Government's policy: his claim that budgetary discipline has been introduced. Will he tell us in what respect discipline can exist when the very document that purports to bring that discipline into existence includes explicit references to exceptional circumstances, aberrant developments and changes in the reference framework, all of which appear to allow for the complete breaking of any discipline that we may have hoped to introduce into the budgetary procedures?
Mr. Renton: I am sure that my hon. Friend will catch your eye, Mr. Speaker, next Tuesday in the debate on own resources. I am sorry that he did not catch your eye this afternoon.
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The process began at Fontainebleau — [HON. MEMBERS: "What is the answer?"] I shall not become involved in next Tuesday's debate tonight, unlike my hon. Friend.
Mr. Speaker: Order. I am afraid that I cannot guarantee that!
Mr. Renton: The change began at Fontainebleau and developed through the Dooge committee. I should like to join in the tribute paid by my right hon. Friend the Member for Guildford (Mr. Howell) and other hon. Members to the work of my hon. Friend the Member for Edinburgh, Pentlands (Mr. Rifkind) in the Dooge committee. I know that his thinking on the internal market was very much reflected in the final report.
Mr. Marlow: Will my hon. Friend give way?
Mr. Renton: I should like to make some progress and then I shall give way.
The steps that have been taken during the past few months have embodied British ideas, initiatives, modifications and improvements that have increasingly met with the approval of other Governments. These are, in effect, the means towards completing the internal market, towards quicker firmer decision-taking to bring it about, towards closer political co-operation in dealing with the world at large and towards a more efficient, institutional balance, thereby building a more coherent and successful European partnership in which, as the hon. Member for Hamilton said, more employment in the Common Market would be a main objective.
Cultural co-operation and frontier control are two issues that arise from the documents. One of the documents that the Scrutiny Committee recommended for consideration was "Strengthening of Community Action in the Cultural Sector". It is essential to avoid stifling creative expression by bureaucratic controls, whether they be national or Community. Culture is not strengthened by organising it — I note the comments of my hon. Friend the Member for Welwyn Hatfield (Mr. Murphy) on caution and circumspection—hence the independence that we allow our cultural institutions. Nevertheless, we believe that there is a case for greater co-operation on cultural questions in the Community, provided it does not cut across activities in the Council of Europe.
Our approach, therefore, is to encourage co-operation between Community cultural bodies where this will be productive and, on occasions, between Community Governments. I remind the House of the CSCE cultural forum in Budapest on which there has been close co-operation between member states.
We believe that it is right to encourage our partners to think of the European Foundation as the right body to take on cultural tasks. What of Labour's cultural policy for Europe? The last we heard was from the Leader of the Opposition who proposed shipping the Elgin Marbles around the world from country to country as a kind of travelling Acropolis. Has the right hon. Gentleman developed these exciting plans any further?
Mr. Buchan: As the person who gave the pledge that we will return the Elgin Marbles, I repeat it—we will return the Elgin Marbles. Does the hon. Gentleman agree with the cultural commissioner, Carlo Ripa di Meana? Does the hon. Gentleman know what I am talking about? If not, will he not be quite so clever?
Mr. Renton: We must treat this matter with considerable circumspection. We believe in the independence of our cultural institutions. This is an area in which the Community is advised to move circumspectly and cautiously. I am pleased to hear the hon. Member for Carrick, Cumnock and Doon Valley say "Hear, hear".
The House must consider two documents on frontier controls in the European Community. I remind the House that, when Ernest Bevin was asked about his foreign policy aim, he said that it was "To go down to Victoria station, get a railway ticket and go where the hell I like without a passport or anything else." I have a lot of sympathy with this point of view, which corresponds to the strong feeling of ordinary men and women who travel abroad in their millions, many of them bound for destinations in the Community. The reduction of frontier controls is part of the drive to which we have given priority to make a reality of the Common Market by doing away with unnecessary bureaucratic controls at Community frontiers.
I had talks on 4 June with my French opposite number, M. Baylet, about improving the arrangements for excursionists going to France, but we have to recognise that Ernie Bevin's vision will not be realised overnight. As the people's Europe committee pointed out, there are differences between land frontiers on the one hand and sea and air entry points on the other. The United Kingdom for example is able, for geographical reasons, to rely on controls on the frontier instead of internal controls.
Moreover, it is vital that freer movement across the frontiers should not weaken defences against drug trafficking, terrorism or illegal immigration. Recent events have demonstrated yet again how important it is not to drop our guard against terrorism.
Therefore, the answer for us is clearly that we have to consider how to work with our partners to find ways and means of allowing bona fide travellers and goods to cross inter-Community frontiers with a minimum of dislocation and delay. If this movement is to make progress, we shall have to think in terms of strengthening the Community's external frontiers. The answer is to keep track of terrorists and drug smugglers not only out of the United Kingdom but out of the European Community as well.
Mr. Marlow: My hon. Friend the Member for Mid-Worcestershire (Mr. Forth) asked a question about financial discipline, as my hon. Friend the Under-Secretary had said that this was operating. My hon. Friend the Member for Mid-Worcestershire then proved that financial discipline was not operating in the Community. My right hon. Friend the Minister of Agriculture, Fisheries and Food gave me an answer today saying that agricultural spending this year is budgeted to be 9 per cent. greater than it was last year and, as we all know, the budget will be exceeded by a good 10 per cent. Can my hon. Friend tell us exactly how financial discipline is operating, because the House is waiting with bated breath?
Mr. Renton: I regret that I gave way to my hon. Friend. I shall now deal with some of the other points raised in debate. My hon. Friend will have his opportunity to speak on Tuesday, if he catches your eye, Mr. Speaker, and will be able to discuss own resources.
My right hon. Friend the Member for Guildford, in a thoughtful and well-informed speech, spoke of the EMS. We have an open mind on it. We have considered it carefully and we are still ready to consider joining it when
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the time is right. However, with regard to his remarks about the governor of the Bundesbank welcoming us, I should point out that we have had fewer restrictions than many other western European countries, including the federal reserve, on the use of ecus and the holding of ecus in our country. This has been a progressive step forward for us.
I join others in congratulating the hon. Member for Inverness, Nairn and Lochaber (Sir R. Johnston) on his recent award. He spoke about decision-taking, a subject also touched on by the hon. Member for Walthamstow (Mr. Deakins). I shall briefly sum up the position of the Government and the Secretary of State. While accepting the continuing principle of the national veto, we wish to see use of the possibilities under the existing treaty, first to make more use of majority voting, which can be used under the existing treaty. Secondly we wish to use the abstention procedure so that decisions are not prevented where the treaty requires unanimity. Thirdly, we agreed that where the European Council decides on a specific objective, member states should not use unanimity procedures to prevent implementation. Lastly, we agreed to seek agreement where member states ask that the voting be postponed because of an important national interest that they will explain formally to the Council. Against that background, our proposals will be considered at the European Council next week.
Sir Russell Johnston rose—
Mr. RentonI ask the hon. Gentleman to forgive me, but I cannot give way as I wish to make progress.
My hon. Friend the Member for Reigate (Mr. Gardiner) spoke well on the attention that should be given to employment and the development of high-tech within the Community. I wholeheartedly agree, and it is remarkable that 15 million new jobs have been created in the United States over the past 10 years, whereas no net new jobs have been created in the Community. It is for that reason that I have already called attention to the importance the March Council attached to unemployment within the Community.
On high technology as well it is clear that if a technological Community is to develop we have to change from being so dependent on the United States and on Japan for our supply of computer equipment and electrical goods. These are all problems that will be at the forefront in considering the French suggestion of EUREKA.
I must come back to the question of Mrs. Castle, of whom the hon. Member for Cynon Valley (Mrs. Clwyd) spoke so warmly. Although I am sorry Mrs. Castle lost her job in the European Parliament, I do not think that we should have too much sympathy for her, bearing in mind that it was she who led the walk-out of the Labour MEPs during President Reagan's speech—[Interruption]—in celebration of the 40th anniversary of VE day and thus caused us shame in front of that entire nation on which we most depend as our strongest NATO ally in the defence of western Europe. I heard cries of "That hooligan". Who has appeared to a greater extent as the political hooligan of western Europe than Les Huckfield who produced a hooter to drown the debate in the European Parliament, thus causing the sitting to be suspended? I wait for any comment from the Opposition Front Bench or from the Leader of the Opposition on the new leadership of the Labour party delegation to the European Parliament. The

531
new leader is Mr. Lomas, a member of the World Peace Council, a body in which the hon. Member for Oldham, Central and Royton (Mr. Lamond) is so active.
Mr. Foulkes: On a point of order, Mr. Speaker. Is it in order for the Minister at this late stage to enter into a personal attack on a Member of the European Parliament in such a disgraceful way? Does this not indicate that he is totally incapable of answering the debate properly?
Mr. Speaker: Every hon. Member and every Minister makes his own speech and must justify it.
Mr. Buchan: On a point of order, Mr. Speaker. This is the general rule of the House. When the last two minutes of a debate are taken to make this kind of attack, unless we get an opportunity to reply, it is a disgrace to the rules and traditions of the House. The Minister should withdraw his remarks now.
Mr. Renton: Methinks the hon. Gentlemen doth protest too much. They know very well that Mr. Lomas is dignified by one thing only, that he has reasserted his party's belief that the Community is no place for this country. Is that the view of Opposition Members? That is what we should have a statement on from the Labour Front Bench.
We in Britain are now leading our partners in the European Community. We should continue to do this as we settle into this new but not unnatural role. We have come far. It is a long time since Ministers from the Labour party returned from Community Council meetings in Brussels boasting about how they had held up the Community's business. May that time never return.
British ingenuity is not to be used to frustrate European progress but rather to guide the 12 in the direction that we all wish for common prosperity, security and liberty. Now there is a will to turn words into deeds. The Government look for action in Milan. We want action now. We hope others will follow.
Amendment agreed to.
Main Question, as amended, agreed to.
Resolved,
That this House calls on the Government to ensure that proper control is exercised over the Common Agricultural Policy; expects the Government to take all possible steps to ensure that expenditure is made subject to effective limits and urges the Government to use the British veto as necessary to protect very important national interests; urges the Government to ensure that areas in Britain with special needs receive a proper share of the regional aid budget; believes that the European Council should be fully engaged in planning jobs and giving particular attention to youth employment and should not dilute its energies by focusing on less important goals; urges the European Council to cut the burden of bureaucracy and to reduce the number of Community rules and regulations; and urges the Government to resist any proposals to dismantle border controls which would interfere with its ability to combat terrorism and drug trafficking.

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

VALUE ADDED TAX
That the Value Added Tax (Hiring of Goods) Order 1985 (S.I., 1985, No. 799), dated 22nd May 1985, a copy of which was laid before this House on 23rd May, be approved.—[Mr. Major.]
Question agreed to.

Bangladesh (Cyclone Disaster)
Motion made, and Question proposed, That this House do now adjourn.—[Mr. Major.]
10.1 pm
Mr. Frank Dobson: Last week we debated overseas aid when, naturally, the speeches concentrated on the desperate plight of those living in sub-saharan Africa. No part of the debate was, therefore, devoted in any substantial way to the recent cyclone disaster in Bangladesh.
That disaster has been important not only for the people of Bangladesh but for our Bangladeshi community in Britain, particularly in London and in the constituencies of my hon. Friends the Members for Bow and Poplar (Mr. Mikardo) and for Bradford, West (Mr. Madden) and my right hon. Friend the Member for Bethnal Green and Stepney (Mr. Shore). The recent cyclone was a reminder of the vulnerability of the people who live on the Ganges delta or the edge of the bay of Bengal, whichever way one likes to describe the area.
The people there live on one of the ultimate frontiers of the world. It is a frontier between land and water, between humanity and nature and between life and death. They live a tenuous existence. They are dependent upon the abundant water there for their transport and for much of their food, and they spend much effort trying to reclaim land from the sea.
But because they have not received sufficient support from the wealthy nations of the world for their efforts to regain land from the sea, whenever a cyclone occurs the sea reclaims the land again and death and destruction ensue.
In the long-term we must give more aid, financial and practical, to Bangladesh to try to make sure that the cyclones, which we cannot stop, do not cause the death and destruction which work on the delta would stop.
The cuts in aid to Bangladesh made by the Conservatives since 1979 are a standing disgrace. In 1979, we gave £33 million, and that was not enough. In 1984, we gave, in real terms, only £33 million. To put it another way, at today's prices, the cuts which the Conservatives have imposed on aid to Bangladesh since 1979 have deprived that country of £88 million. We are one of the richest societies the world has ever known. Bangladesh is one of the most impoverished. Yet our Government's ludicrous priorities have deprived that poor society of £88 million.
Much of the aid that has been given has been misdirected and not well spent by the British Government. Large amounts of it have been spent on tea gardens, for the benefit of the owners of those tea gardens and, possibly, for tea drinkers in the developed world. That money has certainly not benefited the people working on the tea plantations. They and their families have got nothing out of the aid.
Another substantial amount of the aid was poured into an electricity scheme in Dacca, the principal product of which was an improvement in the reliability of air conditioning in the luxurious housing in the Gulshon part of Dacca, scarcely a sensible priority for British aid, particularly when that aid was being cut.
What is necessary for the people who live in the islands of the delta is to make them more safe, to undertake massive works of civil engineering such as those being

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carried out now by the Dutch Government with the intention of making those islands as safe as is humanly possible and to make sure that the benefits flow, not to the rich and powerful or to people in the Bangladesh army, but to the landless people of the gulf.
The Dutch Government have displayed all the knowledge and skill that one would expect of a nation which itself has reclaimed vast tracts of land from the sea and made the country safe from its incursions. But the Dutch Government have also displayed a vast commitment to do something positive for the poorest and most vulnerable people in Bangladesh. We must try to ensure that our Government and other Governments of rich countries show a similar commitment, or in a few years we shall be debating another cyclone disaster affecting perhaps another 50,000 or 100,000 people of Bangladesh.
Bangladesh needs immediate help. It needs, above all, flat-bottomed boats, helicopters, vessels for keeping clean water and radios. They are not particularly sophisticated needs. The Bangladesh Government have recently repeated their request to the whole world for flat-bottomed sea-going motor craft, as they describe them. We as a military power have an abundance of such vessels. Indeed, in 1970, as has been pointed out in recent recruitment advertisements, the Royal Marines were in action in Bangladesh after the cyclone using flat-bottomed vessels to help to rescue people and to move food and medical supplies from one island to another.
Why are we not doing it now? It would provide practical training for the marines in landing, which is something that they need to practise because of what they are there for. It would be good training for them and it would be useful work for the people of Bangladesh. We want to know tonight whether the British Government have even considered this and, if they have not, why they have not. It is not as though we do not pour military aid into Bangladesh; we do—to support the regime and to finance an army whose only possible purpose can be to police Bangladesh, because it would not last five hours against the military might of India and there is no one else to threaten Bangladesh. So, if we can give military aid consistently to sustain the undemocratic Government of Bangladesh in power, surely we ought to be able to give some immediate aid by using military means that would help to sustain the people of the Bay of Bengal in their greatest need.
Recently we have heard of new flooding, not in the ultimate reaches of the delta, but in the northern part of Bangladesh, in Sylhet, whence most Bangladeshi people in Britain originally hailed. We have also heard that the supply links in the cyclone-affected area are showing great strain and that further help is needed. So what the Bangladesh Government and people need now is more practical help and more financial help.
I am not criticising the contribution that the British Government have made to the Brussels football disaster fund; I think it was appropriate for Britain to give £250,000. But that disaster involved the death of just 38 Europeans. That works out at a British contribution of roughly £6,500 per life lost in the Brussels football disaster.
To date, the Government have given only £750,000 towards the fund for the Bangladesh cyclone disaster in which it is estimated 50,000 Bangladeshis died. That
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works out at just £15 per life lost in the natural disaster. The Bangladeshi community represented by my right hon. Friend the Member for Bethnal Green and Stepney and by my hon. Friend the Member for Bradford, West, who are both present, have noted the discrepancy, more in sorrow than in anger. We must do something to right that contrast. It is a wicked contrast, and it appears to be a racist response.
We owe it not just to the people in the cyclone disaster affected area but to the Bangladeshi community in Britain to share its anxiety. It is part of our community. A caring community cares about the anxieties of everyone. Their worries about their relatives and former compatriots in Bangladesh must be ours. We must give practical help because that is how proper interest manifests itself.
Practical help must be given by the British Government because all over Britain, wherever there is a Bangladeshi community—it being a practical purposeful community—its members are clubbing together to establish funds. In my constituency and in Tower Hamlets, part of the Bangladeshi community has arranged an appeal with War on Want. Separately, the Bengali Workers Action Group has set up an appeal. It is an example of self-help that one would expect to commend itself to Conservative Members.
Those spontaneous efforts and the support that I am glad to say they are receiving from other people living in those areas is not being matched by a commitment from the Government to provide the immediate practical help or substantial financial help which is needed at the moment. We need that commitment. Beyond that, we need a much longer term commitment to ensure that we make a proper contribution in the future towards making life safe, decent and sustainable on those extremely vulnerable islands in the delta.
We should urge the two great nuclear, potentially warring, powers to take their duties seriously. In their separate ways, the United States and the Soviet Union devote thousands of millions of pounds every year to developing further their capacity to destroy each other and all of us.
The people at the Geneva talks should bear in mind, each time they talk about the possibility of doing something to reduce the threat of nuclear war, that there is a positive side to that. If they were to divert to peaceful, sensible purposes, I should not object to them competing. I am sure that the people of Bangladesh would not object to the Soviet Union and the United States competing to carry out the enormous works necessary to make those islands in the Ganges delta safe, prosperous, fertile and somewhere for people to earn a decent living. That would be a sensible objective for the world; it would be a sensible objective for those two major powers.
We need a lead from Britain because of our colonial links with Bengal, in which you, Mr. Speaker, played a prominent and honourable part. I hope, therefore, that the Government will show some initiative, some commitment, and will try to set the remainder of the developed and wealthy world doing something to make Bangladesh a better and more prosperous place.
10.15 pm
Mr. Max Madden: I congratulate my hon. Friend the Member for Holborn and St. Pancras (Mr. Dobson) on securing this debate. I thank him for allowing me to make a brief intervention.

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I wrote to the Prime Minister on 28 May about Bangladesh, and received a reply on 17 June. I raised three issues, and in her reply she said:
"You suggested that women and children in Bangladesh who have applied to join their husbands and fathers in the UK should be allowed to enter the country immediately. As you know, in the Sub Continent, where there are immigration queues, we operate a priority category for all compassionate and exceptional cases. There is also provision within the current Immigration Rules for children to be admitted to this country in exceptional circumstances. Individuals who are the victims of this tragedy and who seek priority or exceptional treatment will of course have their cases considered quickly and sympathetically."
I should like to know what arrangements have been made to make that position widely known in Bangladesh.
Secondly, I pointed to an article in The Observer which alleged that British aid was being withheld because of reservations about the population programme within Bangladesh. I was told that meetings were taking place in the hope of resolving those difficulties, and I should like to know what progress has been made.
Thirdly, the Prime Minister said:
"you ask that the British aid programme to Bangladesh should be reviewed urgently. It is, as you point out, one of the poorest countries in the world, and this is reflected in our programme, which has recently been increasing substantially. In financial year 1983/84, expenditure on our aid programme to Bangladesh was some £27 million. In 1984/85, the figure exceeded £32 million. We expect there to be a further substantial increase this year."
I should like the Minister to tell us what that "substantial increase" will be.
Bradford city council has contributed £15,000 to the Bangladesh disaster fund. On Saturday night I attended a concert organised by the Bradford Sikh parents' association, which contributed £300 to the Bangladesh appeal and £300 to the Bradford disaster appeal. On Saturday morning I shall be attending the presentation of a cheque for £3,000 by another Bangladesh organisation in Bradford for the relief of the Bangladesh disaster.
I wholly support what my hon. Friend said about the disgraceful response of Britain to the disaster. In Bradford alone, a very substantial amount of money has been raised. We heard tonight that other Bangladesh communities and other groups in Britain are contributing generously to the disaster appeal. I very much hope that the Minister will say that Britain will make a further contribution because I rebut what the Prime Minister said in concluding her letter:
"We have thus made a total of £750,000 available for relief and rehabilitation programmes. This represents a very substantial response to this tragic event, for which President Ershad has expressed his deep gratitude.
I do not believe that he should be expressing his gratitude; he should be making urgent demands for more help from Britain. I hope very much that the Minister will indicate when that help will be forthcoming.
10.18 pm
Mr. Peter Shore: I intervene briefly, not just as a constituency Member representing a very large number of Bengalis in Tower Hamlets, but as chairman of the all-party parliamentary group on Bangladesh.
I strongly endorse what my hon. Friends the Members for Holborn and St. Pancras (Mr. Dobson) and for Bradford, West (Mr. Madden) have said. I urge the Government to make a far more speedy and generous response to the cyclone disaster that has hit Bangladesh so recently. It is difficult for us to imagine the effect of 10 ft or 15 ft waves striking low-lying coastal areas and
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swamping whole islands in the Ganges delta and beyond, but we know that the effects are appalling—11,000 is the minimum figure for the number of people who have died and hundreds of thousands have lost their livelihood, their cattle and their homes.
We must consider not just what can be done now to provide immediate help—I believe that we could do very much more than the offer of £750,000 so far—but what can be done for the future. Cyclones in the bay of Bengal will not stop happening. This is the sixteenth in about 15 years. We must help the Bengali Government to plan coastal defences, irrigation and land reclamation works which would make the millions of people living in the coastal regions of Bangladesh far safer in the future.
I hope that the Minister will have something encouraging to say today, not just about the response to General Ershad's appeal for $50 million of emergency aid but about the longer-term plans that are needed to make the coastal areas of Bangladesh much safer then they now are.
10.20 pm
The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Tim Renton): I welcome this opportunity to discuss the recent cyclone in Bangladesh, but I confess that I was a little surprised at the interventions of the right hon. Member for Bethnal Green and Stepney (Mr. Shore) and the hon. Member for Bradford, West (Mr. Madden) as I thought that it was common practice in the House for other Members wishing to speak in an Adjournment debate to tell the Minister replying to the debate of their intention and I was not told of any such intention by either Member today. As I have only a few minutes left, if I cannot answer the detailed questions raised in the debate I hope that right hon. and hon. Members will write to me or to my right hon. Friend the Minister for Overseas Development so that detailed answers can be given.
I had the good fortune to visit Bangladesh in January at the invitation of the Government there. I could not fail to be impressed by that country's achievements, notably in agriculture, but also, I must admit, by the poverty of its people. Despite its encouraging performances in recent years the economy will remain fragile for the foreseeable future, with the prospects of development balanced on a knife edge which can be easily upset by a single catastrophic event.
It seemed as though such an event might have occurred in the second part of 1984 when there was a series of floods of a severity comparable to that of the floods of 1974. As I was reminded during my visit in January, natural disasters are—alas—a way of life, and the House needs no reminding of the famine that ensued more than a decade ago. In 1984, however, things were different. The Government of Bangladesh reacted quickly, especially in buying and distributing grain, and tragedy was averted. The ability of the Government of Bangladesh to respond to a crisis and the resilience of its people was to be tested again all too soon in the disaster that we are discussing today.
I confess that I was surprised at the comment of the hon. Member for Bradford, West — if the hon. Gentle man will listen he will hear my answer to what he said—that the British Government's response was disgraceful. I wholly disagree with that and I have heard no such comment from any member of the Bangladesh

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Government or the high commission in London. I think that the hon. Gentleman may wish to think twice about that remark and to withdraw it.
Mr. Madden: Certainly not.
Mr. Renton: After the cyclone struck, an immediate response was required and an immediate response was made. My right hon. Friend the Prime Minister sent a message of sympathy and support to President Ershad and £50,000 was made available immediately to the Government of Bangladesh relief fund. That was quickly followed on 31 May by further announcements by my right hon. Friend the Minister for Overseas Development. First, a pledge was announced of £200,000 for immediate disaster relief, the bulk of which was to be channelled through British voluntary agencies active in the area. Secondly, there was a pledge of £500,000 for long-term rehabilitation—again to be channelled through British non-governmental organisations. Those measures have been warmly welcomed by the Bangladesh high commissioner.
The hon. Member for Holborn and St. Pancras (Mr. Dobson) asked particularly about the provision of landing craft or water craft. We considered whether there were any suitably equipped Royal Navy vessels in the area which could have provided immediate assistance, but there were none. We have said that we will make flat-bottomed boats being used in another United Kingdom-financed project to the west of the cyclone area available if required, but we must be aware of duplicating what other donors are doing. We had been asked to provide outboard motors, but we understand from the Bangladesh high commission in London that that requirement is now being met by the Canadian Government.
The hon. Gentleman talked of matching commitment. I do not follow what he meant. Our aid programme to Bangladesh is large—it was £32 million in 1984–85 and is increasing. The quality of our aid is also important. All of our assistance to Bangladesh is on grant terms and we are able to meet up to 50 per cent. of local costs. We do not have detailed information, but our impression is that our response compares very favourably with that of other major donors. We understand that the United States has given $0·6 million, that Canada has given $0·2 million and that the Germans have also made a contribution. I do not understand what point the hon. Gentleman wishes to develop.
Mr. Dobson: I am suggesting that, in terms of emergency aid, it would be reasonable for the Government to match the voluntary efforts of the Bangladesh community in Britain.
Mr. Renton: The hon. Gentleman knows full well that we have gone out of our way to encourage the
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development of voluntary aid through groups such as Oxfam. That is especially the case with the disaster in Ethiopia and the rest of sub-Saharan Africa. What the Government can do must be within the context of the overall aid programme. The choice of words of the hon. Members for Holborn and St. Pancras and for Bradford, West was unfortuate and unfair in terms of the quick reaction and the money that had been dedicated.
We understand that a group of the main British voluntary agencies launched an appeal on 31 May which has already raised substantial sums of money, much of which will be used to complement schemes for which we shall provide funds. The agencies have warmly welcomed our response and concur strongly with our view that the emphasis must now be on rehabilitation.
The Government of Bangladesh value our programme because of its quantity and its quality. They have shown themselves increasingly willing to get to grips with longer-term problems such as landlessness and the relentless population pressure. The dangers of the growing population were made clear to me in January. Both of those factors explain why the islands that were directly affected by the cyclone were so heavily populated when the dangers must have been obvious. We shall do what we can to support the efforts of the voluntary organisations.
With several other donors, including the World Bank, we are planning to participate in a large population and health care project in support of a major Government programme. Several of the projects in which we are involved, such as rural development and fisheries, have as one of their key objectives the provision of more income—earning opportunities for the landless. As part of our response to last year's flooding, we agreed to make £4 million available for the purchase of British wheat to be used in support of vulnerable group feeding programmes.
Although I disagreed with the tenor of some of his remarks, I should like to thank the hon. Member for Holborn and St. Pancras for giving us the opportunity to discuss this important topic. If, in the time available, I have not answered the questions that he and his right hon. and hon. Friends have asked, I hope that they will write with details to my right hon. Friend the Minister for Overseas Development or to me. Bangladesh will remain dependent on substantial inflows of aid for a long time to support its economic development. I am sure that we all agree that a country that is so susceptible to natural disaster will also rely on donors responding quickly to crises such as the recent cyclone.
Our record is good. The Government of Bangladesh share that belief. I assure the hon. Member for Holborn and St. Pancras that the Government of Bangladesh can rely on our continued support.
Question put and agreed to.
Adjourned accordingly at half-past Ten o'clock.

PRIME MINISTER
  Mr. Gorbachev
  Mr. Gorbachev
  Lenzie
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  Chile (Arms Sales)
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TRADE AND INDUSTRY
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  Scottish Cables
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  Parliamentary and Scientific Conference, Tokyo
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  TEXT ADOPTED
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NATIONAL FINANCE
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  EC (Harmonisation)
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  EC (Overspending)
TRANSPORT
  Vehicle Emissions and Driving Conditions
  Vehicle Emissions and Driving Conditions
  Greece (Airport Security)
  Greece (Airport Security)
  Road Traffic (Driving Instruction) Act 1984
  Road Traffic (Driving Instruction) Act 1984
  Scheduled Air Services
  Scheduled Air Services
  Fares
  Fares
  Dartford Tunnel
  Dartford Tunnel
  Road Programme
  Road Programme
Preamble
The House met at three of the clock (Prayers having been read earlier at the Judicial Sitting by the Lord Bishop of Chichester.): The LORD CHANCELLOR on the Woolsack.

Electricity: Resale by Landlords
Baroness Burton of Coventry: 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 action they propose to take following the report of the Director General of Fair Trading entitled Resale of Electricity by Landlords, in view of the distress caused to tenants.
The Parliamentary Under-Secretary of State, Department of Trade and Industry (Lord Lucas of Chilworth: My Lords, the Government welcome the director general's analysis of the problems and will study the report's recommendations.
Baroness Burton of Coventry: My Lords, while I am glad that the Government welcome the analysis, can the noble Lord answer the Question on the Order Paper, which asks what action the Government propose to take? That seems to me the relevant part of the Question. May I ask the Minister whether he has himself read the report, or whether he is relying on his brief? If he has read it, would he not agree that those most susceptible to overcharging are the poorer sections of the community who are afraid to take action because of disputes with their landlords? Concerning the action, may I ask the Government whether they will consider making overcharging a criminal offence so that the resale of electricity may be brought into line with other fuels?
Lord Lucas of Chilworth: My Lords, had I been able to add to my earlier Answer, I most certainly would have done so. But until we have studied the report in full it is difficult to describe to the noble Baroness the action we propose to take. As to her second supplementary question, indeed, I have read the report from the beginning to the end; I am not relying entirely upon my brief. I accept that those who might be hardest hit are certainly the poorer sections of the community in rented accommodation who, although having a civil remedy, are often not willing to exercise that option for fear of retribution from a landlord.
We shall consider the recommendation, one of eight that the report includes, with regard to making the overcharging for electricity a criminal offence. But the noble Baroness and your Lordships will know that this requires primary legislation. There are other issues involved in making this a criminal offence which would need close study by a number of Her Majesty's Government's departments of state.
Lord Harmar-Nicholls: My Lords, is my noble friend aware that, while the House has great respect for the noble Baroness, Lady Burton, there would be reluctance in the country, I believe, to have any more criminal offences added to the statute book? Nowadays it is almost criminal to wake up in the morning. There is no need to add to that; otherwise, the free society that we talk about will soon be non-existent. Will the Minister put the "criminal offence" answer to the problem very much at the bottom of the list and not at the top?
Lord Lucas of Chilworth: My Lords, I understand what my noble friend means by his question. Certainly the recommendations of the Director General of Fair Trading, who does suggest that this should be a criminal offence, will be studied most carefully. I do not think that my noble friend would expect me this afternoon to say exactly in which order of listing of priorities that recommendation should fall.
Lord Harmar-Nicholls: My Lords, at the bottom.
Baroness Gardner of Parkes: My Lords, is my noble friend aware that information on this matter is of great importance to the tenants concerned and that many electricity authorities, and certainly the London Electricity Board, issue leaflets explaining to tenants the maximum amount that should be chargeable?
Lord Lucas of Chilworth: My Lords, different electricity boards do indeed, as my noble friend suggests, adopt different tactics. But one would hope that all the electricity boards would take note of the suggestion of the Director General of Fair Trading that greater publicity be given to the resale of electricity and the conditions that apply to users of electricity by those boards.

Nicaragua: Peace Objectives
3.5 p.m.
Lord Molloy: My Lords, I beg leave to ask the first Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government what is their policy concerning the action of the United States Government in Nicaragua.
The Minister of State, Foreign and Commonwealth Office (Baroness Young): My Lords, we share with the United States Administration the common objectives of promoting stability, security and peaceful development in Central America. We want to see progress in Nicaragua towards the establishment of a genuine pluralist democracy, the scaling down of armaments and an end to support for subversion of neighbouring states.
Lord Molloy: My Lords, is the noble Baroness aware that that is a most appalling reply? Does she not realise that it casts the British Foreign Office in the role of sycophantic vassal of the United States of America? What is really happening, as Americans themselves say—they are highly disturbed by it—is that the CIA is

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beginning to rule part of their Secretaryship of State, and that the overthrow of the Nicaraguan Government by force, by assassination, and by murder will in no way enhance the name of the United States, nor that of my country if it is associated with that policy of the United States against Nicaragua.
Baroness Young: My Lords, I am not prepared to accept any of these extraordinary allegations that have been made by the noble Lord, Lord Molloy. I can confirm to the House that we discuss all important issues with the United States Government at various levels. They are fully aware of our views. Nicaraguan allegations that the United States is about to invade Nicaragua have been formally denied by the United States. Indeed, President Reagan has given a written assurance to a United States Congressman that he is not seeking the military overthrow of the Sandinista Government.
Lord Cledwyn of Penrhos: My Lords, will the noble Baroness be kind enough to say how the Contadora peace talks are progressing and to which of the Contadora recommendations, which Her Majesty's Government support, she attaches the greatest importance?
Baroness Young: My Lords, we continue with our European Community partners to give full support to the Contadora process. We welcome the progress made at the meeting of the Central American states with the Contadora group in Panama on 11th and 12th April. We hope to see further agreement on outstanding points as soon as possible. The general principles that I gave in answer to the original Question—namely, to see stability and democratic development in Central America—are of course particular points of the Contadora process that we wish to see achieved.
Lord Renton: My Lords, is my noble friend aware that whatever views may be expressed by the noble Lord, Lord Molloy, or any of his noble friends, we on this side of the House support the Government's policy in this matter? Is she aware that it has very wide support in this country? Bearing in mind that what she says about supporting democracy is something that appeals to us very specially, can my noble friend explain a little more fully how it is that we find ourselves having to support the Americans in supporting democracy in Nicaragua?
Baroness Young: My Lords, as I have already indicated, we share with the United States Administration the common objective of a peaceful settlement of the dispute in Central America on the basis of the Contadora principles. We have, at the same time, made plain that we see a need for restraint on all sides in the present situation. However, in particular, we want Nicaragua to end the substantial build-up of arms, troops and foreign military advisers and to stop supporting attempts to destabilise neighbouring democratic governments.
Lord Brockway: My Lords, would the noble Baroness not agree that there is a contradiction in
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American policy in justifiably protesting against the Soviet invasion of Afghanistan and in providing arms for the rebellion in Nicaragua?
Baroness Young: No, my Lords, I do not see a contradiction in our view about the situation in Nicaragua and our total condemnation of the Russian invasion of Afghanistan. I have already made plain in a supplementary answer to the noble Lord, Lord Molloy, that so far as the United States is concerned, there is no intention to invade Nicaragua, and President Reagan has given that assurance. In the case of Afghanistan, there has been an invasion of Afghanistan by the Russians and we have completely deplored what is going on in that country.
Lord Molloy: My Lords, can the noble Baroness tell the House who the Foreign Office supports? Is it Mr. Schultz, the American Secretary of State, or Mr. Caspar Weinberger? Mr. Schultz is very apprehensive because of the massive complaints made in Great Britain and NATO countries by the Roman Catholic Church and the Anglican Church throughout Europe about what is going on in Nicaragua. Although Mr. Caspar Weinberger does not seem to care, Mr. Schultz does seem to care and he has expressed his apprehension. Are our Government on his side or on the side of Mr. Caspar Weinberger? The country has a right to know where it stands.
Baroness Young: My Lords, I thought that I had made the British Govenment's policy towards Nicaragua quite plain to the House.

