Sitting of 22 May 1985

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

    Strategic Defence Initiative
    Mr. Evansasked the Secretary of State for Foreign and Commonwealth Affairs if he has made any further representations to the United States of America about the strategic defence initiative.
    The Secretary of State for Foreign and Commonwealth Affairs (Sir Geoffrey Howe): We remain in extremely close touch with the United States and our other allies about the strategic defence initiative research programme. We have made clear our support for United States research, which is necessary to balance Soviet efforts in this area.
    Mr. Evans: Will the Foreign Secretary take the next opportunity available to him to impress on the Americans that he has some sympathy with Mr. Gorbachev's recently expressed view that the star wars programme increases the risk of nuclear war and sharply reduces the chances of reaching any accord on disarmament issues?
    Sir Geoffrey Howe: I shall not take the opportunity to put the point that the hon. Gentleman raises. I shall emphasise that the purpose of the United States in this respect is to achieve not superiority but balance, and in doing so to take account of the substantial Soviet programme for research of this kind. The Soviet Union has extensive ballistic missile defence programmes, has deployed the only anti-satellite system, has the only active anti-ballistic missile system in the world and has been undertaking research of this kind for a long time. For that reason we understand the United States' research programme.
    Mr. Bill Walker: Does my right hon. and learned Friend agree that since the beginning of time man has looked for ways of preventing weapons systems being delivered, that it is normal to research this programme, that there is nothing unusual about it, and that it is simply a continuation of what has gone on since wars began?
    Sir Geoffrey Howe: I agree with the general analysis offered by my hon. Friend. Against that background I stress the points that I made about the scale and nature of Soviet research into such matters. It is equally important to bear in mind that all aspects of arms deployment need to be considered in the context of the search for an arms control agreement that can be sustained.
    Mr. Strang: Will the Foreign Secretary acknowledge that the development of these weapons is destabilising, as seen from the Soviet perspective, especially in the so-called transitional phase? Is there not a genuine danger that pressing ahead with the SDI could lead to the failure of the Geneva talks?
    Sir Geoffrey Howe: I cannot emphasise too strongly and too often the fundamental fact, with which I answered the first supplementary question, that research into defensive space systems of this kind has been undertaken for many years on a large scale by the Soviet Union. For that reason we support the research being undertaken by the United States. We also welcome the attempts by the United States to discuss these matters with the Soviet Union, and its clear statement that any SDI-related deployment must be a matter for negotiations. That is the right way to approach these matters.
    Mr. Chapman: Does my right hon. and learned Friend agree that the research programme holds out the prospect of a non-nuclear antidote being found against the firing of a nuclear weapon? If that prospect is realised, surely it will be to the eternal benefit of all mankind?
    Sir Geoffrey Howe: It has been made clear that the research programme is bound to take many years be fore one can reach any conclusions about what it is likely to produce. Obviously, one factor to be taken into account is that it may offer prospects of enhanced defence. It is important to bear in mind that the United States' research is consistent with treaty obligations. We regard the treaty obligations as an important element in preserving peace and stability. In that framework, the whole matter should be considered.
    Mr. Healey: In view of the Secretary of State's reply to an earlier question, what representations has he made to the American Administration about the repeated statement of the American Defence Secretary to the effect that the United States will not negotiate the deployment. of the space defence system if it proves feasible? Is that not a clear breach of the understanding reached between the Prime Minister and President Reagan in December?
    As to the research programme, since the Americans have made it clear that they are monitoring Soviet research and have published a list of experiments which they plan to carry out in this area, would it not be sensible to kill the thing at birth by seeking a ban by both sides on all space defence-related experiments, which could be verified, and already have been?
    Sir Geoffrey Howe: The right hon. Gentleman must refrain from over-simplifying the matter. Although some research has been identified as taking place, including the nature of the deployment undertaken by the Soviet L nion, both sides believe that a system for the monitoring of research would, in practice, be unattainable. The important feature to notice is that the United States has repeated many times that any SDI-related deployment must be a matter for negotiation. The Americans emphasised that not just in the Camp David points, but during the Prime Minister's visit to Washington in February and on several ether occasions.

    Honduras
    Mr. Cohenasked the Secretary of State for Foreign and Commonwealth Affairs if he has any plans to seek to visit Honduras.
    The Parliamentary Under-Secretary of State for Foreign and Commonwealth Affairs (Mr. Tim Renton): My right hon. and learned Friend has at present no plans to do so.
    Mr. Cohen: Will the Minister welcome the reported pact in Honduras whereby the head of the Supreme Court will be released from gaol and the President will not be allowed to interfere in the forthcoming elections? Will he communicate his support to those in Honduras who wish to disarm the Contras, maintain their national security by not allowing the United States to use their country as a centre of counter-insurgency against Nicaragua, and wish to establish normal, peaceful relations with the Government of Nicaragua? Will he support them, or will he follow President Reagan obediently?
    Mr. Renton: As the hon. Gentleman will know, there were conflicting reports last week about border incidents between Honduras and Nicaragua. The best way to promote peace in the area is to follow the aims of the Contadora group, which we firmly support. As the hon. Gentleman will also know, a settlement between trade unionists and the constitutional groups in Honduras was announced yesterday. President Suazo has gone to Washington for discussions with President Reagan.
    Mr. Flannery: Is it not true that the border between Nicaragua and Honduras is now a serious flashpoint? No matter what we say about supporting the Contadora group, the reality is that the United States is losing its head and trying to push troops so near to the border that the Nicaraguans may do something in self-defence and we may have the beginning of another Vietnam. Could we not use our immense influence to cool the President's ardour in this direction and try to get a peaceful settlement?
    Mr. Renton: If the hon. Gentleman reads carefully the reports of yesterday's meeting between President Suazo and President Reagan, he will see that there was a balanced approach on both sides to the problems that he described. The hon. Gentleman and I would agree that the best means of settling the matter is through the Contadora group's attempts to achieve peace throughout the area.

    India
    Mr. Jannerasked the Secretary of State for Foreign and Commonwealth Affairs whether he is satisfied with the current state of relations with India.
    Sir Geoffrey Howe: We attach great importance to maintaining the very close relations we enjoy with India. My right hon. Friend the Prime Minister visited India in April, and we hope to welcome Mr. Gandhi here soon.
    Mr. Janner: Does the Foreign Secretary realise that the problems with the Westland helicopters are symptomatic of the worst relations between the United Kingdom and India for many years? If we are to retain the good will of Prime Minister Gandhi and most of his Government, should we not make a generous gesture in the form of aid, together with a review of our law, which manifestly failed to deal with the supporters of terrorism after the tragic assassination of Mrs. Indira Gandhi?
    Sir Geoffrey Howe: The hon. and learned Gentleman takes a close interest in these matters. I ask him not to conclude that the Westland helicopter matter had an effect, or flows from an effect, on bilateral relations. Mr. Gandhi expressed some technical reservations about those helicopters, and further information on them was supplied to the Indian Government. We have not yet received a formal response.
    The hon. and learned Gentleman is right to draw attention to the behaviour of a small and unrepresentative group of Sikh extremists in Britain. We utterly condemn their behaviour, which did much undeserved harm to the reputation of their community, the great majority of whom are law-abiding. It should be understood that those who break the law will, like any other citizens, suffer the consequences.
    Mr. Dickens: Should we not be thanking our Prime Minister, who, in spite of a tiring and exerting visit to the far east, still found time to visit Mr. Gandhi? It is her usual practice. When touring abroad, she likes to call in on Delhi to keep up our very good relationships. Is it not a fact that the Indian nation is now interested in purchasing many other types of British goods?
    Sir Geoffrey Howe: I gladly endorse the tribute paid by my hon. Friend to my right hon. Friend the Prime Minister. He is right to draw our attention to our exports to India, which last year totalled no less than £780 million. I should like to remind the House that Mr. Gandhi is expected to visit the United Kingdom this year. He has accepted an invitation in principle, and I am sure that he will be warmly welcomed by the British people.
    Mr. Meadowcroft: Is the Foreign Secretary aware that many British citizens belonging to the Sikh religion, who are law-abiding, are desperately concerned at the continued violence against Sikhs in India, and are anxious that that should not spill over into this country? Will the right hon. and learned Gentleman make representations to the representatives of the Indian Government, to express our concern at the continued problems being faced by members of the Sikh community in India?
    Sir Geoffrey Howe: I understand the concern expressed by the hon. Gentleman on that matter. It is right to acknowledge that the Indian Prime Minister has made several statesmanlike moves in relation to the problems in India. He has released the Akali Dal leadership, legalised the All-India Sikh Students Federation, and organised a judicial inquiry into the riots after Mrs. Gandhi's assassination. Those moves deserve to be acknowledged.
    Sir John Farr: Will my right hon. and learned Friend confirm that he is not entirely happy with the state of affairs in India? Apart from the helicopter deal that fell through, the Indian Prime Minister is at present on his first official visit abroad to Russia, where he is now, and will be for the next week, and his next official visit abroad is to Washington, where he will be for another week. As India is the biggest democracy in the free world, will my right hon. and learned Friend assure the House that he is a little concerned about the situation? We want to get the Indian Prime Minister into Britain as soon as we can.
    Sir Geoffrey Howe: Of course, I am anxious to ensure that the close relations to which I referred in my original answer are maintained and strengthened, but it is worth reminding the House that both the Prime Minister and

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    myself met the Indian Prime Minister in Moscow. As has been said, the Prime Minister herself visited New Delhi not many weeks ago. So, too, have my right hon. Friend the Secretary of State for Transport and my right hon. Friend the Minister for Overseas Development. Several other ministerial visits to India are planned in the fairly near future. As I have said, Mr. Gandhi has accepted an invitiation in principle to vist the United Kingdom this year. What my hon. Friend says underlines the point that he will be warmly welcomed by the British people when he comes.

    South Africa (Detentions)
    Mr. Sedgemoreasked the Secretary of State for Foreign and Commonwealth Affairs what representations he is making to the South African authorities over the detention order under section 29 of the Internal Security Act of officials of the United Democratic Front.
    The Minister of State, Foreign and Commonwealth Office (Mr. Malcolm Rifkind): We have consistently condemned the practice of detention without trial and have made our position clear to the South African authorities on many occasions. We have expressed our concern about the recent detention of the United Democratic Front officials to the South African Government.
    Mr. Sedgemore: Does the Minister agree that it is ludicrous for the South African ambassador to seek to argue that the judiciary for this issue in that country is acting independently of the wishes of the Government?
    Mr. Rifkind: The South African judiciary has, on several occasions, acquitted people who have been charged with treason or other politically related offences. Therefore, it would be wrong to suggest that the South African judiciary does not have considerable indepen-dence. We hope that anyone who is brought before the South African courts will be considered by the South African judiciary on the basis of the evidence that is presented.
    Mr. Winnick: Is the Minister aware of the renewed concern in this country and elsewhere at the number of people held in detention in South Africa and the deaths of some of them in very suspicious circumstances? How long will it be before the Prime Minister and the Foreign Secretary speak out in forthright terms against the racial tyranny in South Africa and make people there recognise that this country is no ally of that regime and that the community in this country condemns the practices which take place in South Africa?
    Mr. Rifkind: As my right hon. Friend the Prime Minister and my right hon. and learned Friend the Foreign Secretary have both made clear their abhorrence of the apartheid system on many occasions, I see no need for any change of policy of the kind suggested by the hon. Gentleman.
    Mr. Bill Walker: Does my hon. Friend agree that the judiciary in South Africa has to operate, as all judiciaries should, within the law of the land and that that is exactly what is happening?
    Mr. Rifkind: My hon. Friend is correct, but at the same time we must make clear our own view that a system of detention without trial precludes those so detained from appearing in court and establishing whether they are rightly in custody.
    Mr. Foulkes: Is this not yet another example of the South African Government's legal tyranny persecuting leaders of black opinion who are committed to non-violence? Does the hon. Gentleman agree that that underlines the failure of the so-called constructive engagement and how little has really changed in that appalling country? Will the Government now start to isolate South Africa economically before we have to do so, following lamely after the Americans?
    Mr. Rifkind: There have been a number of important reforms in South Africa which we have welcomed and which have been rightly welcomed by the international community, including the hon. Member for Swansea, East (Mr. Anderson) when he wound up the last foreign affairs debate for the Opposition. Nevertheless, if the South African Government are serious about wanting a policy of dialogue with genuine representatives of black opinion in that country, it is difficult to understand why they continue to charge and to detain without trial leading members of the United Democratic Front. I entirely reject the suggestion that a policy of economic sanctions would make any helpful contribution to achieving the objectives that the hon. Gentleman seeks.

    Hong Kong (Refugees)
    Mr. Ashdownasked the Secretary of State for Foreign and Commonwealth Affairs how many refugees are currently being held in the closed camps in Hong Kong; how many were moved out of the camps in the last month for which figures are available; and if he will make a statement.
    The Minister of State, Foreign and Commonwealth Office (Mr. Richard Luce): At 9 May there were 5,646 Vietnamese refugees in closed centres in Hong Kong. During April 277 refugees were resettled from Hong Kong, of whom 142 were from closed centres and 135 from open centres.
    The closed camps are a matter of great concern to the British Government and to the Government of Hong Kong and neither Government wish to maintain them longer than is absolutely necessary. We are urgently considering the recommendations of the Sub-Committee on Race Relations and Immigration and will give our response to the House as soon as possible.
    Mr. Ashdown: Does the Minister agree that those figures show that the population of the camps has remained substantially the same for six consecutive years and that at the present level of take-up the camps will still exist in 10 years' time? Is he aware that many of us regard conditions in those camps as a disgrace for which he and the Government are responsible? Will he explain why in 1984 Britain took fewer refugees than any other participating nation—one twentieth of the number taken by the United States, one twelfth of the number taken by Australia and a quarter of the number taken by Canada? Does he agree that that is utterly inadequate?
    Mr. Luce: To describe conditions in the closed camps or, indeed, the camps generally as a disgrace is absolutely unwarranted and unfair. Mr. Hartling, who has recently in Hong Kong, stated publicly that in his view the Hong Kong Government were treating the refugees well. That should be stated clearly in this House, too. Of course we do not wish closed camps to be retained any longer than necessary, but the House should note that in the past 10

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    years Hong Kong has taken no fewer than 100,000 refugees in transit. Hong Kong has absorbed 14,000 refugees and Britain has taken nearly 20,000. That, too, should be acknowledged. We are doing our utmost to ease the problem and we shall be responding to the Sub-Committee shortly.
    Sir Peter Blaker: Does my hon. Friend agree that the Hong Kong Government have acted most commendably in their acceptance of refugees from Vietnam? Will he confirm that the only reason for having closed camps is the fear that their abolition would lead to an even greater influx of Vietnamese refugees? In responding to the Sub-Committee, will my hon. Friend bear in mind that if this country accepted a small number of Vietnamese refugees other countries could probably be persuaded to take many more?
    Mr. Luce: I note my right hon. Friend's last point, and we are considering urgently our reply to the Select Committee. The Hong Kong Government should be praised for looking after the refugees for over 10 years. It is very important to note that since the introduction of the closed camps in Hong Kong in July 1982 there has been a substantial decline, compared with the rest of the region, in the rate of arrivals of Vietnamese refugees.
    Mr. Tom Clarke: Does the Minister of State agree that it is somewhat indulgent for those involved to congratulate themselves upon the 1997 agreement when this great humanitarian problem, which is a challenge both to this country and to other civilised nations, remains unresolved?
    Mr. Luce: I must tell the hon. Gentleman, if he did not hear me say it in a recent Adjournment debate, that we are treating this matter with the utmost urgency. We wish this problem to be resolved and the closed camps to be ended as soon as possible, but this has to be balanced against the very real problems with which the Hong Kong Government have to grapple in terms of numbers of arrivals.
    Mr. Sims: Will my hon. Friend accept that the free world as a whole has an obligation both to the Hong Kong Government, which is carrying the burden in the way that he described, and to the refugees—not only to those in the closed camps but to some of those who are in what are described as transit centres where they have been living for several years? Is there not a very real obligation upon us to try to help, and is it not true that other nations are looking to Britain to take a lead in order to solve this international problem?
    Mr. Luce: I acknowledge my hon. Friend's point, and I commented on these matters in my evidence to the Select Committee. But the House should not lose sight of the cause of this problem. Because of the gross abuse of human rights in Vietnam there have been more than I million refugees from there during the last 10 years. If only Vietnam would start to respect human rights, we might not have this problem.
    Mr. George Robertson: Is the Minister of State aware that the Hong Kong Government deserve great credit for their humanitarian attitude towards the very large numbers of Vietnamese refugees with whom they have had to deal, but that it is intolerable that thousands of people who are partly our responsibility should still be incarcerated in what are effectively prison camps? Since very few of the
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    refugeess who are now in those camps will be relocated unless the British Government take a lead, urgent action should be taken by the Government that will encourage other Governments to follow our lead. The Government have been warned during the past 18 months — long before the Select Committee took evidence—about this problem.
    Mr. Luce: We have been generous to the Vietnamese. During the last five or six years nearly 20,000 Vietnamese refugees, which is a quite substantial number, have been taken into this country. Of course, the hon. Gentleman is right when he says that this country, in addition to Hong Kong, has a responsibility towards these people, and we are treating it as a matter of urgency.

    Lebanon (Christian Community)
    Mr. Fosterasked the Secretary of State for Foreign and Commonwealth Affairs what contact he has had with the Syrian and Lebanese Governments concernin the plight of the Christian community in the Lebanon.
    Mr. Richard Luce: We deplore the continuing violence in different areas of Lebanon. Her Majesty's embassies have been in touch with leaders of the Lebanese communities and the Lebanese, Syrian and Israeli Governments to express our concern about the recent fighting in the Sidon-Jezzine area between Moslem and Christian groups.
    Mr. Foster: Will the Minister of State confirm that it is the Syrian-backed Druze, Shi'ite and Palestinian militias who have been responsible for the attacks upon Christian communities in the Lebanon? What is being done to aid the 50,000 Christian refugees?
    Mr. Luce: It is a matter of the greatest urgency that the various communities in the Lebanon—both Christians and Moslems of all confessions—should find a way to live with each other again, otherwise, there will be continuing casualties and abuses of human rights.
    Mr. Temple-Morris: Does my hon. Friend agree that the Christian community in the Lebanon is, sadly, as responsible as any other for the situation in the Lebanon today? Does he further agree that if the Lebanese factions do not think very soon about the Lebanon they will have no country to think about?
    Mr. Luce: I do not think that it would be proper for me to apportion blame between communities for the present condition in the Lebanon, save to say that it is extremely serious and that if the Lebanon is to survive, which is in both the national interest and the interests of this country, it is essential for those communities to reconcile their differences.

    Papua New Guinea
    Sir William van Straubenzeeasked the Secretary of State for Foreign and Commonwealth Affairs whether he will make a statement on his talks with the Foreign Minister of Papua New Guinea on 24 to 25 April.
    Sir Geoffrey Howe: On 24 April I held talks with the Foreign Minister on Papua New Guinea. Mr. Giheno and I were also present at the meeting between my right hon. Friend the Prime Minister and the Prime Minister of Papua New Guinea. The subjects covered included matters of concern in the south Pacific and East-West relations.
    Sir William van Straubenzee: Apart from the pleasure given to this country by the visit of the Foreign Secretary and the Prime Minister of Papua New Guinea, did my right hon. and learned Friend have the opportunity to consider the remarkable economic development of that country, much of it with British participation, both private and official, and does he envisage further opportunities for participation in that laudable objective?
    Sir Geoffrey Howe: I agree with my hon. Friend about the success of economic development in Papua New Guinea and its importance, because total British investment now approaches £250 million. We are also backing, through the Export Credits Guarantee Department, the finance for the first stage of a new project at OK Tedi Mining Ltd. and have also made a renewed offer of aid and trade provision funds to cover a feasibility study for the further development of Jackson airport. All those represent opportunities for Papua New Guinea and for ourselves, of which both sides are taking advantage.
    Mr. Tom Clarke: During these discussions, did the Foreign Minister of Papua New Guinea express his concern about Indonesia's external policies—those that involve East Timor that might have consequences for Papua New Guinea?
    Sir Geoffrey Howe: There was no specific discussion about that. We welcome the steps taken by Papua New Guinea and the Indonesian Government to resolve their border problems.

    Middle East
    Mr. Waltersasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on progress towards a middle east peace settlement.
    Mr. Luce: We and our European partners have welcomed recent moves in the search for a peaceful, negotiated solution to the Arab-Israeli conflict. It is up to the parties concerned to take the lead in working for a just and lasting solution. For our part, we are in regular contact with the United States Administration and with King Hussein, and look forward to discussing the next steps during the visit to Britain of the Israeli Foreign Minister.
    Mr. Walters: Mr. Murphy and Mr. Shultz have recently visited the middle east. Does my hon. Friend feel that the visits have brought a relaunching of the Reagan initiative any nearer? In the context of progress towards peace, will he comment on the reported testing of Israeli nuclear weapons?
    Mr. Luce: We welcome the fact that Mr. Shultz has recently undertaken a tour of the area and that Mr. Murphy is keeping up a regular contact with the middle eastern countries. As my hon. Friend knows, we believe that the agreement between the Jordanians and the Palestinians of 11 February is a basis for making progress. We are keeping in close touch with the parties. My right hon. and learned Friend and I will be seeing King Hussein tomorrow morning, and he will be coming through this country again following his visit to the United States.
    Mr. Jim Spicer: Does my hon. Friend accept that the courageous initiative of King Hussein has made the prospect of peace on the west bank and between Jordan and Israel very much closer? Will he give an undertaking
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    to use his best endeavours not only on behalf of the United Kingdom Government but within the Council of Ministers meeting in political co-operation to bring a European element into this discussion, which is vital?
    Mr. Luce: I agree entirely with my hon. Friend, who has recently undertaken a tour of the middle east and met many leaders. King Hussein is showing great courage in his efforts to try to make progress on this intractable problem—one on which there is an urgent need to make progress. That is why it is important for us, as we wish to give King Hussein every encouragement and support, to keep in the closest touch and to see him this week.
    On the European Community, the Prime Minister recently issued a strong statement in support of the Jordanian-Palestinian proposals of 11 February.
    Mr. Faulds: Would it not, perhaps, be advantageous if the Government had less frequent contact with the United States Government, as it is quite clear that that Government are not prepared to put pressure on Israel—which has been the aggressor and which is not prepared to enter meaningful talks towards a resolution of these problems?
    Mr. Luce: I do not agree with that. I think that it is important that we should keep in regular touch. Indeed, my right hon. Friend the Prime Minister has had two discussions with President Reagan recently and my tight hon. and learned Friend the Foreign Secretary has regular discussions with Mr. Shultz. The Americans have an extremely important role to play in the middle east if there is to be progress, and I think it is right that we should keep in close touch with them.
    Mr. Sumberg: In the light of the deplorable events in the Lebanon to which we referred earlier, are not the Government of Israel entirely right in being concerned about the security and safety of Israel's northern border. and will my hon. Friend reaffirm the commitment of the Government that that must be an integral part of any eventual peace settlement?
    Mr. Luce: I certainly agree with my hon. Friend that in the withdrawal of the Israeli forces which is taking pace now, and which we welcome, it is very important that there should be security arrangements between Israel and the Lebanon. That is why I think it is regrettable that the two Governments are not at the moment prepared to talk about these arrangements.
    Mr. Meadowcroft: Will the Minister commend the increasing signs of realism in Israel in respect of the need to involve the PLO in discussions, even within the columns of the Jerusalem Post, and urge on the Israeli Government the need to deal with the PLO before the PLO is undermined by the failure to achieve progress in the middle east?
    Mr. Luce: We shall be able to discuss these matters with the Israeli Foreign Minister when he comes to London the week after next, and we welcome the fact that Prime Minister Pares has made some positive remarks about a direct dialogue between the Arabs, the Palestinians and the Israelis.
    Mr. Latham: Has my hon. Friend managed to establish whether it really is the PLO's view, as expressed by Hani Al-Hassan on 26 April, that it is prepared to agree to a deputation with the Jordanians which does not include prominent members of the PLO?
    Mr. Luce: If my hon. Friend is talking about the delegation that is being proposed to visit the United States, these are matters for the United States and for the parties concerned to work out. We are concerned with focusing our attention upon supporting the proposals that have been produced by King Hussein and the Palestinians, which we think are a basis for progress.
    Mr. Campbell-Savours: Will the Minister answer the question asked by his hon. Friend the Member for Westbury (Mr. Walters) about the testing of a nuclear device by the Israelis?
    Mr. Luce: Yes, Sir. I must apologise to my hon. Friend the Member for Westbury (Mr. Walters) that I lost sight of the question. I think that it concerned trigger weapons, on which we have seen reports of their export from the United States to Israel. We have seen these reports, we are concerned by them, but we have no knowledge about this. The House will be aware that Israel is not a signatory to or a member of the non-proliferation treaty. We believe that it would be in her interests and in international interests if she were now to sign the treaty.
    Mr. Healey: I think that the issue concerning us mostly now is the report from the United States that the American Navy Department, after examining the results of an explosion in the south Atlantic, came to the conclusion that it was the explosion of a nuclear weapon and might well have been an Israeli weapon tested by the South Africans. Have the British Government any information of this?
    Mr. Speaker: Order. The question is about the middle east, with great respect.
    Mr. Healey: Israel is in the middle east, Mr. Speaker.
    Mr. Speaker: The Minister may answer, but I thought that the south Atlantic was not in the middle east. [HON MEMBERS: "Israeli weapons".]
    Mr. Luce: I do not know that it is for the right hon. Member for Leeds, East (Mr. Healey) to interpret the question put by my hon. Friend the Member for Westbury, but I understood him to be talking about the trigger mechanism. With regard to Israel, all I would say is that it would be very much in the international interest if Israel were to sign the non-proliferation treaty. I think that that is the most important thing.

    Spinelli Report
    Mr. Proctorasked the Secretary of State for Foreign and Commonwealth Affairs what consultations he proposes to have with other EEC Foreign Ministers concerning the Spinelli report; and if he will make a statement.
    Mr. Rifkind: We are in regular consultation with our Community partners in preparation for the European Council in June at which the question of possible institutional reforms of the European Community will be discussed. We do not believe that the Spinelli report, which would radically change the balance between Community institutions, is the right way to make progress.
    Mr. Proctor: Will my hon. Friend give the House an assurance that Her Majesty's Government will not bring forward proposals to the House based on the Spinelli report and also that we will not countenance any transfer of any more sovereignty from the House to the EEC?
    Mr. Rifkind: I can say to my hon. Friend that not only will Her Majesty's Government not commend proposals based on the Spinelli report to the House, but it is very unlikely that any other Government will wish to do so either, so far as we can tell. Most of the discussion taking place within the Community takes into account the report of Mr. Spinelli and his colleagues, but is essentially based on other proposals that have been discussed in the Dooge report and in other fora.
    Mr. Deakins: How can the European Assembly be given a greater role in Community affairs without, in effect, giving it greater power?
    Mr. Rifkind: The question whether the European Parliament should have greater powers is an issue that will be discussed. Her Majesty's Government take the view that the existing powers of the European Parliament are already considerable and substantial, and we are not convinced that there is a satisfactory argument for increasing the powers of the European Parliament. We would, however, wish to see the European Parliament more intimately involved in the early consideration of proposals that will subsequently go to the Council of Ministers, so that the Parliament's views can be more fully taken into account by the Council of Ministers when it deliberates on these matters.
    Mr. Forth: What advice will my hon. Friend be giving to the Prime Minister when the subject of the recommendations of the Dooge report come before the meeting in Milan? Will he, in particular, be warning the Prime Minister not to accept the terms of reference suggested in the Dooge report, which would pre-commit any conference to the concept of further European unity and the principles of Spinelli?
    Mr. Rifkind: I fear that my hon. Friend has not properly read the Dooge report to which he refers — [Interruption.] — because there is no commitment in it, either by the majority or minority, to incorporate the proposals of the Spinelli report. There is one passing reference to that report, but no commitment or support for the fundamental recommendations of Mr. Spinelli and his colleagues. Her Majesty's Government believe that there is a good prospect of reaching agreement at the European Council on a package of proposals that will help decision-making in the Community and will help to make progress on the internal market, on political co-operation and on other matters which the vast majority of hon. Members believe are important and desirable in the interests of this country and the Community.
    Mr. Maclennan: Is it true that the Prime Minister welcomed the use by the German Agriculture Minister of the veto and encouraged Chancellor Kohl in the continuation of that policy?
    Mr. Rifkind: We were happy to support the proposals of the Commission on cereal prices. We attach importance also to the right of any member state to indicate when it believes that its important national interests are at stake, and therefore we abstained when the essential question was considered by the Council, to show that we believed that the Federal Republic was entitled to use that procedure if it thought it appropriate.
    Mr. John Mark Taylor: Will my hon. Friend reassure the House that Altiero Spinelli is neither more nor less than the Father Christmas of Italian politics and that his report

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    is neither more nor less than the futuristic fancy of a man old enough to have been imprisoned by Mussolini but not, it seems, too old to daydream?
    Mr. Rifkind: The report to which his name has been given covers a wide range of issues. The basic institutional reforms proposed by the report are not seen by Her Majesty's Government as providing an acceptable basis for the future of the Community.
    Mr. George Robertson: During the discussions, will the Minister raise the crucial issue of the veto and highlight the cloud of hypocritical humbug that is now being raised on this issue? When we note the actions of the two Governments most in favour of abolishing the veto — first, France vetoes the idea of trade talks and then the Federal Republic of Germany vetoes the farm price review — we have amply illustrated the gap between rhetoric and reality on this issue.
    Mr. Rifkind: While I do not believe that the example of the trade talks is relevant to this question, I agree that the French Foreign Minister has made it clear that France believes in the continued indispensability of the right of veto, and the recent action by the Federal German Republic demonstrated the position of that country in the matter. The vast majority of Governments in the Community accept that it is unthinkable that on any vitally important matter any country should be overruled. Therefore, the consideration of the Heads of Government will not concentrate on replacing or removing the right of veto, but rather on ways of ensuring that it should be used only when important national interests are at stake and not to hold up progress on other matters.
    Mr. Heathcoat-Amory: Is it not our task to enforce the existing treaty obligations of the Community rather than take a leap into the unknown with Mr. Spinelli and his report? In particular, will my hon. Friend insist on a freer market in financial services, where Britain is comparatively strong? Will this be top of the agenda at the Milan summit?
    Mr. Rifkind: My hon. Friend is right to comment on the fact that the completion of the internal market is required under the original treaty and is not yet fully implemented. It has not only been a unanimous recommendation of the Dooge report but features in the list of priorities of the President of the Commission. The completion of the internal market should be the first priority of the Community. It will be the policy of Her Majesty's Government to emphasise the essential importance of the subject at the European Council.

    Stockholm Conference
    Mr. Wallerasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on recent developments at the Stockholm conference on confidence-building measures.
    Mr. Luce: We are working with our allies to get more discussion on the details of our proposals for confidence-building measures. We will work hard for progress during the current, sixth, session which began last week.
    Mr. Waller: While it is very welcome that discussions are taking place, must we not judge the talks by their practical results? Can my hon. Friend confirm that
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    confidence depends ultimately on carrying out a number of commitments that have political and humanitarian aspects, as well as military ones?
    Mr. Luce: I agree entirely with what my hon. Friend has said. Of course, we must remember that this conference is not, strictly speeaking, an arms control conference but stems, as he suggests, from the CSCE process, which goes wider than arms control. The objective of Britain and our allies, on which we put forward proposals, is to get practical confidence-building measures that will lead to greater harmony between both sides and might lead to a better climate for arms control negotiations.
    Mr. James Lamond: What is the Minister doing to try to increase public interest in these talks which have been going on for a long time and which are to continue for some time yet? Should not the Government increase the amount of information that is available to the public instead of relying on an occasional question at Question Time in the House, with very little information in the newspapers, so that the public can support — or otherwise—the policies which we are pursuing at these important talks?
    Mr. Luce: I note what the hon. Gentleman has said. Certainly the British Government are most anxious to get across information about what is taking place in various arms control and other talks. The Foreign and Commonwealth Office and the Ministry of Defence produce a great deal of information about arms control talks. That information is available to the public, and is made available.
    Mr. Soames: Does my hon. Friend agree that, with the whole mechanics of arms control creaking dangerously at the seams, the talks need to be given added and more important impetus?
    Mr. Luce: If my hon. Friend is referring to the Stockholm talks, he must be assured that we are giving them the greatest possible support. That is why it is good that the procedure for the new session has been improved so that there will be two working committees and we can focus attention on the practical proposals which the British Government and our allies in the Western worn: have produced, so as to get down to the nuts and bolts of confidence-building.

    Federal Republic of Germany
    Mr. Redmondasked the Secretary of State for Foreign and Commonwealth Affairs when he next expects to meet the Chancellor of the Federal Republic of Germany.
    Sir Geoffrey Howe: I met Chancellor Kohl at Chequers on 18 May. I next expect to meet him at the Milan European Council on 28 June.
    Mr. Redmond: Will the Foreign Secretary give an assurance that, when he next meets Chancellor Kohl, he will discuss with him the serious position between America and Nicaragua? Will he consider a joint approach to bring sanity to American policy on that country'
    Sir Geoffrey Howe: There are questions on Nicaragua further down on the Order Paper. I can only confirm that

    1003
    at the meeting that took place between the Heads of State and Foreign Ministers at the Bonn economic summit Nicaragua was one of the questions that was discussed.
    Sir Anthony Meyer: When my right hon. and learned Friend next meets Chancellor Kohl, will he explain to him how sad it would be if Germany, which has as much interest as the United Kingdom in making a success of the European Community, were, by wanton resort to the use of the veto, to make the process of necessary reform quite impossible?
    Sir Geoffrey Howe: My hon. Friend raises an important matter about which I know he has thought a great deal. The recourse by the Federal German Republic at this month's Agriculture Council to the Luxembourg compromise confirms a political reality, which is that no member state is ready to be voted down when an important national interest is at stake. It is our view that, to prevent that right being abused, a member of the Council insisting upon the veto should, through a special procedure of the Council, explain fully and more formally why his Government consider that a vital interest is at stake. It is important to reach a practical balance which recognises national interests while enabling the Community to proceed apace.
    Dr. Owen: If the German Chancellor is, rightly, to continue championing the cause of European unity and more majority voting, would it not be better if he stated unequivocally that he believes that the Luxembourg compromise is necessary for the development of the Community and that, if there is to be a treaty amendment to allow majority voting, the new treaty must incorporate the Luxembourg compromise?
    Sir Geoffrey Howe: The important feature is that the Federal German Government have practically exercised and recognised the Luxembourg compromise. The other important feature is to ensure that we are capable of achieving majority voting more effectively and more frequently, as that will enable us to make progress.
    Mr. Budgen: Will my right hon. and learned Friend tell Chancellor Kohl that it is now clear from Germany's attitude towards the price of cereals that there will be no fundamental reform of the common agricultural policy until national parliaments say that they will give no more money to the EEC? Further, does he agree that it would be a good thing if the British Parliament started the process?
    Sir Geoffrey Howe: No. I shall leave my hon. Friend to transmit his own message for himself. The result of decisions taken in 1984 and subsequently is that substantial steps are being taken towards reform of the CAP. Price cuts and freezes have been applied in a number of areas. The milk quota has been established and reinforced. It is important that the same discipline should apply to cereal prices.