Strategic Defence Initiative
3.11 p.m.
Lord Molloy: My Lords, I beg leave to ask the second Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they will press for a Summit Conference to be held to promote a moratorium on the development of the strategic defence initiative by any country and in any form.
Baroness Young: No, my Lords. The strategic defence initiative is a United States research programme permitted under existing treaties. Any strategic defence initiative-related deployment would have to be a matter for negotiation. We strongly support the agreed aim of the United States-Soviet talks in Geneva to prevent an arms race in space and to end it on earth.
Lord Molloy: My Lords, I am grateful to the noble Baroness for that reply. Can the noble Baroness say what progress has been made as a result of the December meeting, when the Prime Minister set her hand dead against any superiority in star wars and thought that there should be encouragement for much wider discussion on what might happen? There was also put forward the proposition that even the Soviet Union should participate in the research, in the hope

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that this might result in a massive contribution to the abolition of nuclear weapons and the return of sanity to the world. Can the noble Baroness tell the House whether or not the Prime Minister's remarks last December are now being pursued by the British Foreign Office?
Baroness Young: My Lords, I can assure the noble Lord, Lord Molloy, and the House that the British view towards the strategic defence initiative is based on the four points that were agreed between President Reagan and my right honourable friend the Prime Minister at their meeting last December. That remains our position. On the noble Lord's supplementary question about the Soviet Government, I think that we must recognise that Soviet research on ballistic missile defence has been continuing since the 1960s. The ABM defences around Moscow are the only type in existence in the world. They have extensive programmes on ballistic missile defence-related technologies, including high-powered lasers, electric pulse beams and heavy-lift capability. All this research is currently taking place in the Soviet Union and, therefore, it is not surprising that research should be going on in the United States.
Lord Gladwyn: My Lords, will not the Government recognise that, as the European members of the North Atlantic Alliance are obviously all very much in the same boat as regards the possible effects of SDI, they should seek to formulate a common attitude towards this unfortunate project which might perhaps best be formulated by the President in office of the Council of the European Community?
Baroness Young: My Lords, as I am sure the noble Lord, Lord Gladwyn, is aware, the French have put forward a proposal for a European research coordination agency, known as EUREKA. We have responded positively to this suggestion, proposing the formation at the forthcoming Milan Council of a high level group of interested countries. This is of course a separate issue from the immediate one of the strategic defence initiative, as the French have made clear, because it is for each country to determine what its attitude to the research will be. As my right honourable friend the Prime Minister has indicated, we intend to take part in the research programmes.
Lord Harmar-Nicholls: My Lords, is my noble friend aware that most people will support the sober and realistic attitude that she is adopting on behalf of the Government? I think that the same people will deplore the blatant anti-American attitude which is contained in Questions being tabled these days from the Labour Benches. The American are our main allies, as we are theirs, and this undermining of mutual confidence can do nothing but harm for the future peace of the world.
Baroness Young: Yes, my Lords, I agree with much of what my noble friend has said. I believe it is important for us all to recognise that an arms race in space would benefit no one, and we are glad that the Geneva talks are focusing on the prevention of an arms race. We believe that negotiation and mutual restraint are both needed to meet the urgent challenge posed by costly new space technologies.
Lord Beloff: My Lords, in relation to the question asked by the noble Lord, Lord Gladwyn, will my, noble friend the Minister agree that the Council of Ministers would be an inappropriate body to discuss this matter as defence is expressly excluded from the Treaty of Rome, but that European interests are continuously being taken into account by the Government of the United States, as witness the tour of Europe which I believe the American Vice-President begins today?
Baroness Young: Yes, my Lords, that is perfectly true; and of course European countries discuss all these matters in the appropriate forum, such as NATO.
Lord Gladwyn: My Lords, will not the Government at least admit that those in this country who oppose SDI are certainly not anti-American in any way, that they merely share the views of what is probably half the American people and certainly the views of a large number of the members of the American Congress?
Baroness Young: My Lords, whatever the view of the population of America may be on SDI, we are of course considering the policy of the United States Government.
Lord Molloy: My Lords, is the noble Baroness aware that these Questions are in no way designed to be anti-American? If one wanted to be anti-American one could say that it is a good thing the Americans are surreptitiously invading Nicaragua or wish to have an overwhelming command of nuclear weapons ready to wipe out the Soviet Union. However, many Americans do not believe that that is their policy and many Americans agree with me.
Noble Lords: Question!
Lord Molloy: My Lords, is the noble Baroness not aware that when I went to America (where I am noted to be anti-American) to become an honorary American of the United States, they took a totally different view from the noble Lord, Lord Harmar-Nicholls? When the noble Lord has been made an honorary American of the United States, he can come and talk to me! As the late Lord Attlee said:
"We should now expect a reasonable period of silence from him".
Noble Lords: Question!
Lord Molloy: My Lords, is the noble Baroness aware that in reality the situation is that top scientists anticipate that SDI tests will take place in 1990? Our Prime Minister has said that there must now be efforts to involve all allies on both sides—Warsaw and NATO—which seems to be sensible. Will she not agree that the Foreign Office ought to adopt that attitude in its consultations with the Government of the United States of America?
Baroness Young: My Lords, I am not absolutely clear about all the questions which were included in the remarks of the noble Lord, Lord Molloy, but perhaps I might deal with two points. The noble Lord several times referred to the suggestion that the Americans are trying to achieve superiority. That is

367
not the case. President Reagan and the Prime Minister are in full agreement that the United States and Western aim is not to achieve superiority but to maintain a balance, taking account of Soviet developments. This is one of the four points agreed at the meeting between my right honourable friend the Prime Minister and President Reagan in December.
Furthermore, in March 1983 President Reagan acknowledged the formidable technical task relating to the strategic defence initiative and said that decades of effort would be needed. The present research is designed to establish the limits of what is possible. There are obvious technical problems, especially in view of likely counter-measures, and there are of course immense cost factors to be weighed, so that there are no easy answers. That is why we attach such importance to progress at Geneva.
Lord Renton: My Lords, as the noble Lord, Lord Molloy, has told us that he is an honorary American, could my noble friend encourage him to act up to that great status by reminding the noble Lord, Lord Molloy, of the debt which we and all other western European countries owe to the United States for the wonderful help which they give us in our defence?
Baroness Young: My Lords, I am sure that that is a view that would be shared by the overwhelming majority in your Lordships' House.

Business
3.21 p.m.
Lord Denham: My Lords, at a convenient moment after 3.30 this afternoon my noble friend Lord Gowrie will, with the leave of the House, repeat a Statement that is to be made in another place on banking supervision and Johnson Matthey Bankers.
It may be for the convenience of the House if I also announce that the Report stage of the Local Government Bill will be adjourned at approximately 7 p.m. for about one hour, and that during this adjournment the Third Reading of the Hospital Complaints Procedure Bill, the Committee stage of the Hill Farming Bill and the Third Reading of the Further Education Bill will be taken.

Clwyd County Council Bill [H.L.]
Read a third time, and passed, and sent to the Commons.
Associated British Ports (No. 2) Bill
Read a third time, and passed, and returned to the Commons with amendments.

Road Traffic (Production of Documents) Bill
Lord Brougham and Vaux: 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
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a manuscript amendment or to speak in Committee. Therefore, unless any noble Lord objects, I beg to move that the order of commitment be discharged.
Moved, That the order of commitment be discharged.—(Lord Brougham and Vaux.)
On Question, Motion agreed to.

Local Government Bill
3.23 p.m.
The Minister of State, Department of the Environment (Lord Elton): My Lords, I beg to move that the Bill be now further considered on Report.
Moved, That the Bill be further considered on Report.—(Lord Elton)
On Question, Motion agreed to.
Lord Rochester Lord Rochester had given notice of his intention to move Amendment No. 81 AA:
After Clause 49, insert the following new clause—
(".—(1) The following provisions of the Local Government Act 1972 (in this section hereinafter called "the 1972 Act"), that is to say—

(a) section 255 (transfer of officers);

(b) section 259 (compensation for loss of office) and

(c) section 260 (option for early retirement);

shall apply for the purposes for this Act as they apply for the purpose of that Act subject to the adaptations and modifications contained in or provided for by the following subsections.
(2) In the provisions of the 1972 Act as applied by this section—

(a) references to the 1972 Act or the provisions of that Act shall include references to this Act and the corresponding or equivalent provisions of this Act;

(b) references to local authorities which ceased to exist by virtue of the 1972 Act shall include references to a local authority abolished by this Act;

(c) references to 1st April 1974 shall be construed as references to 1st April 1986; and

(d) references to 31st March 1974 shall be construed as references to 31 st March 1986.

(3) The reference in subsection (2) of section 255 of the 1972 Act as applied by this section to the employment of such local authority as may be specified in or determined under an order under the said subsection (2) shall include a reference to the employment of a London borough council, the Common Council, a metropolitan district council, a new authority, a residuary body or any other body or person by whom functions exercisable by the Greater London Council of a metropolitan county council are exercisable after the abolition date.
(4) The entitlements to compensation or benefits payable under regulations to be made pursuant to sections 259 and 260 of the 1972 Act as applied by this section shall be not less favourable to employees than those provided for under the terms of the Regulations made under that Act, or the most advantageous compensation or benefits payable under any scheme for early retirement or for the payment of redundancy compensation which has been approved by any relevant employing authority before 2nd March 1984, whether or not such scheme forms part of the employees' contract of employment.
(5) The Secretary of State may make by order such further modifications to or adaptations of the provisions of the 1972 Act applied by this section as may appear to him to be necessary or expendient to secure the purposes of this section.")
The noble Lord said: My Lords, on Tuesday night I gave the noble Earl, Lord Gowrie, oral notice, and yesterday morning written confirmation, that I was tabling this amendment in what, as your Lordships will see, is a form modified to take account of one or two imperfections in the original version. Since then my noble friend Lord Winstanley and I have given further earnest consideration to the whole matter in the light of two factors. The first is what the noble Earl

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had to say in Committee concerning the Government's acceptance that, in the negotiations they hoped to conduct with trade unions on the question of compensation for loss of office, or diminution of emolument, there should be broad equality of treatment between the employees of all relevant authorities in terms of reasonable settlement. The second is that we understand that some discussion has now actually taken place between the Government and representatives of at least one trade union branch on this question.
We are most anxious to say nothing today which could possibly prejudice the outcome of further negotiations and discussions. In those circumstances, we are prepared to wait until the last possible opportunity, namely, Third Reading of this Bill, and for 2nd July next, before deciding whether to pursue matters such as transfer orders, pay and employment conditions for people transferred to successor bodies, and especially in our view the need referred to both in this amendment and, more specifically, in Amendment No. 81AC for substantially improved compensation arrangements to be made as soon as possible.
Amendment No. 81AC: Page 36, line 20, after ("1972") insert ("; such regulations shall be made by the Secretary of State within two months of the passing of this Act and provide for benefits significantly greater than those regulations currently applicable to local government employees with a view to giving greater equality of compensation entitlement between all staff affected by this section;")
If at Third Reading the Government were in a position to table their own amendment dealing adequately with this particular point, that would be equally acceptable to us. For those reasons, I do not now wish to move Amendment No. 81AA.
Baroness Gardner of Parkes: My Lords, I am unhappy about the statement which has just been made. I understand that I have the right under Standing Orders to move this amendment. If the noble Lord would clarify his reasons in greater detail to the satisfaction of the House, then I might not move this amendment. I was present in the Chamber the other night at ten past eleven, when this point was made: would it be possible for the noble Lord, Lord Rochester, to cover this amendment in the remaining 20 minutes for which it was agreed the business would be extended.
The noble Lord rose to say that this was a highly important matter, and required a lengthy speech on his part which would certainly exceed the twenty minutes, and he believed that other people would wish to discuss the amendment and that in no way could it be dealt with in twenty minutes. He also said—or perhaps I am wrong, it may have been said in earlier debates—how staff matters had always come up late at night in Committee stage, and how unfair that was to the members of the staff and to those who wanted to see a good deal for the staff of the GLC after abolition.
I believe that it was the noble Lord, Lord McCarthy, who said how good it would be to have something concerning staff matters discussed at a time when there were more present in your Lordships' House. I therefore find it amazing that this matter, which was so important less than 48 hours ago, should today
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suddenly have reached the point where it is not worth discussing at all.
I am horrified by the statement that if we do not discuss it today—when it is constantly emphasised that items should not be left until the last minute—it would be brought back at Third Reading. I think that is a totally wrong attitude to take and that this should be discussed today. I know that under the Companion to the Standing Orders I have the right to put this amendment to the House. I would ask for the House to consider my doing so. The staff issues are important, and I do not, find at all satisfactory the explanation given so far as to why the noble Lord, Lord Rochester, is not proceeding with his amendment today.
I should like—as I am sure everyone else here would—to be satisfied as to why something which was so important that it required much longer time than we had available on Tuesday night, and required the attendance of more noble Lords present in the House, could suddenly become totally irrelevant today.
Lord Renton: My Lords, the noble Lord, Lord Rochester, said that he intended to move this at Third Reading. I feel that I would be speaking for all your Lordships if I reminded him that the rules for moving amendments at Third Reading are very restrictive. They are confined mainly to amendments to fulfil Government undertakings, and amendments to improve or correct the drafting of what is already in the Bill. As I understand it, it is not the function of debates at Third Reading to deal with matters which could have been dealt with at Committee stage or at Report stage, or even both. But this is a matter which, coming at Third Reading, would be coming up fresh. I should have thought that it would be only fair to the noble Lord, Lord Rochester, to tell him here and now that if he attempted to raise this matter at Third Reading, the kind of arguments which I have just advanced are arguments with which he might well be faced.
3.30 p.m.
Lord Mottistone: My Lords, in saying that he would not move this amendment the noble Lord, Lord Rochester, mentioned Amendment No. 81AC. I have put my name to that amendment. I agree with it in principle, and I was hoping for a nice lively debate, perhaps with a decent Government statement to explain what they are doing in this respect. From what the noble Lord has said I am not quite clear, because when he sat down he said firmly that he was not moving Amendment No. 81AA. Does that include Amendment No. 81AC, or shall I have to move that myself when we come to it?
Lord Rochester: My Lords, I have already given the House as openly and as briefly as I can, and as seemed appropriate to me at Committee stage, the reasons why at this stage I do not propose to move the amendment. In response to the noble Lord, Lord Renton, I did not say that I was proposing to move this amendment at Third Reading. What I said was that I was prepared to wait until that time before deciding whether to pursue matters such as those covered by this amendment. That is my answer to the noble Lord, Lord Renton.

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In relation to what has just been said by the noble Lord, Lord Mottistone, I covered the amendment to which he has referred in my opening remarks. I do not know quite what the procedure is, as we have not yet come to that amendment. But if it is of assistance to the House, perhaps I may say now that included within my intention was not to move that amendment, as I hope may have been evident from my initial statement.
Lord Henderson of Brompton: My Lords, I wonder whether I may ask the Leader of the House, what is the Question before the House. It seems to me that the entire discussion is outside the rules of order of this House, because no Question has been put.
The Lord President of the Council (Viscount Whitelaw): My Lords, I stand rebuked by a very important authority in this House. I accept that what the noble Lord says is obviously a fact. I plead guilty under a certain amount of duress because I am not quite clear what the House really wants. I was in the House on the occasion on Tuesday night when the House was adjourned, and I understood that the noble Lord, Lord Rochester, at that stage, was most anxious to move this amendment. I heard him say that that was what he intended to do today. Therefore I found myself inevitably having to consider very carefully whether it was right for me to intervene immediately, considering that on Tuesday night the noble Lord was anxious to move it. I am in no doubt that he, in his own interest, would wish to put to the House why it was—
Noble Lords: He has.
Viscount Whitelaw: My Lords, I think the House was wishing to hear from the noble Lord exactly why. I was giving that opportunity, but I must say to the noble Lord and to the House, reproved as I have been, that we ought to resume an orderly procedure. The amendment either should or should not be moved, but I was being fair to the noble Lord and giving him the opportunity to explain. If there were to be any further discussion it must be right that either the noble Lord, himself, or, as I understand is possible, another noble Lord, should move the amendment. If a noble Lord decided to do so he might perhaps take this opportunity.
Lord Rochester: My Lords, perhaps I should say one further word in defence of myself. With respect to the noble Viscount the Leader of the House, I did not say on Tuesday night that I was proposing to move this amendment today. That will be evident from a reading of Hansard, which is now available. For the rest, I have given the House my reasons as to why in the circumstances I have outlined I am not proposing to move this amendment. I must leave the matter in the hands of the House.
Viscount Whitelaw: My Lords, I obviously do not wish in any way to be unfair to the noble Lord. My understanding was that he had wished to move his amendment today. If I have done him an injustice in
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any way, it would be my first duty as Leader of your Lordships' House to apologise to him; and that I most certainly do.
Lord Harmar-Nicholls: My Lords, may I—
Noble Lords: No, no!
Viscount Whitelaw: My Lords, having said plainly that we must come to order, I must tell my noble friend that to order we must come. Therefore, the only way that I can understand our coming to order—I hope I am not unduly stupid in this matter, and I do not think so—is that if it is the wish of the House or the wish of any one Member that the amendment should be moved, that noble Lord can move the amendment. That course is open to any noble Lord who decides to do so. If a noble Lord wishes to take that course, I must ask that that noble Lord should take that action now.
Lord Harmar-Nicholls: My Lords, in those circumstances I formally move Amendment No. 81AA as it stands on the Marshalled List today.
Amendment No. 81AA: [Printed earlier; col. 369.]
It is essential that this amendment should be discussed now if it is to be discussed at all. The even remote possibility that it would be raised as late as Third Reading would not be in the best interests of the Bill or of the statute when it becomes enacted. We cannot have any longer than need be the feeling among employees that their interests are not being properly safeguarded. The fact that the speeches have already been made and the fact that this amendment is on the Marshalled List now breeds disquiet at a time when the one thing we do not want is disquiet among the people who will have to organise all the procedures that will flow from this Bill when it becomes a statute. I do not think there is any need for the amendment as it is worded—
Noble Lords: Oh!
Lord Harmar-Nicholls: My Lords, the noble Lord, Lord Rochester, cannot think it is very important, or he would want to pursue it at the earliest possible moment. The reason I am moving an amendment to which I have not put my name is the silence from the Official Opposition Benches. The dog has not barked and I cannot help feeling that the tactics behind their refusal to propose the amendment are perhaps more important than the amendment or what will flow from it—
Noble Lords: Order!
Lord Harmar-Nicholls:—because I believe that there are such tactics behind this that they—
Lord Cledwyn of Penrhos: My Lords, perhaps the noble Lord would be good enough to explain his tactics.
Lord Harmar-Nicholls: My Lords, my tactics are very clear. My tactics are that this House shall carry out its proper function, that it shall examine the proposed legislation and revise it if we think that is

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right, with our expertise. It is not the function of this House to enter into rabid party political tactical manoeuvres.
Noble Lords: Hear, hear!
Lord Wallace of Coslany: My Lords, what is the noble Lord doing?
Lord Harmar-Nicholls: My Lords, those noble Lords who were in the House will remember that at the end of the Committee stage I personally placed on the record my apprehension as to this possible development. Noble Lords who were in the House heard me say at the end of the Committee stage that I hoped that the withdrawal of many of the amendments from actual voting did not mean that they were merely to be kept in reserve to waste time on Report and Third Reading. That is on the record. I rather suspected from the general attitude that I had seen adopted that that might be happening.
I have the greatest respect for the noble Lord, Lord Rochester, and I should feel very sad indeed if I felt that he had been deliberately a party to this tactic which was used to take up time, because that is not in his normal being. Neither is it so on those Benches. But I do not give absolution to the Opposition Benches on that score. It is because I feel that there is a risk of that, and it is because I feel that if it is not cleared up now the effects that can flow from it would be so much worse, that I am moving the amendment.
Lord Cledwyn of Penrhos: My Lords, is it not a contravention of the rules of order and of the Companion to the Standing Orders that the noble Lord should go on at length without speaking to the Motion which he has purported to move, although he understands nothing about it? I should be grateful if the noble Viscount the Leader of the House would take account of this.
Lord Harmar-Nicholls: My Lords, that very intervention from the noble Lord the Leader of the Opposition is part of the tactics.
Viscount Whitelaw: My Lords, I must ask my noble friend to address the amendment. I hope in a difficult situation to guide the House as its Leader. Quite apart from any other considerations, I said that I thought the noble Lord, Lord Rochester, should have the right to explain his position. I made it clear that someone else could move the amendment. I understand that I was correct in saying that. But I must in the interests of the whole House—and I sense that I am speaking for the whole House in this matter—ask my noble friend to address himself to the particular amendment to hand.
Lord Harmar-Nicholls: My Lords, now that I have my prologue on the record I am happy to confine my remarks to the actual amendment itself. I believe that this in its way is an important amendment. It is important because the time factor insists that the doubts that it seems to express should be cleared away at the earliest possible moment. Up until this amendment was put on the Marshalled List, I had understood that the Government had made arrangements to safeguard the future of employees who will be
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affected by abolition. That is the understanding that I have always had. This amendment puts doubts in my mind and I believe that it is essential that those doubts should be cleared away. In answering this amendment, my noble friend the Minister can clear them away.
I understood, and I should like it confirmed, that they have established an independent staff commission to look after the interests of the staff. I should like that confirmed, and that can be done in an answer to this amendment which I am now moving. I should like also to have either confirmed or disposed of the suggestion that the orderly transfer of staff has been delayed and put into question to a large extent because of the refusal of Labour-controlled authorities and many trade unions to take part in the discussions which the Government are having with the staff commissions.
I move this amendment with a certain amount of feeling that I am making a real contribution so that at the earliest possible moment people who have to be employed in future, and the unions and the staff generally, can know exactly where they stand with this Government and this Government's Bill. The only way that we can arrive at that is to have an authoritative statement from the Dispatch Box by my noble friend who is responsible to the Cabinet for this very thing. It is in the belief that this amendment will serve a good purpose by eliciting such a reply from my noble friend, that I formally move it. I beg to move.
3.45 p.m.
Baroness Faithfull: My Lords, my name is put to this amendment. The noble Lord, Lord Rochester, spoke to me and I had understood yesterday that there were certain negotiations going on. I wrote my speech in the form of some questions. I had not really intended to put these questions today because I knew that these negotiations were going on. However, the amendment has been moved and therefore I shall now ask my noble friend the Minister the questions which I had originally intended to ask. In speaking to this amendment, I should like to say that it has the support of the Guild of Senior Officers of the GLC and of ILEA and of the staff association and therefore covers approximately 80 per cent. of the staff of the GLC.
My first question is this. May I be told why it has been found necessary in respect of redundancy proposals to depart from the well-established precedents in dealing with staffing matters? I refer to the Crombie and Cutler regulations and also to regulations under the 1972 Employment Act. I understand that there are regulations being used under that Act but that they are intended only to prevent unjustified increases in pay gradings. Are there still discussions going on concerning redundancy terms? Do I understand the position correctly when I say that instead of regulations being brought in under the 1972 Employment Act, what are called day-to-day terms (which usually apply to voluntary and not forced retirement) are being used? May I be told whether this is so? I understand that the day-to-day terms usually apply only to illness and inefficiency. As I understand that there are negotiations going on, it may be that my noble friend the Minister will feel that he does not wish to answer these questions at this stage.
Lord Harmar-Nicholls: My Lords, may I ask my noble friend a question? Would it not be helpful if we could know more of the details of the negotiations which she has said are going on?
Baroness Faithfull: My Lords, I am not subject to those negotiations. I am not negotiating with the GLC or with the employers or with anyone else. I am simply asking questions, and I think I am entitled to do so.
I also once worked for the London County Council and my feelings for the staff are very deep. As a local government officer, I have been through two reorganisations and I know what staff can suffer and what they can go through. Perhaps I may just say—and I shall not keep your Lordships long—that, for instance, an employee with up to five years' service can receive a lump sum of £962, the equivalent of five weeks' pay. I shall not quote all the figures.
Lord Harmar-Nicholls: My Lords, why not?
Baroness Faithfull: Well, my Lords, I think that noble Lords can read them in the Library. I wonder whether my noble friend the Minister can say how the pay which the Greater London Council employees are going to get compares, for instance, with the white-collar workers in the Coal Board and with the white-collar workers at Consett. Is the redundancy pay being offered to the Greater London Council workers consistent with the redundancy pay throughout the country?
Lord Thorneycroft: My Lords, I think the House should be deeply grateful to my noble friends Lord Harmar-Nicholls and Lady Faithfull for raising this matter. Indeed, it goes to the root of the Bill. Like my noble friend Lady Faithfull, in my life I have seen many reorganisations. They have been argued sometimes in industry and sometimes in local government powerfully and passionately for the efficiencies that they will attain. But no reorganisation will really work unless one has answered the 64-dollar question of what is happening to the men employed in that reorganisation. What is their situation now and what will be their situation tomorrow?
If I may say so with deep respect—and this is no reflection on the noble Lord, Lord Rochester—your Lordships would really be failing in your duties if the Bill were to go through without some attempt to consider issues of that character. It is not simply that a number of your Lordships may be interested in this amendment. What matters, if I may say so with deep respect, much more, is not your Lordships but the people who work in the GLC. That is where the real interest is occurring. I am quite satisfied that that is what the noble Lord, Lord Rochester, had in his mind when he put down this amendment. It is not a party amendment; it has received support on this side of the House too. It may have been supported in many quarters.
I would not wish to say what final view I would take about it. But certainly, speaking to the Motion, I do not dismiss the fact that this amendment has in it great merits, and at least raises matters which deserve careful consideration and discussion. The noble Baroness, Lady Faithfull, has spoken of some of the
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issues involved. The noble Lord, Lord Rochester, said at the outset that because negotiations and discussions were going on it might perhaps be better not to discuss the matter at the moment. That is a perfectly fair point of view. I do not say that that is wrong at all. But it so happens that the matter is being discussed at this moment. Whether we like it or not, we shall have discussions.
In a few moments I very much hope that a Minister from the Front Bench will rise and will seek to satisfy the House that careful consideration has been given to just these issues of redundancy, of the transfer of workers, and other matters which deserve a respectful consideration. Against that background I would myself make a plea to the noble Lord, Lord Rochester, to let us have the benefit at any rate of his opinion in the course of this debate. It may not be now; it may be more convenient after the Government have given the defensive position in this matter. I shall not detain your Lordships. We do not want to waste time in any way. But I feel that if ever there was a matter which deserved discussion, consideration and approval of the House, it is the fortunes of the men and women who work in that great organisation. We should not permit this Bill to go through without paying attention to it.
Lord Bellwin: My Lords, perhaps I may make an observation. I listened with much interest to the great concern expressed on all sides of the House for the future position of the work people concerned. I certainly look forward to what my noble friend the Minister will say with regard to the current position. Is it not rather astonishing that we have here a Bill coming towards the end of its Report stage and, so far as I am aware, the trade unions have persistently refused even to discuss the condition under which these circumstances will come about as regards their own workforce? I found, in another incarnation —acting in another capacity—when going up and down the country and seeing people who were so concerned as to what would happen if abolition came about, that when I asked: "Who is negotiating for you? Who is discussing what terms and conditions will apply when the Government's policy comes about?"—because it will come about—again and again the work people said "We don't know, because our trade unions are in fact not making representations on our behalf." I shall be fascinated to know if they have as yet started to make those representations on behalf of their members. In my opinion this is to the great discredit of all concerned who, either for political reasons or anything else, have ceased to allow, or not permitted, their own negotiators to speak on behalf of the workforce.
When my noble friend Lord Thorneycroft expresses his concern—with which I agree—I think that he should also bear in mind what has happened and the limited extent to which the Government have been able to engage in discussions of this kind on behalf of the workforce, because it is their representatives who have refused, for whatever reason, to take part in those discussions. That should be placed clearly on the record.
Baroness Gardner of Parkes: My Lords, I should like to ask the Minister a couple of questions on this

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amendment. First, does he know anything of the negotiations that have been described? I am sure that the House would like to hear more detail of those. If the Minister is not able to tell us perhaps the noble Lord, Lord Rochester, would do so at a later stage.
I am well aware of the concern expressed by the noble Baroness, Lady Faithfull, in a number of the points that she made. But I think it important to clarify that one reason why it is very important that staff should not be artificially upgraded before transfer is because of past experience when the housing transfers within London were carried out. The staff who were transferred from County Hall were all at very enhanced salaries which created great difficulty when they were transferred to other authorities who were operating at the same salaries as previously. I think it important that that situation is not allowed to recur. I certainly want to see very fair terms for the staff. I have the highest regard for the GLC staff association.
There is one point which they have asked me to raise. It may be too detailed to discuss at the moment but perhaps I could mention it for the record. Those people who are in an acting post are there because there is no vacancy in the permanent post. Yet in the permanent post the officer is permanently away—perhaps on maternity leave or on illness—but the acting officer cannot be upgraded into the right post because that post is technically still filled; yet the acting officer has been doing the work and carrying out these duties. I would say that this special case should apply to those who have done the job for perhaps over six months. In those circumstances, I would think it only right that those people should be treated at transfer as being employed at the higher post.
Lord Bottomley: My Lords, it is very gratifying that so many Members of the House of Lords should be concerned about the conditions and the welfare of employees in local government. It should be so. I hope that the Minister has taken note of that fact and in due course will ensure that the Government are generous in the way they treat these employees. This discussion shows further evidence that this is a thoroughly bad Bill, one that ought never to have been presented to this House or to the country.
Lord Maude of Stratford-upon-Avon: My Lords, before the Minister replies, would it not be interesting and helpful to the House if we could hear from a representative of the Front Bench of the official Opposition whether they are in favour of or against this amendment?
The Chancellor of the Duchy of Lancaster and Minister for the Arts (The Earl of Gowrie): My Lords, I have to say that after 15 years or so working in your Lordship's House this is the first time that I have ever become very slightly cynical. It seems to me to be quite astonishing that amendments dealing with the terms and conditions offered to staff following a reorganisation of local government should attract virtually no interest on the part of the Opposition or the Liberal and Alliance Benches.
Very late on Tuesday night I made it clear through the usual channels that I was happy to try to give the
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Government's answers to the amendments of the noble Lord, Lord Rochester, and amendments in the name of others, about staffing. I was not only happy, but keen to do so because I knew that a number of employees of the threatened authorities had actually sat through a very long evening in order to try to hear something from this House and from the Government about what might be their position. All I said through the usual channels was that it was simply beyond my powers to condense my answers into something like 10 minutes. I do not think that I am known in your Lordships' House for very inflationary language or for going on too long. But the fact is that the amendments were complex and it would have needed something like a 20- or 25-minute answer from the Front Bench in order to deal with the points that were likely to be made. That was not possible. It had nothing to do with the business in hand, but was because of the terms of the agreement—in the light of the lateness of the hour —which had been reached through the usual channels. As a result, we decided to take them today.
4 p.m.
I do not think the noble Lord, Lord Rochester, will take it amiss from me if I say to him that when we adjourned he came to me and said that he thought this was a most important issue and that he wished to amend his amendment slightly. I gave the ordinary ministerial indications of anxiety that something which had been carefully gone over and carefully prepared by extremely hard-stretched officials should now, at very short notice, be subject to additional and manuscript change. However, in my desire to accommodate the noble Lord, Lord Rochester, I said that if he would be so good as to send round any proposed changes to my office the next morning—if need be by taxi—I would try to take them on board in time to deal with them this afternoon.
It is therefore with a certain and very reluctant cynicism that I discover that all these issues of great importance both to the Official Opposition Benches and to the Alliance Benches are not to be moved by them, presumably in the interests (as they might see it) of doing rather better at an earlier stage on some subsequent amendment. I hope that the staff of these threatened authorities will take note of the treat ment they have received from the Opposition Benches in this House. It seems to me to be a very shabby way for them to be treated.
I know very well that whenever any government introduce changes, those changes create uncertainties, and those uncertainties create anxieties. That is the penalty and the consequence of all change. It is of course too high a price to pay to relieve anxieties and uncertainties to put off change altogether if, in the judgment of a political party or a government trying to execute their manifesto, there are beneficial reasons for bringing about changes. We in this country have a long and extremely honourable tradition of not shrinking from changes but of trying to ameliorate the effects of change on any individuals who may be caught up in them.
There is another reason—and I think this is particularly pertinent to some of the questions put to me by my noble friends Lady Faithfull and Lord Bellwin—why I find the conduct of the Official

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Opposition peculiarly distasteful. It is, I think, an open secret that the policy of non-co-operation with which we are faced in respect of this legislation stems from a resolution of the National Executive Committee of the Labour Party. It is this resolution as much as anything that has prevented the unions from talking to us, and it is this that has led those who have been courageous enough to break away from a foolish and politically-motivated line to be threatened with expulsion from their union. Thus, it is the policy decisions of the party opposite that have produced a situation in which the representatives of certain interests have not been able to speak in their defence or to negotiate good terms and conditions with us. Surely the least these staff can now expect is that the representatives of the Opposition in this House will speak for them; but, as we have heard this afternoon, they have refused to do so. The upshot therefore is that the Official Opposition have first acted to prevent the staff from speaking for themselves and then have acted to refuse to speak on their account.
As to the noble Lords on Benches which innately I find politically more sympathetic, on the Liberal and Social Democratic Benches, it is literally beyond my comprehension how they can lend themselves to this kind of abuse of the procedures of the House. My Lords, so much for a brave new world in which the corruption and comprises of the old two-party politics, as they put it, would be replaced by policies based on high principles and concern for individuals.
I now turn to some of the points in the amendments themselves and, if the House will give me leave, I should like to deal with Amendment No. 81AA, which has been moved. That will be the substance of my remarks, but I will glance at issues raised in Amendments No. 81AB and 81BA as well.
Amendment No. 81AB: Leave out Clause 51.
Amendment No. 81BA: Leave out Clause 52.
These would fundamentally alter the arrangements for staffing the new structure. To begin with, the staffing measures will implement a dispersal of activities. By virtue of the decisions which your Lordships have taken on Clauses 1 to 48 of the Bill, the functions of seven authorities are to be dispersed to about 100 successor bodies, notably the 68 borough and district councils and of course the City of London. In both the 1965 and 1974 reorganisations, activities were generally concentrated into a smaller number of often very much larger bodies. The measures appropriate to concentrating staff into larger bodies cannot simply be applied to dispersing staff.
Again, in marked contradiction to the past reorganisations which were cited by my noble friend Lord Thorneycroft in his intervention, this Bill transfers functions principally to existing bodies and, moreover, where new bodies are being set up they are to take over existing discrete units within the existing authorities. I am thinking particularly of the Inner London Education Authority, the fire brigades and the police forces. It follows that the abolition staffing arrangements must respect the existing bodies and organisations. To put that point into perspective, the GLC and the metropolitan county councils employ the equivalent of 120,000 full-time staff. Of these, some 94,000 work for the ILEA, the fire and the police
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areas. The remaining 26,000 will for the most part look to posts within the London borough councils and within the metropolitan district councils, which already employ some 650,000 employees, or 25 times as many.
We should therefore bear in mind that this Bill does not always provide for the kind of simple transfer of function that would point to a clear transfer of work. To take just one example, the unitary development planning role to be conferred on the borough and district councils will be different from the structure planning currently being carried on by the GLC and the MCCs. Further, the position of all employees, including those in local government, has of course been radically altered since 1974 by developments that have taken place during the last 11 years in employment legislation generally. Many of these were brought together in the Employment Protection (Consolidation) Act 1978 and a number of the provisions of the 1978 Act are mentioned in Part VI of the present Bill. There are special local government arrangements about redundancy payments under that Act which are governed by what is known as the modification order, whose main features are set out in the introduction to the notes on Part VI. There are safeguards and arrangements in these statutes which do not need to be duplicated and which we have been at great pains to preserve and adapt to this Bill.
I am not one of those who believe that legislation put forward by a government drawn from the Conservative Party is any less favourable to the real rights and interests of employees or less protective of them than legislation put forward by governments drawn from the Labour Party. Nevertheless, I have to acknowledge that it is very often a perception in the structure of British political life that the Labour Party is considerably more protective. It may therefore be reassuring to employees—however badly placed I think this reassurance is in actuality—to realise that the employment protection legislation of the previous Government is, in fact, enshrined in the present Bill.
I of course acknowledge that we live in financially rigorous times, especially where the costs of the public sector are concerned; and, in my judgment, these harsh arithmetical rules apply to governments of whatever ideological complexion. We have made no secret of the fact that the reorganised structure of local government will, once it has settled down, have some 8,000 fewer posts than at present. That is part of the purpose of this legislation and that must, of course, be a consideration in planning for staffing the new structure. It is therefore a very different consideration from the generally expansionary ethos in respect of local government hiring which prevailed in 1965 and 1974. Again, I must say that the provisions of the 1972 Act, the previous Conservative reorganisation provisions, just do not fit into the context of the mid-1980s. Therefore, this time we have had to develop a quite specific approach to staffing the new structure, and inevitably this presents problems for those staff who are affected by it.
That is why my right honourable friend the Minister for Local Government issued a paper in November last year which described our proposals. He sent it to the authorities that were affected and he sent sufficient copies to enable them to circulate the paper to their

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staff. He invited the employers and the unions to discuss it with us, but I regret to say that only a minority of unions and employers have responded. My right honourable friend and the Government have, despite that response, had to get on with developing their approach. First, we see both the need and the scope for transfer of staff by order—hence Clause 51. We have said that the majority of employees will be transferred to their new employers on their existing contracts of employment, and that should give considerable reassurance. Principally this will apply to the staff of the new Inner London Education Authority and to the staff of the fire and police joint authorities. It could also apply to staff in a number of clearly defined specialist units engaged on tasks which are to go to single successor bodies.
But where functions and therefore jobs are being dispersed to existing bodies—bodies which will have, as at present, very many more staff and their own pay scales, which will often differ from those of the GLC and the MCCs—then those bodies must be free to recruit the staff which they decide they need. Under this legislation they will be free to do so. It is simply not practical to disperse staff by order in these circumstances, and I do not think it would be fair on the existing staff of the organisations to swell their numbers by legislation in that way.
There are other concerns of staff which were raised by my noble friends Lady Faithfull, Lord Harmar-Nicholls and Lady Gardner. We have heard, for example, about the adverse effects on staffing arrangements of compulsory staff transfers related to the current transfer of GLC housing. Of course we are aware that issues of this kind can mean uncertainty for the staff affected, but we have built into our approach all practical means to protect their interests which respect the interests of the successor bodies.
4.15 p.m.
Clause 54 places a duty on authorities to decide what staff they need and gives them a financial incentive to make timely offers of jobs to GLC and MCC staff, who will then benefit from the continuity provisions of both Clause 53 and the modification order. We have also promised to make regulations providing for compensation paid by residuary bodies as a lump sum where staff take jobs at lower pay. That, I hope, will give some reassurance to my noble friend Lady Gardner. That is fair and it avoids the very difficult situation, in personnel management terms, of having people sitting next to each other doing precisely the same work but for different rates of pay. That, I think, was an undesirable outcome of the 1965 and 1974 reorganisations—if I could make that point particularly in respect of a remark from my noble friend Lord Thorneycroft.
Then, again, we have given our backing to the ring fence procedures, brought in by the staff commission just a week ago, to give GLC and MCC employees priority in competing for posts in successor authorities. Surely, regardless of the merits or demerits of the arguments about the policy as a whole, that is the right way and the British way to proceed in the circumstances of abolition where the interests of affected individuals are concerned. We expect, therefore, that most GLC and MCC staff will obtain
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posts in the new structure, and that the very great majority have nothing to fear in their individual lives from this proposed legislation.
I come back to an intensely important warning. This desirable goal of the amelioration of anxieties and uncertainties for individuals will he achieved much more easily and completely if successor authorities begin implementation plannning now, without delay, and we have asked the GLC and the MCCs to co-operate for this purpose. The residuary bodies will be established as soon as possible after the Local Government Bill has received Royal Assent, should it do so. The Government expect that many GLC and metropolitan county council staff working in areas such as finance, superannuation and property, together with supporting legal personnel and computer staff, will be needed by the residuary bodies. Indeed, my advice is that residuary bodies will be recruiting some such staff well before 1st April next year. The residuary bodies will have the identification of such staff as one of their priority tasks.
We accept, as I have said, that some staff will not be needed after abolition. We will therefore provide for compensation to be paid to them by the appropriate residuary body on terms which are yet to be settled. I do not wish to anticipate the debate on the amendment in the name of the noble Lord. Lord Winstanley, but I can say that we accept the need to treat staff fairly in this as in other respects, and I hope that what I have said about compensation will ease anxieties in those relatively smaller numbers of individuals who may not be needed by successor bodies. On this, as on all other matters, we are still prepared to consult the unions and employers, if only they will follow the constructive and courageous approach of others, notably the FMPOU and the West Midlands branch of NALGO and come to meet with us.
I trust that I do no violence to the amendment itself when I say that if my noble friends were minded to press it, in my judgment it would place three inappropriate, indeed rather impossible, tasks on my right honourable friend the Secretary of State. Under the amendment as currently tabled, he would have to transfer every GLC and MCC employee who wanted a job to a successor body, despite the problem in many areas of work of finding the right one out of the hundred or so. He would have to impose on each successor body, for as long as each job continued, a rate of pay which took no account whatsoever of the body's rates for its far more numerous existing employees, and took no account whatsoever of the Employment Protection Act's provisions for employer-employee relations, and he would be obliged to provide for the compensation of staff on terms chosen by the authorities, knowing that we intended to bring in this Bill to abolish them, and so that they would not have the onus of meeting the costs. That would be unacceptable, and I hope that my noble friends will accept that.
But it is also unnecessary as well as unacceptable, because we have, as I said, provided for transfer by order where that is the right approach, but we have not included any power to prescribe post-abolition rates of pay. Surely that must be a matter for the usual processes of negotiation within the framework of

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employment legislation. We have given to the successor authorities the freedom they sought to recruit the staff they need on their own terms and conditions, but we have put in place a system of constraints, duties and incentives for employers and a provision for compensation and continuity for employees which will protect the interests of staff.
May I finally just deal with two specific points that were put to me by my noble friends. My noble friend Lady Faithful] asked me whether negotiations were in progress. There are no negotiations in progress. Our approaches to the TUC local government committee have met with a rebuff and, like noble Lords opposite, they have preferred at my right honourable friend's meetings with them to discuss simply the principles of abolition, rather than pursuing issues of concern to the staff. I hope the staff that they purport to represent will take that on board. Representatives of the staff in one area, I am glad to say—the West Midlands—have now decided to talk to us and there has been one meeting with them. But my noble friends will recognise that formal negotiations can take place only at national level. As I said in my earlier remarks, our door remains open for that purpose.
I am able to give a little more reassurance on that front to my noble friend Lord Bellwin. I understand that the TUC local government committee are, in fact, discussing this very issue today, which is all the more reason that your Lordships' House should be dealing with these staffing issues this afternoon, instead of some of your Lordships sitting on your hands. We hope therefore that they will now agree to negotiate. If they do so, my right honourable friend will be delighted to meet them as soon as possible. I hope that what I have said has given sufficient reassurance to your Lordships—and, beyond your Lordships' House, to those many individuals who are caught in the inevitable anxieties and uncertainties of change—on two principal grounds: first, that the majority of staff will find jobs and, secondly, that those who do not will be compensated.
Lord Rochester: My Lords, I should just like to say a few words, if only in response to the invitation so to do by the noble Lord, Lord Thorneycroft, though perhaps he will understand, in view of what transpired earlier, why I do not propose to enter into the discussion on the merits of the amendment which has now been moved by the noble Lord, Lord Harmar-Nicholls. May I say simply that I had not understood that the noble Earl, Lord Gowrie, had said through the usual channels that he would be in a position to give a definitive answer today, particularly on the matter of compensation which has been my main concern in these exchanges? May I also be allowed to say that on these Benches we have the interests of staff very much at heart? That certainly applies to me. I hope that my record in this respect within the House may stand on its own merits, but that is for the House to judge and not for me. There was reference by the noble Earl, Lord Gowrie, to this having been an abuse of the procedures of the House. May I say that I did not myself feel that it was such an abuse or I should not have been a party to it?
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I should like to say just a word about the substance of what the noble Earl, Lord Gowrie, has had to say. I did not, with respect, learn anything from his reply that was not apparent to me from his response at the Committee stage. I am rather sorry that, in response to the debate that we have had, he did not find it possible to go into any detail in relation to the amounts of compensation which might be payable by the residuary bodies, though I appreciate why it was that he related that more particularly to the later amendment to which I referred in my opening remarks. That is all I wish to say at this juncture.
Lord Harmar-Nicholls: My Lords, it is clear that the Government have taken every possible step to bring the staff and their unions around the table and I am sure that, as we have gathered from my noble friend's speech, in the absence of such contact the arrangements made are fair and equitable so far as we can see today. I also accept that, if this amendment as it is now worded were accepted, it would introduce almost insurmountable problems in giving effect to the Bill when it became a statute. For all those reasons, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.

Johnson Matthey Bankers
4.28 p.m.
The Earl of Gowrie: My Lords, the amendment having been withdrawn, it might be at this point for the convenience of the House if I repeated a Statement that is being made in another place by my right honourable friend the Chancellor of the Exchequer on banking supervision and Johnson Matthey Bankers. My right honourable friend's Statement is as follows:
"In my Statement on 17th December, I told the House that the Johnson Matthey Bankers affair raised important issues about our present procedures of banking supervision, and the legislative framework within which it is conducted. I announced a full review, which would consider whether any early changes in present supervisory procedures were called for in the light of the problems which had arisen in Johnson Matthey Bankers, and whether there was a need to review or amend the Banking Act 1979.
"The Review Committee has now presented its report, which I have arranged to be published as a Command Paper and have laid before the House. I shall be considering the committee's proposals carefully. In the meantime, I have accepted the report as a basis for immediate consultation. Many of the recommendations do not require legislation. Some are already being implemented. But some of the committee's proposals do require fresh legislation. I therefore propose to publish a White Paper later this year, with the intention of bringing a Banking Bill before the House as soon as possible. The group of Treasury and Bank officials which I set up under the Review Committee's terms of reference is continuing its detailed examination of the Banking Act 1979.
"I am most grateful to the Governor of the Bank of England, who has chaired the Review

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Committee, and to its members, who comprised senior officials of the Bank of England and the Treasury, and a distinguished commercial banker, Mr. Deryk Vander Weyer.
"A note by the Bank of England on events leading to the failure of Johnson Matthey Bankers, the subsequent rescue by the Bank, and its conduct of Johnson Matthey Bankers' affairs is annexed to the Bank's Annual Report and Accounts, which have been laid before the House today.
"The Bank's account makes it clear that serious shortcomings in the management of Johnson Matthey Bankers led to its collapse—over-rapid expansion of the loan book, heavy concentration of exposures, and lack of adequate control systems. Johnson Matthey Bankers was also guilty of serious misreporting to the supervisory authority.
"The circumstances described in the Bank's report must inevitably raise questions about the role of the auditors, Arthur Young. The board of Johnson Matthey Bankers, which is a wholly-owned subsidiary of the Bank of England, has today announced that it will be initiating legal action against Arthur Young. The Bank's account also explains its reasons for rescuing Johnson Matthey Bankers. In mounting the rescue, I am satisfied that the governor was acting properly within his discretion.
"The board of Johnson Matthey Bankers now estimates the company's losses at £248 million. Of this £130 million has been met by Johnson Matthey Bankers' original capital, reserves and provisions, and £50 million by a cash injection from Johnson Matthey plc, the former parent company. The rest of the losses are to be met from the indemnity of £150 million, split pound for pound between the Bank of England and a group of private sector banks and members of the London gold market. Potential claims on the indemnity to date thus amount to £68 million, of which £34 million falls to the Bank. Though in many instances recoveries will be only over the long term, Johnson Matthey Bankers' present board of directors are satisfied that the total eventual calls on the indemnity will fall comfortably within the £150 million ceiling.
"Since Johnson Matthey Bankers is now its wholly-owned subsidiary, the Bank of England of course stands fully behind it. On 22nd November the Bank placed a deposit of £100 million with Johnson Matthey Bankers, which has since been converted into £100 million of additional capital to strengthen Johnson Matthey Bankers' balance sheet. This will, of course, be fully reflected in the price the Bank of England receives for the sale of Johnson Matthey Bankers back to the private sector, which it plans to conclude as soon as practicable.
"The review committee has made 34 specific recommendations. Their implementation will require action by the Bank of England, supervised institutions, their auditors and the Government. The committee proposes two fundamental changes in the present arrangements, and several important modifications. It has taken the view, which I share, that the Johnson Matthey Bankers' case exposes
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serious shortcomings in the present legislative framework and supervisory procedures. I shall in my Statement outline only the committee's main proposals. A full summary of their recommendations is annexed to their report.
"The Banking Act 1979 draws a distinction between recognised banks and licensed deposit-takers. Johnson Matthey Bankers was, and still is, a recognised bank. Most of the Act's provisions, and of the Bank's powers set out in it, relate to licensed deposit-takers. A dual system of supervision has resulted. Licensed deposit-takers have been subject to a more rigorous regime of supervision, whereas the supervisors have relied heavily on the integrity and co-operation of the management of recognised banks. With most banks, this confidence has not been misplaced. But the banking industry has expanded rapidly, and its activities have diversified. Recognised bank status—as we have seen with Johnson Matthey Bankers—has not always guaranteed prudence and responsibility.
"The committee recommends that the two-tier system be abolished and that the powers given to the Bank under the Act should apply to all authorised institutions. I accept this recommendation. The committee accepts that all authorised institutions would in consequence be entitled to use banking names. I also intend to tighten the criteria for authorisation, including the minimum net assets required.
"The second fundamental change recommended by the review committee concerns bank auditors. In this context, I am grateful to the Institutes of Chartered Accountants of England and Wales and of Scotland for the co-operation they have afforded the committee.
"The committee recommends that there should in future be a regular dialogue between the supervisors and banks' auditors. I strongly endorse this proposal.
"A bank's auditors are uniquely placed to monitor its control systems and assess its financial prudence. The accountancy profession at present considers itself prevented by a duty of confidentiality to the client from passing information to the supervisors. At the same time, the supervisors are themselves inhibited by the Banking Act from communicating supervisory information to third parties without the institution's consent. This is clearly an unsatisfactory state of affairs. It is in cases where consent is not forthcoming that dialogue might most be necessary. This is why I accept the committee's recommendation that the constraints on contact between auditors and supervisors be removed.
"I emphasise, however, that it is the directors and senior managers of banks who are responsible for the conduct of their business. They have duties both to depositors and to shareholders. This responsibility cannot be shuffled off to auditors or supervisors. The overriding lesson of the Johnson Matthey Bankers' collapse is that banks must have in place adequate management and control systems. I therefore endorse the committee's suggestion that banks should appoint an audit committee and

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finance director where they do not already have them.
"The committee has also made important recommendations on the staffing and organisation of the Banking Supervision Division of the Bank of England. The work of the supervision division has increased greatly in both complexity and volume in recent years, and the Bank of England now supervises more than 600 institutions. In general it does a difficult job diligently and well. But in the case of Johnson Matthey Bankers the supervisors cannot escape criticism for failing to respond more quickly to the danger signals.
"The committee has recommended that the staff of the division would benefit from wider commercial experience; that there should be more secondments in both directions between the division and commercial banks; that a significant cadre of experienced long-term banking supervisors must be built up and that there should be more professionally qualified accountants in the division. It has suggested that more staff are needed.
"The Bank has already begun to implement these recommendations. The division is being strengthened both in numbers and in the range of expertise available. Some rearrangement of responsibilities has taken place within the division and further secondments to and from commercial banks have been arranged. To provide advice at a senior level, Mr. Sidney Procter, Chief Executive of the Royal Bank of Scotland Group, who retires from that position on 30th September, has accepted the Governor's invitation to serve on a part-time basis as an adviser on banking supervisory issues.
"The failure of Johnson Matthey Bankers stemmed directly from a number of large, related exposures. The committee recommends—and the Bank of England has accepted—that in future no exposure to a borrower, or to closely related borrowers, should exceed 25 per cent. of the lender's capital base, other than in the most exceptional circumstances. An effective system of banking supervision is essential not merely for the protection of depositors but for the financial health of the economy as a whole.
"The review committee's report brings out very clearly the lessons to be learned from the collapse of Johnson Matthey Bankers. But more than that, it proposes a number of important changes to banking supervision in this country, which I am confident will greatly strengthen the system and make a repetition of the Johnson Matthey Bankers' affair very much less likely to occur. I commend it to the House."
My Lords, that concludes the Statement of my right honourable friend the Chancellor of the Exchequer.
Lord Barnett: My Lords, I begin by thanking the noble Earl for repeating the Statement made by the Chancellor of the Exchequer in another place. It was a very long Statement and there are lengthy documents to go with it. Also, there is to be legislation, so I am sure your Lordships will want more time to study all that has been put forward in the documents and the
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Statement. I am certain that I speak for most if not all Members of this House when I say that we would welcome changes to strengthen the Bank's supervisory position, which has been shown to be so inadequate in these particular circumstances.
I should like to take up one or two points with the noble Earl. The Chancellor of the Exchequer says in his Statement that:
"The governor was acting properly within his discretion"—
that is to say, when he did not tell the Treasury about the money being put into Johnson Matthey Bankers. Can the Minister tell the House whether the Chancellor did not expect to be consulted on so important a decision? I hope that there will never be another case of this kind, but if there is, will the Chancellor and the Treasury be so consulted?
I refer briefly to the other recommendation in the Statement, when the Chancellor said that:
"In future no exposure to a borrower … should exceed 25 per cent. of the lender's capital base, other than in the most exceptional circumstances".
The House will have noted that comment. Can the noble Earl assure this House, and reassure many people outside it, that there are no banks in that particular condition at the present time?
The House will have noted also the fact that the auditors are being sued. As the noble Earl rightly said, the Institute of Chartered Accountants and the accountancy profession generally (of which I am honoured to be a member) are only too willing to co-operate with the Government and the Bank of England, and with anyone else, to ensure that what has happened in this case does not happen again. But despite the shortcomings of the legislation, is the Chancellor saying in his Statement that the supervisors did not have it in their power, in co-operation with any particular bank and firm of accountants, to obtain additional information that would have been available to them? Can the noble Earl tell the House therefore whether any action is being taken against the supervisory department of the Bank of England itself?
Lord Taylor of Gryfe: My Lords, we on these Benches would also like to thank the noble Earl for repeating the Statement and for his very frank confession of the weaknesses and problems which arose in this particular case. I do not intend, on a banking matter, to make a party political point but I believe that this is the first occasion on which this Conservative Government have nationalised an industry. The net result of this exercise is that the Government, through the Bank of England, have acquired Johnson Matthey, although it is implied in the Statement that the bank will be returned to the private sector at the appropriate time. It is an interesting comment on the debate we had in this Chamber not so long ago, when the virtues of robust private enterprise were lauded and the inadequacies of state enterprise were exposed.
The Statement proves of course that bad management produces bad results whether a company is owned by the private sector or is a state enterprise. I should be interested to hear the Minister's comments on the effect of the indemnity that is being provided by the Bank of England, which I am glad to see should not

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exceed £150 million. Part of this is being carried by the well-managed banks in the City of London, in most cases quite reluctantly. I should be interested to hear from the noble Earl what impact such underwriting will have on the dividends, which are payable to the Treasury in due course. Much has been said of the fact that the money involved is not public money—but it is public money, since it is part of the accumulated reserves of the Bank of England, and the profits of the Bank of England are made available to the Treasury in the form of dividends.
4.45 p.m.
This is a sad Statement. Any noble Lords who may have read The Times of last Monday, 17th June, which went into this matter in some detail, will realise the full implications of the undermining of the reputation of the financial institutions of the City which is implied in the Statement we have heard today. It was a rescue operation; of this there is no doubt, and that is accepted by the Minister. Not only was the supervision of the Bank of England totally inadequate but also the management of Johnson Matthey was inept. Also, the process of supervision of the Bank of England and its relationship with Johnson Matthey was subject to criticism. As the report in The Times states:
"There was nothing to celebrate. In just 48 hours the assumption that the inherent authority of the Bank was itself a deterrent to imprudent financing by banks in the City had been shattered'.
There is no doubt at all about that; there has been a serious undermining of the authority and the status of the Bank of England in this whole matter.
I should like to ask the Minister whether the Price Waterhouse Report on this matter is to be published and made available and whether the fact that the Fraud Squad was brought in at some stage to investigate the proceedings will lead to any development in that direction, arising from their study of the Price Waterhouse Report.
We very much welcome the Minister's comments and his support of the tighter controls which are going to be introduced now. They will be of some reassurance to all in the banking community in the City. The old rules can no longer apply in the new environment of the City. There has been an invasion by new banking organisations and the growth of financial conglomerates. All of this requires a degree of supervision which is not catered for in the present arrangements.
We welcome also the fact that there is to be insistence on setting up an audit committee within the bank. This is a practice which is generally quite common in industrial and commercial institutions. One is rather surprised that an audit committee did not exist within a well-established organisation such as Johnson Matthey. We look forward very much to the White Paper that has been promised. This will be the subject of great debate and I hope that we shall all be able to make constructive proposals for strengthening supervision and for bringing rules to the governing of the City which will be beneficial not only to shareholders in banks but also to depositors in banks, and to the reputation of the City as a whole.
The Earl of Gowrie: I am grateful for the generally supportive reaction from the opposition Benches to my right honourable friend's Statement. The noble Lord, Lord Barnett, asked about the discretion and independence of the Governor of the Bank of England in this context. The governor's independence has been accepted by successive Governments. Individual judgments are always difficult and when there has been an upset of some kind, any of us can make criticisms with the benefit of hindsight. But in this field, decisions need to be taken very quickly and it seems to me right that the governor should take them and be responsible for them.
The Bank of England Act 1946 left the bank entirely free to conduct its own affairs, as did the Banking Act 1979. I remind the House that both Acts were passed by Labour Governments. My right honourable friend the Chancellor has discussed these issues with the Governor of the Bank of England and the governor has agreed that in future rescue cases he will inform my right honourable friend of his concerns and intentions as fully and as far in advance as possible.
The noble Lord, Lord Barnett, asked also about mistakes by banking supervisors, and about disciplinary measures. It is clear from my right honourable friend's Statement that it was the former management of Johnson Matthey Bankers who were responsible for its collapse and not the Bank of England. The review committee identified weaknesses in staffing of the supervision division of the Bank of England, however, and recommendations to correct this are already being implemented. I think that Mr. Sid Proctor's appointment will enormously help to strengthen this division. That said, of course, specific staff appointments and discipline are matters for the governor.
On that particular aspect of the issue, the noble Lord, Lord Taylor of Gryfe, raised the issue of any criminal activity or fraud. My understanding is that Price Waterhouse is still investigating the affairs of Johnson Matthey Bankers and so far neither Price Waterhouse nor the board of Johnson Matthey Bankers have found any prima facie evidence of fraud. If in due course any such evidence is found I am confident that the board will inform the appropriate prosecuting authority.
The noble Lord, Lord Taylor of Gryfe, asked about the rescue costs. The rescue costs have not affected the level of the bank's dividend to Her Majesty's Government. Losses to date have been absorbed by the banking department of the Bank of England. As my right honourable friend's Statement made clear, Johnson Matthey Bankers is, of course, to be sold as soon as practicable for the best possible price, and that should recoup some money.
On the question of publishing the Price Waterhouse report, the report was commissioned by the Bank of England and the board of Johnson Matthey Bankers, now a wholly-owned subsidiary of the Bank of England, for their own guidance without publication in mind. Much of it relates to information about customers' accounts which, under common law, is confidential. My right honourable friend also accepts the governor's advice that publication would prejudice the conduct of Johnson Matthey Bankers' suit against

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Arthur Young; that is, of course, the suit of the new board. I understand that the new board has acted on the criticisms by Price Waterhouse of Johnson Matthey Bankers' operations, and the annexe to the bank's report on Johnson Matthey Bankers also reflects the views of Price Waterhouse and the action taken upon them.
As to the mildly teasing remarks with which the noble Lord, Lord Taylor of Gryfe, prefaced his welcome of the Statement, I do not think that they are very well founded. It seems to me that both the governor of the Bank of England and my right honourable friend have moved very quickly in this case to redress any deficiencies in the present system. It is certainly quite right that the Bank of England made the rescue decision. The banking industry is unique in its reliance on confidence and the shock waves which bank failures tend to cause can go far beyond the immediate causes or, indeed, the immediate connections with any given bank. The House will be well aware that support, rescues and reorganisations leading to legislative changes or changes in appointments are not unknown in other parts of industry, whether in the public or private sectors, and I do not see why, when the time is right, that should not be the case in the financial sector.
That said, this was a decision taken by a particular governor in a particular case and it is in no sense a signal to other institutions.
Lord Polwarth: My Lords, as the director of a clearing bank, may I say that it would be improper for me to comment on the detail of this Statement at this stage. However, may I ask the Government to accept that I believe the vast majority in the banking industry who conduct their affairs with prudence will welcome any measures designed to maintain and enhance their reputation for sound banking, and will wish to cooperate in supporting the measures proposed when we have time to see them in detail?
The Earl of Gowrie: My Lords, I am sure that is right and I am most grateful for that endorsement of the remarks made in my right honourable friend's Statement as to the general health of the banking community. That endorsement, coming from one as experienced in both English and Scottish banking as my noble friend, is a clear signal which we welcome.
Lord Zouche of Haryngworth: My Lords, before the noble Earl sits down I should like to ask him whether the Government are aware of any Johnson Matthey Bankers' customers who have had their loans withdrawn or lines of credit curtailed because of the Johnson Matthey Bankers' collapse? If this has occurred, will these lines of credit or loans be reinstated by Johnson Matthey Bankers or the Bank of England?
The Earl of Gowrie: My Lords, I am not aware of any such cases, but I shall investigate the matter and let my noble friend know.
Lord Bruce-Gardyne: My Lords, I join in the thanks to my noble friend for repeating the Statement. Was it
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not somewhat unreasonable of the noble Lord, Lord Taylor of Gryfe, to accuse the Government of setting a precedent in this instance since the previous Conservative Government undertook a far larger piece of nationalisation in the shape of Rolls-Royce? That apart, is there not some slight danger in this instance of casting out the baby with the bath water, if one can refer to the Bank of England as a baby in this affair? I have in mind that my noble friend referred to the governor acting properly within his discretion in this matter. Is it not unfortunately the case that it is not just the shortcomings of supervision to which my noble friend referred but also, perhaps more fundamentally, the actual circumstances and methods of this rescue operation which may have done some harm to the standing of the bank in the City and to the relationship between the bank and the Treasury? Is it not crucially important that the fences, particularly between the bank and the Treasury, should now be mended as rapidly as possible? Does that not call for a certain amount of, should one say, forbearance on both sides?
As to the announcement of a new banking Act, is it not a little preoccupying that only six years ago we had a Banking Act which was supposed to cover these matters? Although I was not there at the time, one is led to understand that the Bank of England had a substantial role in the preparation of that Act. If we appear to have got it so badly wrong then, are we absolutely certain that we shall be able to get it right now? Is it not conceivable, notwithstanding what my noble friend said in reply to the last question, that the lessons of this affair might possibly have been more effectively achieved if the attempted rescue had not been undertaken in the first place?
The Earl of Gowrie: My Lords, I think that my noble friend would not be right to assume that the system of legislation covering banking activities was generally wrong because of this particular case; rather should he and, I think, the House be encouraged at the speed at which my right honourable friend, the Government and the Bank of England have agreed to make changes in the system, both in terms of the internal ordering of the Bank of England's supervisory division and in terms of my right honourable friend's proposals to plug what may appear to be some legislative loopholes. That seems to be the way, empirically and sensibly, to proceed. As my right honourable friend's Statement said:
"An effective system of banking supervision is essential not merely for the protection of depositors but for the financial health of the economy as a whole".
I do not accept that that is an indication of any lack of financial health in the economy as a whole, but certainly what might be a disturbing virus is being, as it were, throttled at birth.
Lord Bruce of Donington: My Lords, I have two short questions to ask the noble Earl, but if he does not find it convenient to answer them now perhaps he would care to write to me. Will he inform us of the form and composition of the audit committees that he has mentioned, and their terms of reference? Will he also give the assurance that there will be complete facility for interchange of views between the audit committees and the auditors of the bank itself?
The Earl of Gowrie: My Lords, I am grateful to the noble Lord, who of course has a distinguished record as an auditor and an accountant, for allowing me the loophole of writing to him. Having been plunged somewhat into the deep end of this Statement in the middle of legislation on another issue, I think that I shall yield to the temptation of taking him up on it.
Viscount Trenchard: My Lords, does my noble friend agree that, while everybody has supported the strengthening of the supervisory department of the Bank of England in his right honourable friend's Statement, the key is the highest possible quality of people in the department; and that probably that will not be achieved by simply strict rules of enforcement alone but more by the terms of reference being made wider and thus more interesting for high quality people, following his remarks on secondments from private banks which I think bear on that? Will it be possible for the duties, as they will become, to be looked on as an extremely valuable training area for commercial banks' secondments or for other people taking those jobs?
The Earl of Gowrie: My Lords, I think that my noble friend is quite right. We must of course learn lessons from what transpires. There are lessons to be learnt from Johnson Matthey Bankers itself and its history, as well as from any shortcomings in the supervision division of the Bank of England. I think that everyone in the House who knows or knows of Mr. Vander Weyer will know of his ability and independence. I hope that that will be an indicator of the kind of quality that we shall be able to command in attempting to learn those lessons.

Local Government Bill
5.2 p.m.
Consideration of amendments on Report resumed.
Clause 51 [Power to transfer staff]:
Lord Dean of Beswick Lord Dean of Beswick had given notice of his intention to move Amendment No. 81AAA:
Page 35, line I0, leave out subsection (1) and insert—
(".—(1) The Secretary of State shall—

(a) by order designate for transfer to an appropriate successor authority all persons who immediately before the abolition date are in the service of the Greater London Council or a metropolitan county council (in this section referred to as the "employing council") not having taken the option of voluntary early retirement or redundancy and who are under a contract of employment which would have continued but for the abolition of that council and who are wholly or mainly engaged in discharging any function which by virtue of any provision made by or under this Act will become a function of a successor authority including a residuary body; and

(b) by regulation ensure that proper arrangements exist for consultation with the employing councils, the successor authorities and the employees of those bodies and in the case of both individual and collective disputes, that appropriate appeal procedures exist.").

The noble Lord said: My Lords, I have to inform your Lordships that I am not proposing to move this amendment at this stage on the same grounds precisely as those that the noble Lord, Lord Rochester, gave for
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not moving his amendment. There was a good deal of criticism of that which I believe was totally uncalled for. On behalf of my noble friends and myself I should like to pay the warmest tribute to the noble Lord. His knowledge of the subject and the diligence with which he has gone about collating information on behalf of the staff is as well known as his total integrity.
For those reasons I do not propose to move my amendment at this time. Our Front Bench was asked whether we would give our view of what was happening by, I think it was, a former Member of the other place like myself, the noble Lord, Lord Maude. Let me just say this. The Minister in replying to an amendment moved by a Government Back-Bencher whose name was not down to the amendment made a very comprehensive statement indeed.
Lord Denham: Order!
Lord Dean of Beswick: My Lords, I am not moving anything. I was asked to give reasons, and I am giving the reasons why I am not going to move certain amendments. I am adopting the same procedure as the noble Lord, Lord Rochester. It was challenged as to whether it was out of order to do that and to come back to the amendment on Third Reading. I have to tell noble Lords that I sought the advice of the Clerks and was told that it was perfectly in order. If there was a variation or something which was not delivered at the Report stage, it was possible to come back to it on Third Reading.
The Minister of State, Ministry of Agriculture, Fisheries and Food (Lord Belstead): My Lords, if the noble Lord will forgive me, on behalf of my noble friend the Leader of the House may I say that I think that the noble Lord ought either to move or not move the amendment? Otherwise the House does not have a Question in front of it.
Lord Dean of Beswick: Not moved, my Lords.
[Amendment No. 81AAA not moved.]
[Amendments Nos. 81AAB to 81AAD had been withdrawn from the Marshalled List.]
[Amendment No. 81AB not moved.]
Clause 52 [Compensation for loss of office or diminution of emoluments]:
Lord Rochester Lord Rochester moved Amendment No. 81AC:
[Printed earlier: col. 379.]
The noble Lord said: My Lords, I said at an earlier stage in response to a question from the noble Lord, Lord Mottistone, that I was not proposing to move that amendment, and the House will recall that. However, since then the noble Earl, Lord Gowrie, in response to the earlier amendment moved in the event by the noble Lord, Lord Harmar-Nicholls, led me to feel that he might have something positive to say in terms of a statement on compensation for staff by the residuary body. In those circumstances I should like to give him the opportunity to make such a statement in the hope that it will bring satisfaction not so much to me or to other Members of your Lordships' House but to the staff concerned.
May I therefore briefly move the amendment? It seeks to commit the Secretary of State to the drafting of new regulations applicable to all staff and providing a higher level of compensation for those made redundant than do the current regulations. The amendment is a modification of one, as the noble Earl will recall, tabled by my noble friends Lord Winstanley and Lord Evans at Committee stage.
The amendment is so framed as to try to take into account the points that were made by the noble Earl in Committee. We hope therefore that it is in a form that the Government might be prepared to accept. I appreciate from what the noble Earl has already said this afternoon that the normal practice is for issues of this kind to be agreed at national level rather than that there should be several independent local schemes operating round the country. He may have another word to say about that shortly.
The Government also indicated at the Committee stage through the noble Earl that they would wish to see as far as is reasonably possible equality of treatment among the staffs of all the authorities concerned. In my belief the central issue is that compensation terms should be improved substantially and that the new scheme which we hope might be drafted should come into effect as soon as possible; hence the suggested time limit of two months included in this amendment.
I do not think that there is any need for me to say more in order to elicit what I hope may be a positive response from the noble Earl. I therefore beg to move.
Lord Mottistone: My Lords, I support the first part of the amendment calling on the Secretary of State to make the relevant order quickly. In fact, I hope that my noble friend, when he comes to reply, might indicate that such a regulation will be made in even less than two months to make sure that the uncertainties around this whole point, as mentioned by many noble Lords, are reduced to a minimum. Although seeing the sense of what the noble Lord, Lord Rochester, says about the need for equality of compensation, I find it difficult, on reading the amendment, to equate that with "benefits significantly greater". If benefits are significantly greater they are surely less equal. I do not quite understand that. The noble Lord can perhaps explain exactly what this means when he concludes the discussion on this amendment—unless, of course, my noble friend, when he speaks, explains it. Or, perhaps, another noble Lord may explain it. To that extent, I support the first part but cannot support the amendment as a whole, because I do not believe that the latter part really makes sense.
Lord Campbell of Alloway: My Lords, the noble Lord, Lord Rochester, has done the House a service by moving this amendment. I, for one, am grateful to him. This is a matter of great public interest, great public importance, and considerable public concern. I am speaking about compensation entitlement—the words in the noble Lord's amendment—in this particular context. Most people in the employ of the relevant authorities will have jobs with the successor authorities. For those who do not have compensation,
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under Clause 49, a staff commission will be set up. This is to be independent. My understanding of the idea—I am open to correction—is that there will be block group transfers of operational staff upon the existing terms and conditions, and that those recruited to a new job will be entitled to what is called detriment compensation. That is one aspect of the noble Lord's amendment.
There are also proposals, I understand, for diminution of emolument compensation. I see that the noble Lord, Lord Rochester, accepts that. I am grateful. That comes under Clause 58(3) on redundancy for those who do not secure jobs. Also under Clause 58(3)—it is a little complicated—there is compensation envisaged for early retirement. The whole question of compensation, in addition to any financial entitlement now recognised by law, is of great importance and warrants the consideration of your Lordships' House on the following issues. These all arise in context with the amendment. Firstly, there is the eligibility for compensation; secondly, the method of determining that eligibility; and, thirdly, the amount of compensation, whether according to scale under some regulation which is inevitably arbitrary, or by some arbitral award ex axquo et bono, and if by such arbitral award, by which tribunal. Should one consider, for example, conferring final arbitral jurisdiction in the industrial tribunal? I do not know, but these matters warrant consideration.
For these reasons it is important, as I say, that the noble Lord, Lord Rochester, has been good enough to move the amendment. It is equally important that any of your Lordships who has ideas on this vital question should express them. It is of even greater importance that my noble friend the Minister should let the House know what he has in mind on the matter. I do not say "anything" because I am sure that he always has something well in mind.
5.15 p.m.
The Earl of Gowrie: My Lords, I congratulate the noble Lord, Lord Rochester, on deciding to leave Tammany Hall. It is, if I may say so, an extremely—
Lord Cledwyn of Penrhos: My Lords, the noble Earl should get on with his speech!
The Earl of Gowrie: My Lords, it is, if I may say so, a far from salubrious environment for the noble Lord, I should like to get that on the record. I am sorry that the noble Lord, Lord Dean, in his previous remarks, did not take the same decision. I remember the fine show of indignation that the noble Lord, Lord Dean, put on, at about midnight on Tuesday, when he said that,
"the whole of this Bill is about people. This particular part of the Bill is about the people who service people". [Official Report, 18/6/85; col. 255.]
The noble Lord was extremely cross that he was not able to speak to the Motion on Tuesday evening.
Lord Dean of Beswick: My Lords, it was 10 past 11!
The Earl of Gowrie: My Lords, the noble Lord has had every opportunity—
Lord Dean of Beswick: My Lords, it was 10 past 11!
The Earl of Gowrie: My Lords, if, from a sitting position, the noble Lord is complaining that he was not able to speak to the amendment at 10 past 11the other night, why on earth can he not speak to it at a quarter past 5 tonight?
Lord Dean of Beswick: My Lords, I was not given the chance to explain why. I was beginning to say that the Minister has made a very extensive Statement today. I left this Chamber to discuss with people representing those involved with the Bill and the amendment what it meant. They said that it did not mean anything; it has not changed anything. I shall not know until I can look at it in the cold light of dawn, read it and see what has actually been said.
I have to say this to the Minister, too. The phoney show that he is putting on is amazing. This is about people. If it had been written into the Bill that the people involved in the change in local government were to be given the same treatment as people have been given in the past when such exercises have been carried out by Government decision, there would not have been any need for an amendment on the Marshalled List at all.
The Earl of Gowrie: My Lords, I hope that the House will find that explanation more convincing than I do. The fact is that on a previous series of amendments which the noble Lord, Lord Dean, had every chance of speaking to but which he refused to speak to, I went into great detail on precisely the issues that he is now raising in an intervention—employment transfers, protection and consultations with unions and other groups of workers on how best to protect their interests as individuals in a reorganisation of local government that affects them. I believe that I did that with some clarity. I hope that the noble Lord, when he comes to read it tomorrow, will not rest on his criticism that I had nothing new, detailed or important to say.
I shall start to deal with this amendment, if I may, by taking up a suggestion that our proposals could be unfair to staff or that we could be considered insensitive to their representations or to representations being made on their behalf. We are, as I said in response to a previous amendment, fully aware of the anxieties and uncertainties that any change, however desirable we believe it to be, may bring to individuals affected by it. It is in no sense true that we have an uncaring or inflexible stance in respect of staff or that such a stance is embodied in Clause 52. We have never concealed our view that the new arrangements will need fewer posts, and therefore that some reduction may necessitate involuntary redundancies.
But it is not part of our approach, and it has never been part of our approach, to create unnecessary redundancies. Indeed, Clause 54 is designed precisely to keep the number of redundancies to the minimum possible. It is, however, the actions and the decisions of the successor authorities on recruitment which will determine crucially how many redundancies occur and how many Greater London Council and metropolitan county council staff suffer detriment in the transition.
We have always intended—and I am glad to have this opportunity to make this very clear again—to
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provide fair compensation to any staff who suffer involuntary redundancy. It has been suggested that Clause 52 has precisely the opposite effect in that it discriminates against the staff of some authorities. As I explained at some length at the Committee stage in your Lordships' House, I believe that that is to misinterpret both the effects of this clause and the background against which we felt it necessary to make this particular provision.
Clause 52 does not specify what the compensation terms should be. Those terms will be set in regulations under Section 24 of the Superannuation Act 1972, and, we would prefer, after consultation with the unions and employers involved. We issued proposals—and I emphasise very strongly that these were only proposals, matters to talk over or negotiate about—on redundancy terms as long ago as last November and we shall issue proposals on compensation for loss or diminution of emoluments shortly. With few exceptions—notably the courageous and sensible Federation of Management and Professional Officers Unions and the West Midlands County NALGO Branch—the unions have not taken up our repeated invitations.
Against this background Clause 52 is designed to prevent the GLC and MCCs anticipating those negotiations and the compensation regulations by setting their own terms locally. Our reasons for doing this are to protect the ratepayers from the possible consequences of irresponsible decisions by councils which know that the bills will fall due only when they themselves have been abolished and are not liable for them. Regrettably, three authorities appear to have slipped in under the wire, so to say, and some—not all—of their staff will enjoy contractual entitlements which the Bill cannot disallow.
To vary the operative date of the clause would not remove these disparities but would merely shift their incidence. Acceptance of an amendment such as Amendment 81B, to be discussed shortly, would therefore undermine the accepted procedure followed by my right honourable friend, the Secretary of State for the Environment, in making his announcement on 1st March last year whereby the Government have sought to prevent anticipatory action from frustrating the intended effects of legislation. Your Lordships spent some time discussing that aspect of this clause at the Committee stage and, as I believe your Lordships recognised then in rejecting the amendment moved by the noble Lord, Lord Dean, 1st March 1984 is the only date which can be justified. I trust therefore that I have satisfactorily answered that aspect of the matter.
As I outlined, or started to outline, earlier—and I think that this is pertinent to staff anxieties—the experience of the London housing transfers, and in particular the difficulties which receiving boroughs have experienced in assimilating ex-GLC staff on protected terms into their own existing staff structures, has been one of the factors that persuaded us not to adopt the staffing arrangements which have applied to previous reorganisations.
These GLC housing staff transfers have taken place on "Crombie" terms, as provided by the 1980 regulations. The Crombie Code was drafted some 20 to 25 years ago to provide for the treatment of public