    El Salvador
    Mr. Terry Lewisasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on the current human rights situation in El Salvador and the implications for relations with the United Kingdom.
    Mr. Renton: We support the Salvadorean Government's efforts to improve the human rights
    1004
    situation in El Salvador. On 13 March the United Nations Human Rights Commission passed. with our support, a resolution which took account of the improvements in this field.
    Mr. Lewis: Are resolutions sufficient? Since January, 501 civilians have met their death at the hands of the death squads. Bombings in the north of El Salvador are increasing apace and bombing by helicopter in the west has been introduced. Is the Foreign Office doing all that it can to exert British influence in this sensitive area?
    Mr. Renton: I have listened with care to the hon. Gentleman's supplementary question. He should take cognisance of the fact that the United Nations resolution on human rights, to which I have referred, shows an awareness of the need for further improvement in human rights in El Salvador. It takes account of the dramatic fall in the number of murders by death squads in recent months. It is clear that further improvements are necessary, but, as the resolution has recognised, there have been substantial improvements.
    Mr. Foulkes: The Government have offered to train officers from El Salvador. As it is highly likely that any such officers will have been involved in the death squads, will the Government reconsider their unfortunate decision?
    Mr. Renton: No, Sir. We have offered the Government of El Salvador the provision of one or two places for suitably qualified El Salvadorean officers to attend staff college courses in the United Kingdom. The offer is compatible with similar offers that we have made to a wide range of developing countries. The hon. Gentleman likes to see the issue in a black light, but when the officers return to El Salvador they will have the opportunity to consolidate democratic rule in El Salvador in the face of, should it occur, a destructive insurgent war.

    Gulf War
    Mr. Torneyasked the Secretary of State for Foreign and Commonwealth Affairs what initiatives he is considering to assist the United Nations in bringing an end to the fighting in the Gulf war.
    Mr. Luce: We wish to see the earliest possible end to the conflict between Iran and Iraq. We shall, therefore, continue to support any realistic initiatives, especially through the good offices of the United Nations Secretary General. My right hon. Friend the Prime Minister and my right hon. and learned Friend and I were glad to be able to discuss these questions with the Arab League delegation which visited London last week.
    Mr. Torney: Why do the Government not press the United Nations to institute a ban on the supply of all arms, including chemical weapons, to both sides in this horrific dispute?
    Mr. Luce: As the hon. Gentleman knows, we, along with other Governments, have strongly condemned the evidence of the use of chemical weapons. The Secretary General of the United Nations has produced eight points, which are the best basis for making progress towards a comprehensive solution to the Iran-Iraq war, as opposed to other initiatives. We shall give all our support to them.
    Mr. Cyril D. Townsend: Will my hon. Friend confirm that Britain recently gave permission for the dispatch of

    1005
    two logistic ships to Iran? Is he aware of the allegations that one of them was instantly equipped with anti-aircraft machine guns? Can he confirm that it is still the British Government's position to maintain neutrality in this?
    Mr. Luce: I can confirm that it remains firmly our position that we shall not sell defence equipment that can in any way prolong or exacerbate that war. It is true that two ships from Yarrow have been released. They cannot he used in the war between Iran and Iraq, and are principally for disaster relief. I have seen the reports to which my hon. Friend refers, but there is no evidence available to me to support them.

    Anglo-Zairean Relations
    Mr. Sayeedasked the Secretary of State for Foreign and Commonwealth Affairs if he will make a statement on Anglo-Zairean relations.
    Mr. Rifkind: Anglo-Zairean relations are good. I visited Zaire during 6 to 8 May, and had discussions with Zairean Ministers on matters of mutual interest.
    Mr. Sayeed: When my hon. Friend met the Prime Minister of Zaire. did he raise the issues of human rights there and the expropriation of the assets of British people in the 1960s and 1970s?
    Mr. Rifkind: I can confirm that the expropriation of British assets was raised with the Zairean authorities. We emphasised the importance that we attach to this matter, and the Zairean authorities implied their willingness to introduce an investment promotion and protection agreement for all future British investment. As to human rights in Zaire, this was considered at the last session of the United Nations commission on human rights under the confidential procedure, and our views on this matter are well known to the Zairean Government.

    Departmental Staff
    Mr. Thurnhamasked the Secretary of State for Foreign and Commonwealth Affairs what are the latest estimates for numbers employed in his Department during 1985–86.
    Sir Geoffrey Howe: The average estimated provision for staff employed by the Foreign and Commonwealth Office, including the Overseas Development Administration, in 1985–86 is 9,885.
    Mr. Thurnham: Does my right hon. and learned Friend expect to make any further reductions beyond those projected in the Government's expenditure plans for the next three years?
    Sir Geoffrey Howe: No, Sir. Staffing levels in my Department have already been substantially cut. Since 1969, the diplomatic staff has been cut by more than 17 per cent., and the overall reduction since 1979 is over 14 per cent. We are working towards the manpower targets for 1988 that are set out in the Command Paper to which my hon. Friend refers.
    Mr. Dalyell: Is the right hon. and learned Gentleman satisfied with the human and industrial relations between his Department and the staff of GCHQ Cheltenham? Specifically, will he look in detail at the case of the distinguished cryptoanalyst, Mr. Hamilton, who is no longer working in Cheltenham?
    Sir Geoffrey Howe: If I am asked a question about that specifically, I shall try to answer it.
    Sir Anthony Kershaw: Is my right hon. and learned Friend aware that there are already too few diplomats, especially diplomats of the second grade—implying that the posts are too small—and that ambassadors have to spend most of their time cleaning cars and doing washing up, which is not efficacious for diplomacy?
    Sir Geoffrey Howe: I am grateful for my hon. Friend's graphic illustration of the effectiveness of our economy campaigns, which need to be maintained, but within the bounds of reason.

    Geneva Disarmament Talks
    Mr. Michael Marshallasked the Secretary of State for Foreign and Commonwealth Affairs what consultations he has held with his North Atlantic Treaty Organisation opposite numbers about arms control following the end of the opening round of the latest Geneva disarmament negotiations.
    Mr. Luce: My right hon. and learned Friend has had the opportunity to discuss arms control issues with North Atlantic Treaty Organisation colleagues on a number of recent occasions; at the ministerial meeting of the Council of Western European Union in April; during the economic summit in Bonn; during the celebration of the 30th anniversary of the Austrian state treaty in Vienna: and at a number of bilateral meetings.
    Mr. Marshall: Does my hon. Friend agree that, given the Russian propensity to seek to drive a wedge between th United States and its NATO allies, such consultations should continue as a matter of urgency? Does my hon. Friend accept that the strategic defence initiative is one area within NATO where we should seek to find common ground?
    Mr. Luce: I agree entirely with my hon. Friend that it is of the utmost importance that we continue this intensive consultation—not only with the United States but within the NATO Alliance — on these important issues, including SDI. This is something to which we attach the highest importance, and we shall certainly continue in that direction. There is no doubt that the Soviet Union is still indulging in wedge-driving between Europe and the United States.
    Mr. Healey: Is it not the case that the real wedge was driven by the unilateral decision, within the Alliance. of the United States to pursue SDI and then to revise its position on SDI repeatedly since the meeting last December with the Prime Minister? In view of the serious deadlock during the first series of meetings in Geneva, has not the time come — the Foreign Secretary having expressed some wise reservations about SDI in a recent well-known speech to which we have all given our assent —for the Government to take the initiative in organising European action to break the deadlock by combining action to prevent experiments in space-related weapons with a massive reduction in offensive weapons? This is the only way forward. Only Britain can lead an initiative within NATO in this direction.
    Mr. Luce: The right hon. Gentleman knows that the objective agreed for these talks between the United States and the Soviet Union was to prevent unconstrained

    1007
    military competition in space and to limit and reduce nuclear arms on earth. The two surely complement each other, as, indeed, the United States Administration made plain. My right hon. and learned Friend said earlier that
    1008
    we stick rigidly, as does the United States, to the four-point agreement reached between President Reagan and my right hon. Friend the Prime Minister. This includes the fact that there must be negotiation before there is any deployment of weapons.

Bates Colliery (Closure)
Mr. Speaker: Before I call the hon. Member for Blyth Valley (Mr. Ryman) to ask leave to move the Adjournment of the House under Standing Order No. 10, I draw his attention to the fact that he sought similar leave on 8 May for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
"the peremptory announcement of the closure of Bates colliery in Blyth yesterday by the National Coal Board."
Today, the hon. Member will have to make out a different case. It would be an abuse to raise the same subject twice.
3.33 pm
Mr. John Ryman: This is a different case, Sir, because there has been a fundamental change of circumstances since 8 May.
I beg to ask leave to move the Adjournment of the House, under Standing Order No. 10, for the purpose of discussing a specific and important matter that should have urgent consideration, namely,
"the unlawful action and the breach of the colliery review procedure by the National Coal Board on 21 May 1985 in the purported formal closure of Bates colliery in Blyth, thereby making 1,400 men redundant."
There has been a change since 8 May. On 8 May, the NCB discussed the matter, but the formal closure did not occur until yesterday afternoon. I ask you, Mr. Speaker, to consider seriously the urgency of the matter and to recognise that the criterion which I must satisfy is that the matter is so urgent that it should take priority over the business that is already arranged.
I address you, Mr. Speaker, with such a degree of urgency because, if this pit is closed, as purported yesterday, 29 million tonnes of coal, which engineers representing the NCB and the NUM acknowledge to be workable reserves, will be lost for ever.
The NCB area director in the north-east — Mr. Archibald—has been thoroughly dishonest in revoking guarantees made to the work force as recently as January 1984. The Secretary of State for Energy and his junior Minster have completely shirked their responsibilities. The Minister visited the north-east last Friday and pretended that he would consider proposals for the pit, yet yesterday, when there had not been time to consider those proposals in any detail, it emerged that they had been rejected outright.
I do not want to exaggerate anything associated with these matters, because this is a highly emotional issue, but it is no exaggeration to say that the Secretary of State and his junior Minister have acted thoroughly dishonestly in misleading the work force at that pit, and me, into believing that they would consider alternative proposals for the viability of that pit. The document was handed to the Minister only last Friday. He has not had time to read it yet, even less to consider it. Nevertheless, yesterday afternoon, after pretending that the matter had been considered, a peremptory order for closure was made.
I am asking you for a debate on this subject, Mr. Speaker, because 1,400 of my constituents will lose their jobs for ever and 29 million tonnes of workable coal reserves will be lost for ever. The coal is of high quality and the pit has a record of good productivity and industrial relations. This is a most serious matter and I ask you to consider it earnestly. This is not a token application, as sometimes happens, and it is not a matter that can be considered lightly.
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Although today's business is important, it should not be allowed to jeopardise the jobs of 1,400 of my constituents who have been thoroughly misled by the dishonest behaviour of the Government—[HON. MEMBERS: "Oh!"] —the National Coal Board and the area director. I ask for an opportunity to make this application without interruptions or catcalls from a party which is not interested in employment in the north-east or anywhere else in the country.
Mr. Speaker: Order. I think that the reason for the interruption was the hon. Gentleman's allegation that Ministers had been dishonest. I did not hear the hon. Gentleman very clearly, but, if he said that, I hope that he will withdraw the allegation.
Mr. Ryman: To say something which is known to be not true must on any reasonable interpretation of the English language, if the language means anything, be considered dishonest. The junior Minister was at Ellington colliery in the north-east when he said that he would seriously consider the proposals submitted for the viability of Bates colliery. He has not done that. He has not had time to do that, because the closure was announced yesterday afternoon. [HON. MEMBERS: "Withdraw."] That is why I am suggesting that the Government have been thoroughly dishonest—[HON. MEMBERS: "No."]—so has Mr. MacGregor, the chairman of the NCB — [HON. MEMBERS: "Withdraw."]—and so has the area director. It is no use Conservative Members protesting, throwing up their hands in horror and shrieking. I am not insulting the NCB or the Government, I am describing them. Their conduct has been thoroughly dishonest. Because of that dishonesty, 1,400 of my constituents are to lose their jobs.
Sir Kenneth Lewis: On a point of order, Mr. Speaker—
Mr. Ryman: I ask you, Mr. Speaker, in fairness to me as a representative of those people and in fairness to the coal industry in the north-east of England, to give us an opportunity to discuss these matters today. They are extremely urgent. Before you peremptorily refuse my application, I ask you to consider the matter most carefully.
Sir Kenneth Lewis: On a point of order, Mr. Speaker.
Mr. Speaker: Yes, what is the point of order?
Sir Kenneth Lewis: As, under Standing Order No. 10, the Minister has no right of reply, should not the hon. Member for Blyth Valley (Mr. Ryman) be asked to withdraw the charge of dishonesty or give the Minister a chance to answer?
Mr. Speaker: The Minister cannot, under Standing Order No. 10, have the right of reply. I listened carefully to what the hon. Member said. If he was implying that the Minister was dishonest, that is a personal accusation and I ask him to withdraw it. I do not think that he was saying that as such.
Mr. Ryman: May I reply to that? It is difficult for me to decide whether Ministers are being dishonest, incompetent or both.
Mr. Speaker: Order. Whether Ministers have been incompetent is another matter, but the Minister himself is not dishonest, and that is the word that I want the hon. Gentleman to withdraw.
Hon. Members: Withdraw.
Mr. Ryman: The conduct of the Government—
Mr. Speaker: Order. The hon. Gentleman is not helping his case.
Mr. Ryman: May I have an opportunity to explain what I have just said? [HON. MEMBERS: "No."] In fairness, perhaps I can be given an opportunity to explain. The Government act through Ministers, and have acted dishonestly, and the Ministers were carrying out the wishes of the Government.
Mr. Speaker: I take that as a withdrawal.
The hon. Gentleman asks leave to move the Adjournment of the House for the purpose of discussing a specific and important matter, which should have urgent consideration, namely,
"the unlawful action and the breach of the colliery review procedure by the National Coal Board on 21 May 1985 in the purported formal closure of Bates colliery in Blyth, thereby making 1,400 men redundant."
I in no way underestimate the hon. Gentleman's anxiety for his constituents in this matter, but he has stated the criteria that I must follow. I have listened to what he has said, but regret that I do not consider that the matter which he raised is appropriate for discussion under Standing Order No. 10. I cannot, therefore, submit his application to the House. I am sure that he will find other ways of drawing attention to it.

BALLOT FOR NOTICES OF MOTIONS FOR FRIDAY 7 JUNE
Members successful in the ballot were:
Mr. Andrew Bowden
Mr. Martin Stevens
Ms. Jo Richardson

Law Reform (Parent and Child) (Scotland)
3.42 pm
Lord James Douglas-Hamilton: I beg to move,
That leave be given to bring in a Bill to make fresh provision in the law of Scotland with respect to the consequences of birth out of wedlock, the rights and duties of parents, the determination of parentage and the taking of blood samples in relation to the determination of parentage; to amend the law as to guardianship; and for connected purposes.
In moving the motion this afternoon I should mention a potential interest as a Scots advocate. Last year, with the support of colleagues I put through the Law Reform (Husband and Wife) (Scotland) Bill, which is now an Act. The Law Reform (Parent and Child) (Scotland) Bill involves a bigger issue. If I may rephrase that, the issue of the liaison may start small, but the implications are considerable.
The Bill relates to children of unmarried parents and is based on the recommendations of the Scottish Law Committee, after widespread consultations. It has the support of both the Scottish Council for Single Parents and the National Council for One Parent Families. There are now an increasing number of people for whom this Bill is relevant. In 1965 in Scotland the average percentage of live births of children whose parents were not married was 5·84 per cent. Last year, the average percentage had increased to 16·34 per cent. That is a considerable increase.
The Bill's main aim is to remove legal differences between children of married parents and children of unmarried parents without conferring parental rights automatically on the unmarried father of children. In extreme circumstances, for example, when a man rapes a woman and she has a baby, it would be unsuitable for the father to become a guardian. Apart from limited acceptance, the Bill replaces existing guardianship legislation with provisions based on the principle of legal equality for all children. There are four principal reforms in the Bill.
First, full parental rights of custody and guardianship are conferred on the mother of a child of unmarried parents. The father may acquire parental rights by court order, and in determining an application for parental rights, the court is correctly directed to regard the child's welfare as the paramount consideration.
Secondly, and most importantly, the Bill introduces further rights for inheritance. The rights to inheritance will no longer depend upon whether a child's parents were married. In 1968, the Law Reform (Miscellaneous Provisions) (Scotland) Act gave the child of unmarried parents full rights of succession to his or her father's estate. There have been almost no problems since then. The anomaly in the present law is that, although children or unmarried parents and their fathers can succeed to each other's property, the rule does not apply to more remote relatives. The provisions in this Bill will mean that a child of unmarried parents will be considered on an equal footing to children whose parents are married, when their relatives die without a will. It will involve considerable benefits to many.
Thirdly, the Bill improves and clarifies court proceedings for determining the paternity of a child.

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Provision is made to facilitate the use of blood-test evidence to determine paternity in civil proceedings, and the court is empowered in limited circumstances to consent to the taking of a blood sample from a child for that purpose.
Fourthly, provision is made in the Bill to facilitate the registration of the birth of a child of unmarried parents and the recording of the father's name after registration of birth. A man registered as the father of a child of unmarried parents will be presumed to be the father.
However, there is a further dimension to the Bill. The Scottish Law Commission stated:
"We have no doubt from comments received on our consultation memorandum, that the word 'illegitimate' is found offensive by many of those to whom or to whose children it is applied."
The commission suggests that the implication is that the person is unlawful. The report also stated:
"We would endorse the view of the Law Commission for England and Wales that the terms 'legitimate' and 'illegitimate' should, wherever possible, cease to be used as legal terms."
The English Law Commission suggested that those words should be replaced by "marital" and "non-marital". The Scottish Law Commission believes that the Bill, which it prepared, would pave the way for the gradual disappearance from the statute book of adjectives such as "legitimate" and "illegitimate".
In many European and Commonwealth countries, the legal position of children whose parents are unmarried has been improved. The preamble to the European convention on the legal status of children born out of wedlock states:
"In a great number of Member states of the Council of Europe, efforts have been made to improve the legal status of children whose parents are unmarried."
I have tried to discover the roots of prejudice, and I came across a revealing comment in a 1984 report from the South African Law Commission. It stated:
"The illegitimate child's legal position is historically ascribable … to the fact that parents were punished for their immoral behaviour by penalising the child in an attempt to persuade the parents to marry."
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What could be more monstrously unfair to any child than that? Apart from the fact that it is cowardly and contemptible to try to pressurise parents by penalising the child, as the South African Law Commission admitted, such a policy does not succeed.
Some years ago I was instructed as an advocate to take a case of affiliation and aliment through the sheriff court in Glasgow. The circumstances were straightforward. The father of the child had not paid a penny towards the child's keep. Not only that, but he refused to acknowledge that he was the father. It was my job to establish the facts, which I did. But when I left the sheriff court I could not help feeling sympathy for a child in those circumstances, and I was left with the conviction that the law should not be unsympathetic to such a child.
In my view, no child should be referred to as unlawful, directly or indirectly, because of a lack of marital status of the parents. A child of unmarried parents is a person in his or her own right, and what matters most is the child. The Bill strengthens the position of the child whose parents are not married. I commend it to the House.
Question put and agreed to.
Bill ordered to be brought in by Lord James Douglas-Hamilton, Mr. Hugh Brown, Mr. Alexander Eaclie, Mr. Nicholas Fairbairn, Mr. Michael Forsyth, Mr. Michael Hirst, Mr. Gerald Malone, Mr. John Maxton, Mrs. Anna McCurley, Mr. Albert McQuarrie, Sir Hector Monro and Mr. Bill Walker.

LAW REFORM (PARENT AND CHILD) (SCOTLAND)
Lord James Douglas-Hamilton accordingly presented a Bill to make fresh provision in the law of Scotland with respect to the consequences of birth out of wedlock, the rights and duties of parents, the determination of parentage and the taking of blood samples in relation to the determination of parentage; to amend the law as to guardianship; and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 7 June and to be printed. [Bill 150.]
Orders of the Day

  Transport Bill
  [2ND ALLOTTED DAY]
  As amended (in the Standing Committee), further considered.

  Transport Bill
    Clause 45

      TRANSFER OF OPERATIONS OF THE Bus COMPANY TO THE PRIVATE SECTOR
      3.50 pm
      Mr. Matthew Parris: I beg to move amendment No. 62, in page 39, line 38 after `undertaking', insert
      `with not more than 49 per cent, thereof being transferred to any party'.
      If one has a complaint about the Standing Committee procedure that we adopt in the House, it is that we tend to alternate between questions of the broadest principle and legal questions of the minutest detail without sometimes giving proper attention to the middle ground —those important aspects of the Bill where it may be made to work better or not to work at all. For reasons of the striking of political attitudes, questions of broad principle tend to be dwelt upon, and for reasons of delaying the progress of the Bill, questions of the minutest detail tend to be dwelt upon. Sometimes both sides of the Committee do not look at the Bill itself and how it might best be made to work.
      The motivating force behind the Bill is competition policy. Central to that policy is the proposition that the Government should divest themselves of the National Bus Company. The form in which the NBC is privatised and the timing of that privatisation could be absolutely essential to whether competition policy is effectively stimulated or inhibited by the Bil.
      My amendment, if taken literally—it is not intended to be—would oblige my right hon. Friend the Secretary of State to divest the state of the NBC in at least three separate companies. I have discussed the matter with the National Consumer Council, and the purpose of my amendment is to introduce a short debate on the form of privatisation. I invite the House to recommend my right hon. Friend, when deciding how many companies to break the NBC up into, to favour a large number of small companies rather than a small number of large companies.
      My hon. Friend the Member for Hereford (Mr. Shepherd) knows better than I, but I know too, that it was the monopoly, the monolithic power, of the Midland Red West Company, that all but jeopardised the experiment undertaken in Hereford and Worcester, although in the end competition won through. Should we divest ourselves of the NBC as one large monopoly organisation, the competitive threat that that would present to other bus companies, existing and putative, throughout the country, would be so great that the conditions of free competition for the customer-passengers that we hope to establish through the introduction of the Bill might never be successfully set up.
      In deciding how to privatise NBC, my right hon. Friend the Secretary of State will have taken and will take advice
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      from many different sources. He will have spoken to representatives of the NBC itself. Naturally, they will have told him that the more closely that the form in which the company is privatised resembles its present form, the more that will suit them and the easier it will be. I imagine that the last thing the present management wants is that the company should be fragmented before sale into many small and unfamiliar companies.
      My right hon. Friend the Secretary of State will also have spoken to the trade unions involved. I am sure that they too would prefer to deal with one large organisation or a small number of large organisations than with a large number of small organisations.
      My right hon. Friend will also have spoken to the local authorities. No doubt they too would prefer to carry on working with companies of more or less the same size and type of management as those with which they are familiar, so I imagine that they would also not wish the NBC to be broken up into a large number of small, unfamiliar units.
      Mr. Martin M. Brandon-Bravo: Does my hon. Friend agree that breaking the NBC up into companies of similar size to the present main constituent companies — for instance, Trent Motor Traction in my area—would allow the possibility of management buy-out and employees having a stake in the company employing them, thus providing the same opportunities to advance as in the case of the National Freight Consortium? Does my hon. Friend agree that it might be better to proceed in that way rather than by having very large companies which could not possibly offer opportunities for managment buy-out?
      Mr. Parris: Yes, I entirely agree with my hon. Friend. If my right hon. Friend the Secretary of State were minded to break up the NBC into something approximating to the current pattern of constituent sub-companies I believe that that would be the right decision. I am familiar with the operations of Trent Motor Traction and I believe that a company of that size and form could operate effectively and properly, but it is not for me to say that every one of the constituent companies now under the NBC umbrella is in the same position. Certainly, anything larger than that would be too large, although anything very much smaller might be too small provide the management structure, the number of buses or the facilities to stand alone in the market place. Nevertheless, in my view it stands to reason that the NBC should be broken up into a number of much smaller companies. That is the purpose of my amendment, and I commend it to the House.
      Finally, my right hon. Friend the Secretary of State has no doubt also spoken to my right hon. Friend the Chancellor of the Exchequer, who, I imagine, will have concluded that, the larger the company to be sold, the better the immediate proceeds to the Treasury. In the short term, that is true. In the long term, however, I believe that the establishment of a proper competition policy will benefit future Chancellors, as it will be possible to reduce subsidy because the companies will be able to provide a good service without it. I am sure, too, that the draftsmen and accountants at the Department of Transport will have told my right hon. Friend the Secretary of State that it is much easier to sell one large company or a small number of large companies than to sell a large number of small companies.
      All those considerations are important, concrete aspects which bear heavily in the immediate term. Competition

      1017
      policy is an abstract, long-term matter which does not bear heavily in the immediate term, but it is the motive behind the entire Bill and I hope that my right hon. Friend and the House will not lose sight of it in considering the form in which the NBC should be privatised.
      Mr. Malcolm Bruce: As we are now reaching the stage when the Bill is likely to become law whether we like it or not, although its shape may be changed in another place, the amendment moved by the hon. Member for Derbyshire, West (Mr. Parris) is clearly worthy of consideration. I was somewhat concerned at the outset in case he was encouraging fragmentation down to totally anarchic proportions, and I was glad to hear that that was not his intention. If the companies are too small, that is clearly undesirable, but if privatisation is to take place as proposed it seems sensible that the operating companies should be the main constituent components. To the extent that the amendment seeks to achieve that, it has something to commend it.
      There is considerable concern that, if the NBC is to be broken up, in view of the experience in Hereford it should not be broken up in such a way as to create a series of local monopolies instead of one national monopoly. The Minister, I know, would agree with that. However, we have to secure circumstances in which competition is fair and equal.
      If I may make an oblique reference to circumstances north of the border, what causes me concern is that the Scottish Bus Group, which is to be retained as 100 per cent. Government-owned, will seek to gobble up the services of the passenger transport executive and create, effectively, a national monopoly in Scotland. I regret that the Government tend to regard Scotland as a region of the United Kingdom, whereas it is a distinct national entity. If a monopoly is created, there will be less competition in Scotland. If the consequence of what is likely to happen in England is a series of regional monopolies, real competition will not be improved. I should like the Minister to consider that point.
      4 pm
      There is genuine and serious concern that the National Bus Company may be broken up in such a way as to create a series of regional monpolies instead of the competition that the Secretary of State for Transport seeks. My hon. Friends and I have expressed reservations about the thrust of the Bill, but I intervene at this point in a spirit of realism, recognising that the Bill will be passed. I urge the Secretary of State for Transport to take account of the genuine concern about the implications of breaking up the National Bus Company. The amendment takes some account of the need to implement the Bill's provisions in a balanced and sensible manner.
      Mr. Brandon-Bravo: Before the hon. Member sits down, will he explain what kind of size, if the National Bus Company is broken up, the Liberal party thinks it is reasonable for these companies to be, bearing in mind that the smallest of the NBC companies operates 134 vehicles and the largest 1,105? Will he also say a few words about. management buy-outs and employee participation?
      Mr. Bruce: I am surprised that the hon. Gentleman does not realise that the Liberal party believes that local authorities and local passenger transport authorities should be making the decisions. That is why we oppose the Bill.
      1018
      They would be able to determine what is the right balance. Given that the Secretary of State for Transport intends to implement the Bill, I am suggesting that he should ensure that local circumstances in each region should be taken properly into account. That is the point of the amendment, and that is why it deserves consideration.
      Mr. Ted Leadbitter: Although this amendment appeals to hon. Members, one has to remember that clause 45(8) makes it abundantly clear that the Secretary of State has reserve powers. Therefore, if he discovers that defective proposals are put to him, or if he does not approve them, he will be empowered to draw up his own. In Committee, it became clear to me that. the attitude of the Government borders upon obduracy and that hon. Members have therefore formed the view that the only salvation, minor though it may be, will be found in the House of Lords. Therefore, the hon. Member for Derbyshire, West (Mr. Parris), whose amendment appeals to the House, should consider the attitude of the Secretary of State for Transport. Even if the House agrees to the amendment, the Secretary of State will quickly find a means by which to have his own way.
      Mr. Colin Shepherd: I wish to underline the point made by my hon. Friend the Member for Derbyshire, West (Mr. Parris). The National Bus Company has learned from the Herefordshire trial area that the effectiveness of Midland Red West as an operating company was immensely improved by direct communica-tion between management and garages and drivers. The management of Midland Red West would, I believe, endorse that point, because it has made it to me.
      It leads me to believe that more and smaller operating companies, with no more than 200 buses at most, would be most responsive to the market. It would also meet the point made by my hon. Friend the Member for Nottingham, South (Mr. Brandon-Bravo). Management or worker buy-outs would become even more possible, which could only be to the good. When those who are employed in the great state monoliths have a direct interest in their companies, their attitude changes. I want the attitude of these workers to change. I want them to be responsive.
      In particular, I wish the label "the friendly bus service" to be returned to Midland Red. It used to be a friendly bus service before it was nationalised in 1968. Since then, the friendly bus service has been lost sight of. Those of my constituents who have spoken to me believe that Midland Red has become a distinctly unfriendly bus service.
      Mrs. Gwyneth Dunwoody: It must have been a very selective cross-section of the hon. Gentleman's constituents.
      Mr. Shepherd: The hon. Lady, as ever, makes a derogatory remark. My constituents have volunteered this information when I have asked for comments. That view has been expressed too often to be ignored. I want the label "the friendly bus service" restored. It will be restored by means of short lines of communication and small units with the maximum direct employee participation.
      Mr. Richard Caborn: The timetable for the disposal of the assets of the National Bus Company could create great difficulties for the passenger transport executives when they are broken up. If the PTEs were to be broken up before the NBC and if tendering were to commence after the PTEs were broken up but before the

      1019
      NBC was broken up, the NBC assets could be over-valued and the NBC would be in a very good position over tendering. What will the timetable be? Also, how do the Government intend to deal with the problem of the PTE agreements with the NBC?
      The Parliamentary Under-Secretary of State for Transport (Mr. David Mitchell): I shall deal first with the point raised by the hon. Member for Sheffield, Central (Mr. Caborn), although it is somewhat outwith the rest of the debate. The National Bus Company will, by D-day, be broken up into operating companies. There is no such pressure upon the PTE. He need not, therefore, be concerned about the PTE. If there is any cause for concern, it is that the PTE is not to be broken up so quickly as the National Bus Company.
      My hon. Friend the Member for Derbyshire, West (Mr. Parris) has done a service to the House in moving this amendment and I am glad to have the opportunity to reassure him. I can well understand his concern. He does not want the National Bus Company to be transferred to the private sector in a form which will enable it to dominate the competition and thereby undermine our policy. It is for that reason that clause 46(1) says that the main objective of the NBC in preparing its disposal programme and in running its business until the programme is completed shall be to promote sustained and fair competition. That will be competition between the NBC subsidiaries and former subsidiaries and other operators. The NBC will have to dispose of its operations into a number of units. The objective of promoting competition clearly could not be met if the NBC was privatised as a whole.
      My hon. Friend the Member for Derbyshire, West referred to the central purpose of the Bill, which is to introduce competition. Many of our debates have, wrongly, been overshadowed by the failure to recognise that the key point of the Bill is competition, which brings with it the opportunity for efficiency of management, more businesslike organisation and a position in which the consumer comes first.
      Mr. Leadbitter: We are trying to obtain some notion of the Government's thinking, if there is any. The Minister referred to competition and said that if we privatised the NBC as a whole, we would not have competition. Yet only a week or so ago, the Government decided to privatise the gas industry as a whole to promote competition. Where is the logic in the Government's thinking?
      Mr. Mitchell: The hon. Gentleman knows that one can relatively inexpensively promote a competitive bus service alongside another bus service, but cannot, for the same relatively low cost, provide a gas pipeline into each household alongside the established pipeline. The hon. Gentleman's point has no validity.
      I am delighted that my hon. Friend the Member for Hereford (Mr. Shepherd) is present because the Hereford experiment was enlightening. We made it clear that it was a trial and that we had many lessons to learn from it. One lesson we learned was the way in which Midland Red used its clout in the form of predatory pricing that was anti-competitive—
      Mrs. Dunwoody: Should we therefore conclude that the Minister believes that, if two or three companies
      1020
      compete in the same area for the same routes, there will be no attempt at predatory pricing? Has he not heard of one company seeking to use its economic muscle to drive out other companies? It does not need to be Midland Red; it will be typical practice throughout the country.
      Mr. Mitchell: The hon. Lady knows that Midland Red, which has a large operating area, was faced with competition on a narrow front. It concentrated its resources on seeking to smash that competition. When the Bill is on the statute book and there is competition throughout the country, such companies will face competition on every flank and will not be able to concentrate their resources in that way. I hope that the Liberal party will now return to its traditional belief in opposition to monopoly and support what I am saying.
      Mr. Bruce: I am concerned that the Bill may inadvertently create local monopolies. Is the Minister aware that the former manager of Grampian Passenger Transport has recently transferred to become the general manager of Alexander's Northern and the Scottish Bus Group on the clear indication that he sees the expansion of the Scottish Bus Group to replace existing local authority services and, therefore, create a monopoly that will provide him with his career prospects?
      Mr. Mitchell: I shall come to that point in a moment.
      4.15 pm
      Mr. Eric Forth: Is my hon. Friend aware of the significance of the local election results? For example, in Lancashire the local Labour group spent more than £130,000 to scare people with a misinterpretation of our bus policy, but lost control of the county, while there was a magnificent result in Hereford and Worcester—the Conservatives retained control—where the experiment took place that has been much maligned by the Opposition? Does my hon. Friend draw the obvious conclusion from that?
      Mr. Mitchell: I am sure that the whole House will draw the obvious conclusion from that. If the hon. Member for Crewe and Nantwich (Mrs. Dunwoody) fears that she will lose the company of my hon. Friend the Member for Mid-Worcestershire (Mr. Forth) in the next election, I assure her that, once the Bill is in operation and there are improved bus services in his area, he will be re-elected with an even larger majority.
      My hon. Friend the Member for Derbyshire, West referred to competition as being more important than the maximum short-term yield to the Treasury, and I carefully noted his point. He also said that the units should not be so small that they were unviable or inadequate in management structure. An important point was made by my hon. Friend the Member for Nottingham, South (Mr. Brandon-Bravo) who said that the size was such that a management buy-out would be possible. We have good reason for studying some of the other places where management buy-outs are taking place. Huge advantages have flowed from that, especially in the change in worker attitude — for example, in the National Freight Corporation.
      Mr. Peter Fry: If companies are split into too small units, there is a danger that some of them will not be subject to management buy-outs. Why should anyone bid money for weaker companies? Why not