399
service staffs affected by statutory reorganisations. The code established three principles: that the jobs of employees should be protected; that the existing pay rates of employees should be protected after moving to a new employer; and that where there are redundancies there should be very generous compensation terms comprising both lump sum payments and continuing payments. In 1980—as we confirmed in Streamlining the Cities—the Government indicated that the Crombie Code would be withdrawn. I have said that the Crombie principles and job and pay protection are not appropriate to this reorganisation, and I have shown how, in practice, we are providing measures instead which will be fair to the staff. Accordingly, the Crombie Code is outdated and is not relevant to this particular reorganisation.
There are other issues connected with detriment compensation—not with redundancy compensation—which apply to circumstances where an employee is entitled to, or has received, compensation in accordance with the provisions of the clause and is made an offer of a new job. Such an offer can, if the requisite conditions are complied with, prevent the employee from receiving a redundancy payment if he unreasonably turns down the offer. In such a case Clause 52 requires an industrial tribunal to take into account the amount of any detriment compensation, as if it formed part of the employee's remuneration in his new employment, in determining whether the terms of the new job differ from the old terms or whether the new job is suitable to the new employee.
I hope that what I have said will give some comfort to those who are suffering anxiety and that therefore the noble Lord, Lord Rochester, will think that I have been able to go some way in his direction and will not press Amendment No. 81AC.
Lord Rochester: My Lords, I am grateful for the limited support offered by the noble Lord, Lord Mottistone, and for what the noble Lord, Lord Campbell of Alloway, had to say. Perhaps I may respond to one question asked by the noble Lord, Lord Mottistone. I can only say that I do not see any anomaly between the phrase:
"benefits significantly greater than those regulations currently applicable to local government employees"
and "greater equality"—not equality—
"of compensation entitlement between all staff affected by this section".
It may be that there is just a difference of understanding between us on that point.
As regards what the Minister has just said, I do not think he will expect me to acknowledge that I have ever felt myself to be a part of Tammany Hall. However that may be, I had hoped for something rather more positive to emerge than what he had to say and I listened intently for some indication of improved terms, but that did not seem to me to emerge, though I shall of course wish to study very carefully what he said.
The Earl of Gowrie: My Lords, I am most grateful to the noble Lord, Lord Rochester, for giving way. He indicated that I had disappointed him a little. I disappointed him because I am afraid that the part of
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my brief which might have given him joy had temporarily escaped me. Perhaps I may now quickly return to it. It will not take very long, and it may give some comfort to the noble Lord.
We accept some of the arguments underlying Amendment No. 81 AC and indeed they have been put to us forcefully by the West Midlands County NALGO Branch, who, I believe, are associated with it. We accept that the GLC and the MCC staff now find themselves facing uncertainties and difficulties which are well-nigh unique. They know that in nine months their employers will cease to exist and will not be replaced. Most employees will be transferred to successor authorities but some will not. These will have no individual guarantees of replacement jobs. For these, therefore, we are proposing compensation.
5.30 p.m.
In our November staffing paper we proposed some enhancements over current local government terms for staff in their forties. Both the FMPOU and the West Midlands NALGO have made it clear to us that the terms we have proposed fall well short of what they would wish. West Midlands NALGO have indeed put in a firm bid for the compensation regulations to provide for all staff terms akin to those provided by the Greater Manchester scheme.
The noble Lord's amendment adopts a more realistic and reasonable approach. I have, therefore, made it clear that within the grounds of prudent and responsible government, we are willing to negotiate on the redundancy terms before we set them in the special regulations. I have also said that we shall shortly issue proposals on compensation for detriment, again with a view to consultations, before incorporating them in the compensation regulations.
We have already put the New Town redundancy terms on the table. We are still willing to listen to the case for other variations from the general local government terms before we make up our minds. If the unions and employers come to the negotiating table they will not find us inflexible, but they must come soon and they must be ready to negotiate in earnest.
While welcoming its spirit, I therefore cannot recommend the House to accept the amendment if it is pressed. Despite its realistic approach it would still fetter the negotiations which I am inviting too much, and impose a time limit which, while a desirable aim, must depend on negotiations which have not yet started, and this not because the Government are dragging their feet. I hope, therefore, against the assurances I have given about our willingness to negotiate, that the noble Lord will not feel the need to press his amendment and will feel more cheerful than I left him when I concluded my previous remarks.
Lord Rochester: My Lords, I thank the noble Earl, because I am indeed more cheerful. I did not know that the noble Earl numbered among his accomplishments those of a conjurer. What he has now had to say is a comfort to me. I had noted the point he had made a little earlier, that proposals would be available shortly for compensation for detriment, and he has now in my view—although I shall wish to

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study with my noble friend precisely what he has said—said enough to cause me to feel that there is a willingness on the part of the Government to negotiate. May I associate myself with him in encouraging the unions for their part to join in such negotiations, and express the hope that, since this appears to have acceptance throughout the House, those negotiations soon result in improved terms for the staff.
From what the noble Earl has said, it seems that there is a prospect that that should happen. He has said enough at any rate to enable me to withdraw this amendment at this stage. I hope it will not be necessary to return to the matter at a later stage, but I am sure he will be the first to understand that we need to carefully consider his remarks before arriving at a final decision. On that basis, I beg leave to withdraw this amendment.
Amendment, by leave, withdrawn.
[Amendment No. 81AD had been withdrawn from the Marshalled List.]
Lord Irving of Dartford Lord Irving of Dartford had given notice of his intention to move Amendment No. 81B:
Page 36, line 26, leave out ("2nd March 1984") and insert ("22nd November 1984").
The noble Lord said: My Lords, in view of what the noble Lord the Minister said, I should like to consider what he put in his statement and perhaps come back at another stage. I do not propose to move this amendment.
[Amendment No. 81B not moved.]
[Amendments Nos. 81BZA to 81BZC and 81BA not moved.]
[Amendments Nos. 81BB, 81BC, 81BD and 81BE had been withdrawn from the Marshalled List.]
Clause 55 [Information as to local government manpower]:
Lord Campbell of Alloway Lord Campbell of Alloway moved Amendment No. 81BEA:
Page 39, line 18, leave out ("may") and insert ("shall").
The noble Lord said: My Lords, this is a short amendment, and equally I can be brief. Its purpose is totally straightforward and simple. Unlike some we have seen in this part of the Bill, its purpose is wholly self-evident from the wording. It would require the Secretary of State to make regulations requiring the boroughs and districts to give him details of their staffing levels both before and after abolition.
But, as it stands, the clause is permissive with the use of "may", which is wholly inapposite in view of the assurances that my noble friend the Minister has given to the House on more than one occasion, when he said that he intends to bring in regulations. If he intends to bring them in, why then should it not be "shall" and not "may"? There is something to be said for this because in earlier reorganisations there were considerable difficulties. It is wrong to leave this as a matter of discretion, and the proposal is that it should be mandatory to make these regulations in these circumstances. I beg to move.
Lord Elton: My Lords, I listened with close interest to the arguments put forward by my noble friend in support of his amendment. He played on a sympathetic chord. Clause 55 rounds off the measures we have included in the Bill to cover functions where it is appropriate for the successor authorities to recruit the staff they decide they need to meet their new or enhanced responsibilities. To that extent, it is complementary to Clause 54, which applies to the actions of authorities before the abolition day.
We have made no secret of our intention that abolition will, once the new arrangements have settled down, yield a substantial reduction in the overall number of posts in local government in those areas. But it is no part of our arrangements to cause unnecessary redundancies among the employees of the Greater London Council and the metropolitan county councils. That is why Clause 54 places a duty on the authorities to get on with making timely offers of jobs to GLC and MCC employees.
It also gives them a financial incentive to do so. If they plan properly and if the GLC and the MCCs co-operate in that planning process, the number of redundant staff will be much less than the reduction in the number of posts. But there must be that reduction. The noble Lord referred to the direct controls which are to be imposed on the new authorities to achieve this goal. It is right and practicable to provide for such direct arrangements on new single-purpose bodies of this kind. But it should be only a transitional measure whose value will decline as the new authorities find their feet in terms of efficient manpower control. That is why the direct controls are for a three-year period.
When one turns to the borough and district councils, it is a different matter in three ways: first, these are existing bodies with their own arrangements for manpower control; secondly, they are multipurpose bodies; and, thirdly, they employ many staff on their existing responsibilities. We can look to the borough and district councils to apply to their new staff complements the means they have in place now which aim at economy, efficiency and effectiveness in the use of manpower. Nonetheless, I see the force of the arguments that my noble friend has made because he said, "You are intending to do this anyway, yet you are shirking the risk, if there is a risk, of making yourself do it". If I were to shirk it it would appear that there was a risk but there is not. Therefore to reassure my noble friend I am happy to accept this amendment.
On Question, amendment agreed to.
Lord Barnett Lord Barnett moved Amendment No. 81 BF:
After Clause 55, insert the following new clause:
("London Co-ordinating Authority
.—(1) On the abolition date there shall be established for Greater London a body corporate to be known as the London Co-ordinating Authority (in this section and Schedule (Co-ordinating functions) referred to as "the Authority").
(2) The Authority shall consist of members elected by the local government electors of Greater London in accordance with this Act and the Representation of the People Act 1983.
(3) The Authority may in respect of any financial year beginning on or after the date on which it is established issue precepts to the rating authorities in Greater London for the levying of rates to meet all liabilities falling to discharged by the Authority for which provision is not otherwise made.
(4) In section 12(1) of the General Rate Act 1967 (supplementary provisions about precepts) after the words "a county council," there shall be inserted the words "the London Co-ordinating Authority".
(5) Part I of Schedule (Co-ordinating functions) to this Act shall have effect with respect to functions relating to executive authorities, that is, the London Waste Disposal Authority, and the London Fire and Civil Defence Authority.
(6) Part II of that Schedule shall have effect with respect to the resourcing of executive authorities and other bodies and miscellaneous functions of the Authority.
(7) Part III of that Schedule shall have effect with respect to the functions of the Authority regarding financial assistance for the purposes of economic development.
(8) Part IV of that schedule shall have effect with respect to the drawing up and periodic review of a strategic plan for London by the Authority.
(9) Part V of that schedule shall have effect with respect to residuary matters.
(10) The Secretary of State shall by order make provision for the amendment, adaptation or modification of this Act or any enactment passed before this Act as may appear to the Secretary of State to be necessary or expedient for securing the purposes of, or to be incidental to or consequential upon the establishment of the Authority under this section.").
The noble Lord said: My Lords, perhaps I should start by moving the amendment, in view of what has been happening! I say to your Lordships at the outset that I accept that both another place and this House have decided that both the GLC and the metropolitan counties should be abolished. That is the decision of both Houses: I accept that. Indeed in this House as long as eight weeks ago on 29th April we debated the possibility of having another elected authority to do something like those jobs. That was not carried so your Lordships decided that they did not want anything of that kind.
However, this new clause is, as I hope to explain, a rather different proposition. It proposes a different way of administering functions that are not abolished by the Bill, because the GLC and the metropolitan counties will be abolished, but the functions will not. What I am proposing in this new clause is that there should be a co-ordinating authority which would be county-wide, which I hope to show to your Lordships would be a better way of administering the functions that the Government have left than the proposal that is in the Bill. Indeed I hope to show to your Lordships that it will be a more cost-effective way, a way of getting better value for money than that proposed in the Bill. The noble Earl, Lord Gowrie, was telling us recently about his great concern about staff in the GLC and the metropolitan counties. The new clause will enable him to be tested in that because what I believe is proposed in this co-ordinating authority will serve the staff of those authorities rather better than what is now proposed under the Bill.
In the past, supported by the noble Lords, Lord Home of the Hirsel and Lord Boyd-Carpenter, the Government have argued constitutionally that as a House we should not be considering county-wide elected authorities because this alters the kernel of the Bill.
Noble Lords: Hear, hear!
5.45 p.m.
Lord Barnett: My Lords, I note the, "Hear, hears" from the Front Bench opposite. I leave aside whether noble Lords who are now saying, "Hear, hear" would persist in those arguments if they were sitting on these Benches. But the Government and the noble Lords who have spoken in that vein are wrong on the issue. I accept that the Government and both Houses will abolish the GLC and the metropolitan counties, but they have not abolished the functions that still have to be administered. They have proposed under the Bill that such functions should be administered in certain ways. I shall try to explain to your Lordships that this is not the most cost-effective way of administering those authorities. It is not only right that your Lordships should consider these matters constitutionally, but if we did not consider them we should not have a role to play.
I leave aside for a moment the question of whether a county-wide or GLC London-wide authority should be democratically elected. I shall return to that in a moment. The first question to ask is: should there be a London-wide authority? I know the noble Lord, Lord Diamond will be discussing the metropolitan counties. The Government have answered that question: yes, there should be, for in the Bill as it stands, they have proposed that there should be London-wide services that will be responsible to collective joint borough arrangements, a London residuary body, London fire and civil defence authority, waste disposal board and there are many other boards not touched by the Bill like the Thames Water Authority, the Arts Council, the Sports Council, the Lee Valley Authority, and many others. Indeed, even if one excludes debt charges that are paid by the GLC, in 1984–85 (from now on under the Bill) only 29·3 per cent. of those GLC authority expenditures will be administered by individual borough services and some 70·7 per cent. will be administered by London-wide authorities. In the case of the "met" counties, as the noble Lord will be showing, it is much higher still.
There is no argument about whether there should be London-wide or county-wide authorities. That is accepted and understood under the Bill and accepted by the Government. Surely it is reasonable therefore to ask whether what is being proposed to be done under the Bill is the most cost-effective way to administer those functions? Looked at objectively the answer to that question, for anyone who has considered how those functions and services will be administered, would surely not simply be, "No" because what is being created is a legislative shambles, an administrative nightmare and total chaos and confusion. Let me explain why I believe that.
Since the Bill first started on its path in another place it has been substantially amended and significant changes have been made, so little forward planning of substance has or could have taken place. Now we have coming into effect the Bill and all it proposes on 1st April 1986 when all these functions and services will be taken over. That will mean that many GLC staff will be trying to perform three jobs in the period effectively from September to next March, because nobody expects much to happen in August. In that

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short time they will, first, have to continue to provide the GLC services and perform its functions; secondly, they will have to work directly for single borough councils or quangos, who may have appointed them to their staff; and, thirdly, they will have to answer questions and requests for information from the 31 other boroughs, from quangos and from Ministers. That is hardly a recipe for smooth functioning of the services to be handled from 1st April next year.
On top of that, despite what has been said by the noble Earl this afternoon and by the noble Lord, Lord Elton, large numbers of staff will have to be transferred to the successor bodies—or sacked as they have admitted—and the staff commission has so far played no role in implementing the transfer and shows little sign of having conducted forward planning.
To add to that, as has been acknowledged by Ministers at the Dispatch Box this afternoon, there is bound to be grave uncertainty over the future of job security in London government and the metropolitan counties caused by the legislation. It is inevitable that a large number of key staff will leave GLC employment if the Bill is enacted, slowing down the performance of functions and making the transfer of powers even more difficult.
Those are just some of the problems. There are many others. Quangos, preparatory committees and joint authorities will not meet until September. They will have a maximum of seven months to implement the transfer of services. We are told that new office accommodation will be needed. The files, computer programs, information systems, legal records and the rest, presently with the GLC, will have to be routed to scores of different destinations.
This is hardly the way to ensure a smooth transfer of those services. On top of that, proper joint working arrangements will have to be established by the joint boards involving the creation of a consensus as to which policy should be pursued and what level of services should be given among the 32 London boroughs of different political complexions in a situation where there is no mandate or guidance from the electorate on these matters. In addition, the Secretary of State will have to make decisions and give guidance on hundreds of issues relating to the organisation of local government in a situation where his civil servants have no direct experience or qualifications to do so. I do not think that it is unfair—indeed, I think that it is putting it pretty mildly—to say that there will be chaos and confusion on 1st April next year if things are left as they now stand in the Bill.
It may be said that it still would be worthwhile because there are going to be very substantial cost savings from the introduction of this legislation and the abolition of the GLC and the metropolitan counties. That is how it was all started: there were going to be major savings in costs. That may have been how it began but that is not how it is today. The highly respected, international firm of chartered accountants, Coopers and Lybrand, have issued a very substantial report. I do not propose to bore your Lordships with the whole of it.
They have estimated that the transitional problems of setting up and changing and abolishing these
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authorities could cost up to £167 million. It might well then be said, "All right. It may be worth all that because of the offsetting savings". But this highly respected firm went on to show that the estimated savings, operational savings, would be between £24 million and £39 million—£9 million of that arising from not having to serve democratic authorities any more. I have always been in favour of controlling public expenditure. But that is not the kind of reason I would have wanted to give in order to cut public expenditure. I suppose you would need much less expenditure if you were to abolish even more authorities; it is hardly a case that is being made for it.
On top of that, as is again pointed out in the report, even these minimal savings exclude the extra interest costs of £15 million which it is estimated would arise from increased borough indebtedness. So that the original argument for cost savings, if that is still to be worthwhile, no longer is seen to be the case on the most independent and highly respected advice that we can have. I must say to your Lordships that if councillors took financial decisions on this basis they would deserve to be surcharged. I cannot help feeling that it might not be a bad idea and we might get better legislation if Ministers could be surcharged. I am sorry to see that the noble Lord, Lord Young, does not fancy that surcharging idea; but it may be that we can return to it on another occasion.
I believe that the new clause enables the functions that continue under the Bill to be administered more cost-effectively and I want briefly to explain why I believe that to be so. I want to make it quite clear at the outset, because I myself have adopted this tactic on other occasions, that I do not pretend that the drafting of the new clause is perfect. Without the benefit of the parliamentary draftsman that I used to have, it may be that it is not perfect. But your Lordships will be happy to know that if you agree the principle of the new clause, there will still be time, if the Government agree with it (as I hope they will) to put it into a better-drafted condition. I hope therefore that we shall not have the argument that there are some drafting problems with it. In the interests of time I shall therefore now summarise what is in the clause and the schedules which establishes this overall co-ordinating authority.
First, and not unimportant, as I am sure your Lordships will agree, there would be a single precept instead of the three precepts under the Bill—the waste disposal, fire and the residuary body levels and more under the metroplitan counties. The co-ordinating authority absorbs the functions of the residuary body and provides support services for the joint bodies and other successor authorities. It would have powers of financial assistance for industrial development and it would produce a strategic plan covering in particular land and economic development.
That is not an unimportant matter because the GLC at the prevent time owns some 12,234 properties and pieces of land. I am told that legal documents relating to ownership occupy four miles of shelving. In all these circumstances, it must make sense to have a co-ordinating authority which will go some way to deal with the kind of problems that I have identified. Your Lordships do not have to take only my view of the matter. Perhaps I may quote another very highly

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respected authority, PA Management Consultants. They said in a recent report:
"Budget preparation for all the new separate bodies would be more complex than now and will fail to ensure the effective planning of local expenditure".
We are all concerned about the effective planning and control of local expenditure, and therefore it will be generally accepted that the co-ordinating authority will be better able to deal with that than as is now proposed in the Bill. And I should make it quite clear, lest anybody should think that this is just another repeat of what was said before the Bill was introduced, that many of the other functions that the Government have proposed should be continued will continue and will be administered as the Government have proposed.
They have, for example, suggested—and this will continue—that the new co-ordinating authority would not exercise (I make this quite clear) any powers in relation to development planning, voluntary grants, the South Bank, the Thames Barrier, historic buildings, sports, road maintenance, magistrates' and coroners' courts, probation, entertainment and safety licences. The joint boards would continue in London to exercise functions for fire and waste disposal, and as executive authorities they would operate independently subject to precept control and an annually-approved three-year programme. The ILEA administration would remain separate, as in the Bill, although it would be open to the bodies to work jointly if they wished.
I imagine that the Minister may well argue, "Ah, yes. But it retains an unnecessary tier of local government". But, as I explained, the Bill itself proposes to continue more than one tier, except that they are called joint boards and residuary bodies. But that is more than one tier. As Coopers and Lybrand have indicated, the way that it is proposed to do it with those joint bodies is not the most cost-effective way of doing it. Indeed, Coopers and Lybrand could only identify maximum savings, if it were continued in the way proposed in the Bill, of between 1·4 per cent. and 2·3 per cent. of the GLC's budget—and this against the costs to which I have referred!
The Government's only remaining argument, it seems to me, would be that there would be a conflict between the elected boroughs and an elected co-ordinating authority. That is the case for the clause and not a case against it; for the joint boards, if left as in the Bill, would be simple, single-function pressure groups. That is what they would be, and with priorities inevitably chosen for them by the Secretary of State. That is how they would work and we all know that that is how they would work. It must surely lead to better control over public money if the choice of financial priorities between services, within given limits, are made by a properly accountable co-ordinating authority. That is why I believe that your Lordships should support the new clause.
I have concentrated on the whole question of cost-effectiveness and value for money—and the House will not be too surprised, since I was Chief Secretary to the Treasury and Chairman of the Public Accounts Committee—because I was and am concerned to ensure that we have the best possible value for money
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in public expenditure. And I know the Government share that view. So I hope they will see that the new clause, as I have indicated, without offending the main principles of the Bill, would ensure continuing functions are better administered in the public interest than the way now proposed under the Bill.
I do not pretend that it would be ideal. At this stage of the Bill, there is no ideal way of proceeding. All that I am saying is that this must surely be a very much better way to proceed than the way described in the Bill. And it must also be right for members of a coordinating authority to be accountable to those paying for those services that they administer. That must surely be right, and I hope that your Lordships will accept it.
6 p.m.
When I was chairman of the Public Accounts Committee I worked closely with the Comptroller and Auditor General, a former senior Treasury official highly respected on all sides of the House, and indeed outside. Finally, I should like to quote what he said in the House of Commons Paper 313 in April of this year:
"The main discipline to secure value for money is intended to be the accountability of local authorities to their electors for the services they provide and for the rates they levy to balance their accounts."
It seems to me that the simplest and most appropriate way to improve the value for money incentive is to continue enhancing accountability to local electors with the assistance of studies by the Audit Commission and district auditors. The Audit Commission was set up by the Government, and I strongly support it; it is an excellent body.
That adds yet a further dimension in the case for the clause. I hope wherever your Lordships sit in this House, that you will support it as being a more cost effective way of administering continuing functions than the way proposed in the Bill. I beg to move.
Lord Diamond: My Lords, I understand—although I do not know whether this was specifically mentioned by the noble Lord—that it is your Lordships' wish that, together with the amendment which has been so ably moved by the noble Lord, Lord Barnett, we should discuss the amendment standing in his name, Amendment No. 81BG. I should therefore like to speak to that amendment.
Amendment No. 81BG: After Clause 55, insert the following new clause:
("Metropolitan county co-ordinating authorities.
.—(1) On the abolition date there shall be established for each metropolitan county a body corporate to be known by the name of that county with the addition of the words "Co-ordinating Authority" (each authority so established to be referred to in this section and Schedule (Metropolitan County Co-ordinating Authorities' Functions) as "the Authority").
(2) The Authority shall consist of members elected by the local government electors of the metropolitan county in accordance with this Act and the Representation of the People Act 1983.
(3) The Authority may in respect of any financial year beginning on or after the date on which it is established issue precepts to the rating authorities in the metropolitan county for the levying of rates to meet all liabilities falling to be discharged by the Authority for which provision is not otherwise made.
(4) In section 12(1) of the General Rate Act 1967 (supplementary provisions about precepts) after the words "a county council." there shall be inserted the words "a Metropolitan County Co-ordinating Authority".
(5) Part I of Schedule (Metropolitan County Co-ordinating Authorities' Functions) to this Act shall have effect with respect to functions relating to executive authorities, that is the authorities established for each Metropolitan County under Parts II and IV of this Act (including any such authority established by the Secretary of State after the passing of this Act).
(6) Part II of that Schedule shall have effect with respect to the resourcing of executive authorities and other bodies and miscellaneous functions of the Authority.
(7) Part III of that Schedule shall have effect with respect to the functions of the Authority regarding financial and other assistance for the purposes of economic development.
(8) Part IV of that Schedule shall have effect with respect to the drawing up and periodic review of a strategic plan for each metropolitan county by the Authority.
(9) Part V of that Schedule shall have effect with respect to residuary matters.
(10) The Secretary of State shall by order make provision for the amendment, adaptation or modification of this Act or any enactment passed before this Act as may appear to the Secretary of State to be necessary or expedient for securing the purposes of or to be incidental to or consequential upon the establishment of the Authority under this section.").
A good deal of what has already been said in respect of the Greater London Council applies equally to the six metropolitan counties with which this amendment is exclusively concerned. Therefore I do not need to repeat everything. But I should like to make the case which is set out in the amendment and the proposed clause and the accompanying Schedule because I think it is of vital importance to the good conduct of the management of local government expenditure; and that is the main concern which I have.
I shall suggest to your Lordships that this amendment will remove what is the near-chaotic situation at present under the Bill. I shall explain "near-chaotic" in a moment. It will remove that near-chaotic situation and install in its place co-ordination. Where there is at the moment lax and undisciplined methods of controlling public expenditure—I repeat to the Government, lax and undisciplined methods of controlling public expenditure at this level—the discipline of compelling those who wish to spend the money to set expenditure against expenditure instead of adding expenditure to expenditure. Those who have had to concern themselves with control of expenditure—the noble Lord, Lord Barnett, and indeed there are four ex-chief secretaries in your Lordships' House at the present time, and I am sure that none of them would wish to express a different view—know that the essential way, the kernel of controlling public expenditure, is to set up a system whereby expenditure is set against expenditure, and those who wish to spend are compelled to choose their priorities rather than to look at each individual proposal on its own and to add them up.
Each proposal for expenditure made by a local authority, by one of the bodies which are concerned at present in the Bill, will be a good proposal. Looked at individually it will be a good proposal put forward by honest citizens and their advisers as to the way in which local public money can be spent on useful purposes. It will be a good proposal. You will get one good proposal, then another, and then a third, fourth, fifth and sixth; each one good in themselves. The total of them make an impossible, intolerable burden. You
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have therefore to find some machinery for setting one set of claims against another and deciding how far the citizen—who at the end of the day is paying for it all—would want to go in supporting the totality of this expenditure. Therefore, if he goes too far in denying himself that substantial liberty, then that important liberty which each one of us claims for himself—the right to lead one's own life by choosing the kind of expenditure one wants to incur on books, holidays, whatever it is one wants to choose for oneself—would be denied. That is so if all one's income went on 100 per cent public expenditure. The choice would then be made by others. Therefore, to protect that freedom, to control expenditure, one must provide the machinery which I have indicated.
That is precisely what this amendment provides. It sets up under the name of a co-ordinating authority a method whereby the discipline to which I have referred is installed and the body concerned has to compare demand with demand instead of adding demand to demand. The present situation, so far as the metropolitan counties are concerned, as the noble Lords will recollect, is that at the moment there are five precepting authorities; four in action, and a fifth a possibility within the power of the Secretary of State. Those precepting authorities have the power to precept in respect of six different services for each one of the metropolitan counties. In addition, they are bodies which are entitled to call for levies, to make charges and to agree voluntary splitting of expenditure. The position is that any local authority would have to wait until it had received precepts, levies, demands, charges—a minimum of six, and it could well be 10 or more—from a variety of sources before it could start to work out its own costs and therefore to collect from the ratepayer whatever was needed.
Here is a method of co-ordination which will avoid all that. As the noble Lord, Lord Barnett, made very clear earlier on in his comments, and I therefore repeat them, it is not a method of providing new strategic services of any kind. I beg your Lordships to remember that every single service which is carried on by a local authority which will succeed to the metropolitan counties' duties will have exactly as many responsibilities if these amendments are carried as if they are not. No single duty, responsibility, or right is being withdrawn from them. Not one.
I hope I have made it clear why I—and I hope that your Lordships and the Government—think that this is a far better method of controlling expenditure than the lack of method which exists in the Bill. I go further than saying it is lack of method. I say that it is a near-chaotic situation when there are so many different authorities making charges, calling for levies, demands and precepts of the number that I have indicated. Obviously if one is going to compel choice, and the art of Government is the art of making the right choice—"gouverner c'est choisir", as we have heard time and time again—one has to make a choice within a ceiling. How shall this ceiling be provided and who is the most appropriate person to provide it? We believe that the best way—echoing exactly what the noble Lord, Lord Barnett, has said in his capacity as Chairman of the PAC—of imposing a ceiling is to invite the citizens as a whole to impose it through their

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representatives. Therefore it follows that one must have an elected co-ordinating authority to achieve this.
I have explained why we need a co-ordinating body. I will now turn to the reasons why we need it to be locally elected by the citizenry, and not appointed. It is the citizenry who have to foot the bill and it is they who need direct access to those who are paying the money, which they do not get unless there is a directly-elected co-ordinating body of the kind I have described. It is that body which will determine the totality of expenditure involved for these various joint bodies and so on. Therefore if one is going to have a locally-elected body one will also have the machinery whereby people can use the ballot box to express their views when elections or by-elections come along.
Although the ballot box is not available every day of the week, there is an opportunity every day of the week of approaching those who are responsible for the payments, and of making representations to them. If your Lordships think that is not a very effective way of making representations, I would ask you to bear in mind what happened to the Prime Minister in Scotland, in addressing members of the Conservative Party on the subject of rating. The Prime Minister heard the response from her Scottish supporters on the matter of rates and she decided then and there, for good reasons, that the rating system in Scotland ought to be varied.
I would also ask your Lordships to bear in mind what happened when the Secretary of State for Education took the view that parents ought to be contributing more towards their children's university fees. Those parents expressed their views in clear terms through their representatives to the Government, and the Government decided that a new view should be taken about the matter and that the fees ought not to be raised in the way that had been suggested. I am not saying whether that is right or wrong but I am saying that one must have directly-elected representatives in order to be able to express a view on where priorities lie. Therefore it is an elected body that we ask for, and for the reasons that I have given.
There is nothing new or revolutionary about this; it is an established principle of the control of expenditure. No less a body than the Associated British Chambers of Commerce made its view known, supporting this method, as long ago as 12 months or more. The machinery provided in the amendment is that the co-ordinating body would receive every year from the joint bodies which wished to raise these funds a three-year budget, and would each year, having set claim against claim and having consulted the joint body, set a figure for one precept—not six, eight or ten, but one. That is something of which the local authority in question would be aware.
6.15 p.m.
The amendments contain other provisions, and I want to make clear to your Lordships that there is nothing new in the sense of creating new functions. There is already a provision in the Bill for the residuary bodies to take over the residuary functions. It is suggested in the proposed new clause that those
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functions should be merged in this co-ordinating authority which I have been describing. Therefore we would not be creating one new authority; we would be removing one, creating another and transferring the functions from the former to the latter. The residuary functions, of course, require a precept, and that is provided for in the Bill. This is another case where a single precept would avoid confusion.
It is also proposed that this body would have the power to prepare an overall economic plan. That is nothing new; it is what is done at present but is not provided for in the Bill. If the Bill does not provide for it there is merely a lack of provision. This proposed clause merely suggests, without having anything new in it, that what has been the practice but which is not provided for in the Bill should now be provided. My Lords, if you want to spend money wisely you must also have regard to the raising of money; and one function of local authorities is the raising of money in various ways. They have need, in particular with regard to the EC, to apply for their grants in an overall way. The EC cannot readily deal with a multiplicity of individual, small authorities. It is far easier for them to deal with a body representing a metropolitan authority as a whole. Therefore it is right that this co-ordinating body should have that function. It is also right that it should have the function, as expressed in the proposed new clause, of providing specialist and professional services to the joint boards; otherwise each body, if it needed them, would have to provide such services for itself. That would be much more costly than having these professional services provided centrally within the ex-metropolitan authorities, provided centrally by this co-ordinating body.
In short, that is what is proposed in these amendments to which I am speaking and which I shall move at a later stage. And if at a later stage the point is put forward that this is in any way contravening the proprieties of your Lordships' House—which, with respect, would be a lot of nonsense—or if the point were to be made that it is in any sense going against either the Long Title of the Bill or the manifesto of the Conservative Party at the last general election, I should be very happy to deal with those objections at that stage. I shall not weary your Lordships on that at the present moment because I do not believe that you would wish to press such objections.
In short, what is proposed is a financial coordinating authority able to do the thins I have referred to and able to impose a financial discipline which your Lordships, and the other place in particular, insist upon in our national affairs. I hope the Government will deal sympathetically with these proposals, which can be nothing but helpful or right.
Lord Harmar-Nicholls: My Lords, if I were inclined to be controversial—which I never am—I think I would open up on the basis that if we were in another place and acting under certain rules we could be accused of tedious repetition, because these arguments, if one looks at them, are precisely the arguments we have had on every major amendment that we have discussed. It is another way of trying to replace the GLC and the MCC with something almost the same, but marginally different.

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The noble Lord, Lord Diamond, made it perfectly clear that he wants a separate elected body which in certain important functions would take precedence over the decisions of the boroughs and the districts. That is completely against the whole spirit of the Bill and if either of these amendments that have been suggested to us so far is accepted, it would be going against the decision at which we arrived on Second Reading. The whole aim of that was to remove this central power in order that the people who are really democratically elected in the smaller areas of the district would sit in the driver's seat, and these amendments cut right across that. It is a slight, minor modification which, at the end of the day, would bring us back to the very thing that we have said should go. We have a mandate to support us and a Bill which has gone through all its stages in another place, where the Members are the elected representatives of the people, to support it. I think that at this stage of the Bill it would be absolutely wrong to contemplate accepting an amendment such as this which would cut across the main principle.
I agree completely with the noble Lord, Lord Diamond. I believe that the ultimate sanction against bad control or bad government, be it local or otherwise, is the power of the voters. But I believe that the power of the voter at the level of the district and the borough council is more effective and keeps more control of the situation than it does at the level of bodies which cover this much bigger area, where one cannot hope to understand all the ramifications of the details of the smaller authorities.
What bothers me is that these two amendments have been presented to us by two of the most experienced and effective parliamentarians I have come up against in 34 years in Parliament. The noble Lord. Lord Barnett, has held high office. Of course he knows what he is talking about when he talks about money. The same goes for the noble Lord, Lord Diamond, who has held similar office. They are very effective and their very stature makes it difficult for people who have held only minor office, compared with their major ones, to contradict them.
There is one area where I have perhaps a slight superiority when it comes to the question of elections and what is true democracy. I have fought 18 elections; I have won some and lost some. I have the experience gained before the war and after the war, and have seen the whole of this develop, and I am convinced that, if it is control through the ballot box that you want, an organisation of the size of the GLC or the metropolitan county boroughs is nothing like as effective as a similar body that is made up of people who have been elected to the smaller authorities and who have the intimate contact with the voters and with the problems that surround that individual area.
Of course, these amendments are perfectly all right. There is nothing wrong with the suggestion as a possible alternative. I am not saying that they are in any way out of order. They have certain attractions if you think that it is only the big groups who know how to run a show. But my experience, in local government in particular and also in business, is that, if you want effective control over the people who are spending the public's money, you are more likely to get it if the people who sit in the driver's seat are those who come
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very near the point of contact from which the money is coming. These amendments take us further away from that.
I am a little surprised—perhaps I missed it because I was three minutes late in coming into the Chamber when the noble Lord, Lord Barnett, was making his submission—that no reference has been made to the amendment of my noble friend, Amendment No. 8 I CBA, which we will be dealing with later. When I read the Marshalled List and remember the debates that we have had in Committee, it seems to me that my noble friend is honouring the undertaking that he gave to face up to this very problem. If Amendment No. 81CBA is looked at it will be seen that it means that during the overlap period the residuary body can be called upon by the boroughs and the local coúncils to do the very thing that these two amendments require. But instead of the final control being in the hands of a newly elected overall London group or metropolitan county group, it would be in the hands of the people who were first of all elected to represent the people. I beg my noble friends not to produce this conflict.
My experience, which I think is worth repeating, is that, when there is one elected group having to be in conflict with another elected group, to have, this second bigger group elected gives them the feeling that they have a mandate. I found that as a Member of the European Parliament and perhaps I may say, that without any pomposity. I find that I am the Only person in the United Kingdom who sat at the head of a local authority, was 25 years in the Commons, 12 years in your Lordships' House and five years an elected member of the European Parliament. So I have experience of quite a number of elected organisations upon which to form a view. I am told that at the moment no one else in the United Kingdom has had that particular experience, if you can call it that.
I found in Europe that there were elected members of the European Parliament saying, "We have our mandate and we represent the people", who were in conflict with the Members of the Westminster Parliament, who also felt they had their mandate. This conflict between the two does not lend itself to good government at the end of the day. I strongly urge that, if under this Bill we give the ultimate power so far as the electors are concerned to the smaller authorities, then we do not cause any sort of conflict or confrontation by putting the important matter of spending money on to the bigger authorities. It is a conflict that runs contrary to the thrust of the Bill; it is contrary to our Second Reading decision; it is contrary to what the other place has sent to us, and it is contrary to what we put in our manifesto. I believe we ought to stand firm on this, and I hope my noble friend will feel that he can support the point of view which I am expressing.
The Lord Bishop of Liverpool: My Lords, I support the amendments which propose elected co-ordinating authorities for London and the metropolitan counties, because they seem to me to pull together very effectively the amendments which have been passed in your Lordships' House at Committee stage. Noble Lords from all sides of the House expressed genuine anxieties about the inability of joint boards to co-

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operate and serve the best interests of the whole of a county area in a great city.
The noble Lord, Lord Harmar-Nicholls, spoke as though no amendments had been carried in your Lordships' House. I am bound to say that I have found the lack of response from the Government to reasoned arguments very disappointing indeed. The noble Viscount, the Leader of the House, kindly responded to what I said at the Second Reading by promising to listen very carefully to what was said. I gladly acknowledge his readiness to listen, but that was not quite the point that I have tried to make. In fact I have looked up Hansard to see just what I did say to which he made that response. Here it is. I said:
"It concerns me very much that … the Government hear these points about the importance of an over-view made repeatedly from many sides, … but they do not seem to go beyond listening to any response to the points that we make." [Official Report, 15/4/85; col. 486.]
I went on to say that I hoped Government Ministers would,
"enter with much more seriousness into the real debate on the merits of the case".
I say that again today. Frankly, I find it difficult to understand why the Government do not reach out to meet us on these amendments. Their case is against wasteful, erratic government stepping over the lines of what is appropriate to local government. This proposal for elected co-ordinating bodies in contained within strictly limited tasks and powers. It restores direct democratic accountability.
6.30 p.m.
In these debates it has been very important for the distinct case for the metropolitan counties to be heard as well as that of London. In particular, no one has disputed the point that we have put about the reality, certainly of the county of Merseyside. With us, the county council has won general acclaim on all sides for its achievements during these 10 years and I concentrate for two minutes more on two areas: economic development and the securing of funds from the European Community.
I talk frequently with employers about stimulating economic development in Merseyside. They acknowledge the valuable role that the county plays as a catalyst and innovator between the private sector, the community and public resources. Without a central body to act as a point of contact for potential developers, the problems and delays incurred in dealing with five district councils would be a major disincentive to industry and commerce.
Finally, I come to the connection with Europe. In 10 years, £68 million has come to Merseyside from the European Commission and the European Investment Bank. When I was still chairman of the Area Manpower Board for Merseyside of the MSC, we were involved in discussions last year about an integrated development operations study. This would bring substantial further funds. The Commission requires one authority to oversee the implementation of the policies defined in the study. I believe that such an authority needs to have responsibility for the whole of Merseyside, or the whole of a county area over a great city, and I believe that it should be an elected body.
Lord Boothby: My Lords, in rising to deliver the briefest speech that I have ever made in Parliament, and as one who has sat in Parliament for quite a long time, I want only to say that I sincerely hope that your Lordships will pass this amendment because, after studying the terms of the amendment and listening to the speeches with great care, I am convinced that if it is not passed the government of London will very soon be reduced to a disorderly shambles. I can see no other way.
The Earl of Perth: My Lords, this is the Report stage of the Bill, and I must say that in a Report stage it is unusual, to say the least, to introduce such a revolutionary proposal as we find in these amendments. I may be wrong, but my own reading of what happens is that in a Report stage one does not do something like this; rather could it be in the Committee stage or not at all. I think it was the noble Lord, Lord Diamond, who said that in the event that the amendment was passed, we would probably have to change the Long Title of the Bill. I think that that is right. I may have misheard him, but if I may look at the Title of the Bill it states that—
Lord Diamond: My Lords, I am sorry to interrupt the noble Earl. The difficulty at that end of the House—as I have been told over the past three years, but we have been unable to get it altered—is that nobody there can hear adequately what is being said from these Benches. I apologise to the noble Earl. I said precisely the opposite and I draw the noble Earl's attention to the Title of the Bill, where it states:
"to transfer their functions to the local authorities in their areas and, in some cases, to other bodies".
It is quite within the Title of the Bill.
The Earl of Perth: My Lords, it is a matter of opinion, but I thank the noble Lord, Lord Diamond, for explaining his view. But the whole purpose of this Bill, as I understand it, is to transfer the authorities' functions to the local authorities in their areas. Again—and this is a very worrying point—the purpose of the Bill as I read it, and I remember well saying this on Second Reading, is to abolish a tier of government. This amendment does not do that. It continues a tier of government, with certain less great powers than exist now, but with other new ones which are perhaps even wider than before. Strategic planning is to be handled in that way, as is economic development. Perhaps these functions are already with the GLC and the metropolitan councils, but the powers are certainly very wide. This would be an elected tier of government when, as I understand it, the spirit of the whole of this Bill is to get rid of a tier of government.
I recall very well saying at Second Reading that the reason why I spoke, apart from the fact that I was very often in London and was born here, was that I hoped that the Government would take encouragement to do the same thing for Scotland; namely, to abolish the third tier of government there. But this amendment does nothing of the kind. It reiterates a form of government which is to be elected and which will have power of precept. I do not know what that is, if it is not a third tier of government.

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So I feel that this is a very worrying amendment. It is worrying to come up at Report stage and it is worrying as a general constitutional issue, shall not get into a constitutional argument, because others may be more able to do that. I think it was the noble Lord, Lord Diamond, who talked about the proprieties of your Lordships' House. So far as I am concerned, the very fact that the amendment has been allowed to be tabled is enough, but I suspect that before it was allowed it must have been something which was very long debated by those who do, or do not, accept amendments.
I say to my fellow Cross-Benchers that here we have a very real function; that is, when there is a political issue, and this is clearly a political issue—Conservatives on one side and Labour, Liberals or, perhaps, Alliance on the other—we have to judge the proprieties of what should, or should not, be allowed and it worries me very much to find at this very late stage the proposal that there should be a third tier of government elected, with powers of precept and so on. So I feel that we should not accept the amendment.
Lord Thorneycroft: My Lords, I rise simply to say that I find myself very much in agreement with the speech which has been made by the noble Earl, Lord Perth. I see the arguments. I thought that they were put with great skill by the right reverend Prelate the Bishop of Liverpool, and I must confess that I feel a conservative—always unorthodox, perhaps—respect and affection for the right reverend Prelate. There is force in his argument. There is a case for a tier there. There is a case in a great city like Liverpool for having some overall body of that character. Quite obviously, it is the case, and it is a case that is, can be and has been, by him, powerfully argued.
It has, however, been rejected and we have to accept that it has been rejected. I do not think that democratic discussion is very usefully carried on, if we go on talking as though things have not happened which manifestly have happened. I stand here and I am far from saying that the decision was inevitably a right one. I can well understand other arguments. No one with any knowledge of public affairs in this country would utterly dismiss the case for some tier of government in that area. But once the decision has been made, surely the right thing for us is to accept that decision and to direct our minds, our energies and, if possible, our amendments to how to deal with that situation; how to make the best of a new structure for local government.
My objection is not to the arguments put forward by the noble Lord, Lord Diamond, who put his case with his usual skill, but to the fact that they are outdated. We have passed that point altogether in the Bill. Little purpose is served by going on in stage after stage arguing as though we were talking about a Second Reading. It does little credit to us and it does little credit to your Lordships' House. The purpose of your Lordships' House is to try to take situations as they develop and then try to improve upon the situation in which we find ourselves. I therefore urge your Lordships not to accept the amendment.
Lord Sandford: My Lords, I think the House will have been intrigued by the late entry into the debate on these two amendments by two former Labour Chief Secretaries. Each of them described their main motive as being that of controlling public expenditure. Each of them preached us quite considerable sermons on the importance of that. I personally would have been more convinced by what each of them had to say if, when they had the power to influence the party opposite, they had so preached those sermons that when the Labour Party gained power in the GLC we were not—we Londoners in particular—faced with the exorbitant precepts under which we have all suffered these past two or three years. A failure to control public expenditure more flagrant than the one we have all experienced under the GLC is hard to conceive of.
There are a number of other reasons why I think this amendment should be firmly rejected. Most of them have been given already so I need not spend very long on them. One reason is that in subsection (2) of each amendment we are asked to vote in favour of an elected authority. That has already been firmly rejected by this House. Secondly, we are asked to vote in favour of a multi-purpose authority. That, too, has been rejected quite firmly by the House.
I shall not go into detail but I shall dwell for a moment on subsection (8) of each of the two amendments which relates to planning, a matter in which I have a particular personal concern. What is set out in Part IV of the schedules that follow from the amendments which we are now considering is palpably incompatible with all that we have already settled about the preparation of unitary development plans by the individual boroughs. As the noble Earl, Lord Perth, said, to introduce broad brush amendments at the Report stage which would need enormous consequential amendments at the only remaining stage, is, I should have thought, a complete abuse of the procedures of the House. For all those reasons I suggest to the House that this amendment and Amendment No. 81BG should be firmly resisted.
6.45 p.m.
Lord Elton: My Lords, perhaps I may start—it is a necessary exercise—by reminding your Lordships of what are the effects of the Bill as it is now drafted, because it is these effects that the noble Lord's amendments are designed to change, and to change, as my noble friend Lord Sandford, has just said, fundamentally at a late stage in their preparation.
The Bill affects both London and the metropolitan counties. In London it abolishes the GLC and transfers most of its functions to the London borough councils. There will be two statutory joint authorities in London—one for fire and civil defence and, on your Lordships' decision in Committee, which I have not asked your Lordships to reverse on Report, one for waste disposal. They will be composed of elected borough councillors. Those councillors will be appointed by their councils to represent the interests of those councils and the electorates of those councils. There will also be one directly elected authority in the shape of ILEA, and again I have not asked your Lordships to revise your opinion of the future of that body.

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These authorities will be freestanding and will decide their own policy and arrangements, subject to the precautionary power to prevent the birth of a new sprawling bureaucracy that the Secretary of State will have for their first three years only. I do not see in that the labyrinthine economic maze which the noble Lord, Lord Diamond, said would militate against the efficient control of money. As for planning, it will become a borough responsibility although the Secretary of State will issue strategic guidance.
As I told your Lordships when we debated Clause 3, I shall bring forward an amendment on Third Reading providing for a committee of London boroughs to advise the Secretary of State and the authorities on planning issues. I had the clear impression in Committee that this was something which was welcomed not only by my noble friend Lord Sandford, who is the most eminent practitioner in this field among my noble friends and who is chairman of the South-East Regional Planning Conference, but by your Lordships' Committee as a whole.
These arrangements would walk through that like a cow walking through a cucumber frame. There will be continuing liabilities for debt and pensions as well as a fairly considerable surplus of property to be dealt with after abolition. I accept the point made by the noble Lord, Lord Barnett, in that regard. There is much work to be done before abolition. Not all of it will be done—we acknowledge that—but the noble Lord, Lord Diamond, makes two errors, if I may respectfully say so. He exaggerates the difficulty and he ignores the remedy.
He exaggerates the difficulty by, for instance, suggesting that the staff commission has been sitting on its hands. It has not; it has already sent out six circulars and put the ring fencing around the transfer posts that are vital to the protection of the interests of the people who work for the abolition authorities. If the noble Lord wants them to make faster progress, as we do, then the thing he could do which I would welcome most would be to go out and tell his friends of the same political persuasion in the trade union movement to enter now into constructive discussion.
The noble Lord ignores the remedy having convinced, I regret, the noble Lord, Lord Barnett, of the immensity of the difficulties; he ignores the remedy by failing to acknowledge the key role of the residuary bodies, boards to which, your Lordships have noted, we are already getting ready to make appointments when the Bill reaches the statute book. There are residuary bodies in each abolition area. In London, it is the London Residuary Body. That is a temporary body with an expected life span of five years—five years to complete the allocations which the noble Lord, Lord Barnett, found so impossible to resolve in six, eight or nine months.
In later amendments, in answer to your Lordships' clearly expressed concerns, I shall be proposing to strengthen and clarify the residuary bodies' roles specifically for the purpose of preserving intact concentrations of skill that cannot be catered for before the abolition date. In an amendment which again I have not asked your Lordships to reverse, your Lordships have also added to those functions responsibility for most highways and traffic functions.
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The rest goes to the boroughs, which will no longer have to support the GLC through precepts which this year, I ask your Lordships to note, reached the level of £663 million.
Those are the arrangements for London. For the metropolitan county councils the arrangements we propose are similar but there will also be joint authorities for police and passenger transport as well as fire and civil defence. Following what I believe to be the custom of the House, we have also left in the Bill amendments put in by your Lordships against our advice, to provide a joint authority for waste disposal and for highways functions to go to passenger transport joint authorities.
Although, as in London, those joint authorities will be free-standing, they will, as in London, have very clear links with the districts. The districts will appoint their members and the members will be recallable by the districts and be answerable through them to ratepayers and to electors. On this matter also the noble Lord, Lord Diamond, needs a correction. No—I mean the noble Lord, Lord Barnett. I am confused. I do not know what has gone wrong with my direction-finding mechanism, but I am sure that from the tone of the remarks to which I reply noble Lords will know from which direction they came.
Having a single-purpose authority for one service and other authorities for other purposes is not to have more than one tier of government. But having a co-ordinating authority to which other authorities are subservient and have to pay precept is more than one tier, as the noble Earl, Lord Perth, pointed out. The residuary bodies will not take their decisions in isolation. It is the borough and district members who will take the decisions. They will, for example take the important decision on the level of precept in the light of their knowledge as borough or district councillors. I refer also to the joint authorities. It is the joint authorities which are composed of councillors who can be recalled by the councils which put them there and who can be replaced by other councillors if they do not do what that council wants them to do in the division lobbies, as it were. They are answerable, therefore, to the electorate who put those councils into office. I must say, for the reassurance of my noble friends, that they will be subject, under Clause 84, to the same temporary manpower constraints as will their London counterparts.
In both London and the metropolitan counties, we expect those authorities to make the most economic and efficient arrangements that they can. In many cases this will mean servicing by one of the constituent councils. Indeed, we have amended Clause 34 to encourage this, by providing that joint authorities shall have regard to the desirability of appointing the chief executive of one of the districts as their clerk.
That in a nutshell is our policy on the main issues touched upon by these amendments. It serves as a timely reminder of why we are all here. We are all here because the GLC and the MCCs have proved throughout their existence—and increasingly in recent years—to be superfluous and therefore expensive and inefficient organs of local government. These abolition councils are corporate bodies. They are elected as London or county-wide authorities. They have the

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power to issue precepts upon all other elected local authorities in their areas.
Much of what was said by the noble Lord, Lord Diamond, in his speech was not unfamiliar because he was addressing himself to a theme to which your Lordships have returned rather more often than some noble Lords might wish. The same is true of the speech of the noble Lord, Lord Barnett. I noted one familiar theme, when reference was made to the report of Coopers and Lybrand. The noble Lord, Lord Barnett, sought to convince your Lordships that any idea of making a saving as a result of this Bill was illusary. As the noble Lord said, the consultants have been at work for the GLC, and your Lordships may have seen the result on the banners outside County Hall. The numbers shown on that banner are only a small part of the story to be found in the report the consultants sent to the GLC. I remind noble Lords of one or two other passages in the report which the noble Lord did not, I think, quote:
"Annual savings in operating costs could be made. We estimate them as being between £24 million and £39 million per year, depending on the level of co-operation from and between the successor authorities".
Lord Ponsonby of Shulbrede: He said that, my Lords.
Lord Elton: My Lords, I am grateful to the noble Lord for saying it. I should like to repeat it and add that those are annual savings and that the costs to which he referred were one-off costs. The Coopers and Lybrand report went on to state:
"The GLC is currently in a position whereby without structural change a proportion of the operating savings could be obtained by improved internal efficiency including, for example, a reduction in overmanning".
Coopers and Lybrand are saying in effect that the GLC is an inefficient organisation; that some of its failings could be put right, but that greater savings could be found if we abolish it. In those circumstances I find their figure, which runs up to about £30 million, and our figure of £50 million in respect of the GLC, remarkably close.
My faith in the Coopers and Lybrand report was shaken a little for a different reason. I was recently a Minister in the Home Office, and I was shaken when I examined the basis on which Coopers and Lybrand rested their conclusions. In paragraph 22 of their report, they revealed that they believe that the Metropolitan Police somehow fall within the Bill, and therefore, I suppose, within the remit of the GLC. If they believe that then they will believe that they have elected bodies governing all or any part of Managua—with which London has been so recently and incongruously twinned.
The need for a co-ordination of precepts was a theme in the opening speeches. The objective is to ensure that someone is taking an overall view of the burden on ratepayers in the area. But the biggest call on the ratepayers will be made not by the joint authorities individually or even collectively but by the boroughs and districts. They are the major authorities. In London the co-ordinating body would only be coordinating less than 5 per cent. of spending on local services. Let me repeat that. The great issue that has been rolled out before your Lordships is the enormous
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complexity of the accounting and the arrangements and the huge amounts of money that must not be allowed to run wild. If one does one's arithmetic on the arrangements proposed in this amendment, one finds that what would be restrained would be only 5 per cent. of spending on local services. In the metropolitan county councils—
Lord Diamond: My Lords, the Minister really cannot yet away with saying that. He knows full well that what is proposed for the metropolitan authorities is the control through this co-ordinating committee of more than 90 per cent. of their total expenditure.
Lord Elton: My Lords, I shall return to that point in a moment.
Noble Lords: Oh!
Lord Elton: My Lords, I am sure that the noble Lord would wish me to return to it in a moment rather than to charge inadvisedly into the breach and perhaps skewer him by accident rather than design.
In the metropolitan counties the districts will be responsible for nearly 80 per cent. of spending. I repeat: the districts will be responsible for nearly 80 per cent. of the spending. The co-ordinating authority would therefore only be co-ordinating a relatively small proportion of the burden on the ratepayers. I believe that the figure of 90 per cent. to which the noble Lord is referring is 90 per cent. of the money that is wished upon the constituent councils from, as it were, outside, and not for functions which they themselves discharge. That is the only way I can understand the noble Lord's claim that the figure is 90 per cent. Indeed, I stand on that assumption.
It is the boroughs and districts who are therefore best placed to exercise the co-ordinating role. They are the major spenders. They will form the joint authorities, and their members will decide on the policy of the joint authorities in the light of their knowledge as borough or district councillors, which brings them into close contact with the electorate.
Of course, I defer to the experience of the noble Lord, Lord Diamond, as a Treasury Minister, but I cannot entirely agree, for the reasons I have given, with the line of argument he has chosen to follow. At bottom, we are not actually looking at that aspect. Your Lordships have said that there is a problem and my noble friend Lord Thorneycroft has pointed out what we should do about it. We ought not to be arguing now, for the third time round the course, on the scale of the problem; we ought to be considering what to do about it. What we should now be concerned about chopping and changing across this table is the proposal for removing, that problem, exaggerated and illusory though I believe a great deal of it to be.
7 p.m.
That brings me to the question of why we are here. We are here because these—
Noble Lords: Oh!
Lord Elton: My Lords, if I were engaged in protracting the debate I would say that we are here

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because we are here because we are here, but I am not so engaged. We are here because of a decision taken by Government. The abolition councils are corporate bodies elected as London or county-wide authorities with the power to issue precepts upon all the other local authorities in their areas. We are here because the national Government decided that enough was enough. The noble Lord, Lord Diamond, suggests I should ignore the party manifesto. I am happy to do so. He said he would deal with it in an intervention if I raised it—so I shall not! The decision we took was that the ratepayers should no longer have to carry the burden of this superfluous tier of local government and that these bodies should be abolished. The decision was not to modify them, and it was not to adjust the way they operate or to limit their powers; nor was it to replace them with something else with roughly the same features. The decision was to abolish them. Parliament created them and Parliament has the undoubted power to dismiss them. To Parliament, therefore, Her Majesty's Government have come for an exercise of that power.
The Government's decision was accepted by another place which passed this Bill through every stage to Third Reading with decisive votes on this specific issue. It was endorsed by your Lordships at Second Reading; and again it was a decision to abolish the GLC and the metropolitan county councils. It was not a decision to replace them by organisations with the same essential features. Eight weeks ago, in Committee, not once as the noble Lord, Lord Barnett, suggested but on three separate occasions—twice on 30th April and again on 13th May—we returned to the issue. It was on the third occasion that, after considerable patience, senior Members of your Lordships' House who were not Members of this Government raised the objection that the noble Lord, Lord Barnett, sought, in moving his amendment, to sweep aside. The decision had been repeatedly taken.
I remind your Lordships of the essential features that we are committed to dispense with. They are that the authorities are elected for the whole of their areas as bodies corporate with a range of functions and with a power to precept on all the elected local authorities in their areas.
I now direct your Lordships' attention to Amendment No. 81BG so that you can see for yourselves the features—
Noble Lords: Ah!
Lord Elton: Your Lordships may laugh, but I have the script and I might as well have the props. Your Lordships will see that in subsection (2) the new body is to be elected, and that it is to be elected for the whole of Greater London. In subsection (1) your Lordships will see that it is to be a body corporate. In subsection (3) it is to have the power to precept on all the elected borough councils in its area. Moreover, it is to have a wide range of functions. That ought to be enough to make my point and to make the points of my noble friends Lord Harmar-Nicholls and Lord Thorneycroft. But if it is not, there is more in the schedule dependent on this clause in Amendment No. 81BK.
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Part I of the schedule gives the authority complete policy and financial control over the authorities set up under Clause 9. The amendment states Clause 9, but noble Lords possibly meant Clause 10 because I think they intended to refer to waste disposal and not highways. The noble Lord does not appear to mind, so I shall leave it as either. It is either the waste disposal authority or the fire brigade. That would be to revert precisely to the position we are now in. Part II gives it six of the support services now provided in the GLC. Part III empowers it to make grants, like the GLC, and Part IV gives it a planning role, like the GLC. If your Lordships feel that the body described in these amendments has a strong family resemblance to the GLC you will be right. The GLC is a huge directly-elected authority with insufficient functions to justify its existence. What is now proposed is another directly-elected authority with even fewer functions to justify its existence.
So much for London. But there are other amendments. The noble Lords' attempts to convince your Lordships that they are offering something new, something different, something which your Lordships have not seen before, have failed in London. But London is not the whole world. Perhaps there is something new, fresh and reviving to be found in the metropolitan counties. Is there a refreshing difference there—apart from the noble Baroness, Lady Fisher of Rednal? Do their provincial proposals offer a better deal to the ratepayers in the districts than their London ideas offer the people who pay the rates in the boroughs? Let us look. We start with Amendment No. 81BG. What do we find? What we find, as all of us full well know, is depressingly familiar. We find, for each metropolitan county, a corporate body, elected as a county-wide authority with the power to levy precepts on every elected local authority in its area. The major features of this new clause are identical with the major features in Amendment No. 81BF. The features in the schedule dependent on this new clause are almost exactly the same. Therefore, with both pairs of amendments we are back to the first principles, as the noble Earl, Lord Perth, so rightly said; and I wonder whether, at Report, that is really where we ought to be. Noble Lords opposite have returned there repeatedly since the beginning of our proceedings in this House.
The principle behind this Bill is that the elected multi-function London and county-wide precepting authorities shall be abolished, not replaced. That principle was proposed in another place and accepted in this House, on a vote, by a substantial majority. The vote was on a reasoned amendment that went straight to the heart of the matter and it was overturned by 230 votes to 109 votes. Nevertheless, noble Lords opposite returned to the issue in Committee on three further occasions. I have said it before, and it is worth saying again, because that is what the debate is about. There is in this House a general understanding that an issue decided, even once on a vote in Committee is to be left undisturbed. I have been in your Lordships' House for only 12 years, but during that time I have grown to respect that principle as a sensible way, in general, of getting our business done in a reasonable time. I do not preach that gospel because it suits me. On the contrary, I have refrained from returning on Report on

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a number of amendments which your Lordships put into the Bill in Committee.
Therefore, I ask your Lordships whether there are not two questions to be answered now and not just one. The first is, as always, what are the merits of the case? The merits of the case have changed not one whit since we first saw the case—I correct that, they have changed in their familiarity. I see no reason whatever to think that noble Lords opposite have hit on a revolutionary new reason for overthrowing the policy of Her Majesty's Government and the stated decisions of both Houses of Parliament on the essential features which, for the sake of the noble Lord the Chief Whip opposite, I shall not repeat again. The answer to the first question, therefore, is simple. It is, Not-Content.
The second question relates to the customs of your Lordships' House. They are not sacrosanct and they rest, as do all our procedures, in your Lordships' hands. The question is, and to both questions the answer will, I believe, be the same: do your Lordships wish the custom of returning on Report to matters of general principle already decided in Committee to become more common? Remember, this is not a principle new to this House at Committee. In Committee we merely endorsed, three or four times on a vote, a principle decisively adopted at Second Reading.
I should have thought that the very structure of your Lordships' procedures falls against this way of doing things. After all, Committees on public Bills are Committees of the whole House. Therefore, noble Lords opposite are, in fact, asking the same question of the same body of people for no less than the fourth time in succession. And it is the same question. However they may highlight the trimmings and the side issues, the question is about doing away with these bodies and not about replacing them with something with the same essential features which inescapably they have in their amendments. I therefore suggest that the answer to that question too must be a resounding, "Not-Content".
Lord Barnett: My Lords, if I may briefly reply to the noble Lord and others who have spoken in this debate, let me make it quite clear, as I did at the very outset of my remarks, that I am not proposing to alter or amend, or suggest to the House that it should amend, the decision taken to abolish these councils. That was not and is not my intention. But as I pointed out right at the outset, what Parliament and the Government have not done is to abolish the functions and services, and we are talking in this debate about how best they should be managed and administered.
The noble Lord said just now that there is no chaos: the chaos that the noble Lord, Lord Diamond, and I explained in some detail does not exist. Why does it not exist? Well, there has been no problem with staff. The staff commission has sent out six circulars, so it will all be all right. There will be no confusion. There will be no chaos. There is such confusion and chaos—and I understand it—that the noble Lord could not even get my name right. I perfectly understand it. He must be more bored with this Bill than anybody.
My thanks to the noble Lord, Lord Boothby, for his kind remarks in agreeing with all that I have said and
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that your Lordships should support the new clause. The noble Lord, Lord Harmar-Nicholls, the noble Earl, Lord Perth, the noble Lord, Lord Thorneycroft, the noble Lord, Lord Sandford, and again just now the Minister had a very strange argument, it seems to me: it is too late to do something even if it is good. It is too late. We must not consider it any more because it is a late stage in the Bill. That is the most odd argument I have ever heard. What kind of an argument is that for your Lordships? I should hope that you would reject that kind of argument out of hand.
What the noble Lord, Lord Diamond, and I have tried to explain is why it would be better for the Government's own Bill for these services and functions to be administered by a co-ordinating authority. It is surely right and proper that we should discuss that, and if your Lordships think it right then that should happen.
I am happy to agree with the right reverend Prelate the Bishop of Liverpool. It is marvellous to have him with me on any occasion and particularly on this one. I sympathise with the point that he was making when he said that the Leader of the House had told him that he was listening to his arguments. He is absolutely right. The Government have been listening. Knowing the noble Viscount the Leader of the House I know that he always listens very carefully. He must have a rough job in Cabinet, mind you! But I am sure that he does. As the right reverend Prelate said, he was disappointed at the fact that even though the noble Viscount had listened nothing was ever considered on its merits. As my noble friend just said, we have heard exactly the same speech again from the noble Lord the Minister—a speech with which he is as bored as everybody else—because he is not prepared to consider the issue on its merits.
I hope that your Lordships will consider that what we are talking about here is not reversing what Parliament has done before. It is considering how best the Government's own legislation, and how best the functions that have not been abolished, should be administered from here on in in terms of cost-effectivness and value for money. That is in everybody's interest. I therefore hope that your Lordships will support the new clause.
7.13 p.m.
On Question, Whether the said amendment (No. 81 BF) shall be agreed to?
Their Lordships divided: Contents, 147; Not-Contents, 164.

DIVISION NO. 1

CONTENTS

Airedale, L.

Bernstein, L.

Alport, L.

Beswick, L.

Amherst, E.

Birk, B.

Ardwick, L.

Birkett, L.

Attlee, E.

Blease, L.

Avebury, L.

Boothby, L.

Aylestone, L.

Boston of Faversham, L.

Banks, L.

Bottomley, L.

Barnett, L.

Briggs, L.

Barrington, V.

Briginshaw, L.

Beaumont of Whitley, L.

Broadbridge, L.

427

Brockway, L.

Lockwood, B.

Bruce of Donington, L.

Lovell-Davis, L.

Burton of Coventry, B.

McGregor of Durris, L.

Campbell of Eskan, L.

McNair, L.

Caradon, L.

Manchester, Bp.

Carmichael of Kelvingrove, L.

Mayhew, L.

Chandos, V.

Melchett, L.

Chitnis, L.

Meston, L.

Cledwyn of Penrhos, L.

Mishcon, L.

Collison, L.

Molloy, L.

Crawshaw of Aintree, L.

Monkswell, L.

Darling of Hillsborough, L.

Monson, L.

David, B.

Morris of Grasmere, L.

Davies of Leek, L.

Morton of Shuna, L.

Dean of Beswick, L.

Mountevans, L.

Denington, B.

Mulley, L.

Diamond, L.

Nicol, B.

Elwyn-Jones, L.

Ogmore, L.

Elystan-Morgan, L.

Oram, L.

Ennals, L.

Peart, L.

Falkender, B.

Perry of Walton, L.

Falkland, V.

Phillips, B.

Fisher of Rednal, B.

Pitt of Hampstead, L.

Fitt, L.

Plant, L.

Foot, L.

Ponsonby of Shulbrede, L. [Teller.]

Fulton, L.

Gaitskell, B.

Prys-Davies, L.

Gallacher, L.

Rathcreedan, L.

Galpern, L.

Rea, L.

Gilford, L.

Ritchie of Dundee, L.

Gladwyn, L.

Robson of Kiddington, B.

Glenconner, L.

Rochester, Bp.

Graham of Edmonton, L.

Rochester, L.

Gregson, L.

Scanlon, L.

Grey, E.

Seear, B.

Hall, V.

Serota, B.

Hampton, L.

Shackleton, L.

Hanworth, V.

Shepherd, L.

Harris of Greenwich, L.

Silkin of Dulwich, L.

Hatch of Lusby, L.

Simon, V.

Head, V.

Soper, L.

Hirshfield, L.

Southwark, Bp.

Houghton of Sowerby, L.

Stallard, L.

Howie of Troon, L.

Stewart of Fulham, L.

Hughes, L.

Stoddart of Swindon, L.

Ingleby, V.

Stone, L.

Irving of Dartford, L.

Strabolgi, L.

Jacobson, L.

Tanlaw, L.

Jacques, L.

Taylor of Blackburn, L.

Jeger, B.

Taylor of Mansfield, L.

Jenkins of Putney, L.

Tordoff, L.

John-Mackie, L.

Turner of Camden, B.

Kagan, L.

Tweeddale, M.

Kaldor, L.

Wallace of Coslany, L.

Kilbracken, L.

Walston, L.

Kilmarnock, L. [Teller.]

Wedderburn of Charlton, L.

Kirkhill, L.

Whaddon, L.

Kirkwood, L.

White, B.

Kissin, L.

Wigoder, L.

Lawrence, L.

Wilson of Langside, L.

Leatherland, L.

Wilson of Rievaulx, L.

Listowel, E.

Winchilsea and Nottingham, E.

Liverpool, Bp.

Llewelyn-Davies of Hastoe, B.

NOT-CONTENTS

Aberconway, L.

Brabazon of Tara, L.

Abinger, L.

Brentford, V.

Airey of Abingdon, B.

Brougham and Vaux, L.

Ampthill, L.

Bruce-Gardyne, L.

Arran, E.

Buckinghamshire, E.

Auckland, L.

Caithness, E.

Barber, L.

Cameron of Lochbroom, L.

Bauer, L.

Campbell of Alloway, L.

Belhaven and Stenton, L.

Campbell of Croy, L.

Beloff, L.

Carnegy of Lour, B.

Belstead, L.

Cayzer, L.

Bessborough, E.

Clitheroe, L.

Boardman, L.

Coleraine, L.

Boston, L.

Colville of Culross, V.

428

Colwyn, L.

Merrivale, L.

Cork and Orrery, E.

Mersey, V.

Cottesloe, L.

Middleton, L.

Cowley, E.

Milverton, L.

Cox, B.

Monk Bretton, L.

Craigavon, V.

Montagu of Beaulieu, L.

Craigmyle, L.

Montgomery of Alamein, V.

Cullen of Ashbourne, L.

Mottistone, L.

Davidson, V.

Mowbray and Stourton, L.

De La Warr, E.

Moyne, L.

Denham, L. [Teller.]

Munster, E.

Denman, L.

Murton of Lindisfarne, L.

Dilhorne, V.

Napier and Etterick, L.

Donegall, M.

Nathan, L.

Dudley, E.

Onslow, E.

Eccles, V.

Orkney, E.

Eden of Winton, L.

Orr-Ewing, L.

Ellenborough, L.

Peel, L.

Elliot of Harwood, B.

Pender, L.

Elphinstone, L.

Perth, E.

Elton, L.

Peyton of Yeovil, L.

Faithfull, B.

Plait of Writtle, B.

Ferrers, E.

Poltimore, L.

Fortescue, E.