      1021
      wait until they go out of business and buy their buses at cheap, second-hand values and refuse to do anything about future pension requirements? Is there not a need to retain a balance to ensure that the scenario I have outlined—which in some areas is as likely to happen as the scenario outlined by my hon. Friend—does not happen? Should not the Government be aware of that danger when considering the amendment?
      Mr. Mitchell: My hon. Friend is well known for his interest in this area, but he may not have been in the Chamber when I spoke about the purpose entrenched in the Bill—the promotion of sustained and fair competition. Sustained and fair competition will not be promoted, with units of the size that my hon. Friend says nobody will want —units which would therefore go bust. That is not the promotion of sustained competition. Therefore, my hon. Friend's point is fully met.
      Mr. Fry: Will my hon. Friend bear in mind the danger that large municipal operators — for example, Manchester, with more than 3,000 vehicles—can make mincemeat of any private operator unless the Government are careful to ensure that they are scaled down at the same time?
      Mr. Mitchell: I take my hon. Friend's point, which has some substance. However, in the bus industry there are diseconomies of scale above a certain level and there is no reason to believe that some of the PTEs will not want to break down into smaller units to make management more economic and efficient.
      The hon. Member for Gordon (Mr. Bruce) said that he feared an inadvertent creation of monopolies. I am delighted to welcome him back to the traditional Liberal view that a monopoly is not desirable. I only hope that he will address his remarks to his hon. Friend the Member for Isle of Wight (Mr. Ross) and look at the way in which the Liberal party has approached this Bill throughout its passage. It has sustained the view that local authorities should have the right to decide, which—in the pattern of the knowledge of what many local authorities will do —is to create local monopolies. We believe that that is against the interests of the customer and of the industry as a whole.
      It is too early, however, to say exactly what will follow in connection with the break-up of the National Bus Company. We have asked the board to draw up options for privatisation of the company. The company has appointed a merchant bank to advise it, and my Department last week appointed consultant accountants. Until we have seen later in the year the options for privatisation and discussed them in detail with the company, I cannot say in how many units the National Bus Company will be transferred to the private sector. However, I can give my hon. Friend an assurance that I would not agree to any programme for the disposal of the National Bus Company's operations unless I was clear that it would indeed promote the competition which is the cornerstone of our policy.
      Mrs. Dunwoody: The Minister will accept that the formula that he has proposed is very complicated. He is saying that the units on the one hand must be large enough to be viable but on the other hand must be small enough for anybody considering a management buy-out to take them over. Will he give an undertaking that he will come back to Parliament when he finally reaches some decisions
      1022
      about the matter, which is fundamental to the future of the transport system, so that we may have the opportunity to discuss the decisions that he takes? If not, will he accept that we are having to take his word that he has no idea at present what he intends to do, but that at some time we can rely upon him to do the best possible thing for the best of all worlds? He will accept that that is a trifle vague, even for him.
      Mr. Mitchell: The hon. Lady produces, as if it is some strange new idea which suddenly worries her, the fact that at this stage the negotiations between the representatives of the merchant bank on the side of the National Bus Company and the Department's representatives have not reached a stage at which any conclusion can be brought forward. That is correct. The hon. Lady knows that, and she has known it all along.
      We have said that we are setting down the broad criterion upon which those decisions will be taken. That criterion is promoting sustained and fair competition. That does not mean that the patterns will be the same size in every part of the country. Indeed, as some of my hon. Friends have argued, in some areas, larger units may be appropriate because larger units will be opposing them. In other parts of the country there may be more demand for a management buy-out, and the resources available for the management buy-out and the amount that management and workers want to take over may themselves have a profound effect upon the decisions taken. It would be wrong for us to set down now, before advice has been taken on these matters, the precise pattern in the way that the hon. Lady has requested.
      She now asks me—it is an unusual concept—that we should come back to Parliament and give it the opportunity to discuss the proposals when the negotiations between the two parties have been completed. There will be nothing hole-in-the-corner about this. The hon. Lady will have public knowledge of what is being done and, if she does not like it, the opportunity of a Supply day will of course be available to her.
      Mr. Leadbitter: The Minister is as much seized of the issue as any other hon. Member, but in fact he is asking the House to give him a blank cheque. After many weeks considering the Transport Bill, he cannot yet tell Parliament what the apportionment shall be. All he says is that he can assure Parliament that, whatever the apportionment and whatever the break-up, it will comply with the central point of Government policy, competition. The words sound very inviting, but in practical terms I ask the Minister to try to respond to my hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody) and say whether at some point he will let Parliament know what will arise from the blank cheque for which he now asks.
      Mr. Mitchell: It is not a blank cheque. If the hon. Gentleman had been in business, he would know that a decision is often taken that an expenditure between X and Y will be permitted. We have set down parameters within which such decisions will be taken. The parameters are that we seek a break-up of the National Bus Company which will promote sustained and fair competition. The criterion is established, and we shall do our best to ensure that it is fairly and properly carried out. On that, the hon. Gentleman can have my assurance.

      1023
      It is impossible to go further at present, when we do not know which group of management and workers will come forward, what its resources are and how much it wants to take over. Nor do we know the advice of the National Bus Company and its merchant bankers or the advice of our own consultant accountants. I have given the hon. Gentleman a reasonable criterion against which he can judge the success or otherwise of our policies in this matter, and I hope that he will accept that.
      I hope, therefore, that my hon. Friend the Member for Derbyshire, West, having drawn attention to a useful point and having had the advantage of a useful debate, will find it appropriate to withdraw the amendment.
      Dr. John Marek: I apologise to the hon. Member for Derbyshire, West (Mr. Parris) for not having heard the beginning of his opening remarks.
      I wish to speak briefly against the amendment and to bring to the attention of the House the example of Mid-Wales. The company that operates in Mid-Wales is Crosville. Indeed, it operates in the whole of north and Mid-Wales with buses going down as far as Cardigan and Carmarthen in the south and covering the Aberystwyth, Newtown and Dolgellau area of Mid-Wales. I am told that only one bus service in that area makes a profit. If the Bill is enacted, severe problems will arise in the area. Nobody will wish to undertake a management buy-out or to compete because it is not possible to make a profit in the area. Any buses that are run in the area will be run only because the county councils are providing the necessary funds and subsidies. I do not believe that any company wants to run a service that will be wholly dependent upon subsidies.
      The area of Mid-Wales has to be tied to a much larger company such as Crosville. It could be contrary to the intention of the Bill to require Crosville to produce plans for the break-up of the company. If a break-up of the company is to be produced, the units must be as large as possible. This means that it is unlikely that any management buy-out would be undertaken in the area. I think that the Minister needs to have as much freedom as possible in order to be able to provide for services in such an area.
      With regard to selling off any part of the company, the provision
      "with not more than 49 per cent. thereof being transferred to any party"
      puts additional restrictions on the Minister. In my view, the Minister will have enough trouble trying to privatise the bus service in Mid-Wales. I do not wish him to be hampered further. For that reason, I am not happy with the amendment.
      Mr. Parris: It is not for us to dictate what should or should not happen in Mid-Wales. The House is at its least effective when it attempts to dictate the detailed structure into which companies such as NBC should be broken up.
      4.30 pm
      Mr. David Mitchell: Before my hon. Friend proceeds, may I draw his attention to the nonsense spoken by the hon. Member for Wrexham (Dr. Marek)? He claimed that nobody wanted to run a service that was dependent on subsidy. There are thousands of businesses in Britain which run on the basis of contracting, and a contractor is
      1024
      delighted to contract to a public body, such as a local authority because he knows that in the end he will get his money. It is, therefore, nonsense to suggest that what we propose is unattractive.
      Mr. Parris: I am sure that many bus companies will have to depend to a greater or lesser extent on subsidy, and what happens with Crosville and in Mid-Wales will have to be for determination outside this Chamber. It is for us to lay down the broad guidelines according to which executive decisions will be taken. It was with that in mind that I initiated this short debate. The Minister, in responding, has gone further even than my amendment sought to go and, in the light of that, I beg to ask leave to withdraw the amendment.
      Amendment, by leave, withdrawn.
      Mrs. Dunwoody: I beg to move amendment No. 176, in page 41, line 8, at end insert—
      '(5A) The Company's disposal programme shall also—

      (a) specify the parts of their undertaking the provision of which has been financed wholly or partly by any one or more Passenger Transport Executives or local authorities and in respect of which sums are repayable to the Executives or local authorities; and

      (b) describe the manner in which such sums are to be assessed.'.

      Mr. Deputy Speaker (Mr. Ernest Armstrong): It will be convenient for the House to discuss at the same time amendment No. 175, in clause 47, page 43, line 2, at end insert
      'and on the disposal of any part of their undertaking shall make repayment of such sums as are repayable, as mentioned in section 45(5A) of this Act, in respect of that part of the undertaking.'.
      Mrs. Dunwoody: We are here attempting to achieve an orderly disposal of assets. Over the years, PTEs have been contributing not just to revenue costs but have put considerable sums — remember, we are talking about ratepayers' money — into the creation of assets for a number of companies. That expenditure has covered, for example, vehicles, garages, bus stations and interchanges.
      As the Minister admitted when replying to the last amendment, he is not certain how the companies will be broken up or even about the size of the units that will then be created. It seems wrong, therefore, that the ratepayers, who have contributed for years, should not be told clearly what will happen to those assets. We are, therefore, asking in the amendment that
      "The Company's disposal programme shall also—
      (a) specify the parts of their undertaking the provision of which has been financed wholly or partly by any one or more Passenger Transport Executives or local authorities and in respect of which sums are repayable".
      We debated this matter at length in Committee. It remains an important and outstanding issue because we are talking of large sums of money. The report on transport aspects of the 1984 public expenditure White Paper said:
      "the fact that the NBC was able … to reduce its capital liabilities to the Secretary of State by £17·7 million in 1983 indicates that the Company is generating substantial cash surpluses after taking account of both interest charges and capital investment requirements. The revenue support payments made by local authorities to the NBC are, therefore, in effect, being used to repay the Company's long-term loans rather than to improve service standards, a situation that we find rather surprising."
      The Minister will also be aware that the Grieveson Grant report pointed out that a further £23 million of NBC debt had been repaid and had not been replaced by further

      1025
      loans. We are considering extremely large sums. That money has been paid to NBC and we have no idea of what attempts will be made to repay it and what will happen about the disposal of the assets in relation to PTEs.
      Mr. David Mitchell: I am not certain what the hon. Lady is after. She said that the NBC made a profit. Any successful, well-run business is likely to make a profit. In this case, out of its profit it has repaid part of its debt to the Government. That has been a proper course for it to take and many businesses do that to their bankers in the course of successful trading periods. She went on to refer to revenue support being given by local authorities to the NBC. That is support to provide services which would otherwise operate at a loss and it is likely to include an element of the cost of depreciation on NBC's vehicles. Over and above that, she may have in mind contributions from ratepayers towards major capital assets such as depots and bus stations. If the hon. Lady will spell out the precise area of her misgivings, I will explain the position.
      Mrs. Dunwoody: I am endeavouring not to delay the House unduly. I specified the items which I had in mind and mentioned garages, bus stations and interchanges—property of various kinds — on some of which large investments have been made. I pointed out to the Minister more than once in Committee the size of the sums involved.
      The Minister says that businesses are in business to make profit. That is not the point at issue in debating this amendment. Local authorities are contributing ratepayers' money to the NBC, not to enable the NBC to repay much larger sums but to enable good services to be provided in their areas.
      In its report on the privatisation of NBC, Grieveson Grant said:
      "Since the December 1983 year end, a further £23 million (of the NBC debt) has been repaid and not replaced by further loans."
      In other words, there is no question of money continuing to be spent on the replacement or building of assets of the type to which I referred. Indeed, the Minister pointed out that Midland Red used its older buses, in the Hereford trial area, to run the competition into the ground. The report continued:
      "The repayment of these liabilities in 1983, while maintaining a strong balance sheet, emphasises the company's ability to generate cash … a consistent feature."
      That cash has come largely from the considerable sums that have been contributed over the years by local authorities. It is not true to say that revenue support grant has recently been given in respect of those contributions. In many instances, the money has been used to create capital assets of the type I mentioned, and in Committee I gave the Minister the figures.
      Because it is important for us to deal with other aspects of the Bill today, I will not detain the House on this issue, even though it is important. But answers are required. Local authorities have contributed large sums of money, yet no attempt will be made to repay them for creating those assets when they are sold, and we have no idea who will take over those assets or what will be the profits that such companies make in the future.
      Why should local authorities, many of which will be rate-capped, be expected to find large sums of money to make up the difference, for example, on concessionary
      1026
      fares, from contributions from their ratepayers? They should be told in clear terms what will happen to NBC's assets that have been created by their money.
      Mr. David Mitchell: The hon. Member for Crewe and Nantwich (Mrs. Dunwoody) has made the position clearer, and it may be helpful if I divide the issues that she raised. There is, first, the issue of revenue support and the repayment of money to the Government. Secondly, there is the issue of the grants that have been made for capital expenditure on garages, bus stations and other property.
      As for the profits that have been made and the use to which the board has put those in repaying debt to the Government, that is a normal procedure for a successful business, and the NBC is successful. In other words, it is proper for a successful business to use the profits from its operations to repay debt. There is nothing strange about that.
      The hon. Lady went on to raise the different question of substantial grants — she was right to say that sometimes a great deal of money has been involved—in garages, bus stations, property and so on. Some of my hon. Friends will be interested if the hon. Lady is saying to the House that the representatives of the ratepayers, in the form of the metropolitan county councils, have parted with public money to the National Bus Company without any contractual arrangements about what is to happen—[Interruption.] The hon. Lady knows perfectly well that the National Bus Company has always had power to sell subsidiaries if it wished. Is she suggesting that ratepayers' money has been put into companies that could be sold without contractual arrangements to cover what was to happen to that money if the subsidiaries were sold?
      Mrs. Dunwoody: Is the Minister of State not aware that he is telling the company—not asking it—to sell its subsidiaries? Does he seriously think that local authorities would have entered into an agreement to put up money over many years if they had thought that at the end of the time all of the assets were to be disposed of with no consultation with the people who had put up the cash? He must think that local authorities are more stupid than anyone else.
      Mr. Mitchell: The astonishing thing that the hon. Lady is trying to reveal to the House is just that. She is trying to say that local authorities have parted with large sums of money to the subsidiaries of the National Bus Company, although she knows that the National Bus company has always had the right — not the compulsion of Government — to sell any subsidiaries it wanted. [Interruption.] No. It has always had that power under existing law. At any time the NBC could have put any one of its subsidiary companies on the market if it judged that to be a profitable and viable way of using its resources. Is the hon. Lady saying seriously to the House that ratepayers have been looked after so badly that their representatives have parted with large sums of public money without any contractual arrangements about what was to happen if the subsidiary company was sold?
      It would be a different matter if the National Bus Company was being made to dispose of assets. The hon. Lady and I are talking about money that has already been paid over under existing legislation. The National Bus Company has an absolute right to sell those subsidiaries. Is she saying to the House that the representatives of the ratepayers have been so incompetent and so unable to

      1027
      protect the interests of the ratepayers that no contractual arrangements were made about what was to happen in the case of the disposal of a National Bus Company subsidiary into which the local authority has put money? If there are contractual arrangements, they will be carried out. If there are no contractual arrangements, it is a disgrace.
      Mrs. Dunwoody: The Minister is not concerning himself seriously with the problem. He is so naive that he cannot see the difference between the National Bus Company coming to some kind of agreement with the people from whom it is to get its funding and being forced to flog off any saleable asset, including all of its buses and other assets, because the Government have insisted. If he cannot see the difference, he must be more naive than I believed. He and his Secretary of State are forcing the National Bus Company to sell off its assets and to divide itself into tiny units. He is not even sure what size the units should be. He should accept the amendment so that an attempt can be made to protect the investment of many ratepayers over many years.
      Mr. Mitchell: I do not think we need detain the House much longer on this amendment. The point I have made is clear and simple. Revenue support has been for the operating expenses of the National Bus Company, including depreciation; profits on its operations have enabled it to repay the debt to the Government. In regard to grants of large sums of money for garages, bus stations and the like, I doubt very much whether the representatives of the local ratepayers have been so remiss as to part with that money without contractual arrangements about what was to happen in the event of the National Bus Company deciding to sell the subsidiary company into which the money was put. If that were the case, as I said, it would be a disgrace. Therefore, I hope that the House will feel it right to reject the amendment.
      Mr. Leadbitter: The issue has become unnecessarily heated. To come back to the amendment, what does it seek? It does not matter a tinker's cuss whether the Minister is right. Money has been put into the National Bus Company for certain capital projects. Whether the contractual arrangement did not foresee what the company would be forced to do as a result of the Bill or whether the possibility was foreseen is of no consequence. The amendment does not argue the point. It says that the disposal programme under clause 45 shall
      "specify the parts of their undertaking the provision of which has been financed wholly or partly by any one or more Passenger Transport Executives or local authorities".
      Why does the Minister not accept the amendment?
      4.45 pm
      Mr. Mitchell: In the cold light of tomorrow the hon. Member should consider the debate carefully against the background that the Audit Commission will be examining the accounts of local authorities to see whether they have disposed of money without making contractual arrange-ments as to its repayment. Either there is a contractual arrangement for what is to happen in the event of a subsidiary of the National Bus Company being wound up or being sold, or there should be. I have no doubt that the Audit Commission will consider with great interest what the hon. Gentleman has said.
      Mr. Leadbitter: I agree with the Minister thus far—
      Mr. Deputy Speaker: Order. I remind the hon. Gentleman that this is Report stage. He must not keep making speeches.
      Mr. Leadbitter: I want just to tidy up one point, Mr. Deputy Speaker. I think the House would agree that it would be better to clear it up. I agree with the Minister thus far. I agree also with my hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody). What we are asking for is an account in the disposal programme. That is what the amendment seeks. It does not argue the point.
      Mr. Caborn: Two questions were raised time and time again in Committee. We brought clearly to the Minister's attention the agreement in the Transport Act 1968 on the financial arrangements between passenger transport executives and the National Bus Company. What the Under-Secretary has said in the House this afternoon is misleading. He knows that there is a clear relationship between PTEs and the NBC and that there are financial agreements between them.
      No one in the United Kingdom would think that we could have such a stupid Secretary of State for Transport who would bring in such a stupid Bill to take us back 50 years. It is like asking people to make financial agreements to put men on the moon. That is how the Secretary of State is seen in the transport industry.
      May we have an answer to the question about the relationship between the NBC and the PTEs under the 1968 Act? Can we be told what the Secretary of State will do about the £40 to £45 million of ratepayers' money that has gone to the NBC? If he is shedding crocodile tears about ratepayers' money, will he return that £45 million to the ratepayers, where it rightly belongs?
      Mr. David Mitchell: I refer the hon. Member for Sheffield, Central (Mr. Caborn) to clause 57(3) under which termination arrangements for section 24 agreements can be made by order.
      In regard to the point made by the hon. Member for Hartlepool (Mr. Leadbitter), it is not for the Government or for the House to interfere in the contractual arrangements that have been entered into between the National Bus Company and local authorities. The parties to the agreements should have drawn them up properly to provide for what is to happen.
      Mr. Leadbitter: The hon. Gentleman is misleading the House now.
      Mr. Mitchell: I am not.
      Mr. Leadbitter: I did not say that it was for the Government to interfere. We have had too much of that already. I am saying as a matter of record that the amounts are known. We are asking in the amendment for them to be included in the disposal programme for information —not to interfere.
      Mr. Mitchell: The National Bus Company will have entered into hundreds of contracts and agreements in varying forms in the course of running its business. Included in those arrangements will be the financial memoranda and financial terms of agreements under which money has been put into NBC subsidiaries. Even before the company had power to dispose of its subsidiaries, which was long before the Bill was

      1029
      introduced, it has had the power to sell assets that were not required for the purposes of its business. Having acquired money from a local authority, there could well come a time when the company would dispose of the asset that had been bought with the money so provided. Unless the hon. Member for Crewe and Nantwich (Mrs. Dunwoody) is right, local authorities will have made proper contractual arrangements for the money arising from such a disposal and I see no reason why we should seek to interfere. If the hon. Lady is right in the rumour that she has started this afternoon and there are no contractual arrangements, the Audit Commission should take a close interest.
      Mrs. Dunwoody: The Minister has treated the House with his normal contempt. He knows what is behind the amendment and he understands its importance. He has chosen not to answer any of our questions and the appropriate responsibility will be his.
      Amendment negatived.