Polwarth, L.

Gardner of Parkes, B.

Portland, D.

Geddes, L.

Rankeillour, L.

Gibson-Watt, L.

Reigate, L.

Glenarthur, L.

Reilly, L.

Gowrie, E.

Renton, L.

Gray of Contin, L.

Renwick, L.

Hailsham of Saint Marylebone, L.

Rodney, L.

Rollo, L.

Halsbury, E.

Romney, E.

Hanson, L.

Rugby, L.

Hardinge of Penshurst, L.

Russell of Liverpool, L.

Harmar-Nicholls, L.

Salisbury, M.

Harris of High-Cross, L.

Sandford, L.

Hayter, L.

Selsdon, L.

Henley, L.

Shannon, E.

Hives, L.

Sherfield, L.

Home of the Hirsel, L.

Skelmersdale, L.

Hooper, B.

Soames, L.

Hornsby-Smith, B.

Somers, L.

Hunter of Newington, L.

Southborough, L.

Hylton-Foster, B.

Stanley of Alderley, L.

Kimball, L.

Swansea, L.

Kinnaird, L.

Swinton, E. [Teller.]

Kinnoull, E.

Taylor of Hadfield, L.

Kitchener, E.

Terrington, L.

Lane-Fox, B.

Thomas of Swynnerton, L.

Lauderdale, E.

Thomeycroft, L.

Layton, L.

Townshend, M.

Limerick, E.

Tranmire, L.

Lindsey and Abingdon, E.

Trefgarne, L.

Liverpool, E.

Trenchard, V.

Long, V.

Trumpington, B.

Lothian, M.

Vaux of Harrowden, L.

Lucas of Chilworth, L.

Vickers, B.

Lyell, L.

Vivian, L.

McAlpine of Moffat, L.

Ward of Witley, V.

McAlpine of West Green, L.

Westbury, L.

Macleod of Borve, B.

Whitelaw, V.

Malmesbury, E.

Wise, L.

Mancroft, L.

Wynford, L.

Marchwood, V.

Yarborough, E.

Margadale, L.

Young, B.

Marley, L.

Young of Graffham, L.

Massereene and Ferrard, V.

Zouche of Haryngworth, L.

Maude of Stratford-upon-Avon, L.

Resolved in the negative, and amendment disagreed to accordingly.
7.24 p.m.
Lord Diamond Lord Diamond had given notice of his intention to move Amendment No. 81BG.
[Printed earlier; col. 408.]
The noble Lord said: My Lords, I sense that it is the hour for dinner. The amendment is not moved.
[Amendment No. 81BG not moved.]
Lord Skelmersdale: My Lords, I detect that it is the wish of the House that we should move on to other business. It has been agreed that we shall not return to this business until twenty five minutes past eight. I beg to move therefore that further consideration on Report be now adjourned.
Moved accordingly, and, on Question, Motion agreed to.

Hospital Complaints Procedure Bill
Lord Colwyn: My Lords, I beg to move that the Bill be now read a third time.
At this stage it is, I believe, in order for me to thank all noble Lords who have contributed towards the passage of this Bill through your Lordships' House. The Bill was introduced by Mr. Michael McNair-Wilson in the other place. I must again pay tribute to his commitment and concern for patients within the National Health Service. Some of your Lordships will be aware that he is not completely fit at the moment. I am sure that you will join with me in wishing him a quick return to normal health. I am grateful, too, for the help that I have received from my noble friend on the Front Bench Lord Caithness and his department, and also the noble Lords, Lord Ennals, Lord Dean of Beswick, Lord Winstanley and the noble Baroness, Lady Masham, for their helpful contributions.
I mentioned at Second Reading the large number of procedures already available for complaints within the National Health Service. At present, they are clearly not adequate for the increased awareness of the public to their rights as consumers within the National Health Service. This Bill will allow for consultation and discussion within the National Health Service in the hope that an effective complaints procedure can be set up. The noble Lords, Lord Ennals and Lord Winstanley, have mentioned the view of the BMA who apparently regard the legislation as superfluous and unnecessary. I have had no contact with the BMA or its advisers which I hope means that it has been able to take a different view following the explanations that have been given in your Lordships' House and in another place. Although the number of complaints is comparatively small—about one in every 3,000 cases of treatment—the number is steadily growing, not, I am sure, with the intention of obtaining financial compensation but for the need of an adequate explanation as to why an action took place in a particular way.
The Bill will provide the Secretary of State with an opportunity to consider all the points that have been mentioned leading, I hope, to the introduction of a statutory complaints procedure which will be acceptable and beneficial to both patients and staff. Effective communication between patients and staff will inevitably reduce the number of complaints. Establishment of this more effective communication is what this Bill sets out to do. I beg to move.
Moved, That the Bill be now read a third time—(Lord Colwyn.)
Lord Ennals: My Lords, at this Third Reading stage, I should like very much to congratulate the noble Lord, Lord Colwyn, not only for the trouble that he has taken in introducing the Bill but also for the manner in which he has done so, for his willingness to accept amendments suggested by others and for enabling this House to act in its best possible tradition when it is non-party, as, over dinner, we are. It was not for the noble Lord, in a sense, a difficult task. It was, however, a very important task that he embarked upon. It was a task very well worthwhile undertaking.
As the noble Lord said in his brief speech, there are a variety of ways in which patients can, at the present time, voice their complaints. They can do so on the spot to a member of staff. They can, if they so wish, go to their Member of Parliament. They can use the Health Service Commissioner. There is, in a sense, almost a plethora of ways in which they can make their complaints, should they so wish. It is, however, right that we should now, for the first time, have a Bill which firmly says that,
"It shall be the duty of the Secretary of State to give to each health authority in England and Wales and to each Health Board in Scotland such directions …".
The responsibility is placed, first, upon the Secretary of State to give advice; and, secondly, upon the health authorities to ensure that that advice is properly fulfilled. I have admired the way in which he has accepted the principle that no one should suffer in any way as a result of making a complaint, and for that matter that no one should be deterred from using his right to make a complaint, and equally that no one should say, "I did not know how I could complain". It is essential that written into the Bill there is the requirement that patients, if they want to make a complaint, should be informed of the means by which they can make the complaint. Therefore, there is no obstacle, except their own judgment, in regard to making a complaint or not doing so.
As the noble Lord has said, it so happens that the number who will wish to make a complaint is likely to be small. This is largely because we have a Health Service of which we are all very proud, on whichever side of the House we sit. Of all the services provided in this country it is the most popular with the public. I was looking at a very recent opinion poll that was published jointly by the National Association of Health Authorities and the Health and Social Services Journal, which showed that 70 per cent. of those who were questioned took a very positive view: they either thought that they were very well treated or that they were well treated. Of those questioned, only 12 per cent. felt that the service was not quite good enough; and 12 per cent. can be quite a lot. However, what was very interesting was that the highest proportion of satisfaction came from those who had actually been patients. I think that this speaks very well for the staff, be they doctors, nurses and ancillaries or members of professions supplementary to medicine. We have good reason to feel proud of those who work for the Health Service.
I do not take seriously a comment made by the BMA or anyone else who thinks that the noble Lord has rendered an unnecessary service. I think that he has rendered a very useful service which I am sure will be broadly appreciated not only by the staff in the

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National Health Service but by those who are most important of all—the patients. I warmly congratulate the noble Lord.
The Earl of Caithness: My Lords, it is an almost rare occurrence to be able to agree with every single word of the noble Lord, Lord Ennals. Now that he has been able to agree with me, as I am with him, I am sure that the health service will go from strength to strength with ever-increasing good will from the Government. I should also like to thank my noble friend Lord Colwyn for the way in which he has introduced this Bill, for his hard work, and for his amendments. I think that the Bill will be a great step towards better communication with the service.
On Question, Bill read a third time, and passed, and returned to the Commons with amendments.

Hill Farming Bill
Lord Stanley of Alderley: My Lords, I understand that no amendments have been set down to this Bill and that no noble Lord has indicated a wish to move a manuscript amendment or to speak in Committee. Therefore, unless any noble Lord objects, I beg to move that the order of commitment be discharged.
Moved, That the order of commitment be discharged.—(Lord Stanley of Alderley.)
On Question, Motion agreed to.

Further Education Bill [H.L.]
7.35 p.m.
Read a third time.
Clause 2 [Powers of local education authorities]:
The Earl of Swinton The Earl of Swinton moved Amendment No. 1:
Page 2, leave out line 31.
The noble Earl said: My Lords, in moving Amendment No. 1, with your Lordships' permission I should also like to speak to Amendments Nos. 2, 4, 5, 6 and 7.
Amendment No. 2: Page 2, leave out line 33.
Amendment No. 4: Clause 3, page 4, line 7, after ("a") insert ("general").
Amendment No. 5: Page 4, line 10, at end insert—
("(3A) Any revenue account kept by an authority under this section and any statement of account prepared by an authority under this section shall show the full cost to the authority of goods or services which are supplied under this Act and which are relevant to that account or statement.").
Amendment No. 6: Page 4, line 14, at end insert—
("(4A) Income and expenditure attributable to the supply of goods or services in circumstances such as are mentioned in section 2(4) above are to be disregarded for the purposes of subsection (4) above, whether or not the goods or services are supplied for less than their open market value.").
Amendment No. 7: Page 4, line 15, leave out ("such an account") and insert ("any revenue account kept by a local education authority under this section").
I hope that these amendments will meet the concern expressed at previous stages by the noble Baroness, Lady David, and others about the requirement that
432
goods and services must be supplied at not less than their full cost. It would be no exaggeration to say that this has proved to be the Bill's most difficult and controversial aspect. The Government have examined the issue most carefully in the light of representations that they received. In this respect our objectives in the Bill are, first, that there should be no diversion of resources from academic provision to the institutions' commercial enterprises; secondly, that there should be no possibility of unfair competition between publicly-funded institutions damaging private-sector business; and, thirdly, that there should be no encouragement in the Bill to engage in ventures which will be loss-makers from the word go.
We accept, however, that the Bill as currently drafted would present an authority with severe problems if a product's development costs were to exceed estimates, or the market were to collapse—for example, due to technical improvements elsewhere—with the result that the market price stood below the full cost of production. In such circumstances, the LEA could not, as the Bill currently stands, sell the product at all. Plainly this would be an unsatisfactory state of affairs. But simply to remove the full-cost principle altogether would be no solution either, however, since this would fail to meet the first two objectives.
The amendments proposed today effectively switch the full cost principle from the Bill's pricing provision, in Clause 2(3) to its accounting provisions in Clause 3. Local authorities will still be prevented from giving hidden subsidies to commercial activities at the expense of their educational provision and will be strongly discouraged by the "best endeavours" duty to secure a surplus on the revenue account from engaging in ventures which will be loss-makers from the word go. They will still be obliged to sell at market value so that competitors are protected from unfair trading practices; but if the market value stands below cost, then they can still sell at whatever price they can get. Their "best endeavours" will be manifest by their ensuring that taken as a whole the profits exceed the losses, thus putting them as nearly as may be into the same position as a private business.
To achieve all this, six amendments are required to be passed together. The first two amendments, Nos 1 and 2 in the Marshalled List remove the requirement to sell at full cost. Instead, under Amendment No. 5 authorities will have to record in their revenue account the full cost to them of all goods and services supplied under the Bill's powers, whether or not the supplies result in a profit or loss. Finally, Amendment No. 6 exempts the authority from their duty to use their best endeavours to keep the revenue account in surplus in so far as it applies to supplies to research councils or arising in the normal course of educational activities. Amendments Nos. 3 and 4 are purely drafting amendments, consequent upon the others in this group. I beg to move.
Baroness David: My Lords, as I have tried on each occasion to leave out line 31, or to amend it, naturally I can do nothing but welcome this amendment. I am grateful for what the Minister has achieved. Possibly we should have liked a little more leeway. I think that the accounting provision will still cause a certain

433
amount of administrative trouble; but the main problem has been eased and I am extremely pleased about that. I shall be glad to support the amendments.
On Question, amendment agreed to.
The Earl of Swinton The Earl of Swinton moved Amendment No. 2:
[Printed above.]
On Question, amendment agreed to.
Clause 3 [Financial and accounting provisions]:
The Earl of Swinton The Earl of Swinton moved Amendment No. 3:
Page 3, line 43, at end insert—
(" ( ) Before determining a rate the Secretary of State shall consult such bodies representing local education authorities as appear to him to be concerned and any local education authority with whom consultation appears to him to be desirable.").
The noble Earl said: My Lords, I promised at the Report stage that I would bring forward an amendment today, following the withdrawal by the noble Baroness, Lady David, of her own amendment on the same subject. I hope that the noble Baroness will be even happier with this amendment because, if anything it is a little stronger than the version that she put forward last week. It places a duty on the Secretary of State not merely to permit representations to be made, but actively to consult appropriate local authority associations and local education authorities before fixing any minimum rates of interest on loans to companies. I should perhaps also add that we shall of course fully consult with the local authorities on every aspect of the Bill's provisions and effects, including accounts, limited companies, ownership of patent rights, pricing practice, and so on. I beg to move.
Baroness David: My Lords, once again I have to say that I welcome this and am grateful for the Government amendment. The worry throughout this Bill has been that the local authorities have not been trusted enough by the Secretary of State and the Government, and this goes some way at any rate to meeting those considerations. I think that possibly the Secretary of State still appears just a little too much in the Bill, but this is certainly a great improvement, and for that I am grateful.
On Question, amendment agreed to.
The Earl of Swinton The Earl of Swinton moved Amendments Nos. 4 to 7 en bloc.
[Printed above.]
The noble Earl said: My Lords, it might be convenient if I move Amendments Nos. 4 to 7 together. I have spoken to them.
On Question, amendments agreed to.
The Earl of Swinton The Earl of Swinton moved Amendment No. 8:
Page 4, line 29, at end insert—
("( ) Without prejudice to the generality of this section, the powers conferred upon the Secretary of State by this section may be exercised separately and differently as respects England and Wales.").
The noble Earl said: My Lords, the purpose of this amendment is simply to remove any doubt that the Secretary of State may exercise the powers of determination contained in Clause 3 concerning loans
434
and accounts independently in so far as they affect the Welsh Principality. In all other respects the arrangements for England and Wales were identical, including the necessity to consult the appropriate local authority associations before determining loan rates. I beg to move.
Baroness David: My Lords, I am not sure that I understand why we have to have this. Can the noble Earl give a little more explanation why it has to be different for Wales?
The Earl of Swinton: My Lords, because it comes under the Welsh Office, and there are separate finance arrangements for Wales.
On Question, amendment agreed to.
Clause 8 [Short title]:
Baroness David Baroness David moved Amendment No. 9:
Page 5, line 32, at end insert—
("(2) The Education Acts 1944 to 1985 and this Act (except sections 4 and 5) may be cited together as the Education Acts 1944 to 1985.
(3) This Act shall in its application to England and Wales be construed as one with the Education Acts 1944 to 1985.").
The noble Baroness said: My Lords, perhaps I may say that there is a slight mistake in the last line of the amendment. Instead of being "Education Acts 1984 to 1985" it should be "1944 to 1985". This amendment attempts to bring a Bill concerned with further education into line with all the other Acts which govern education. That would seem to be both sensible and logical.
If this amendment is accepted it will reinforce the view that further education is part and parcel of the whole education service. I am sure that the noble Earl, and I hope the noble Baroness also, are well aware that I have constantly tried to get the legal basis of further education onto the statute book. This is the reason I should be pleased if this amendment is accepted. I beg to move.
The Earl of Swinton: My Lords, this amendment was tabled rather late in the day, and I am afraid that we have had very little time to consider its full significance. However, we would welcome its general effect and at first glance would think it acceptable. Among other things it would, I understand, bring to bear on activities under this Bill the various powers exercisable by the Secretary of State for Education and Science in relation to the discharge by local education authorities of their educational functions.
I was a bit surprised by what the noble Baroness said earlier about the Secretary of State coming in rather too much, because this amendment in particular would secure access to the Secretary of State's powers contained in Sections 67, 68 and 99 of the 1944 Act, whereby the Secretary of State can in certain circumstances determine disputes between local authorities and institutional governing bodies and issue directions to any local authority or governing body which is in his view acting unreasonably in relation to, or in breach of, its educational functions.

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It may indeed be desirable that there should be some right of approach to the Secretary of State in relation to the activities under the Bill. But it would, we feel, be an abuse of that privilege if the Secretary of State were to become an arbitrator in ordinary commercial disputes, or be called upon to rule on questions where the district auditor or the courts are better equipped to do so. However, the form of this amendment may also raise wider issues. My department's officials are examining this question now, and with your Lordships' consent we would like a little time to consider its implications more fully. Having heard what I have said about what it allows the Secretary of State to do, perhaps the noble Baroness may feel that she would like to withdraw this amendment.
7.45 p.m.
Baroness David: My Lords, I am not going to withdraw it because of certain things that the noble Earl has said. There are some minor acts of interference in this Bill which we do not like. What I want is that this Bill, which deals with further education, should be cited as one with the principal Acts, and that is the reason for moving this amendment. I understand that in principle it is accepted, and when this has had a little more consideration presumably it could be put into the Bill in another place.
The Earl of Swinton: Yes, my Lords.
Baroness David: My Lords, with that assurance from the Minister, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
An amendment (privilege) made.
The Earl of Swinton: My Lords, I beg to move that this Bill do now pass.
Moved, That the Bill do now pass.—(The Earl of Swinton.]
Baroness David: My Lords, this short Bill has been changed quite considerably since it was introduced in the House two months ago, and I believe changed for the better. I am grateful to the Minister for listening to the criticisms we have made and the anxieties we have expressed about the Bill as it was originally drafted. Although it is a small Bill it will be of considerable importance to polytechnics and colleges of higher education and those who work within them. I think that on the whole they and the local authority associations will be pleased and happier with the Bill as it leaves the House than they were when it came in. It has been amended at every stage.
I daresay that the local authority associations and the people who work in the polytechnics and colleges might have preferred a few more changes, maybe with the Secretary of State having a little less say. However, I think that there has been particularly good co-operation, if I may say so, between the two Front Benches on the Bill and I thank the Minister for that.
Lord Rochester: My Lords, I should like from the third Bench, so to speak, to associate myself with what the noble Baroness, Lady David, has said. I played a minor role in the proceedings under this Bill, but I think I am right in saying that I have been present all the time. After playing a more leading role earlier today, I think there is something to be said for having only a relatively minor part in proceedings.
I should like to join in complimenting the noble Earl on the way in which he has handled this Bill and on the degree of co-operation shown by the Government and the extent to which, as was implicit in the remarks of the noble Baroness, Lady David, there has been so high a degree of consensus among us as the Bill leaves this House.
The Earl of Swinton: My Lords, I am grateful for what the noble Baroness and the noble Lord, Lord Rochester, have said. I too should like to acknowledge the contributions from all sides of the House, which have, I am sure, all been offered in a spirit of constructive endeavour. The Government appreciate this, and for their part have tried to bring forward amendments wherever they perceive, in the light of those contributions, that improvements to the Bill's provisions are desirable. With the amendments passed today, I believe we can feel satisfied that it is now in a form to commend itself to the other House, where I hope it will receive a swift and unimpeded passage.
It may be appropriate at this point to remind ourselves of the Bill's underlying objective, lest it be forgotten in the welter of detail. I very much agree with what the noble Baroness, Lady David, said about this. It is to release the innovative talent which we believe already exists abundantly in polytechnics and colleges throughout the land, so it may bring rewards—financial and otherwise—to the LEAs and their institutions, to the innovators themselves, to their partners in industry and to the nation as a whole. This Bill merely provides the framework. It is up to the LEAs, their institutions and lecturers to make it actually happen.
We have done our job pretty well, judging by all the compliments that are flying round the House, but I should like to pick up one or two loose ends which were raised at earlier stages in the passage of the Bill but which, because they did not relate directly to any amendment, it has not until now been possible to follow up.
I was very grateful for what the noble Lord, Lord Rochester, said earlier and I am glad that he is having a happier passage now than he was at an earlier stage this afternoon. He raised a very valid point about the difficult start-up period of a new enterprise, given that LEAs are under an obligation to use their best endeavours to secure a surplus every year, including the first. I have written to the noble Lord about this, but your Lordships deserve an explanation in the Chamber. The Government see such longer-term ventures as being best conducted through the medium of limited companies rather than in the authority's own name. The authority will examine such a proposition as a whole, estimate the timing and extent of future cash flows, and the consequent capital requirement. If it considers the venture worthwhile, it will make its investment in a limited company—perhaps

437
sharing the financial burden with an industrial or commercial partner. Thereafter, the company's activities will be regulated by company law rather than by the provisions of this Bill, and the company will be enabled to carry forward deficits from year to year as long as its shareholders perceive the expectation of profits arising in the fullness of time. None of this conflicts with the requirement that authorities must seek to ensure that their own revenue account must be in surplus every year. Eventually the company's profits will begin to flow, and dividends to the LEA will then feature in the revenue account.
At Second Reading, the noble Baroness, Lady David, asked whether the House could be told that the total receipt from profitable trading could be used for equipment purposes without counting against LEAs' prescribed capital expenditure allocation. I am happy, even at this late stage, to reply to this point. Income may arise under the Bill in one of two ways: first, in the accounts of a local authority itself, and, secondly, in the accounts of limited companies which the LEA owns, or in which it holds an interest for the purpose of activities permitted by this Bill. In the first case I can confirm that by virtue of Section 72(3)(c) and (e) of the Local Government Planning and Land Act 1980, LEAs may supplement their prescribed capital expenditure allocations by an amount equal to any profits arising from trading undertakings. The supplement takes the form of a retrospective allocation for the year in which the profit was generated. Profits from trading undertakings are not included in the statutory definition of capital receipts for the purposes of the 1980 Act, and accordingly are not subject to the limitation which otherwise applies to the proportion of such receipts which may be spent in any one year. If the income arises in a limited company it will be for the company's board of directors to determine the ways in which the income is applied. The prescribed expenditure rules refer only to spending by local authorities, and do not impinge upon companies.
I think I have spoken enough on the detail of the Bill, and I believe that the Government's hopes for the fruitful consequences of its passage are apparent to all. I will not detain your Lordships any longer, and it remains only for me to reiterate my thanks for all your Lordships' contributions and to wish this Bill good speed in the other place. I beg to move that the Bill do now pass.
On Question, Bill passed, and sent to the Commons.
Baroness Cox: My Lords, I beg to move that the House do now adjourn during pleasure until 8.25 p.m.
Moved accordingly, and, on Question, Motion agreed to.
[The Sitting was suspended from 7.54 to 8.25 p.m.]

Local Government Bill
Consideration of amendments on Report resumed.
Clause 56 [Establishment of residuary bodies]:
Lord Elton Lord Elton moved Amendment No. 81BH:
Page 40, line 15, leave out subsection (4) and insert—
("(4) As soon as may be after the establishment of a joint committee under section 94 below for Greater London or a
438
metropolitan county the Secretary of State shall after consultation with that committee, appoint one of its members to be a member of the appropriate residuary body.").
The noble Lord said: My Lords, Amendment No. 81BH is a technical amendment which alters the effect but not the intention of Clause 56(4). Subsection (4) was introduced to provide for a close relationship between the residuary body for each area and the appropriate co-ordinating committee, should the borough and district council set one up under Clause 94. I am afraid that we have provided for too close a relationship; indeed, for one which is rather uncomfortable, in that the existing subsection would delay establishment of a residiary body in every case until after the related co-ordinating committee has been set up.
It is necessary to set up the residuary bodies quickly after Royal Assent. It is neither desirable nor necessary that my right honourable friend should have to wait for action on the part of others before he can discharge his duty. Amendment No. 81BH removes that unnecessary link but places a clear duty upon my right honourable friend to appoint on each residuary body one member from its co-ordinating committee as soon as may be after the borough and district county councils have set it up. That is the correct order of events and I commend the amendment to your Lordships.
On Question, amendment agreed to.
[Amendments Nos. 81BJ, 81BK and 81B1. not moved.]
[Amendments Nos. 81C, 81 CA and 81 CB had been withdrawn from the Marshalled List.]
Schedule 12 [Residuary bodies]:
Lord Elton Lord Elton moved Amendment No. 81CBA:
Page 150, line 8, at end insert—
("Provision of services.
7A.—(1) A residuary body may by agreement with any relevant successor authority, and on such terms as to payment or otherwise as the parties consider appropriate, provide that authority with professional or technical services.
(2) Each residuary body shall as soon as practicable after it is established—

(a) review the professional and technical services provided by the Greater London Council or the relevant metropolitan county council, as the case may be, and the staff employed and property used by them in the provision of those services; and

(b) in the light of that review ascertain from each relevant successor authority whether it is likely to wish to enter into an agreement with the residuary body under this paragraph, being an agreement the performance of which by that body would make it desirable for any such staff or property to be transferred to that body.

(3) If any relevant successor authority indicates to a residuary body that it is likely to wish to enter into such an agreement as is mentioned in sub-paragraph (2)(b) above that body shall make a report to that effect to the Secretary of State who shall take it into consideration and, if in the light of the report he considers it expedient to do so, make such orders under sections 51 and 99 of this Act as appear to him to be appropriate.
(4) In this paragraph "relevant successor authority", in relation to a residuary body, means a successor authority exercising functions in the area for which that body is established and "successor authority" means a London borough council, the Common Council, a metropolitan district council, a new authority and any other body to which functions or property of the Greater London Council or a metropolitan county council are transferred by or under this Act or any other enactment.")
The noble Lord said: My Lords, in moving Amendment No. 81CBA, I think it will be for your Lordships' convenience if, by leave, I speak also to Amendment No. 82A which is consequential upon it.
Amendment No. 82A: Page 152, line 8, after ("17") insert ("Without prejudice to paragraph 7A above.").
I hope that all the participants in our later debates are at least within earshot. Your Lordships will have seen on the Marshalled List a number of other amendments addressed to the same issue. Two of them, Nos. 81CBB and 81CBC, are in the name of my noble friend Lord Cranbrook. They are not amendments to the Bill; they are amendments to the amendment which I am now moving, which is Amendment No. 81CBA. Our eventual business is to decide between the various forms of legislation bearing on this subject and we will have to choose between the solution prepared by the noble Baroness, Lady Birk—although I think that she may say that it is not an alternative; and of course it is entirely for her to decide how we should do it—and the alternative provided by my noble friend Lord Plummer in his amendment (which I believe is to be spoken to by my noble friend Lady Faithfull), and in a further amendment by my noble friend Lord Cranbrook, on the one hand, and, on the other, the amendment which I offer you as the present preference of Her Majesty's Government. Therefore, until your Lordships have decided that what I now offer you should be considered in its present form as it is printed on Amendment No. 81CBA, or would be better considered in the form which my noble friend Lord Cranbrook suggests, by his two following amendments, we do not know who the contenders are for the space in the Bill that we all want to fill. I suggest to your Lordships that the easiest thing to do is first to decide on the merits of my amendment, as I wish it, or as my noble friend wishes it to be, and then to resume our discussions knowing the form of the amendment, and comparing it to the others.
I shall willingly give way if the noble Baroness wishes to suggest an alternative or to seek clarification because I accept that it is extremely confusing. That is why I am spending this time sorting out how we proceed. It seems that the noble Baroness is content.
Baroness Birk: My Lords, may I make sure that I am quite clear about it? I appreciate the difficulty. I also appreciate that the Minister is going to a lot of trouble to try to get it as clear as possible. It is very difficult. Is the Minister suggesting that, when he has moved his amendment, Amendment No. 81CBA, the noble Earl then moves his amendments, and after that will there be a general debate? Will the noble Baroness move the amendment in her name and the name of the noble Lord, Lord Plummer? It seems to me they have to be discussed as alternatives.
Lord Elton: My Lords, may I respectfully suggest to the noble Baroness that she has chosen to look at my amendment with the amendments of my noble friends Lord Cranbrook and Lady Faithfull? Suppose there were only two of those amendments on the Marshalled List. It would be an easier problem to describe, but it would be no easier to manage. In that case we should
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want to finish up by choosing whether we preferred the amendment of my noble friend Lady Faithfull or the other thing. The "other thing" might be my amendment as it is on the Marshalled List or it might be my amendment as the amendment of my noble friend on the Marshalled List would change it. I therefore think that we ought first to get clear whether my amendment will be my amendment, or will it be my amendment as changed by my noble friend Lord Cranbrook. If we can decide that first, then we can look at the other contenders on an equal basis.
Baroness Birk: My Lords, yes.
Lord Tordoff: My Lords, it may be that if we have a substantive amendment at the end of this first process the amendment of the noble Lord, Lord Plummer, might need to be slightly differently worded in the opening half sentence, to replace what has gone before it and to insert. It is a pure technicality but I think we would have to proceed along those lines in order to take out what had been agreed and to replace it with the amendment of the noble Lord, Lord Plummer, as moved by Lady Faithfull.
Lord Elton: My Lords, subject to correction, I think the noble Lord is absolutely right. If I am right in thinking that that is a technical and consequential drafting matter, there would be no obstacle to doing that because we have Third Reading in which to put it right. I shall not, however, be commending the amendment to your Lordships, as you will understand. I suggest we have that debate and, having decided that debate, we shall come back to the others.
There is a long history behind these amendments and I will seek to condense it. In order to assess the value of the proposals, it is essential to see it in its proper context which is the general purpose of the Bill—which is fresh in your Lordships' minds—of transferring as many as possible of the functions of the abolition authorities to the London boroughs and district councils and to secure in the process an increase in the efficiency and a reduction in the cost of local government. That is the central aim and the main purpose of the Bill. Our proper concern, now as always, is to see how it can best be achieved.
If it is to be achieved in the best possible way we must avoid two opposite dangers. One is the indiscriminate transfer of every existing service and every existing employee from the disappearing authorities to their successors. If we remove a whole level of authority and retain its entire apparatus after it has gone we shall not have achieved a great deal of worth.
Equally we must not discard what is worth while. That is the opposite danger and the one of which my noble friend is most acutely aware. Nor—and this is a particular worry of several noble Lords—must we discharge individuals or disperse teams of individuals only to have the need for them discovered and to have to recruit their replacements soon after they are gone. That would not only be incompetent but quite often a personal tragedy for the people whose careers had been messed about in that way.
The first danger is avoided by ensuring that the successor authorities which will in future be running

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the show are able to decide who and what they need to run it with. If there are services for which they see no need, we must not force them to take them on. The councils represent the ratepayers and they cannot be expected to pay ratepayers' money to the providers of a service for which no users are in prospect.
The second danger is avoided by providing in the Bill for a residuary body. In each abolition area that body will be standing ready to do a number of things at abolition: to take on property, for instance, for which no takers have been found by the end of March; to look after the accumulated debt of the abolition authorities; and to carry out their duties in regard to the pensions of their employees. Another function of the residuary bodies is to act as the employers of those who now supply services to the abolition authorities which may be needed by the successor authorities after abolition but for whom no employer is by 1st April agreed and available.
It became clear to me quite early on that your Lordships would not be happy for the residuary bodies just to wait around to see what services of this sort might be proposed to them by the successor authorities. In the debate that we had at Committee stage on 21st May I therefore undertook to bring forward an amendment that would give effect to what I had described in that debate as the catalytic role of the residuary body. The noble Lord, Lord Melchett, took me to task for that term, and I am grateful to him because it was, I accept, insufficient to describe what I meant. Let me say therefore that the residuary body is to have a positive role in ensuring that the necessary arrangements will be made for specialist and common services.
In fulfilment of that undertaking, I tabled an amendment which appeared earlier on the Marshalled List. By "earlier" I mean earlier in time although it was in the place of the present amendment. The purpose of the amendment then on the Marshalled List was to require the residuary body before abolition to ask every one of the successor authorities whether they thought it likely—not certain, but likely—that they would need any professional or technical services then provided to the abolition authorities for the continuance of which they could not make arrangements before abolition. If there were any such, then the residuary body was to offer itself to take on the provision of that service temporarily, pending the making of a permanent arrangement. If the authority accepted the offer, the residuary body was then required to report as much to the Secretary of State with a view to his making orders under Clauses 51 and 99 of the Bill. These orders would transfer both the staff and the property from the abolition authority to the residuary body before abolition. They would then be preserved for future service to the community.
I was able to discuss this amendment with my noble friend Lord Cranbrook, who has, of course, the enormous advantage of being chairman of the Select Committee principally concerned with these matters. I am most grateful to him for his patient consideration of it. It emerged in that discussion that he was concerned, among other things—and I took that concern to be shared by others—that it was still not clear enough in our drafting that the residuary body
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would have a duty to get out and discover what was available. He did not feel that it would suffice to assume that either the board or the successor authorities would know what was available from the abolition authorities and he feared that some valuable services might perish as a result of their ignorance. My noble friend Lord Beloff and others were also still anxious about the effect of the amendment on the existing archive services in the metropolitan county councils. Of course, that is just one aspect of the concern that my noble friend has. That is w by I withdrew the amendment that appeared in the fourth Marshalled List and substituted what your Lordships can now see on the fifth Marshalled List.
Subsection (2) makes it an explicit duty on the residuary body to do two things before they go to the Secretary of State from transfer orders. First, under paragraph (a) they must review what is available, not just in general terms but specifically. They must review the professional and technical services provided, together with the staff employed by them to provide those services and the property used by the staff in order to do so. The second specific thing they must do, under paragraph (b), is, in the light of that review, to ask each and every successor authority in their area whether it is likely—again I say not "certain" but "likely"—that it will want them to provide the service to it on a temporary basis. If the answer is "Yes". they must approach the Secretary of State for orders transferring both staff and property to them for that purpose.
The amendment is in part designed to reflect an undertaking I gave to the noble Lord, Lord Graham of Edmonton, in relation to an amendment moved in Committee on purchasing organisations. I said then that I wanted to look further at the text of what he had proposed because I saw a link with what we are doing here. Your Lordships will see that the co-ordinating committees, as I think they are better called—and, if your Lordships think it is a good idea, I will arrange for them to be so described in the margin of the Bill when it is reprinted, which I understand is not something which is done by amendment but by persuasion—will have a specific duty to consider the arrangements for the joint provision of services in consultation with others, including the successor authorities.
That completes the pattern and ensures that everyone participates in the process of looking both at the long-term and the short-term arrangements. We shall be discussing Amendment No. 84B later, which is where this strikes, but it is an important part of this mosaic, made up of various powers and duties in different parts of the Bill, and I would not want your Lordships to overlook it.
Amendment No. 84B: Clause 94, page 70, line 19, at end insert—
("( ) consider, in consultation with the authorities and bodies mentioned in paragraph (c) above, whether they could with advantage make joint arrangements for the provision of any services or goods required in connection with the discharge of the functions of those councils, authorities and bodies and, if of that opinion, promote the making of such arrangements; and").
Arriving at these amendments has been a long process, but it has produced an amendment which, in response to your Lordships' concern, very clearly spells out what is to happen on abolition. I commend

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it to your Lordships as the product of a long and strenuous effort to meet the wishes of your Lordships' House and of your Lordships' Select Committee.
In conclusion, I would say that my noble friend has two concerns remaining—I say this because of what is on the Marshalled List—and his two amendments to my amendment are intended to meet them. The first is that these processes shall be completed in good time; and the second, if I have understood him aright, is that no worthwhile service shall be left out of it. I sympathise with both ideas and I shall listen with the greatest interest when he explains them. I ask him only that when he does so he will take care to answer one question which I think must be answered if we are fully to understand what he proposes. It is simply this. Given the chain of mandatory duties which he establishes from the point at which the board carries out its review in subsection (2) of the services available to the point in subsection (3) where the Secretary of State transfers the staff and property to it—and in his amendment he has removed the discretion my right honourable friend would have at that point—where does any discretion exist to refuse a request—perhaps an ill-informed or misguided request—from a single authority, a single London borough or a single metropolitan district, to provide an entire service which not one of its fellow boroughs or districts wishes to use?
We have come a long way towards agreement on this issue, and I hope that we can complete the journey tonight. I beg to move.
8.45 p.m.
The Earl of Cranbrook The Earl of Cranbrook moved, as an amendment to Amendment No. 81CBA, Amendment No. 81CBB:
Line 21, after ("shall") insert ("not later than 1st March 1986").
The noble Earl said: My Lords, I should like to speak specifically to this single amendment for the time being because it is an issue which is entirely separate from Amendment No. 81CBC. I thank my noble friend very much for his historical resumé of the events which led up to his Amendment 81CBA and for his appreciation of the concerns of your Lordships' Select Committee which is looking into the scientific and technical capacity of local government. I will pick out one point that he did not mention. He has altered the wording being used by your Lordships' Select Committee, which was "scientific and technical services", and has substituted the word "professional".
The Select Committee very much welcome this. They themselves did not feel sufficiently emboldened to step outside their terms of reference, but clearly the use of the word "professional" in these circumstances without any doubt embraces such things as archives, conservation concern, electrical engineers and others who had possibly felt—not in our opinion but in their opinion—that they had been left out by our terminology of "scientific and technical"; so I am very glad to see that word there.
The other points have been dealt with very adquately by my noble friend. It was a serious concern
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of your Lordships' Select Committee that the successor authorities—that is to say, the metropolitan districts and the London boroughs—because they had not been handling these new functions which had been put upon them would not realise their significance and importance in regard to maintaining the fabric of metropolitan life. These new services will be outside the experience of the successor authorities. The services about which we are concerned are not those which are duplicated at the two tiers and therefore are not services which in the main are appropriate for any form of economy of scale or condensation under the present legislation. These are the services about which your Lordships' Select Committee were highly concerned. They were anxious that every possible step should be taken to ensure their perpetuation, along with the staff who run them, as my noble friend has emphasised.
Unfortunately, I do not have precise figures of overlap in membership between elected councillors of metropolitan districts and metropolitan county councils. I have had some anecdotal discussions with the metropolitan counties and it appears that after the 1972 Act came into force there was enthusiasm among citizens of the metropolitan counties to be on both councils. But the pattern has now changed and there is now only a very small overlap. There are now on the councils of the lower tier very few people who have simultaneous experience of organising affairs as an elected member of the metropolitan counties. That is another reason why I think your Lordships' Select Committee are justifiably concerned about this issue.
I turn now to the point of Amendment No. 81CBB. My noble friend has emphasised that there is a clear timescale built in, but the only timescale your Lordships' Select Committee saw when they looked at this was in Clause 2 of his amendment, concerning the words "as soon as practicable". Quite clearly, that means "pretty quickly", but it does not have a date to it.
The second point of concern is that in subsection (3) the Secretary of State is required to make orders under Sections 51 and 99. The point concerning action under those two sections is that it is no longer possible after abolition date; so if by any chance the timescale were to get so stretched that no report reached the Secretary of State in time for him, with his officials' advice, to reach a decision on this matter, the whole matter could then lapse and this very desirable investigation into the worth of these important services would be lost. Therefore, we have proposed a terminal date before which this report must be submitted to the Secretary of State. We chose one month before abolition date, and that is why we proposed not later than 1st March 1986. We feel that one month is the very least, the minimum amount of time that would allow a reasonable decision to be made. We are anxious that this report should not be presented too late, and of course it will be quite disastrous if this report were not ready by abolition day, because the powers of the Secretary of State would then be gone.
Lord Campbell of Alloway: My Lords, my noble friend Lord Cranbrook speaks to Amendment No. 81CCB only. May I seek guidance? Are not

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Amendments Nos. 81CCB and 81CBC the obverse of the very same coin?
The Earl of Cranbrook: My Lords, I consider them to be totally separate issues.
Lord Campbell of Alloway: Very well.
Lord Harmar-Nicholls: My Lords, I am on a very narrow point. I hope that my noble friend will be able to come to an arrangement with the noble Earl, Lord Cranbrook, on this. I must say, with my experience in Parliament and business, that I am a little loth to put in a fixed date if it can be avoided. If it cannot be avoided for good reason, I understand that. But I find that, if you write a fixed date into a statute—in this case, 1st March—for all sorts of reasons that one cannot envisage one may not be in a position to come to a right conclusion in time. If you have written in 1st March, you are really hidebound and may be giving yourself unnecessary problems. If it can be sorted out—it is not a point on which we are far enough away from each other to quarrel—I would myself try to avoid putting in a date which might be an embarrassment for reasons which at this moment we cannot envisage.
Lord Tordoff: My Lords, with all due respect to the noble Lord, Lord Harmar-Nicholls, there are already dates in the Bill, like 1st April 1986. It is because of that, as the noble Earl, Lord Cranbrook, has explained, that the Select Committee wished to have a date in, and whether it is three weeks, four weeks, or a calendar month is unimportant. Since there are already dates in the Bill when certain things like the abolition have to happen, it was felt necessary to put in a date which was a month before that terminal date.
Baroness Birk: My Lords, it is absolutely essential if this amendment is either to be carried or accepted by the Minister that that should be a date. This is a date only a month before abolition and the amendment of the noble Earl says "not later than", so I imagine he would hope that some of these things would have got under way before that. When I hear the noble Lord, Lord Harmar-Nicholls, saying that things may slip, it makes me even more worried about what will happen by the time we get to abolition date.
Lord Elton: My Lords, on this amendment, which deals with the matter of the date, I should like to be as helpful as I can because my noble friend and I are at one in wanting things to happen as swiftly as possible. I am at one with the noble Baroness and with the noble Lord, Lord Tordoff. What makes me anxious—and my noble friend Lord Harmar-Nicholls put his finger on it, and in fact I thought that my noble friend Lord Cranbrook almost accidentally put the point to your Lordships, because he said what would happen after 1st March and then corrected himself and then said this must be done before 1st March—is that the paragraph requires the residuary body to make a report if any of the successor authorities says that it is likely to wish to enter into an agreement. I am not worrying about the residuary body being dilatory, but suppose for the sake of argument that circumstances
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are such that the authority which is requesting the service, either through incompetence or simply because it did not realise the need in time, does not put in its request and make known to the residuary, body the answer to the residuary body's question, "Do you want this service?" until, say, 3rd March. The danger is that the amendment that my noble friend intends to be helpful would mean that the residuary body could do nothing, and although he would make it likely that more requests would be made before 1st March, it would mean that after 1st March no request could be granted. I do not think that that is his intention.
I should like to be helpful to my noble friend in this way because we have started a good tradition of good conversation he and I, and as the Select Committee Chairman, I think it proper that he should be able to do that. I should like to consider with him what further steps we can take to ensure expedition, but I would ask him not to insist on putting a date in because, although I hope that all these things will be cleared up before 1st March, I do not want the boat to sail with anyone left helpless on the pier.
The Earl of Cranbrook: My Lords, I should like to ask my noble friend whether he agrees that the successor authorities include not only the metropolitan districts and the London boroughs but also any authority in the terms of this amendment such as the Arts Council, shire counties in some cases, and the Secretary of State himself. All of these, as I understand it, are bodies which will have to be consulted under the terms of his amendment because all of them will receive some form of successor authority from the present authorities. Therefore there is a long list. I should have thought it was at any rate within the power of the Secretary of State himself, being one of the people whom the residuary body is obliged to consult, at least to ensure that he himself responds before the terminal date.
Lord Elton: My Lords, by your Lordships' leave, my noble friend is quite right. Anyone who receives powers or duties from an abolition authority is the successor authority if he is the authority receiving them. I am not trying to belittle the size of the task; all I am saying is that, if you use the means which my noble friend has chosen to expedite matters and say that if you are not there by 1st March the door will be shut and there is no point in knocking on it, I am sure that will not achieve what he wants to happen. Therefore we must find some form of words which achieves the early application but which does not disbar the involuntarily late applicant. In other words, I want to do what my noble friend wants to do but I do not think this is the way to do it and I am asking him to assist me between now and Third Reading in devising a way to do it.
Lord Tordoff: My Lords, I wonder if the crucial word is not the second word in paragraph 3: "If any relevant successor body"—or am I reading the thing back to front? It seems to me that it is not so much a question of people getting shut out, at the end of the day. It is a question of ensuring that somebody triggers the process.
The Earl of Halsbury: My Lords, we seem to be very close to agreement on this troubled matter and I will try to pour some oil on troubled waters, if I may. I recognise that the noble Lord, Lord Elton, has really gone to a lot of trouble to try to get his amendment into a form that would be acceptable to the professions involved in this. I also recognise that the noble Earl, Lord Cranbrook, has a duty to his Select Committee as it were to fight his corner as best he can. I believe both parties are so near to agreement that if the noble Earl could see his way to responding to the noble Lord in charge of the Bill and deferring final resolution of this matter to the Third Reading of the Bill, it would be very helpful at this stage.
The Earl of Cranbrook: My Lords, not for a moment would I want to claim that your Lordships' Select Committee is the repository of all wisdom. I am grateful to my noble friend for what he has said and for discussions in the past. I look forward to further discussions on this point. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
9 p.m.
The Earl of Cranbrook The Earl of Cranbrook moved, as an amendment to Amendment No. 81CBA, Amendment No. 81CBC:
Line 23, leave out (", if in the light of the report he considers it expedient to do so,").
The noble Earl said: My Lords, this is a separate issue on which I can be very brief. This amendment would delete the words in Clause 3 which appear to allow the Secretary of State not to do what he is asked to do. It is just as simple as that. The Select Committee feels that, if the need for the continuation of these important services is recognised, albeit only by a small minority of one or two of the successor authorities, the need is likely to be best met by the mechanism proposed by this amendment.
In addition to the worry which I expressed just now—that is, the worry about an important service being left out—there is also concern about future duplication. It is a possibility that some of the successor authorities may feel that they themselves have the scope, the capacity and the power to carry on these services and to set up their own organisations for these important services within their own district or borough area, and thereby not to join in a common county-wide or London-wide scheme. This will lead to duplication and will be wasteful, and it is very much what I understand my noble friend on the Front Bench to be opposed to. That is the second half of the worries of your Lordships' Select Committee. That is why your Lordships' Select Committee envisage that there are circumstances where the Secretary of State must respond and not vacillate. I beg to move.
Lord Campbell of Alloway: My Lords, I am afraid that again I do not understand because I am sure that my noble friend Lord Cranbrook would wish the Secretary of State to take into account the report in some form or other. As a matter of rather technical and boring legal drafting, his amendment has the effect of precluding the Secretary of State from taking it into
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account. I cannot believe that that is the result that my noble friend would want, and if my construction is right is this not yet another matter that ought to be sorted out in amity rather than on the technical construction of this amendment? I do not think that the construction gives my noble friend what he could conceivably want for the reasons that I have stated.
Lord Tordoff: My Lords, if I may attempt to get into the discussion and to reinforce one or two of the points that the noble Earl has made—and I speak again as a Member of your Lordships' Select Committee's subcommittee—it seems to me that the noble Lord who has just spoken has perhaps slightly misread what is being said because the important words are that he "shall take it into consideration". I think he is suggesting that they will be removed, but they will not. What is being taken out is the part about him considering it expedient to do so. Underlying all this—
Lord Elton: My Lords, with respect, the noble Lord has left out the one word which matters, which is "if".
Lord Tordoff: My Lords, let me try to rephrase that then. The subsection states that the Secretary of State "shall take it into consideration" and then we delete from there on. But I still maintain that the important part of that phrase is whether he considers it expedient. What the Select Committee is seeking to do is, as it were, to remove from the Secretary of State that discretionary power for the very good reason that what we are deeply worried about is the lack of confidence which is present in these teams of excellent people, whom we have talked about so many times in the course of this debate and who we refer to as a result of our Select Committee's report. We are terrified that a number of these teams are already breaking up, and we are anxious that the Government will do everything in their power to reassure those people who are in a state of some trepidation at the moment.
I am not suggesting that this is an amendment which the noble Earl would wish to push to the limit, and as has already been said I hope that some accommodation can be reached. But I assure your Lordships that this is a matter which is giving grave concern to these teams of professional and technical services who, in many cases, are totally unknown to your Lordships, but who we have had the privilege of meeting and getting to know and understand in the course of our investigations and deliberations.
Lord Harmar-Nicholls: My Lords, I agree with the general view. Again, I hope that this can be sorted out. The difference is so narrow and everybody seems to want the same thing. The only contribution that I want to make is this. I think that by leaving in the words that the amendment seeks to remove, you are likely to make the report itself more responsible than it would be without them. If it is known that what could flow from the report could affect whether or not the Secretary of State will make the order, then, in the making of the report, there is just a chance that the report will be in a more responsible form, marginally, than it would be if it were felt that the report would not

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have any bearing upon the making of the order by the Secretary of State because without those words the Secretary of State has to make the order.
But, at the end of the day, the Secretary of State is responsible for the orders that he makes, and I doubt whether he would make an order unless he was satisfied that the basis was in the general good and in accordance with what was intended by what would then be a statute. But my main point is that if the words that it is suggested are removed are left, I can well see that that would make the report upon which everything hinged that much more responsible because people would know that it had a special significance in the eventual making of the order.
So, on balance, I would rather like to leave things as my noble friend said in the amendment. But I do not think that the differences are so great that there ought to be any great pushing, and I am certain that while discussions, such as will be going on to deal with the last amendment, are taking place, this could be included, and I am certain that an answer could be found.
Baroness Birk: My Lords, having listened to what has been said, and having read the amendments as carefully as I can, I certainly support the noble Earl and the noble Lord, Lord Tordoff, because what the amendment is quite rightly doing is cutting down some of the discretion of the Secretary of State, and there is plenty of discretion still left as it is. This is really quite otiose and is not only not necessary, but makes the whole case much weaker. I think that a very good—
Lord Elton: My Lords, I am trying to stay within the Standing Orders for Report stage, and I know that the noble Baroness cannot make another speech; but there is something that I should very much like her to do in this speech. I should like her to point out where the discretion of the Secretary of State is in the rest of the amendment, because it is crucial to what we are now considering.
Baroness Birk: My Lords, the subsection states that the body shall make a report to the Secretary of State "who shall take it into consideration". Therefore, he has this element of discretion in taking it into consideration. It seems to me that this is what I would call a belt and braces job because in addition there are the words:
"if in the light of the report he considers it expedient to do so".
I submit, like the noble Lords who have spoken, that those words are not only necessary but weaken what I trust the Minister was hoping to achieve by that subsection. Therefore, it seems to me that they strengthen the whole provision and make it very much more viable.
Lord Elton: My Lords, we are under the difficulty of not being in Committee, but I hope we have overcome that. I am most grateful to the noble Baroness for the postscriptorial part of her speech.
I do not think that the amendment is quite so marginal or so susceptible to sailing across the oily waters created so kindly by my noble friend Lord
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Halsbury as the other. We have put a link into a chain which was left purposely Incomplete. At present the chain starts at paragraph (2) where it says:
"Each residuary body shall".
That is a duty; that is where the chain is anchored. What shall it do? It shall do two things. The first is to carry out at (a) a review; and the second is, in the light of that review, at (b) to,
"ascertain from each … successor authority whether it is likely to wish to enter into an agreement with the residuary body",
for the purposes we are discussing. There is as yet no discretion at all for the residuary body.
It has to ask the question and the residuary body can then answer it. What happens when it gets an answer is described in paragraph (3). If the answer is, no, the chain ends. If the answer is, yes, then paragraph (3) goes on to say:
"If any relevant successor authority indicates to a residuary body that it is likely … that body shall make a report to that effect".
So it must carry out the review; it must ask the question, and it must accept the answer. If the answer is, yes, it must go to the Secretary of State and make its report.
At that point we thought that the Secretary of State at least should be able to weigh up the report and perhaps take a view from the residuary body and perhaps say, "Well, no, this service is not required", or, "No, not all of this service is required". One cannot foresee every eventuality. Therefore we put in not only that the Secretary of State shall take the report into consideration—we are all agreed about that, but that is the next link in the chain—but then we put in the break link which is,
"If"—
that is the vital word—
"in the light of the report he considers it expedient to do so",
then he shall make orders under Section 51.
With respect, I must say to the noble Lord, Lord Tordoff, that if we take out those words—I think we are all clear that it is a continuous chain until we get to those words—the chain finishes up like this. The Secretary of State gets the report. It is made to that effect to the Secretary of State in line 22 who,
"shall take it into consideration and make such orders".
Those words do not carry a discretion. That is why I asked the noble Baroness to tell me where she thought the discretion was. He is allowed to consider them but he may not allow the consideration to influence his action. Whatever his consideration he must make such an order.
Baroness Birk: My Lords, perhaps I may interrupt the Minister to ask him a question. He says that it does not increase the Secretary of State's discretion, but,
"considers it expedient to do so",
is very much a subjective decision; so the Secretary of State does have added discretion.
Lord Elton: My Lords, the noble Baroness has perhaps confused me because those are the words to come out. Those are the words that my noble friend wants to remove from the amendment. I asked the noble Baroness what discretion would then remain.

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There is no discretion remaining. The noble Lord, Lord Tordoff, is going to tell me that there is. I am much relieved because I am looking for it.
Lord Tordoff: My Lords, we may be in procedural difficulties here but perhaps I may interrupt the noble Lord the Minister. What do the words,
"as appear to him to be appropriate"
mean?
Lord Elton: My Lords, that, I must say, is a most useful interruption. I thought I had been terribly thorough and clever, and I shall doubtless have a small piece of paper any minute to tell me that I had been; but before that piece of paper arrives I think I have not been because it appears to me that the words,
"as appear to him to be appropriate",
taken after the word "consideration" may in fact contain an element of discretion which I had not supposed was there. But I am advised that it would be possible to read this, I regret to tell your Lordships, to mean "whatever order would be appropriate to give effect to the request".
I am under guidance here and must take the best advice. I can tell your Lordships that my rather lengthy experience of it over the past few weeks is exceedingly good. The advice I have is that the chain would finish up with the Secretary of State taking the report into consideration in order to find out what would be an appropriate order to give effect to the request. That in fact is not a discretion. It is not a discretion to disagree with the report. It is not a discretion to say, "You only need half this service". It is not a discretion to say, "You do not need it at all". It is a discretion only to make the order match the request.
If I am right in this then I am right in my starting point of this argument, which is that that is to leave an unbroken chain of obligation from start, in paragraph (2), to finish, in paragraph (3). That means that every request must be granted by the Secretary of State, by transferring the whole of the function, the whole of the staff, and the whole of the property necessary to deliver that function from the abolition body to the successor authority.
I ask your Lordships to follow that proposal through a little further. It would mean that only one authority in every county, and only one borough in London (and it need not be a borough or a district because, as my noble friend said, it could be one of the joint authorities, and so on) would need to request the service for the Secretary of State to be bound to transfer it to the residuary body.
9.15 p.m.
I suggest that the effect of that would be to invert the intention we have that there shall be careful consideration of what is necessary for the successor bodies, and that it should be that which is transferred. It seems to me that it might be a good thing if I do not hurry towards the inevitable point in time we are rushing towards, when another of my noble friends has to move an amendment.
The Earl of Cranbrook: My Lords, perhaps I may ask my noble friend a question at this point because another issue has been raised by my noble friend Lord Harmar-Nicholls. What is the nature of the report? The Select Committee did not properly analyse this issue because it was not one which had become apparent to them. My noble friend is so good at thinking on his feet that he has sharpened this issue in my mind and I tried to respond.
The Select Committee had envisaged that the report would be simply comparable to, if one were to take a military analogy, a company sergeant major reporting, "All present and correct, sir". The report might merely say that there is one successor authority that wishes the service to continue. If my noble friend envisages that the report would be of, let us say, at least 15 pages and carefully argued, then that is a different matter. Perhaps it would be advisable to have further discussion and think about this issue on another occasion.
Lord Elton: My Lords, I believe there is a limit to the number of times I can sit down and stand up without making more than one speech and I am not sure that I have not reached it. I want to leave it clear that if what my noble friend wants is to leave no discretion—and that is, I regret, the effect of what he now proposes—then I do not think that is right. I would say that and I would stand on it.
If my noble friend wants there to be a discretion and wishes to consider how it should be evolved, then I am content to consider that matter with him between now and Third Reading, to see whether there is common ground between us. It is really a question of whether or not he believes in any sort of discretion. If he does not, then it would probably shorten the proceedings if we were to decide the issue now. It would also have the advantage that we would have an amendment of some sort to consider with the others.
If my noble friend does wish there to be an element of discretion so that it is not a foregone conclusion that one single request from the smallest authority in a large conurbation must result in the transfer of all the staff, regardless of the length of the report, then I would have to say no, and I would have to say it loud and clear. If my noble friend wants a discretion, then I shall be happy to consider it.
Lord Harmar-Nicholls: My Lords, perhaps I may ask a question which could be of help to the noble Lord, Lord Tordoff, and which might meet to some extent the point made by my noble friend Lord Cranbrook. If the words in question are left in, it would mean that the Minister's discretion will be limited to having good reasons for disagreeing with something in the report. This means that he would have to justify not agreeing with what he was being asked to do by saying, "It is this in the report which I do not think would allow me to do it".
If it is that the words in question are not there, then there will be no restriction on the Secretary of State being able to flout the report. To some extent I am saying that leaving the words as they are is limiting the power of the Minister because he must then refer to

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what is in the report to justify his not agreeing with what he is being asked to do.
Lord Elton: My Lords, with the final leave of your Lordships, I believe that my noble friend is right when he says that there is a limit on what the Secretary of State could decide because the decision would be justiciable and he would have to decide on grounds that were reasonable. The grounds he is permitted to consider in the statute would be the report.
I think, however, that we are treading on tricky and detailed ground. I just want to ask my noble friend this question: does he believe in a discretion or does he not? If he does, I shall be very happy to discuss it with him between now and Third Reading without committing myself to agreeing with him. If, on the other hand, he does not agree with a discretion, then I have to say that there would be no point in doing so.
The Earl of Cranbrook: My Lords, having heard the words of my noble friend, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Deputy Speaker (Lord Murton of Lindisfarne): My Lords, the Question which I now have to put is that Amendment No. 81CBA be agreed to.
Baroness Faithfull: My Lords, I am in some procedural difficulty. I am informed from the Table that I must speak at this stage to my Amendment No. 81CC because it goes, so to speak, alongside Amendment No. 81CBA of the noble Lord, Lord Elton.
Amendment No. 81CC: Page 150, line 8, at end insert—
(".—(1) A residuary body shall provide any relevant successor authority, on such terms as to payment or otherwise as the parties consider appropriate, with administrative, professional or technical services as provided in this paragraph.
(2) The administrative, professional and technical services referred to in sub-paragraph (1) above shall include the following:—

(a) administrative, financial, legal and personnel services;

(b) acquisition, disposal and management and maintenance of property;

(c) scientific, computing and central purchasing services;

(d) research, intelligence, information, library and archive services; and

(e) such other services as may be necessary for the proper exercise of the functions of the authorities specified in subparagraph (3) below and for the proper transfer of those functions from the Greater London Council and the metropolitan county councils to those authorities.

(3) The relevant successor authorities referred to in sub-paragraph (1) shall be—

(a) any new authority established by or under this Act (other than the Inner London Education Authority established by section 18 of this Act) and any joint board or joint committee of London borough councils and the Common Council and metropolitan district councils formed for the purposes of the performance of any function transferred by or under this Act;

(b) any London borough council or the Common Council or metropolitan district council or the Inner London Education Authority;

(c) any other body to which functions or property of the Greater London Council or a metropolitan county councils are transferred by or under this Act or any other enactment;

(d) the Secretary of State in respect of any functions or powers exercisable by him by virtue of this Act.

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(4) it shall be the function of the residuary body alone to provide the services referred to in sub-paragraph (2) above to the authorities specified in paragraph (a) of sub-paragraph (3) above and the Secretary of State may by order require the relevant residuary body to provide such services to any of the authorities specified in (b), (c) and (d) of sub-paragraph (3) above.
(5) Each residuary body shall take all practicable measures to maintain and preserve such of the services of the Greater London Council and of each metropolitan county council relative to the matters referred to in sub-paragraph (2) above as may be necessary for the purposes of this paragraph and to that end the Secretary of State shall take appropriate steps under section 51 of this Act to secure the transfer to the employment of the appropriate residuary body of the necessary staff of the Greater London Council and of each of the metropolitan county councils.").
I should first say that I shall not be moving this amendment, but I am told that I must speak to it at this stage.
I am two-in-one tonight because my noble friend Lord Plummer is not here, and as I am speaking on his behalf, as well as for myself I therefore ask the indulgence of the House. I know that my noble friend Lord Plummer would wish me to thank my noble friend Lord Elton for his great generosity and kindness in the amount of time that he has given to us both on this matter.
During the speeches which my noble friend Lord Elton made today he at one stage referred to the key role of residuary bodies. He spoke of strengthening the role of the residuary bodies and also about the effect of cost. This Bill sets up a demand for services, and the amendment tabled by my noble friend Lord Plummer and myself deals with the mechanism by which those duties can be supplied through the residuary bode to the joint boards and constituent authorities.
The reason why my noble friend Lord Plummer and I have moved the amendment is, first, on the question of costs. The amendment of my noble friend Lord Elton states that:
"A residuary body may by agreement with any relevant successor authority, and on such terms as to payment or otherwise as the parties consider appropriate, provide that authority with professional or technical services."
Our amendment is close to that of the noble Lord, Lord Elton, except for two quite ridiculous words which we have often discussed in this debate; that is, "may" and "shall". The amendment tabled by my noble friend Lord Plummer and myself states that:
"A residuary body shall provide any relevant successor authority, on such terms as to payment or otherwise",
and so on. The reason we have used the word "shall" rather than "may" is that there should be a clear understanding on the part of the staff as to exactly what is the position. We think that that is very important.
Secondly, we believe that we ought to be absolutely sure that there will not be duplication and proliferation of staff. I ask my noble friend this question. If the word "may" rather than "shall" is used, will this not mean that the various constituent bodies will decide to appoint their own staff instead of asking the residuary body for staff? This will mean, therefore, that if the various different bodies do not use the residuary body, they might duplicate staff and take on staff which they could well have done without and which could have been used by the residuary body.

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I shall not go into the figures of Coopers and Lybrand, and so on, but that would put up the cost of the new authorities, whereas if the residuary body has—what shall I say?—two grave diggers, it may decide that they need not go to the various authorities but could be used by all of them. But if each body appoints all its own staff because it may do so, there may be duplication, waste of money and waste of personnel. That is the core matter about which we are worried.
It will not necessarily apply to all the staff. A number of them will have found jobs and posts with the constituent bodies. But it will mean that there can be consultation with the residuary body over which staff are appointed so that there is no duplication in the various constituent bodies, and it would therefore be cost-effective.
I think that I want to be guided by the Minister. What I have been saying I was saying for myself. The noble Lord, Lord Plummer, has given me his speech and it is a long one. I knew that this might happen and so I gave my noble friend the speech and he has read it. I am sure that if I am guided by him he will say that I need not read the speech, and so it is with the rest of your Lordships' House whether you wish me to read the speech. I think that I have given the core of what is in it.
Lord Elton: My Lords, my noble friend asks for guidance. I think that it is the position in your Lordships' House that one makes one's own speech and not that of somebody else. I rather get that vibration from the Table, and I am fairly confident of it.
Baroness Faithfull: My Lords, we are so close and yet so far apart. The real difference is between my noble friend the Minister and myself, and so I shall speak for myself and not for the noble Lord, Lord Plummer. It is simply a question of "shall" or "may". Suppose for argument's sake the various bodies do not ask the residuary body because the word is only "may". What happens? Is my noble friend happy that each body should appoint—
Lord Elton: My Lords, this is not the Committee stage but I must put my noble friend right. The residuary body has no option about asking the questions. It has to, under paragraph 2. The "may" or "shall" about which she is talking, I think, is in paragraph 1. That says that the bodies must have the option of not setting up an agreement if the authority of which they have asked the question does not want an agreement, so it is more than moving that word.
Baroness Faithfull: My Lords, my noble friend, as I said before, has a very high IQ and I have a pretty low one.
Lord Elton: Neither statement is true, my Lords.
Baroness Faithfull: My Lords, I want to be quite clear over the question of "may" and "shall". Is it absolutely laid down and clear that the constituent
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bodies will ask the residuary body for staff; or will the constituent authorities appoint their own staff regardless of the residuary body because they do not necessarily have to apply to it? I think that that is the important point.
As I said before, the staff—those who are not necessarily going to a job or who have not been appointed to one—will know that there is the residuary body with whom they can consult. Also, the residuary body will see that there is no duplication among the various bodies. I think that that will save cost, duplication and proliferation. Suppose, for instance, the constituent body decides not to use the residuary body and orders its own computer when the residuary body has computer services and computer staff. That could apply to many other services as well. So we are really looking at the cost and also a definite structure for the staff. I understand from the Table that I do not move this, and that I sit down and listen to the Minister's reply.
9.30 p.m.
Lord Elton: My Lords, with your Lordships' leave, my noble friend is not quite right. This is Report stage. She has made the second speech in the debate on the amendment that we have now decided will not be amended, which is in my name on the Marshalled List. A series of your Lordships will no doubt want to address the same subject. I shall reply at the end. At that stage, your Lordships will vote, I hope, if there is a Division, to put my amendment in. You may accept it on the nod. I do not know. If your Lordships do not like it, you will vote against it and try to take someone else's amendment.
The noble Baroness can now forget all that has gone before in discussion on my amendment as to whether it should be changed or not, because my noble friend Lord Cranbrook, behind her, has decided that it should not be changed. So that is No. 1 on the counter before your Lordships when you decide what you want to put in the Bill. The amendment of my noble friend Lord Plummer, in the name of my noble friend Lady Faithfull, would be there but she says that she is not actually going to put it there. Any other noble Lord who would like to have an amendment in place of the amendment that I propose should now say so. I think that I have got that right? I have got it right.
Baroness Birk: My Lords, this is extremely complicated and makes things more difficult. We are left a little in the air over what is to happen between the Minister and the noble Earl when they presumably get together over his amendment.
Lord Ponsonby of Shulbrede: The noble Earl, my Lords?
Baroness Birk: My Lords, yes, the noble Earl, Lord Cranbrook. I am speaking to the Minister's amendment but, as he has explained carefully, taking in the comments made on it by the noble Baroness, Lady Faithfull. I should like to take the Minister's amendment, which deals with an important subject, and get it into perspective. It is rather ironic but also refreshing that following a Committee stage during

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which the Government attacked the giving of functions to the residuary body, they should now be seeking to do so themselves. One of the reasons for the difficulty (it explains why we have been going backwards and forwards, as though in Committee stage, by way of questions and interventions) is that this appeared at Report stage. Secondly, there has been an alteration to the amendment that was originally tabled by the Government.
It was clear last week, from the comments made at that time on trading standards by the noble Lord, Lord Mottistone, and on archives by the noble Lords, Lord Campbell of Alloway and Lord Beloff, that the case had not been met even among the Minister's own noble friends, let alone those of us opposite. So now we have this changed amendment, which is quite difficult to comprehend in one moment, together with notes from the Box that we do not have in front of us on the question of "appropriate". Every concession that the Government have made takes the proposals further from what the noble Lord the Minister has constantly called the philosophy of the Bill; namely, the transfer to boroughs and districts. It is good that this should have happened. We have seen a grant scheme created to make up for the fact that boroughs and districts cannot, on their own, fund organisations across a wide area. Historic buildings in London which were originally to pass to the boroughs will pass now to the Historic Buildings and Monuments Commision. That is good. However, it leaves the metropolitan counties in a difficulty.
The balance of arts funding has shifted decisively from localisation to reliance on central Government funding through the Arts Council. I would say in parenthesis that the Arts Council is not very happy about the level of its funding, but I do not expect the Minister to comment on that point. The transfer of waste disposal has gone to a joint board. That was really no more than recognition by the House that the Minister intended to use his reserve power to create county-wide arrangements because this is what would have had to happen in the end. This is a much clearer and cleaner way of doing it.
There are also the issues of archives, trading standards and civil defence in the metropolitan counties. There are many variants of county-wide solutions. Almost every day the Government have been accepting the need to preserve county-wide functions, services and professional and technical expertise. Incidentally, I also much prefer the word "professional" because I hope that it will include archaeology. They have accepted these as long as they go under different names, and as long as one did not use what has become almost a pornographic phrase in this Bill—"county-wide organisation". It is really a rose by any other name. That is what we are gradually setting up.
Perhaps I may look briefly at the options before us. The Minister's amendment seeks to give the residuary body the responsibility for plugging the gap in the Bill in relation to professional and technical services. This was pointed out with great force before the Second Reading by the Select Committee on Science and Technology.
In our view this amendment contains a number of flaws. First, it fails to cover the best option proposed by
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the Select Committee. Paragraph 75 on page 23 of the Select Committee's report states:
"… there is an obvious case on the grounds of economy for replacing the multiplicity of joint authorities with a single joint authority in each metropolitan county and in London. If this were done, the combined authority would be an excellent employer of scientific and technical services and would develop the scientific and technical links between functions which already exist. This would be the best outcome".
However, the amendment does not establish a single authority. In fact, it establishes arrangements which will precipitate the break-up of county-wide specialist services because it requires agreement by individual successor authorities to seek particular services from the residuary body which would be carried out in a piecemeal and unco-ordinated way. This seems to me to be a great disadvantage.
Secondly, the Government's amendment will lead to the loss of economies of scale compared with the amendment of the noble Baroness. The provision of individual services on a piecemeal basis will result in important economies of scale being lost. At present these economies are achieved through positive management action being taken to avoid the duplication of services and to ensure that services are integrated wherever practicable. The amendment will give neither the residuary body nor any other authority clear and firm management control over the full range of services currently provided.
Thirdly, the amendment proposes no permanent solution. The residuary body remains a temporary body with a life of five years, and the amendment does not change that or say what will happen at the end of that time. Therefore the lack of permanent arrangements will maintain and fuel uncertainties about the future. It is this problem of uncertainties about the Bill that concerns a great many people. This will have several major effects, not least upon the highly specialist staff which this House has shown itself so anxious to retain. On that there seems to have been no difference of opinion across the House. It was these uncertainties which it seemed to me the Select Committee went to great trouble to seek to avoid in its report.
Fourthly, under the Government amendment, the residuary body will have inadequate powers, as the amendment places no statutory duty on the residuary body to provide professional or technical services; it is merely a duty to review their provision. The actual provision of services across the whole county or London area depends upon the agreement of all successor bodies and on decisions of the Secretary of State. Lack of co-operation by some authorities will create major uncertainties about the delivery of services, and some services could be permanently lost. That could be the upshot of this action.
For all these reasons we do not believe that the Government amendment can be considered a satisfactory solution—even on the narrow issue of the future of professional and technical services. Still less is it a feasible answer to the problem of the vacuum left by the lack of a single joint authority which the Select Committee saw as "the best solution".
Now may I turn briefly to the amendment in the names of the noble Lord, Lord Plummer, and the noble Baroness, Lady Faithfull—an amendment which I hope she will reconsider and decide to move when this has been dealt with because it makes a great

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difference to the discussion on this amendment as well. Their amendment contains the essential kernel of the case advanced by noble Lords of all parties. This has really been going through the Bill, and I can safely say that this is not a party political matter. This would provide a common services authority for the successor bodies on a statutory basis. This is a great advance on what I call the "wait and see" arrangements proposed in the Minister's amendment.
This would bring together not merely scientific and technical services but legal, personnel, computing, information and purchasing services under one authority. It goes a long way to meet the need for a single authority, recommended by the Select Committee. It would continue the economies of scale—which it must because of the size of it—and standards of professional expertise established by the GLC and the metropolitan counties. It would provide a breathing space during which common services would be preserved, and plans could be laid for their subsequent continuation. The amendment proposes a comprehensive structure—and this is the importance of this amendment—and not a hotch-potch, as does the amendment suggested by the Minister.
It is for these reasons that we should consider carefully before the House jumps into reception of the Minister's amendment. The amendment in the names of the two noble Peers opposite is an amendment which goes much further and is far better in the transitional period. It also holds out more hope for the future, the opportunity to plan, and a chance not to lose the essential services we have at the moment. I hope that the noble Baroness will reconsider and will move her amendment.
Lord Elton: My Lords, I understand that my noble friend Lord Cranbrook does not wish to speak on the amendment as it is proposed it should be amended. This is a new debate, so he has a right to speak if he wishes, and particularly if he wishes to refer to his later amendment, which touches the same issue.
I am sorry to stand with my back to your Lordships. Occasionally some of my closest friends are not always recognisable as such, but this evening they are very agreeable and, if the noble Baroness will forgive me, they sit straight behind me.
The Earl of Cranbrook: My Lords, if my noble friend is inviting me to speak to Amendment No. 84ZA, I shall do so.
Amendment No. 84ZA: After Clause 86, insert the following new clause—
("Professional and technical services.
—(1) The Secretary of State may, after consulting an authority to which this section applies, by order provide that the functions of that authority shall include the provision of professional and technical services in the area of that authority.
(2) In subsection (1) above, the provision of professional and technical services includes the employment of staff engaged in, and the provision of facilities for, scientific research and development or the application of science and technology in support of any function of an authority to which this section applies or the constituent councils of such authority.
(3) The authorities to which this section applies are any authority established under section 10 or Part IV of the Act.").
Lord Elton: My Lords, it is up to the noble Earl and your Lordships' House. If my noble friend sees it as an
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alternative to my amendment, then he ought to describe its advantages before I reply to the debate. If he does not, and wishes to discuss it after my amendment is made to the Bill, it might be a little odd if they are not compatible. Perhaps he does not see them as incompatible.
The Earl of Cranbrook: My Lords, they are entirely compatible because Amendment No. 84ZA deals with the situation after the residuary body. It looks for a final solution. We have agreed that in the terms of the Bill the residuary body taking on these services is an interim measure for providing continuation over a transitional period. But Amendment No. 84ZA is important because it provides a final repository for these services at a later date during the winding-up period of the residuary body or after it is wound up.
Lord Elton: My Lords, the sense of what my noble friend says is that it is not an alternative but is an improvement which can be put in later. That is something we should discuss later. We are therefore debating my amendment, which has not been amended and therefore appears in its proper form on any Marshalled List that happens to come to hand. It is to that that I speak, and I speak also to the amendment of my noble friend Lord Plummer, which has been put before your Lordships for your interest by my noble friend Lady Faithfull. She has been urged by the noble Baroness, Lady Birk, to treat it as an alternative which might be put into the Bill.
9.45 p.m.
I already described the effect of my amendment before this great debate started. I do not think your Lordships will wish me to say a great deal more about that, though I should reply to my noble friend Lady Faithfull. She asked me several questions. A specific one was about the use of the word "may" or the word "shall", and in a committee vein I replied to that in the middle of her speech for which I apologise. I explained that the word "may" had to be used otherwise the body would be forced to make an agreement even though there was nobody with whom to make an agreement. In her second question she assumed that the staff might be able to approach the residuary bodies direct. The answer is that they would be able to do so informally, and I draw her attention to Clause 96(1) and Clause 96(4) in the Bill as printed which place a duty on officers as well as authorities to co-operate in facilitating implementation and so forth. Therefore of course they would be required to speak to the residuary bodies.
My noble friend asked the other question in a direct sense. I recall that she asked whether the successor authorities, such as the districts and the joint authorities, would be able to take on their own staff as it were in competition with the residuary body. I think I have her question straight. The answer is, "Yes". I must remind both her and the noble Baroness, Lady Birk, that the residuary bodies are temporary bodies and the solution of putting something in a residuary body is a temporary one. The intention is that the final solution shall be arrived at within five years. A specialist team may be working under the auspices of a residuary body for one, two, three, four or possibly five years, but eventually they would go under the arrangements agreed with the successor bodies to those bodies