    Clause 46

      GENERAL DUTIES OF THE BUS COMPANY
      Mrs. Dunwoody: I beg to move amendment No. 63, in page 42, line 26, after 'shall' insert—

      ' (a) take such steps as may be necessary fully to secure the payment of the benefits that, but for the operation of this Part, would have been payable under any pension scheme or in accordance with customary practice in respect of the employment, before the coming into operation of this section, of persons employed or formerly employed by the Bus Company or in any undertaking or part of an undertaking which is to be the subject of a disposal under the programme, and to secure the due performance of the employer's obligations in respect of those benefits; and

      (b).'.

      Mr. Deputy Speaker: With this it will be convenient to discuss the following amendments: No. 64, in page 42, line 27, leave out from 'any' to 'are' in line 29 and insert `such undertaking or part'.
      No. 65, in line 37, after '(4)', insert ' (a) or (b) '.
      No. 66, clause 48, in page 43, line 38, at end insert
      'and where the scheme contains provision for the transfer of anything which constitutes an undertaking within the meaning of the Transfer of Undertakings (Protection of Employment) Regulations 1981, as having effect on the day on which the scheme comes into force, the said regulations shall have effect as if regulation 7 (exclusive of occupational pension schemes) were omitted'.
      No. 67, clause 52, in page 47, line 10, at end insert
      ', including the payment of such sums as he may, with the approval of the Treasury, determine to the trustees of the Bus Employees Superannuation Trust and the trustees of the National Bus Pension Fund or either of them for the purpose of meeting the whole or part of any shortfall in the assets of the funds referable to the benefits and gratuities payable in respect of persons employed or formerly employed by the Bus Company or in any undertaking or part of an undertaking which is subject to a disposal under this Part.'.
      Mrs. Dunwoody: In a long working life, one of the most important investments that anyone can make is in his or her pension entitlement. Those who have been working for the NBC or passenger transport authorities have not been among the highest paid and they have not been the best protected members of our society. They have not enjoyed the brilliantly framed contracts of the company director with the sharp lawyer who insists that, no matter why his services are dispensed with, he will leave with a large golden handshake. They have not received any overpayment for working long hours in a dirty and
      1030
      increasingly dangerous job. They have worked for authorities in the belief that their time as busmen and women would be rewarded at the end of their service with a proper retirement pension.
      The Secretary of State has decided in the most arbitrary and insensitive way that the transport system shall be thrown into chaos and disaster. Those who have been least considered during the Bill's passage are those who are employed in the transport industry. Since the Bill was presented to us, we have been talking about the disposal of state assets and the destruction of a transport system that has operated since the early 1930s. At best it will be replaced by a number of smaller companies. It is probable that transport systems in many areas will decline—with, undoubtedly, the loss of many jobs.
      Against that background, one would have expected to find somewhere in the Bill a pension entitlement guarantee. That would have reflected the recognition of a moral duty towards those who have worked for many years in the transport industry. Clause 50 refers to the NBC's staff pensions. Unlike other privatisation measures, the Bill ends the "no worsening" principle for staff pensions. Up to 65,000 employees could be affected, and it is clear that the Treasury is demanding that money should be raised in every possible way so that it can be given in tax concessions to those at the top end of the income scale. It is more interested in doing that than in making suitable provisions for those who are employed in the transport system.
      Clause 50 sets out the transfer of pensions after the break-up of the NBC. It mentions briefly the involvement of its employees but it does not mention what will happen to the employees of the passenger transport executives. Their future has not been referred to by the Under-Secretary of State or by the Secretary of State. There is no reference to the pension rights of those who are most at risk.
      There are a number of ways in which the Bill could have provided for transferred employees to retain their present entitlement to benefits, and we endeavoured to discuss them in Committee. We asked for simple guarantees to be written into the Bill. We observed that state assets had never been disposed of without a guarantee being written into the relevant Bill to cover the pension entitlement of those who had worked in the industry. We were told that employees' interests would be protected at the point of transfer and that we need not worry about the future as it would be in the interests of the companies taking over the assets to look after the employees that they took on. If that is genuinely the opinion of the Secretary of State and his ministerial colleagues, it is indescribably naive. If they have taken a cynical approach and do not believe that there is any guarantee for employees after the dissolution of the NBC, that is outrageous.
      Whenever we endeavoured to extract answers from Ministers in Committee, we were told that they did not consider it necessary to insert a guarantee covering the NBC's pension funds. It is clear that there must be a proper arrangement. Surely Ministers understand that smaller companies will not be able to meet current pension commitments and may find themselves unable even to cover existing payments to pensioners.
      We have been told that the NBC pension scheme is well funded and can meet all its liabilities. Ministers sought to stress that there will be no risks, but under this Government no one can foretell what will happen. It is

      1031
      relevant to observe that we have a higher rate of bankruptcy under the Government than we have had for many a long year. If there is no risk, a guarantee would cost the Government nothing and would be at least a demonstration of their good will.
      We were told in Committee that we were raising unnecessary scares and that the problems we were outlining would not occur. I can assure the Secretary of State that many employees are deeply concerned about their future pensions. The very least that Ministers can do is treat those fears seriously. Subsection (3) contains a guarantee that individual companies will not be put in a worse position by Government order. That implies that, if there is a cash shortfall, pensioners will suffer. The only protection against that is to be found in section 74 of the Transport Act 1962, which provides a "no worsening" guarantee. However, if the money is not there to meet the pension entitlement, pensioners will suffer.
      The two approaches which could have been taken to pension funds following privatisation would both have maintained some version of the "no worsening" undertaking. When British Telecom was taken over, the entire pension fund was transferred in one block. When Sealink was sold off—a section of a state organisation —the staff remained in the British Rail pension scheme. When the NBC is privatised, we shall not be left with a large company. The company is to be broken into small companies, in line with the Government's competition theory. There will be no large company with the resources to underwrite pension funds.
      What was the Government's answer when we raised the issue time and again? It was that, as long as the Government predictions of inflation and investment are exactly correct for the next 40 years, the Government are convinced that there will not be a problem. However, if there is any shortfall, pensions will have to be topped up from some other source. One would be new NBC staff paying into the fund. However, that will end when the NBC is dissolved, which will make closed funds of both the National Bus pension fund and the Bus Employees Superannuation Trust.
      5 pm
      The other guarantee would be a straight payment from the NBC. We have been told today that companies must be small enough to ensure that there is no unfair competition. The Secretary of State appeared to be saying that there might be instances of some municipal companies with 3,000 buses, which he presumably thinks is fair competition. If there are only small companies and there is a shortfall, who will find the money to pay these people who, in good faith, entered into superannuation payments that will now not come to fruition? Is it seriously suggested that what is in effect a contract with the people working in the bus industry, a contract that they have honoured through their working lives, is to be discontinued without any undertakings or any attempt to give them a guarantee that the Government will underwrite any future problems?
      If that is the case, I have to point out one or two things to the Secretary of State. The people who are to have their pension funds put at risk, and the existing pensioners who are wholly reliant on the arrangements into which they have entered, are not suddenly seeking to dissolve the arrangements in their superannuation fund. They are being
      1032
      told that the arrangements into which they have entered over the years are at risk and they have not been consulted. This has happened because the Secretary of State, in a great blaze of light, wants to throw us all back to the Victorian ages and recreate the horse bus system.
      What kind of responsible Government is that? What kind of commitment to ordinary working men and women does that show? Where are the Government who care so much for the individual? If an individual earns more than £40,000 a year, the Government care for him, but if he is working in the bus industry and has made the grave mistake of trusting those with whom he has been in a contract for all his working life, the Government's answer is, "Hard luck." That is the answer of a Government who are uninterested in carrying out their responsibilities to the people working in the bus industry.
      In the Committee on the Transport Act 1982, the hon. Member for Wallasey (Mrs. Chalker), the Minister of State, Department of Transport, claimed that staff pensions would not be worsened by that Act, and that it would be wrong if they were. True, pensions were not worsened by that Act — it took the Government two more years to come up with a brilliant bit of planning to destroy the base on which pension schemes had been worked out.
      The Minister's pledge that it would be wrong to worsen the conditions of anybody in the staff pension funds is being broken with utter cynicism. Saving money is the basis of this Bill and saving money at the expense of the pensioners and people working in the bus industry is about the lowest way of taking advantage of those least able to fight for themselves.
      There is no evidence that the Government intend to carry out their responsibilities. Are we to assume that the argument between the Treasury and the Secretary of State is so important that he regards the sale of the NBC's assets as taking precedence over everything else? It does not matter if, in so doing, he damages the interests of the people working in the industry or the interests of the passengers, or if he destroys the transport industry that has grown up over many years. All that matters to him is flogging off anything that is not actually nailed down to anybody who wants to take whatever assets he wants that used to belong to the state through the NBC.
      Let us be clear what is happening to pensioners. They will be told that at the moment of transfer they need have no worries and their pension rights will be the same with the incoming company. That is nonsense, because the companies that will come into being will be much smaller and less viable and will have far fewer assets, by definition. The only people who will benefit from these changes are those who will be able to ignore all the commitments that were entered into by the NBC and the PTEs with their employees. It is a disgrace. It is one of the nastiest, most unacceptable and most rotten parts of the Bill.
      I hope that the Secretary of State can sleep at night, because what he is doing both to the pensioners of, and those working in, the bus industry is disgraceful. [Laughter.] I am glad that the Secretary of State finds this amusing. Many of those who are now employed will ask one question of him and one question alone: how can he sit there calmly, knowing that his future is protected, while he cheats the bus industry and those who work in it out of their just entitlement? At the very least, the Secretary of State can accept the amendment. If he does not, we shall

      1033
      know clearly how much commitment he has to the interests of people who are now working in the bus industry.
      Mr. Fry: I have added my name to the Opposition's amendment both in sorrow and in anger. I wrote to my right hon. Friend the Secretary of State some months ago expressing concern about the future of pensioners. Following a meeting with my hon. Friend the Under-Secretary of State, who invited me to write to him expressing my concern about the Bill, I wrote to him about my concern about the pension settlements. I am still awaiting a reply from both my right hon. Friend and my hon. Friend. It is a pity that my hon. Friend the Under-Secretary is not here.
      I make it clear that I am speaking on behalf of the people who work in the bus industry, in my constituency or any other constituency, and who are worried about their pensions. I speak particularly on behalf of the Association of Management and Professional Staffs, which I know has written and is concerned about this matter.
      As we consider these amendments, we might at least try to understand what the Government are up to and what they have done in similar circumstances. Accordingly, I put down for answer last week a question to my right hon. Friend the Chancellor of the Exchequer about certain other pension funds. The first related to the National Freight Consortium, and the figures will come as a shock to many Conservative Members and many in the Conservative party. Although the Government raised £53·5 million in gross proceeds from the sale of the consortium, they had to make up £48·7 million in the deficit under its pension funds. Therefore, the taxpayer did not make an enormous profit out of privatising the National Freight Consortium. We still have to make an annual payment of million to the fund. That is not a good deal for the taxpayer and those figures throw a lot of light on the Treasury's attitude to pension funds in the Bill.
      It is clear in agreements that the Government have made with the industrial training boards that the Government set out to give those employees the type of guarantee that is requested in the amendment. The memorandum of agreement of 21 March 1983 between the Secretary of State for Employment, the Minister of Agriculture, Fisheries and Food and others refers to
      "the arrangements agreed to be made to fund the whole or part of any deficiency in the 'closed' part of The ITB Combined Pension Fund".
      That was a clear commitment by the Government to do exactly what is requested in the amendment.
      I mention those two items because they show the danger as it appeared to the Treasury and show that those who want the guarantee are not asking for something that the Government were not prepared to give in another respect.
      It is unfortunate that my hon. Friend the Parliamentary Under-Secretary of State — the hon. Member for Hampshire, North-West (Mr. Mitchell) — is not in his place. When this matter was dealt with in the Standing Committee, of which I was not a member, several of my colleagues raised with the Under-Secretary of State a number of questions about pensions. It is interesting to read the details of that debate and note some of my hon. Friend's statements. He reassured my colleagues and, no doubt, persuaded them not to press their amendments. Having been approached about guaranteeing pensions, he said:
      1034
      "other employees and former employees are already covered by section 74 of the 1962 Act."
      That is not so. Other employees and former British Electric Traction employees will not be covered by section 74, since that provides only that appropriate orders may be made. The orders which have been made so far—2,011 in 1958 and 1,824 in 1969—will lapse when the NBC is dissolved because they impose obligations on a company that will have ceased to exist. So much for that first statement.
      My hon. Friend the Under-Secretary of State made a further reassuring gesture when referring to what would happen after the NBC had been disposed of. He said:
      "Once the Secretary of State had approved the disposal programme the NBC would have a duty to implement it."
      How can the NBC implement protection against a future deterioration in funds after it has gone out of existence? That, too, was a misleading comment. My hon. Friend went on to say:
      "The National Bus Company itself does not formally guarantee"
      the pension funds. I believe that most people would agree that it is accepted that the NBC's covenant to make up contributions to the amounts required to maintain those funds is effectively a guarantee of a continuing employer. My hon. Friend the Under-Secretary of State said:
      "a statutory guarantee would provide NBC pensioners and employees with more security than comparable groups."
      I have already referred to the pensions given to employees of the industrial training boards. It is clear that the guarantee to which my hon. Friend referred is on all fours with the guarantee given to employees of industrial training boards.
      That was not the end of what I can only describe as a most misleading speech. Answering a suggestion by my hon. Friend the Member for Hertfordshire, West (Mr. Jones) about a common pension fund for the bus industry, my hon. Friend the Under-Secretary of State said:
      "if the NBC wished to pursue it the Government would be happy to explore the possibility."
      In relation to the alternative suggestion that the 1:wo existing schemes should be closed to new entrants and that there should be a negotiation with a major insurance company to take over the funds, my hon. Friend said:
      "The NBC has not yet put that proposal to us"—[Official Report, Standing Committee A, 18 April 1985; c. 1287$90.
      It is puzzling that my hon. Friend implied that the idea of a common fund and using an insurance company had not been considered. Both possibilities were discussed by the NBC with the Department of Transport well before that speech. In fact, the particular point about creating a separate fund with a new insurance company was discussed in the December 1984 paper which was submitted to the Department of Transport. In the light of that speech, three or four of my colleagues decided to withdraw their objections. They were right to be concerned. If I had listened to that speech, I might have been encouraged to withdraw my objection.
      5.15 pm
      If I had discovered that I had been misled—I use that word advisedly—by the Minister, either intentionally or unintentionally, I would have been very angry. I do not accuse him of making an intentionally misleading speech. I would have said, "I believe that the pensioners are entitled to some type of guarantee."
      The real issue is whether the Government will follow up the type of obligation that any right-thinking Government should and would undertake—obligations

      1035
      towards employees when a concern is nationalised or denationalised. We are talking about people who were in a private fund, were brought into the public sector and will now be taken out of the public sector again. It is clear from earlier debates this afternoon that there can be no guarantee whatsoever for the future for many people. Even if there is a management buy-out, many of these companies will not be able to retain the same number of staff. They are asking only that the work which they have done and their pension entitlements should be given some form of guarantee.
      I shall not join in the personal strictures of the hon. Member for Crewe and Nantwich (Mrs. Dunwoody), but I believe that the credibility of my hon. Friend the Under-Secretary of State and of the Government depends upon the answer my hon. Friend gives to these amendments. This is a Government who, whatever their failings, try to stick to their word and obligations. I sincerely hope that my hon. Friend the Under-Secretary of State will reconsider the decision which has already been made. I make this point on purely practical grounds: if my hon. Friend the Under-Secretary of State was correct and a guarantee is not needed because the fund will be adequate, what on earth are we arguing about? By giving that guarantee my hon. Friend will be showing an earnest of faith with the many thousands of workers who have given loyal service in the private and public sectors. I could never vote for the Third Reading of this Bill if my hon. Friend cannot give a satisfactory reply to the points made in the amendment.
      Mr. Bruce: The hon. Member for Wellingborough (Mr. Fry) has made a powerful case to which the Under-Secretary of State must seriously address himself. The risk to which the Minister referred has been created, or not created, as a direct result of Government action. As the hon. Member for Wellingborough correctly pointed out, it seems reasonable that the people who have been in and out of the public sector should be given an assurance—first, that those who already benefit from the pension funds may securely expect that benefit to continue and, secondly, that all accrued benefits at the point of privatisation will be met by the funds.
      I am fascinated by the somewhat distracting private conversation between the Parliamentary Under-Secretary of State and the hon. Member for Wellingborough, but if it produces the right result, it will have been worth while. Employees of NBC had every reason to expect that they would be treated similarly to others who have been subjected to developments such as this as a result of Government action. It is clear from correspondence that hon. Members have received that employees are shocked that the Government could proceed with a Bill with such a strong ideological thrust in which they are the pawns and not be prepared to guarantee them a fundamental right.
      Mr. Leadbitter: Perhaps the hon. Gentleman would like to stress that, whereas the Government are over-anxious to provide future employers with fundamental rights to set up new companies, they are reticent about affording employees equally fundamental rights.
      Mr. Bruce: The hon. Member for Wellingborough mentioned the cost that might be involved, which would
      1036
      wipe out a substantial part of the benefit. If there is no potential cost, we may as well have a guarantee and demonstrate good faith.
      There are three categories of employee—those who are in receipt of pension and who must be protected, those who have accumulated pension rights up to the point of privatisation whose contributions and benefits should be guaranteed, and those who are employed after privatisa-tion and who will find that the companies for which they work might not be able to sustain previous levels of pension funding. The Government have an absolute obligation to the first two categories and some obligation to the third. It is a disgrace that the Government have got this far with the Bill without giving the first two categories such a guarantee.
      Mr. Dafydd Wigley: Does the hon. Gentleman agree that, irrespective of what might have been said in Committee or off the record, there is much dismay and uncertainty among employees, their widows and people who depend on such pensions about the future? To end that uncertainty, clear provision must be made in the Bill. More than anything else, that has been the burden of the letters that we have received in the past few weeks.
      Mr. Bruce: The hon. Gentleman is absolutely right. The Bill creates uncertainty in the transport system. Nobody denies that — the Secretary of State merely claims that it will be beneficial. If he wants to ensure that employees in the industry will make a go of the Bill, but he is not prepared to guarantee their fundamental rights, he is creating anarchy and will find that there are many disgruntled employees. He must also address himself to the fact that, as a result of the Bill, there are likely to be many redundancies because the new companies will take on new people to avoid the obligations that the Bill puts on them.
      The Government's conduct on the Bill has been nothing less than disgraceful. If a guarantee about pensions is not given here, it must be included in another place. The right hon. Gentleman has an opportunity today to show that he recognises the obligations that he must accept if he is to give any credence to the commitment behind the Bill. If he does not do that, he will show himself to be no man of honour. I leave it to him to decide whether he wants that stigma.
      Several Hon. Members rose —
      Mr. Deputy Speaker (Mr. Harold Walker): Order. Many hon. Members wish to speak, but there is little time.
      Mr. Richard Alexander: If this group of amendments is accepted, much anxiety among employees of the NBC in my constituency will be relieved. They are worried by what they regard as inadequate provisions in the Bill for their pension rights. I speak on their behalf. They do not feel that the assurance given by my hon. Friend the Minister on 15 April, that their pensions would be protected, is enough. If there is nothing for them to worry about, there was no need to reject in Committee the amendments that afforded such protection.
      My constituents want the Government to know that their proper concern is for their future. It is a simple, natural and fundamental worry of all who pay into a pension fund to know that it is protected. The anxieties go deeper than that, however. These people were obliged by the terms of their employment to pay into the National Bus

      1037
      pension fund or the Bus Employees Superannuation Trust, and many of them have made large contributions. They are now asking my right hon. Friend for the full protection of the law for their investment.
      The Government Actuary has estimated that the assets of the post-privatisation fund will be quite sufficient to cover the outstanding liability for pensions and accrued rights. But just suppose he is incorrect. What guarantee will the pensioners have then? They will have been wronged and will have no concrete assurance that the wrong will be rectified. Correcting injustice is a slow business. It is all very well for my hon. Friend the Member for Wallasey (Mrs. Chalker), the Minister of State, to say in Committee that it is not the Government's policy to affect any existing pension rights, but the pensioners want their rights to be protected, not just not affected.
      We should establish a scheme to replace the obligations to pay the balance of the cost of accrued pension rights. That was dealt with in previous legislation, in 1962, 1968 and 1969, when pensions were protected fully for past and future service. Why cannot the same be done now? The Bill has few enough frieds. A lot is taken on trust about bus services improving, but employees should not be asked to take their pension entitlement on trust too. Concern has been expressed by people in NBC, by members of the pension fund's management trustees and by their beneficiaries. Their worry is real and will be alleviated by the Government accepting the safeguards in the amendments or by greater reassurance than we have had so far.
      Mr. John Home Robertson: I am one of those unfortunates who was not a member of the Standing Committee, so I have not had an opportunity to say as much as I should like, on behalf of my Scottish rural constituents, about this ill-considered Bill.
      I should like to express the strong support of the Transport Salaried Staffs Association, which sponsors me, for this group of amendments. The TSSA has members and retired members with pension rights in NBC pension schemes. I am not sure how many of its members are involved, but I understand that the total is about 65,000. They have every right to be anxious about the fact that the abolition of the NBC will leave their pension fund in limbo.
      It is by no means impossible that in future the NBC pension fund will run into a temporary deficit. There will be no NBC to help it overcome such temporary difficulties, and problems could arise. Inflation will always be a factor, and no one will contribute to the scheme when the NBC has been scrapped. For that reason, such problems could continue for some time into the future. The beneficiaries are likely to be left with a lame duck residual pension organisation, with no NBC to guarantee it in times of need.
      5.30 pm
      I have read the report of the debate in Committee and am less than impressed by the Government's insensitive attitude towards the anxieties of NBC pension beneficiaries. I read the bland assurances that the NBC pension schemes will be able to meet their commitments. As the hon. Member for Wellingborough (Mr. Fry) said, if there is no risk, why are the Government so reluctant to give a reasonable guarantee? I read the Government's suggestion that there is technically no guarantee at present, but there is. The NBC covenants through the trustees to
      1038
      make up the total contributions required, and it would continue to do so if it were not to be scrapped. There is therefore an effective guarantee at present.
      The Minister suggested that the successor companies could pick up the liability, but many of them will be small and will change hands, and there is no provision to compel them to make up any shortfall. Even the old chestnut that the. Government do not want to set a precedent has been dragged up, but there are precedents. The Government guaranteed the finances of the National Freight Corporation pension funds to the extent of ensuring that a payment for historic liabilities was made to the trustees of the fund. When subsidiaries of British Rail were privatised, such as British Transport Hotels and Sealink, specific commitments on maintaining no less favourable pension arrangements in future were written into the contracts of sale. There is no fear of a precedent being set, because a precedent already exists.
      The other technicalities that have been mentioned are irrelevant. The case is overwhelming for a reasonable guarantee for pensioners who could be put at risk by the consequences of this aspect of the ill-considered legislation. I can only repeat that, if the Minister believes his own assurances about the risk of problems arising., he must agree that it will cost him nothing to give the House that guarantee this evening. We must have a positive response to the amendments. The House and people with pension rights under the schemes have a right to demand such assurances now.
      Mr. Peter Griffiths: I have not taken part in previous debates because I class myself as a friend of the Bill. I have been able to defend its political implications from the beginning. However, more recently, since the Bill's implications for both the National Bus Company pension fund and the Bus Employees Superannuation Trust became more apparent, it has been extremely difficult to respond to my constituents' letters. I am referring not only to letters directly inspired by the NBC, which invited pensioners to write to me, but to direct approaches from people whose personal, immediate and direct anxiety is that they are pensioners and who see the future as uncertain and possibly bleak. I have also received letters from people who are nearing the end of their service with the NBC and do not see a place for themselves in a new, thrusting and possibly successful company. They want to know exactly what they can expect.
      Whatever the past legal position of the NBC's covenant to support the pension scheme, I understand from the Minister's comments in Committee that there is no legal obligation on the NBC at present to make up any potential deficit. If that is so, it would be helpful if my right hon. Friend would reiterate that this evening so that the Opposition cannot suggest that the Government are creating conditions legally less favourable to pensioners.
      I do not wish to make the semantic point about whether pensioners are or are not in a narrow sense better off, but I ask the Secretary of State please to give the House a clear assurance that it is his intention and understanding that the conditions of existing pensioners and those who will retire when the NBC ceases to be an entity will not worsen. If he can give us that assurance, I and other hon. Members will be able to respond to our pensioners and potential pensioners more adequately than we have been able to do during the past few weeks.
      Mr. Brandon-Bravo: Will my hon. Friend also ask the Secretary of State to explain what is meant by "the ex gratia payments"? The dictionary definition of ex gratia is
      "in the absence of a legal right",
      yet we are being told we must honour ex gratia payments.
      Mr. Griffiths: I thank my hon. Friend, but I will not take up the time of the House by repeating the question, which I am sure my right hon. Friend heard.
      Mr. Stuart Randall: I shall make a brief contribution because other hon. Members wish to participate. I wish to say a word or two about the impact of the Bill on the bus depot in my constituency, that of the East Yorkshire Motor Services, which is part of the National Bus Company, and about the Bill's indirect effect on my constituents and everyone who lives in the Humberside region.
      I feel particularly strongly because many people who worked in the company for many years are worried about the effect of its break-up on their pensions. My hon. Friend the Member for Crewe and Nantwich (Mrs. Dunwoody) said that about 65,000 people would be affected, but if the dependants are included the figure is probably double that. Therefore, a large number of people will be directly affected by these provisions.
      We are making only a small request of the Government. We ask that people who have worked in the company for many years and those who at present draw pensions should have a guarantee for the future. It is trivial and would cost peanuts. If the Government do not respond, they will be seen as penny-pinching and mean.
      During my surgery on Saturday morning, Mr. Fairless of Priory road, Hull, who is a bus operator, explained to me the great worries experienced by many families. It must be remembered that those people live on an extremely low income. Most of them are almost at benefit level, and they cannot get alternative occupational pension arrangements. To do that, one must earn a higher income than many of them earn, even with overtime rates.
      If the Bill is enacted, many of the small companies that will be created after the break-up of the NBC will not provide the contributions that the NBC currently makes to its pension fund. We know that contributions come from the employer and employees. We cannot say what future employers will contribute, because many of them will be small companies running on tight margins. A cut in pensions is bound to ensue. That idea is appalling. It is another example of the Government moving wealth from the less well off to the very rich, as they have done for the past six years. They have failed to support those who worked in the industry and who contributed greatly to it.
      The Bill shows the sort of Government we have. It is shameful and disappointing and it causes much worry to bus operators not only in my constituency and in the county of Humberside, but throughout the country.
      The Secretary of State for Transport (Mr. Nicholas Ridley): I am sorry that I must speak in the debate now, but since it is a fairly complex matter, I should take some time to reply to the points that have been made. First, I shall deal briefly with what I may call the peripheral points that have been raised, but I shall deal with the main matter soon.
      I apologise to my hon. Friend the Member for Wellingborough (Mr. Fry) and to my colleagues who have not received answers to letters that they sent recently. We
      1040
      have received more than 600 letters, and it will take a little time to reply to them. However, my hon. Friend received a full letter from me on 22 February—I have a copy of it here —on this subject, so I hope that he will not accuse me of discourtesy. He asked about British Electric Traction in relation to the speech in Committee by my hon. Friend the Under-Secretary of State. If he discusses that with my hon. Friend the Under-Secretary of State, I am sure that his mind will be set at rest.
      The hon. Member for Crewe and Nantwich (Mrs. Dunwoody) asked about the future of the pensions of PTE employees. The matter was set down for debate yesterday, but we did not reach it because the guillotine fell. It is only right that I should say a few words about it now. There are several options for the pensions of PTE employees when they go to the new companies. The Government's preferred option is that they should stay in their local authority schemes. There is no reason why they should not do so, but we are discussing the matter with the local authorities to see whether they are content with that solution or whether they would prefer another opinion.
      It would be wise to discuss the amendments later and to come to the point of principle now. The Government and the Opposition believe that the existing pension entitlements of the employees of the National Bus Company, and existing pensioners, are extremely important. They should be in no worse position and, for that matter, in no better position than members of any well managed pension fund. I accept entirely the obligation which my hon. Friend the Member for Wellingborough suggested lies upon the Government to achieve that aim when the NBC's subsidiaries pass into the private sector.
      The hon. Member for Gordon (Mr. Bruce) said that we must consider three categories: service until now; service between now and the break-up; and service in the future. Of course, service after privatisation should be the responsibility of the new employers, who will set up a special scheme or will operate other arrangements to comply with their legal obligations in relation to pensions. However, I accept that the obligation about which my hon. Friend talked relates to the first two categories —existing pensioners, and rights earned up to the dissolution of the NBC.
      5.45 pm
      The difficulty is not whether we should achieve that objective—I agree that it is vitally important—but how we achieve it. A company standing behind its pension fund may be thought to provide extra security, but it does not guarantee the fund. It certainly does not do so legally. The company may meet financial difficulties; it may even go bankrupt. The best that any company can do is to ensure that the money invested in the fund, as a free-standing entity with its own assets and liabilities, is adequate to provide benefits earned to date. I remind the House that NBC employees and the NBC have already made proper provision for pensions on the appropriate actuarial basis. Therefore, substantial assets are already in the funds.
      Secondly, it is wrong in principle for the Government to give an open-ended guarantee to a private sector fund. Indeed, there is no such legal guarantee at present. I should tell my hon. Friend the Member for Portsmouth, North (Mr. Griffiths) that the NBC does not legally guarantee its pension fund. Neither the Government nor the NBC guarantee for all time the present NBC pension fund.
      Mrs. Dunwoody: Will the Minister give way?
      Mr. Ridley: If I complete what I have to say, the hon. Lady may be satisfied and may not need to intervene.
      If we are transferring activities to the private sector, we must not perpetuate a link with the Government, let alone a guarantee. My hon. Friend the Member for Wellingborough and several hon. Members cited some instances where they believed that there was a Government guarantee. In relation to the British Rail fund and some parts of the National Freight Consortium fund, a guarantee was given many years ago by a different Government in different circumstances. The present Government accep-ted that they could not break that guarantee. However, it is not our policy to give any guarantees on privatisation.
      My hon. Friend the Member for Wellingborough and other hon. Members mentioned the industrial training boards. They were not nationalised industries and were not privatised; they were dissolved. Therefore, there were no successor companies to them in the private sector. The Government remain the employer of those industrial training boards, although they were dissolved. It is simple for the Government to decide whether to guarantee the funds in its employees' closed pension funds or to make those funds actuarially sound so that they will be adequate. They chose the former. But that is not a parallel, because the boards were not active industrial concerns which passed into the private sector.
      The reason for the great worry about this point—
      Mr. Randall: Answer.
      Mr. Ridley: If the hon. Gentleman allows me to proceed, he will get his answer. I understand that anxiety is heightened on this occasion because there will be no one successor company to the NBC. Instead there will be several different-sized companies. We do not know how many there will be. As hon. Members said, they might merge, reduce in size or change to other activities. Clearly, that raises worries that they might not stand behind the funds. I recognise that concern, and no doubt the NBC will also take account of it when putting forward proposals for future pension funds arrangements—for example, whether the present funds should stay open, be divided or be closed. However, even if the NBC were privatised as one company, it would not be guaranteeing the funds any more than it does at present. No company can guarantee its future trading environment.
      Even if the NBC were privatised as an entity, in future it could get into financial difficulties and find itself unable to support the funds of its own pension company. Therefore, the problem does not arise because of privatisation; it arises because of the many small companies — or whatever they will be — that will continue.
      The right answer must be to look at the funds themselves, apart from the parent company, recognising that they have their own assets and their own liabilities. We must make sure—absolutely sure—that the assets are adequate to discharge the funds' responsibilities. That is what we have done on all previous privatisations. That is what we have undertaken to do in—[Interruption.] If Opposition Members want the answer, they should keep their mouths shut. I am coming to it.
      That is what we have undertaken to do in this instance. It is doubly important in this case since, as I have said, the funds may be closed at the time of the dissolution of the
      1042
      NBC. They must be left with assets that are adequate to discharge their responsibilities in relation to all employees' service with the NBC up to that time.
      I say this to the hon. Members for Crewe and Nantwich and for Gordon. The funds must be adequate, which is to deny totally that in some way there is a dispute between the Treasury and the Department of Transport because ultimately, if NBC itself were to put more money into the funds, it would be the Treasury that would have to make the funds more adequate through getting less from the sale of the NBC.
      That brings me to amendment No. 63. It would be difficult to implement. For example, I can imagine lawyers arguing for weeks, to nobody's benefit but their own, about what would have been paid
      "but for the operation of this Part".
      In so far as the wording of the amendment is meant to imply a formal guarantee for pension benefits either by the new employers or by the Government, I must remind hon. Members that the NBC itself does not guarantee the funds in that indefinite way. It would not be right to pledge taxpayers' money to put the funds in a specially favourable position.
      The intention of the amendments is admirable, but their effect would be to make the present position too rigid and restrict the scope for negotiation. For example, if the trustees of the pension funds, my hon. Friend the Member for Wellingborough or other hon. Members, seek more certainty about the adequacy of their funding—perhaps because the funds are closed—they may want to seek wider backing from somewhere else in the private sector, such as the insurance industry. Indeed, I hope that the trustees will explore that option fully. That would require negotiation with insurance companies, and I repeat that the House should not seek to fetter that negotiation in advance. All that I ask is that we do not close options in the negotiations that must precede the trustees' acceptance that the funds are adequate. The trustees have to accept that the funds are adequate, so it would be wrong to put restrictions upon any discussions that they might wish to have to satisfy themselves.
      Amendment No. 66 would amend the Transfer of Undertakings (Protection of Employment) Regulations 1981 to require the new employers taking over the NBC to take over the pension scheme rules as well. I think that the amendment can scarcely be meant seriously. Those regulations are of national application, and it would be quite inappropriate to make a special exemption from such legislation for one single case.
      I also recommend the House not to accept amendment No. 67. It would provide for direct payments from the Exchequer to NBC pension funds. There may be payments into the funds. I have already made it clear that we are very ready to countenance that, to give the funds the proper security, but I envisage the payments coming from the NBC's own resources, which I am sure will be adequate for the purpose.
      Therefore, I suspect that all hon. Members share the same objectives, although I do not think that any of the amendments would help to achieve them. That must be true, unless hon. Members want to put the NBC pension funds into a privileged position so that other taxpayers carry the risks in those funds while the pension funds of those same taxpayers are not so guaranteed. That would be intolerably unfair.