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who would by then have had an opportunity to put together joint schemes or joint authorities or what-have-you.
My noble friend spoke to the amendment of my noble friend Lord Plummer. I do not intend to read his speech, either; but she was kind enough to give me a review of what he intended to say, and very good it was too. But it was not quite good enough to persuade me that he was right and I was wrong. As your Lordships can see from the Marshalled List, we go down the same road for quite a long way. We agree that there must be a clean break at the moment of abolition so that the successor authorities have discretion to choose which staff to take on, whether directly or some time later through the residuary bodies. We agree that services must be devolved to the boroughs and districts. We agree that there are certain expert groups of staff who should find places in the new arrangements, and we agree that we should avoid such groups being dispersed because final arrangements are not settled by 1st April. So far so good. But we then part company for it seems that my noble friend does not think that his amendment would lead to virtually all the administrative technical and professional staff in the GLC and the MCCs being kept on by the residuary body willy-nilly.
My noble friend has explained the importance of the wider list of services in Amendment No. 81CC than in the amendment that I moved, the importance of eliminating the discretion of the successor body, thus the residuary body will take on who it chooses not who their client wants or needs. The difference is an important one. My noble friend and the noble Baroness see this as an advantage because it puts matters under the control of the Secretary of State, who determines what the residuary body shall do, and emphasises the short timescale between Royal Assent and the abolition date, and so on. But that brings us back to the issue which I discussed, and shall continue to discuss, with my noble friend Lord Cranbrook; that is, the scope of the Secretary of State's discretion. Whether the route is through the residuary body or not, it is essential that we do not by a procedural device ensure that every single employee and the whole of every service is transferred to the residuary body even though it is a temporary body.
I understand and share my noble friend's concern that the new arrangement should be more economical and efficient. I believe that this will be achieved by the successor authorities having discretion to consider freely the choice between employing staff directly and sharing expertise where appropriate. There are transitional controls, as I say, to guard against the creation of large new bureaucracies; otherwise, they are free to do so.
Finally, may I say to the noble Baroness, Lady Birk, that we are not giving functions to the residuary bodies in the way that she suggests, although the amendment of my noble friend Lord Plummer would do so? On the contrary, we are responding to my noble friend Lord Cranbrook and his committee in an attempt to find a temporary home, if necessary, for specialist teams of staff in case the successor bodies, and in particular the borough and district successor bodies, who will actually exercise the functions, have not got their act together in time. They will be the home, but
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it will be for the successor authorities that the service is provided and, therefore, that they work.
I fear that I have trespassed too long on your Lordships' patience and ingenuity. I believe that at the beginning of this debate I made clear why I think that this is a considerable improvement on what we offered before. It is a response which has moved, as the noble Baroness rightly said, ever since we first put it on the Marshalled List, towards the position of my noble friend. I beg to move.
Baroness Birk: My Lords, I think that this is the sort of thing that we should have discussed in Committee. It is so complicated that I do not think that we can just let it go like this. In view of the great concern over the whole subject and the fact that it is quite late and there is a very thin House, will the Minister consider taking this back to look at it, together with the amendment which has been spoken to but not moved by the noble Baroness, since it comes after the Minister's amendment? Will he do this to see whether he could bring it more into line with the points (which I shall not go over again, because I outlined them quite fully) where we feel that it is at a disadvantage compared with the other amendment which follows his and which causes part of the trouble? I think that in the circumstances it would be a great help if he would do that, because we are on to a very important subject very late at night and very late in the Bill.
The Earl of Onslow: My Lords, before my noble friend answers perhaps I may apologise for not having been here earlier. Secondly, I thank my noble friend for putting down this amendment because a lot of it has to do with the ecology unit of the GLC and its equivalent in the metropolitan counties. Having seen him with my noble friend Lord Chelwood on this particular issue, I should just like to thank him for going a very long way to meeting the concern that my noble friend Lord Chelwood and I had on the future of that particular unit. It seems to me that they have listened, they have been intelligent and they have taken cognisance of serious objections made by, I hope, intelligent if unpunctual people. I should like to thank my noble friend for so doing.
Baroness Faithfull: My Lords—
Lord Elton: My Lords, we are on Report stage and I had invited the Chair to put the Question. I must reply to the two interventions. To my noble friend, I may say that I am grateful for his gratitude. His punctuality was such that he first arrived 24 hours and 10 minutes before the appointment. As to the noble Baroness's proposal, I am afraid that I am not well disposed towards it. I have travelled a great way to try to assist your Lordships. I have agreed that when this amendment is in the Bill I will consider with my noble friend Lord Cranbrook whether I can do more to meet him in that respect. I do not think I can do more to meet my noble friend Lady Faithfull. I believe that if she studies the amendment as it now is she will find it has many advantages that she will welcome and few disadvantages that she will regret. I beg to move.
On Question, Amendment No. 81CBA agreed to.
[Amendment No. 81CC not moved.]
Lord Graham of Edmonton Lord Graham of Edmonton moved Amendment No. 81D:
Page 150, line 19, leave out sub-paragraph (2).
The noble Lord said: My Lords, I beg to move the amendment standing in the name of my noble friend Lord Irving of Dartford and myself. This is a fairly simple amendment. The Bill will make it an offence for any person to obstruct an officer of a residuary body who is authorised to inspect documents in the custody of a metropolitan county council or the GLC. Conviction on such obstruction will lead to a fine plus a daily penalty of £40 if the offence continues. The amendment seeks to remove this provision. The provision is an example of the unprecedented lengths to which the Government will go in an effort to force an unworkable Bill on reluctant councillors and staff. It is sufficient that residuary body employees have power to inspect such documents and to take copies without making it a crime to refuse them. It is an employee's contractual duty to co-operate with his employer. This provision will sour attitudes already hardened by other provisions in the Bill. Co-operation of metropolitan county and GLC employees is not something for which legislation should be needed. Cooperation is a state of mind and is unlikely to be encouraged by draconian exploitation of the criminal law. I beg to move.
Baroness Gardner of Parkes: My Lords, I would wish to oppose this amendment because I believe the Bill as it stands is necessary to protect those officers who are willing to allow access to documents but may well be instructed not to co-operate and not to allow access. I think in this way the Bill is helping those people.
Lord Elton: My Lords, I am most obliged to my noble friend for a very succinct and apposite speech. I doubt whether the noble Lord, Lord Irving of Dartford—who is a very reasonable man—has seen some of the threats that have been uttered by the leaders of the campaign against abolition who are themselves in authority in the threatened bodies, as to what they will do to obstruct the Bill even if it becomes law, when it is an Act of Parliament. I do not think your Lordships would wish this House to pass an enactment against which threats had already been uttered to suggest that it would be made impossible to implement it without providing some guard against that happening and some penalty for those who openly sought to break the law.
I accept that it is sad that we have to do this. It is a sad day when the will of Parliament can be so openly flouted. But the day is here and we must have the measure to fit the day. The residuary bodies will therefore have an important and demanding job to do before abolition day in planning for the transition. For that task they will need to have access to information. From time to time they will need to go physically into the seven county halls—through the door and up the stairs, no doubt. This paragraph provides for right of access to the information within those county halls—and indeed anywhere else—and sub-paragraph (2) provides a necessary, if regrettable, underpinning for that right.
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It is no light matter to provide for a new offence, but in this case it is necessary to make it clear that Parliament will brook no interference with the implementation of its decisions. It is necessary to ensure that anyone—whether an elected member or an officer—who tries deliberately to hold up a residuary body by denying it the access to information which it is legally entitled to have will run the risk of summary proceedings under this provision. Without it some might hope to get away, and some would hope to get away, with behaviour of this sort in the inevitable rush of activity in the run-up to abolition. I do not anticipate that it will be necessary to use the power, but if it was not there I think we should regret it. I am afraid I must oppose this amendment.
Lord Graham of Edmonton: My Lords, I oppose the opposition to the amendment I am advancing! The Minister invites the House to consider two sets of circumstances. One is the will and authority of Parliament as against the will, authority and power of a local council over its employees. The Minister is inviting the House to agree that the will of Parliament shall prevail over the will of a locally-elected council.
That is a massive debate, and I do not think we would be very far apart if in fact we were to discuss which is the sovereign body. In the British constitution, written or otherwise, the supremacy of central government over local government is not in dispute; but what we have got is what is seen by many local councils—I am not talking about the officers but about the elected councillors, unlike Members of this House, for instance. If one is talking about draconian powers, there are powers in this Bill that we are seeking to remove where the Government are issuing threats to those who refuse to comply with the law. One can use words whichever way one likes, and if there is a law and it is broken, it is the duty of a government and the powers-that-be to say, "If you don't comply with the law, something nasty will happen to you." What has been said by local councillors to their officers is "If you do not comply with our wishes, our instructions, something nasty will happen to you." That is the relationship which this Government has introduced between themselves and local government. They have done it willingly. I certainly do not relish for a moment the dreadful dilemmas which this Bill has posed not merely for councillors but also for council officers. The Government have made it very difficult and have created a situation in which undoubtedly the atmosphere has been soured between local councillors and officers.
The last thing I am going to say, standing here on behalf of my party, is that there is no need, first, for a law, secondly, for the supremacy of central government and, thirdly, for sanctions that need to be applied. I am saying what the Minister has said in his final words: "I doubt very much whether this will ever need to be used." I myself would doubt very much whether this would ever need to be used, because of the relationships that have existed in good councils with their employees.
However, the night is advancing and there are other matters still to be debated. I will consult with my noble friend Lord Irving of Dartford and I will read the

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report of our debate in Hansard. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
10 p.m.
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 82:
Page 151, line 24, at end insert—
(" (ee) section 28 of the Health and Safety at Work etc. Act 1974")
The noble Lord said: My Lords, this amendment is a minor one. It applies Section 28 of the Health and Safety at Work Act to the residuary bodies. It would permit enforcing authorities to release to the residuary bodies information acquired under the Health and Safety at Work Act. Section 28 restricts the circumstances in which such information can be released; in particular, information would only be released to residuary bodies for the purposes of the Act. I beg to move.
On Question, amendment agreed to.
Lord Elton Lord Elton moved Amendment No. 82A:
Page 152, line 8, after ("17") insert ("Without prejudice to paragraph 7A above,")
On Question, amendment agreed to.
Lord Graham of Edmonton Lord Graham of Edmonton moved Amendment No. 82AA:
Page 152, line 25, at end insert—
("23. A residuary body shall be treated as a joint authority for the purposes of the Public Bodies (Admission to Meetings) Act 1960.")
The noble Lord said: My Lords, the purpose of this amendment is to provide that members of the public are entitled to attend meetings of the residuary bodies to be established in each of the affected areas before the abolition date. Although a residuary body is a body whose members are to be appointed by the Secretary of State, Schedule 12, particularly paragraphs 11 to 14, provides that it shall be treated as a local authority or principal authority under all enactments which, were it a local authority with the same duties and responsibilities, would govern its affairs.
Each residuary body will have a number of responsibilities, including the management of the existing pension funds, the disposal of property and assets and the re-allocation of debt. Of these functions, the re-allocation of debt is likely to involve decisions which are to some extent arbitrary but which will materially affect the interests of ratepayers in the various district councils.
But residuary bodies are also to be employers of staff and providers of services in their own right. indeed, the Government have tabled an amendment to Schedule 12, in substitution for Amendment No. 81C, which extends the role of residuary bodies by enabling them to enter into agency agreements with the successor authorities to provide technical or professional support services. This is, in fact, what we have been discussing already.
Despite the importance of the role of the residuary bodies, no specific provision is made in the Bill for
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their affairs to be conducted in public. This amendment, by defining them as joint authorities for the purpose of the Public Bodies (Admission to Meetings) Act, brings them within the provisions of Schedule 13, paragraph 37. It seeks to ensure that if they conduct their business in formal meetings then members of the public—and that would include members of the successor authorities—would be entitled to attend those meetings. I really cannot believe that the Minister has any objection to this extension of public observance of how we go about our affairs. My Lords, I beg to move.
Lord Elton: My Lords, in the course of the Committee stage of this Bill we had a number of discussions about the nature of residuary bodies, and it must be clear to your Lordships that they are, in fact, a managerial team with a large number of responsibilities, most of them administrative, and I shall not describe them further. I should say that they are not to have powers to initiate policies and they are not to be permanent parts of the local government scene. We accept that they need to be accountable, and it is accountability that the noble Lord is after, particularly on financial matters. The Bill therefore imposes on them an audit regime which gives public access to their accounts. It requires them to produce an annual report, which my right honourable friend must lay before Parliament, including your Lordships' House, and the conduct of the bodies is within the purview of the Parliamentary Commissioner or Ombudsman. That seems to represent an appropriate regime of accountability for bodies of this kind.
As I have just reminded your Lordships, there is a duty on all the bodies from which it is felt people should come, as opposed to the chap off the street, to co-operate with the body, anyway, so they will be meeting it. But for them to come to the formal sessions of the board as well seems to us to be quite inappropriate and unnecessary, since the public, through its representatives, will have direct access to the board anyway. All its economic and financial affairs will be both monitored and accounted for and open to public inspection by the noble Lord himself, and any misconduct will be appealable to the Ombudsman. I think the noble Lord should not impose upon them the necessity to have a crowded gallery breathing down their necks as well.
Lord Graham of Edmonton: My Lords, the Minister and I are at one in understanding, first, that there is a function to perform rather than a policy to be determined. I can well understand that the business will be exceedingly dull. They may be very businesslike and efficient, but there may not be a great deal of meat in the matters that they are debating. They may not provide very many exciting discussions; but, as I pointed out, there are a number of matters of interest to groups of people, and certainly to ratepayers.
I have attended many council meetings, both on the floor and in the gallery, and there are not a great many people who are what one might call council gallery buffs—people who just go there for the sake of doing it.

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But there are some people who do go and it is always a salutary brake on the performance of the councillors for them to realise that, as distinct from a committee meeting, there are members of the public watching in a formal open meeting. After all, it is their locality that is being governed, albeit in strange circumstances, and I take the Minister's point that, as regards knowing what is going on and the relationships that exist between the existing councils and other bodies and the residuary bodies, there will be good liaison.
The Minister feels that this amendment is unnecessary. I certainly do not say that it is necessary, but I believe that it would be a valuable adjunct to our democratic process. But I see that the Minister is not prepared to accept it, so I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 82AB, 82AC, 82AD and 82AE not moved.]
Clause 61 [Custody of residuary property etc.]:
Lord Elton Lord Elton moved Amendment No. 82B:
Page 44, line 20, after ("construed") insert ("(a)")
The noble Lord said: My Lords, I beg to move Amendment No. 82B, and with your Lordships' leave I shall speak to Amendment No. 82C with it.
Amendment No. 82C: Page 44, line 22, after ("council") insert—("; or
(b) as imposing any liability on a residuary body in respect of the termination of any such contract by the abolition of that council;")
These two related amendments are straightforward technical ones to clarify the provisions of subsection (3) of Clause 61. This subsection will have the effect of preserving the GLC's and the MCC's rights and liabilities as employers arising from actions before abolition and of enabling those rights and liabilities to vest in the appropriate residuary body. This will enable any GLC or MCC employee made redundant by his employer before abolition to receive any redundancy payment or compensation to which he is entitled, but which his employer has not paid before abolition. It will also enable former GLC and MCC staff to obtain from the appropriate residuary body any arrears of pay outstanding at abolition.
The subsection preserves such rights and liabilities of the GLC and MCCs, irrespective of whether or not the individual employee remains in post right up to abolition. These amendments are intended to make clear that where staff remain right to the end, the subsection does not place on the residuary bodies any additional rights or liabilities arising from abolition. I beg to move.
On Question, amendment agreed to.
Lord Elton Lord Elton moved Amendment No. 82C:
[Printed above.]
On Question, amendment agreed to.
[Amendment No. 82CA not moved.]
Clause 67 [Precepts]:
10.15 p.m.
Lord Stoddart of Swindon Lord Stoddart of Swindon moved Amendment No. 82CB:
Page 49, line 18, leave out subsection (6).
The noble Lord said: My Lords, I must say that this is the first time that I have had anything to say on this Bill. Indeed, I have tried to avoid saying anything on the Bill. So many people have said so much that I have been loath to enter into the debates. Nevertheless, because my noble friend Lord Barnett is not able to be here tonight, I am taking his place. But let me state straight away that it is my belief that the Bill is certainly an unnecessary one, and it is a Bill which has been conceived not for the administrative good of local government, but rather out of political spite. I very much regret that, especially bearing in mind my own long and happy years of service in local government.
The Government's proposal is that the new joint authorities should not only be eligible for selective limitation of rates and precepts under the provision of the Rates Act 1984, but that they should also be deemed to have been designated for rate-capping, without going through the proper procedure, for the first three years after abolition. The amendment would not exclude the new authorities from rate-capping; it would merely put them in the same position as existing local authorities. What, may I ask, is wrong with that? Why should the new authorities be in any different a position?
Clause 67(6) provides for the new authorities to be automatically rate-capped from 1st April 1986 for a period of three years. This would be contrary to Section 2(2) of that Act which allows rate-capping only if expenditure is likely,
"to be excessive having regard to general economic conditions".
The current criteria for rate-capping involve comparison of an authority's expenditure with its Department of the Environment defined grant-related expenditure assessment and target. But the Secretary of State is not in a position to make a reasonable estimate of the likely—
Lord Elton: My Lords, will the noble Lord forgive a belated interruption for clarification? I heard him addressing himself to Clause 67. It may be that I have got in a muddle, but I thought his amendment was to leave out Clause 66. I am so sorry—we are on Amendment No. 82CB. I do apologise.
Lord Stoddart of Swindon: My Lords, I hope that point is clarified. The noble Lord interrupted me in mid-sentence, but for his sake perhaps I may start again the point I was making.
The current criteria for rate-capping involve comparison of an authority's expenditure with its Department of the Environment defined grant-related expenditure assessment and target. But the Secretary of State is not in a position to make a reasonable estimate of the likely relationship between the expenditure GREA and target for a joint authority before that authority has been set up and has established itself. This is an abuse of the Rates Act

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powers because, as the noble Lord, Lord Bellwin, said during the passage of the Act,
"authorities can only be selected for rate limitation if they are excessive spenders".—[Official Report, 9/4/84; col. 903.]
At Committee stage the noble Lord, Lord Elton, argued that the joint authorities are at risk of developing into over-spenders both because all of them will be new authorities and because some of them will be inheriting a tradition of over-spending from their predecessors. The noble Lord claimed, as he will remember, that they could,
"result in administrative inflation".
It is ironic that we should use such an argument when the whole purpose of abolition is said to be to eliminate waste and inefficiency.
Have the Government no confidence in their own proposed legislation? That is what the legislation is supposed to be about, and yet the noble Lord himself has no confidence in it. So far as "administrative inflation" is concerned, perhaps the noble Lord can explain why it has been necessary for the Home Office to advertise in the accountancy press for an accountant in the Inspectorate of Constabulary to be responsible to advise on police budgets for the new joint board. The Government are increasingly seeking to interfere at huge bureaucratic cost in the affairs of individual authorities of which they have little knowledge. Indeed, confirmation of this is to be found in a Government inter-departmental working party minute:
"The Home Office said that although they had sufficient knowledge for criticising budgets, they did not have the expertise to formulate them".
That comes from the Home Office itself.
The creation and immediate designation of separate joint authorities means that local perceptions of relative priorities will be denied. Decisions of detail made by civil servants in the name of the Secretary of State about these local services would be an intolerable intrusion into local accountability.
I know from my own experience that the present Government have interfered to an intolerable extent in what should be local decision-making. Certainly in my own time in local authorities there was what we called a partnership between local government and central Government. We are increasingly seeing now excessive interference by central Government in decisions which should be made at local level. Indeed, we are reaching the point in local government where we are failing to attract the new recruits that we should be attracting. As far as elected representatives are concerned, this Government might just as well set up gauleiters to do their bidding in the various areas throughout the country.
These provisions will be severely detrimental to the local democratic management of the new authorities. There will be no incentive for able members to devote their energies to their joint board duties, to plan and make policies, because the budget will be set by the Secretary of State. One can only conclude that the reasons for seeking to introduce such draconian centralism is because the Secretary of State has no confidence in the new structure he is introducing to provide local services. Perhaps that is because the new authorities are not to be democratically accountable.
Lord Elton: My Lords, this amendment would exempt the new authorities from the proposed automatic control over their precepts for the first three financial years after abolition. Listening to what was said by the noble Lord in his clear and persuasive speech, I had a certain sense of déjà vu. The merits of the transitional precept controls were, after all, well aired in Committee. Indeed, it was the noble Lord, Lord Barnett—who, sadly, is not able to be here at this stage this evening—who accused me of getting angry. I hope that that was the only time anybody has felt that I had done that; although I may verge close to it, I hope that it has never showed through the surface. I do not intend to get angry tonight but, since I have referred to that earlier debate, perhaps I may take this opportunity to correct what, on re-reading the noble Lord's speech in Hansard, I realise may have been a misunderstanding about our proposals.
It is not the case, as the noble Lord seemed to be suggesting then, that these controls will be operated by my right honourable friend the Secretary of State for the Environment. I dare say that the noble Lord, Lord Stoddart, is interested to hear that. The controls will be the responsibility of the Secretary of State already responsible for the relevant services. That is to say, in relation to the police authorities and the fire and civil defence authorities, it will be my right honourable friend the Home Secretary; in relation to the strategic transportation authorities, as they are now called, the Secretary of State for Transport; and in relation to the new ILEA, my right honourable friend the Secretary of State for Education and Science.
That is an important point and one on which I should want your Lordships to be clear, although it does not of course alter the concern of the noble Lord as to the principle of the controls being operated regardless of whom they are operated by, if that person is a Secretary of State.
I believe that your Lordships agree that the new authorities should be given a chance to prove themselves. I think that was at the back of what the noble Lord was saying. He felt that the aim of rate limitation under the Rates Act 1984 is to curb the extravagance of high-spending authorities; and that, indeed, it is. He would not, I think, have us believe that there is evidence that the new authorities will be extravagant and that therefore they ought not to be subject to these inappropriate controls from the outset. With respect, I think that that is to misconceive the purpose of the transitional controls.
Although the mechanism for the transitional controls is borrowed from the 1984 Act, the aim is quite different. It is, as the White Paper made clear, to ensure that the creation of the new authorities should not be used as an opportunity to set up extravagant and expensive new bureaucracies. It is to stop them developing high-spending characteristics and to ensure habits of good housekeeping from the beginning of their existence. The Government are determined to ensure the economic and efficient running of the new authorities. We believe that the transitional controls are essential for this purpose, and if that purpose is not achieved then abolition has of course failed in much of its purpose.
That anxiety on our part—and it is an anxiety that we have legislated for—is not merely something we have dreamt up on a dark night. It arises from our

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experience of earlier reorganisations in which there was the freedom of a blank slate to start on when the new bodies were set up. We believe that it is necessary to contain the inevitable pressures—one might say the inevitable momentum—towards a larger bureaucracy than necessary that appears to be built into most bureaucratic planning.
I believe the noble Lord was concerned about my various right honourable friends' freedom to set expenditure levels for individual new authorities other than on the basis of general principles applying to all the authorities with responsibility for the same services. If he is not, I will omit this as it is late at night, but if he wishes me to address that point I shall continue by saying that I believe that that concern is based on the same misconception about the purpose of the transitional controls.
In the case of selective limitation under the 1984 Act, there tends to be a similarity in the selected councils' financial circumstances which enables general principles to be applied and ensures both fairness and consistency of treatment. There will not be any such similarity in the case of the new authorities. Not all the MCCs are currently excessive overspenders. Nor is the pattern even between the services for which the new authorities will become responsible. Some MCCs spend very highly on some but not necessarily the same services as others, and not on others. Nor, as I explained in Committee, will all the joint authorities have the same range of functions. The strategic transportation authorities as, I repeat, we still have to call them—my noble friend Lady Gardner of Parkes pointed to one aspect of the infelicity of that name and I sympathise with her—in Merseyside and Tyne and Wear will, for instance, assume responsibility for the Mersey and Tyne tunnels, but the others do not have tunnels.
Some but not all of these transportation authorities may assume the MCCs' interests in an airport. The transitional controls must take account of those different responsibilities because some of them do not have an airport. No general principles could properly take account of these important differences. A requirement to base expenditure levels on common principles, while it ensures fairness and consistency in the context of selective limitation, would lead to unfairness and inconsistency if applied to the transitional controls. I know of course that that is the opposite of what your Lordships and the Government want.
I understand the concern that the noble Lord has expressed. I think that it is natural on comparing what is in this Bill and what is in that Act. But I hope that I have been able to reassure him as to the purposes and the circumstances which make the differences in the legislation necessary. I believe that the proposed transitional controls are essential to achieve the clear aims set out in the White Paper which I have again explained tonight. I am confident that in operating them my right honourable friends in all departments will act reasonably; nor need your Lordships rely solely on my confidence. There are adequate safeguards, including the involvement of Parliament, to ensure reasonableness, and I ask the noble Lord therefore not to press his amendment and your Lordships not to accept it if he does so.
10.30 p.m.
Lord Stoddart of Swindon: My Lords, I should like to thank the noble Lord for his reply to the amendment and for clarifying the position in relation to the Secretary of State. I understood that it would not be simply the Secretary of State for the Environment who would be imposing his will but that it would be a bunch of people. But nevertheless they would be under the same instruction from the Cabinet that they must in their various departments rigorously impose rate capping on the new authorities. I think that we understood that, but I am not at all sure whether it helps. I do not know whether I should prefer to have one to deal with or a bunch of them. I think the new authorities may well find that their difficulties will be very much compounded by having to deal with a succession of Secretaries of State rather than with one.
The noble Lord said that the successor bodies were being set up to avoid extravagance by the local authorities. That is an assertion with which we would quarrel. I do not believe that the local authorities which are being abolished can in any way be accused of excessive extravagance. It is quite true that rates have gone up in those and many other authorities, but they have gone up for the main reason that the Government have slashed their rate support grant from 61 per cent. in 1979 to 48 per cent. in 1985. That is the real reason why the rates have gone up. The Government have been successful in blaming the local authorities for their own sins of withdrawing about £11,000 million of grant from local authorities.
Baroness Gardner of Parkes: My Lords, I should like to ask the noble Lord a question. If he thinks that local authorities have not been extravagant and that they are so heavily rate capped, how does he account for the current statement being made at County Hall about the vast surpluses that the GLC has this year which it is quite unable to spend?
Lord Stoddart of Swindon: My Lords, since the noble Baroness is one of the guardians of the purse in the GLC she ought to be able to answer that question far better than I can. But rates generally have gone up in this country—and in the GLC—because the Government have, as I said, reduced their grant from 61 per cent. to 48 per cent. If the withdrawal to the tune of 13 per cent.—about £12,000 million in total—has not affected the level of local rates, what on earth has? Local government has been far more successful in containing its expenditure than central Government, as the noble Lord knows to his cost.
The noble Lord says that he does not want, and indeed that it is not intended, that the creation of the new authorities should lead to new and expensive bureaucracies. We entirely agree. That is what the Bill has been about. We agree that it may very well happen that new and more expensive bureaucracies could be created. It would have been very much better if the Government had not interfered with the existing system. It is late at night. We shall of course want to read what the noble Lord has said. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 82CC, 82CD and 82CE not moved.]
Lord Skelmersdale: My Lords, we had hoped by this stage to have progressed slightly further down the Marshalled List. Unfortunately, that has proved to be totally impractical.
Lord Ponsonby of Shulbrede: My Lords, may I suggest that the noble Lord, Lord Elton, might like to move Amendment No. 83 formally?
Schedule 13 [New authorities: application of local authority provisions]:
Lord Elton Lord Elton moved Amendment No. 83:
Page 155, line 6, after ("135") insert (", 136")
The noble Lord said: I am most grateful for that charming, courteous and unexpected kindness of the Opposition Chief Whip. I beg to move.
On Question, amendment agreed to.
Lord Tordoff Lord Tordoff moved Amendment No. 83A:
Page 157, line 44, at end insert—
("(ac) schemes made under section 48 of the Local Government Act 1985;")
The noble Lord said: I am neither of the reverend or right reverend gentlemen, noble Lords, or Prelates—call them what you will—who have their names to this amendment. I have been asked by my noble friend Lord Beaumont of Whitley, for whom I can substitute, although I am rather cleaner shaven—I certainly could not substitute for the right reverend Prelate the Bishop of London—to propose what is essentially a probing amendment. It comes within the terms of amendments that occur from time to time attempting to open up local government in one form or another to the public. This amendment, I understand, deals with voluntary bodies. It is essentially a probing amendment. I would be grateful if the noble Lord could respond in those terms. Clearly we on these Benches like to keep local government as open as it can be. It seems to me that it should be extended to the bodies contained in Clause 48 of the Bill.
Lord Elton: My Lords, as your Lordships will, I believe, know (I had noticed that the noble Lord was neither reverend nor a right reverend gentleman, although charming and elegant, nonetheless) my noble friend Lady Carnegy of Lour is at present taking through the House the Local Government (Access to Information) Bill, as it were, on a parallel track.
This Bill makes provision for greater public access to local government meetings and papers. It is, I believe, generally supported in your Lordships' House. The provisions of the Bill would apply to principal councils, to committees and to sub-committees of such councils, and to joint committees and subcommittees appointed by more than one such council. It provides that meetings of such bodies shall be open to the public. It substitutes for the general discretion in the 1960 Act to exclude the public where publicity would be prejudicial to the public interest a discretion to do so only in one of a number of expressly defined circumstances. One of these is where there would be disclosure of information relating to any particular applicant for, or recipient or former recipient of, financial assistance provided by the local authority.
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Under the Local Government (Access to Information) Bill, if, as we expect, it becomes law, and if it becomes law as it stands in this respect, council or committee meetings at which grants are being discussed would have to be open to the public unless the meeting resolved that the public should be excluded where there was discussion of information relating to particular applications. It is right, I believe, that the collective grant-giving scheme should be covered by the same principles. It seems to me t hat this gives everything for which the noble Lord asks. I hope that in the light of the explanation he will withdraw the amendment and indeed lend his support to my noble friend's Bill.
Lord Tordoff: My Lords, I am most grateful to the noble Lord for that explanation and I am sure that both my noble friend and the right reverend Prelate will also be obliged to him. Certainly we shall be lending our support to the Bill on its passage through this House. As I say, it is a matter on which we feel very strongly and it has our support. I find it difficult to continue any longer in the knowledge that all my questions have been answered and that tomorrow is the longest day. I only hope it does not turn out to be a longer day than it has been today. I thank the noble Lord for that answer, and beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Skelmersdale Lord Skelmersdale moved Amendment No. 84:
Page 160, line 10, at end insert—
("51A. For subsection (6) of section 28 of the Health and Safety at Work etc. Act 1974 there shall be substituted—
"(6) References in subsections (3) and (5) above to a local authority include the Inner London Education Authority and a joint authority established by Part IV of the Local Government Act 1985.".")
The noble Lord said: My Lords, on behalf of my noble friend Lord Elton, I beg to move Amendment No. 84. Your Lordships may recall that in the last half hour we have passed Amendment No. 82, which applied Section 28 of the Health and Safety at Work etc. Act to the residuary bodies. This amendment does exactly the same thing in respect of the new ILEA, which is set up under this Bill. Therefore, I have no doubt that your Lordships will also agree to it. I beg to move.
Lord Graham of Edmonton: My Lords, it seems an eminently sensible extension of provisions which quite clearly were designed by Parliament and by Government to protect workers and public servants. When the Minister says that this is extended to the new ILEA, can he tell us precisely what we are talking about? Does it involve all the ramifications of the ILEA structure, the teachers who are employed by them, or the administrators? Can the Minister tell us a little more about what it is, and about the powers and the responsibilities that have been extended? Is this a gift from the Government, or does it place any responsibilities upon the ILEA? As the Minister is aware, the future of the ILEA has been a sensitive topic in this place and outside, and I should not want to find later that something which appears to me on the surface to be welcome but about which I have no

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knowledge places some onerous duty upon the ILEA that it may not welcome. Perhaps the Minister could clarify the matter a little.
Lord Skelmersdale: My Lords, I am not sure whether the noble Lord, Lord Graham, was in the Chamber when I spoke to Amendment No. 82, applying exactly the same point to the residuary bodies. This amendment does for the ILEA what that amendment did for the residuary bodies. So it would permit enforcing authorities to release information acquired under the Health and Safety at Work etc. Act. Section 28 restricts the circumstances under which information can be released. In particular, information would only be released for the purposes of the Act.
It has been asked outside this Chamber how the Health and Safety at Work etc. Act generally will apply to the ILEA. I think perhaps this was the point behind the question of the noble Lord, Lord Graham. The Health and Safety at Work etc. Act places duties on all employers, employees and those in charge of buildings to take measures to ensure health and safety. These duties will therefore apply to the ILEA and its employees without the need to say anything in this particular Bill.
This is not to say that this amendment gives ILEA local authority powers per se. The amendment does not confer any powers or functions. However, it allows other bodies to let the ILEA have information they need for operational reasons—information which the GLC can be given at the moment. In other words, I should explain that this amendment makes no change to the existing law but applies the existing law into the future, which I think is what the whole House would want it to do.
Lord Graham of Edmonton: My Lords, in the last few words of the noble Lord's remarks it all became clear to me, but the noble Lord had to go through the first part to get to the better second part. This will give power to people who have information to pass that information to ILEA. ILEA then becomes embraced in the information receiving body and an authority which, on receipt of information, is then able to carry out what ought to be the responsibility of every responsible employer, which is to make sure that the premises, the equipment and the operation of the equipment, etc., are covered by an important Act.
The Minister is aware that in many other quite remarkable areas—and I heard someone behind me mention the Palace of Westminster—one finds by default that there are injuries and damage done to the health, safety and welfare of those who work in, and use, the place innocently. To the extent that the Government have made sure that the premises of ILEA and the offices of ILEA, and the officers of ILEA, are covered by this important Act, we on this side of the House are very pleased indeed.
On Question, amendment agreed to.
Lord Denham: My Lords, we have now reached the point in the Bill to which we agreed to go tonight. I beg
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to move that further consideration on Report be now adjourned.
Moved accordingly, and, on Question, Motion agreed to.

Greater London Council (Money) Bill
Brought from the Commons; read a first time and referred to the Examiners.

Leicestershire Bill [H.L.]
Returned from the Commons agreed to with amendments; the amendments considered and agreed to.
House adjourned at thirteen minutes before eleven o'clock.

  PORTUGUESE NATIONALS: RIGHTS ON ACCESSION TO EC
  PORTUGUESE NATIONALS: RIGHTS ON ACCESSION TO EC
  GLASGOW: THEFTS FROM FREIGHT TRAINS
  GLASGOW: THEFTS FROM FREIGHT TRAINS