      1043
      I ask the House to reject the amendments and to trust the Government's assurance that they will see the funds at an adequate level at the time of dissolution of the NBC.
      Mrs. Dunwoody: The Secretary of State has given a passable impersonation of Pontius Pilate. In effect, he says that the matter is nothing to do with him. He has refused to answer any of the questions. Indeed, he has positively distorted some of the truth.
      Let us be clear. NBC employees, the pensioners and the deferred pensioners presently enjoy security because they have a covenant that the NBC will make up contributions to the amounts required to maintain the funds. On the dissolution of the NBC, that protection is lost. As it stands, clause 50 does not provide any substitute. The Secretary of State knows that. He knows that what he is trying to suggest is not tenable. There is a moral responsibility on the Government to fulfil the undertakings that were given to the pensioners working in the NBC. The very least that the right hon. Gentleman could do would be to say to his hon. Friends, "We shall take away the clauses, redraft them and bring them back in another place." The right hon. Gentleman is not prepared to do that. He has never been prepared to take up the responsibility that is inherent in his legislation.
      Let me remind the Secretary of State of a few things. Why are those pensioners now at risk? How can he say that some of the companies might go bankrupt, and, when they are bankrupt, they might not be able to maintain pension rights? It is because of his legislation. Who is changing the structure of the NBC? The Secretary of State for Transport. Who is putting the pension rights of 65,000 people at risk? The Secretary of State for Transport. Who refuses to write in the guarantee or undertake the responsibility? The Secretary of State for Transport. Why is he not prepared to give the same undertakings to people in the bus industry that were given to people concerned in previous denationalisations? It is not good enough to say that in the case of the National Freight Corporation the Government had to honour certain responsibilities, but they were undertaken under another Government. I suppose that we should agree with the right hon. Gentleman about that.
      This Conservative Government, unlike probably any previous Conservative Government, have no interest in either their responsibilities or a moral undertaking to protect the interests of the pensioners. This Conservative Government are interested only in asset-stripping. They are not prepared to carry out the undertaking to find the money to make sure that the pensioners of today or of tomorrow will be protected. As far as the Secretary of State is concerned, if they lose their jobs and their pension rights, so be it.
      I offer just one challenge to Conservative Members. We have heard a great deal both in Committee and in the Chamber today about the fact that the Labour party has no monopoly of commitment or care.
      Mr. Anthony Steen: That is right.
      Mrs. Dunwoody: If that is right, let all Conservative Members join me in the Lobby. If that is so, let the Conservative party—even the old Conservative party—come forward and show the pensioners and workpeople in the bus industry that Conservatives are not just mouthing
      1044
      empty words. They have their rights and they have their challenge. We shall put this to the vote. How many of them will join us?
      Question put, That the amendment be made:—
      The House divided: Ayes 178, Noes 241.

      Division No. 218]

      [6 pm

      AYES

      Archer, Rt Hon Peter

      Garrett, W. E.

      Ashdown, Paddy

      George, Bruce

      Ashley, Rt Hon Jack

      Gilbert, Rt Hon Dr John

      Ashton, Joe

      Godman, Dr Norman

      Atkinson, N. (Tottenham)

      Gould, Bryan

      Bagier, Gordon A. T.

      Gourlay, Harry

      Banks, Tony (Newham NW)

      Hamilton, W. W. (Central Fife)

      Beckett, Mrs Margaret

      Hancock, Mr. Michael

      Beith, A. J.

      Harman, Ms Harriet

      Bell, Stuart

      Harrison, Rt Hon Walter

      Benn, Tony

      Hattersley, Rt Hon Roy

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

      Healey, Rt Hon Denis

      Bermingham, Gerald

      Heffer, Eric S.

      Bidwell, Sydney

      Hogg, N. (C'nauld & Kilsyth)

      Blair, Anthony

      Home Robertson, John

      Boyes, Roland

      Howell, Rt Hon D. (S'heath)

      Bray, Dr Jeremy

      Howells, Geraint

      Brown, Gordon (D'f'mline E)

      Hoyle, Douglas

      Brown, Hugh D. (Provan)

      Hughes, Dr. Mark (Durham)

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

      Hughes, Robert (Aberdeen N)

      Brown, Ron (E'burgh, Leith)

      Hughes, Roy (Newport East)

      Bruce, Malcolm

      Hughes, Sean (Knowsley S)

      Buchan, Norman

      Janner, Hon Greville

      Caborn, Richard

      John, Brynmor

      Callaghan, Rt Hon J.

      Jones, Barry (Alyn & Deeside)

      Callaghan, Jim (Heyw'd & M)

      Kaufman, Rt Hon Gerald

      Campbell, Ian

      Kinnock, Rt Hon Neil

      Campbell-Savours, Dale

      Kirkwood, Archy

      Canavan, Dennis

      Lamond, James

      Carter-Jones, Lewis

      Leadbitter, Ted

      Cartwright, John

      Leighton, Ronald

      Clark, Dr David (S Shields)

      Lewis, Ron (Carlisle)

      Clarke, Thomas

      Lewis, Terence (Worsley)

      Clay, Robert

      Litherland, Robert

      Clwyd, Mrs Ann

      Lloyd, Tony (Stretford)

      Cocks, Rt Hon M. (Bristol S.)

      Loyden, Edward

      Cohen, Harry

      McCartney, Hugh

      Cook, Frank (Stockton North)

      McCrea, Rev William

      Cook, Robin F. (Livingston)

      McDonald, Dr Oonagh

      Corbett, Robin

      McKay, Allen (Penistone)

      Cowans, Harry

      McKelvey, William

      Craigen, J, M.

      McNamara, Kevin

      Crowther, Stan

      McTaggart, Robert

      Cunningham, Dr John

      McWilliam, John

      Dalyell, Tam

      Madden, Max

      Davies, Rt Hon Denzil (L'lli)

      Marek, Dr John

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

      Marshall, David (Shettleston)

      Deakins, Eric

      Martin, Michael

      Dixon, Donald

      Maynard, Miss Joan

      Dobson, Frank

      Meacher, Michael

      Dormand, Jack

      Meadowcroft, Michael

      Dubs, Alfred

      Michie, William

      Duffy, A. E. P.

      Mikardo, Ian

      Dunwoody, Hon Mrs G.

      Mitchell, Austin (G't Grimsby)

      Eadie, Alex

      Morris, Rt Hon A. (W'shawe)

      Eastham, Ken

      Morris, Rt Hon J. (Aberavon)

      Ellis, Raymond

      Nellist, David

      Evans, John (St. Helens N)

      O'Brien, William

      Fatchett, Derek

      O'Neill, Martin

      Faulds, Andrew

      Orme, Rt Hon Stanley

      Field, Frank (Birkenhead)

      Owen, Rt Hon Dr David

      Fisher, Mark

      Park, George

      Flannery, Martin

      Parris, Matthew

      Foot, Rt Hon Michael

      Patchett, Terry

      Forrester, John

      Pavitt, Laurie

      Foster, Derek

      Penhaligon, David

      Foulkes, George

      Pike, Peter

      Fraser, J. (Norwood)

      Prescott, John

      Freeson, Rt Hon Reginald

      Radice, Giles

      Freud, Clement

      Randall, Stuart

      Fry, Peter

      Redmond, M.

      Question accordingly negatived.

    Clause 55

      PASSENGER TRANSPORT AREAS, AUTHORITIES AND EXECUTIVES
      Mr. Kenneth Hind: I beg to move amendment No. 190, in page 48, line 22 at end insert—

      1047
      `(aa) such provision to require that the appointment, or any suspension, dismissal or requirement to resign, of any member of the Executive shall be subject to the approval of the Secretary of State; and'.
      Although it may at first seem obscure, the purpose of the amendment is to provide a semblance of protection for the directors of the passenger transport executives. My intention is to draw to the attention of the Secretary of State for Transport and his ministerial team the problems that may be faced by the directors of the PTEs.
      The passenger transport authority, which in the metropolitan areas will be a board consisting of elected representatives, will form the policy for buses in its area. Both the executive and elected directors of the PTE who are appointed by the local authorities which make up the passenger transport authority will carry out the directive of the authority.
      The purpose of the amendment is to highlight the problems that may be caused if there is a direct clash between the passenger transport authority and the passenger transport executive. The hybrid companies in the area of the passenger transport executive will be wholly owned by the passenger transport authority. In other words, they will be public companies that are wholly owned by the municipal authorities and they will be partially subject to the Companies Acts of 1948 and 1967 and to other legislation passed by Parliament. Unfortunately, however, those local authorities which are dominated by the opposition parties are prone to interfere with the democratic running of public organisations and deliberately flout the law of this country.
      A typical example of the kind of behaviour to which I refer is reported on the front page of today's edition of The London Standard under the headline "Invasion by 'Rent a mob'". At a meeting of Hackney council last night council representatives were effectively prevented by this invasion from carrying out their lawful duty to set a rate. Mr. Hatton and his followers in Liverpool are deliberately flouting the law of England on rate capping. We have seen this in Southwark and we are seeing it in Lambeth. Labour authorities are deliberately breaking the law, and the hooligans whose actions are described in The London Standard are unfortunately encouraging this kind of behaviour.
      6.15 pm
      Mrs. Dunwoody: Will the hon. Gentleman give way?
      Mr. Hind: No, not at this stage.
      If such an authority decided to break the law and form a policy that was contrary to the law and ordered the directors of the passenger transport executive to pursue that course of action but the directors decided to carry out their duties as prescribed by the law, which totally contravened the policy that had been dictated to them, and in consequence the Labour-controlled passenger transport authority said to them, "Because you have not obeyed us you are sacked", it would bring to an end their participation in the passenger transport executive. These people, many of whom are executive directors, would have no recourse to anybody, apart from the courts. The amendment provides a safeguard for the directors. If they have been lawfully carrying out their duties but nevertheless have been dismissed, they will be able to turn to the Secretary of State for Transport who can act as a
      1048
      court of appeal and reinstate them. It is unfortunate that I am obliged to move the amendment. It is a product of the change in atmosphere in local government.
      There is a second reason that must be considered. I cannot disclose my sources because to do so would mean that those who have given me this information would be in danger of losing their jobs. There are Labour-controlled passenger transport authorities which are deliberately telling their employees not to implement the provisions of the Bill when it becomes an Act so as to try to break the timetable, disrupt the plans for bus passenger transport and ensure that the consequent disruption discredits the Conservative party at the next general election. There may, of course, be a general election shortly after the enactment of the Bill. If directors say that they are not prepared to accept a political directive by a passenger transport authority, they can be fired by it for disobeying that political directive, although it has nothing to do with the duty to provide a proper system of bus transport in the area of the passenger transport executive. Those are factors about which the public should be aware, which is why I have tabled the amendment.
      I hope that my hon. Friend the Under-Secretary will give an assurance that that will not be allowed, that the PTE directors will have security of tenure and that they will be allowed to carry out their proper duties in running a bus service so that the public will benefit and be assured of a proper bus transport service.
      Mrs. Dunwoody: A rather worrying trend in the Government is becoming clearer by the day — their deep-rooted fear of properly elected representatives. With the Secretary of State for the Environment it takes the form of removing from metropolitan counties the right to exist. With some Conservative Members it takes the form of seriously suggesting that those who do not pay rates—presumably they mean those in receipt of rate rebates—should not have the right to vote in local elections.
      However, today is probably the first time that a Back-Bench Conservative Member has seriously suggested that we should not trust the locally elected representatives who were elected on a platform that included certain transport policies, but instead should ensure that they are bypassed in any arrangement with their own staff and that the Secretary of State — that well known giver of the judgment of Solomon—should make decisions in such matters as important as the dismissal, suspension or requirement to resign of any member of the executive.
      The hon. Member for Lancashire, West (Mr. Hind) is probably not a bad man. He is probably worried because, on the results of the county elections, there is no doubt that he will find himself looking for another job after the next general election. Perhaps his feeling that elected representatives are not to be trusted stems from that. We must understand exactly what he has in mind—not for him the usual guarantees for any employee in his contract of employment. Of course, we know that the Government are carefully trying to lower the terms of employment—for example, they have changed the conditions for unfair dismissal. It is important to the hon. Gentleman that, in future, the PTAs should not be in control of their staff — that there should be not only a distancing of the PTAs from the PTEs, but a positive intervention from the Secretary of State.
      Mr. Brandon-Bravo: I do not seriously challenge the hon. Lady's comment that those democratically elected to

      1049
      deal with transport should have the right to do that. But is she seriously suggesting that there is not a large element of the Labour party in local administrations that denies the right of this place to make the law of the land, that openly flouts it and believes that because it was elected locally it can ignore the law?
      Mrs. Dunwoody: Those people were elected on a specific policy, and have the right to carry it out. The Government are denying them that right. The hon. Member for Lancashire, West used the word hooligans. We should look at what happens when Conservative students have what they call a quiet weekend. They have to be dealt with severely by the chairman of the Conservative party who, when he had finished squeaking, tried to remove their funding.
      Let us not be mealy-mouthed and hypocritical; it is quite clear what the amendment is about. The hon. Member for Lancashire, West believes that those who are properly elected are not to be trusted to carry out their responsibilities—they should not be allowed to maintain the usual relationship between employer and employee; we must rely on the Secretary of State. After all, when the right hon. Gentleman has finished destroying the bus industry, had a go at the rail industry, mucked up the airports and changed one or two other minor matters, he will not have anything to do, so he will have time to adjudicate between each PTE and its employees.
      Mr. Bob Clay: It is extraordinary audacity for a Conservative Member to move an amendment implying that elected Labour-controlled PTAs will cause disruption in the bus industry. The metropolitan counties are facing abolition, the formation of joint boards, the abolition of transport supplementary grant, the vying between various heads of expenditure for the financing of public transport, all the measures in this Bill and the break-up of section 24 agreements in the NBC —which is of great importance to PTE areas—and yet are being accused by a Conservative Back Bencher of being likely to cause disruption in the transport industry.
      The hon. Member for Lancashire, West (Mr. Hind) should be attacking the Secretary of State. Under legislation passed by this Government, passenger transport authorities should be submitting plans for the next three years to the Secretary of State by 31 July. He should have provided them with advice in February or March, so that they could submit the plans on time. His Department has given them no advice. Yet a Conservative Member has the audacity to move an amendment implying that even more democratic accountability should be taken away from those authorities because they cannot be trusted. He should be moving amendments to stop the Government interfering in public transport.
      The Parliamentary Under-Secretary of State for Scotland (Mr. Michael Ancram): Reaction from Opposition Members shows that my hon. Friend the Member for Lancashire, West (Mr. Hind) has struck a sensitive spot. The hon. Member for Crewe and Nantwich (Mrs. Dunwoody) spoke about my hon. Friend's prospects after the next election. She has only a 290 majority, so it would take only a 0–25 per cent. swing for her to have to find something else to do—but I shall not fall into the same trap as the hon. Lady by pressing that point any further.
      1050
      I share my hon. Friend's concern about the dangers that could arise. Obviously there is a possibility of some PTAs adopting an appointments policy for PTEs that puts more weight on political inclinations than on ability. That would be undesirable. I hope that Opposition Members, when they leave off their swords and shields of political campaigning and consider the best interests of the travelling public, would also feel that that was undesirable.
      My hon. Friend mentioned some of the policies that the PTA might try to pursue. I know there are some Labour Members who take a view contrary to that of the hon. Lady. They believe that local councils should obey the law and that those in this House who try to encourage them not to do that should not be supported because they are undermining democracy and the constitutional position of the House. I was surprised to hear the hon. Member for Crewe and Nantwich say it was her view—I take it that this is not the official Labour party position—that, if a council is elected on a policy, it is entitled to carry it out, regardless of whether that policy happens to be in accordance with the law made by Parliament. If the hon. Lady wishes to qualify her remark, I am delighted to give her the opportunity to do so.
      Mrs. Dunwoody: That is not what I said.
      6.30 pm
      Mr. Ancram: The hon. Lady says that she did not say that, but that was the remark that I heard her make and that I noted. I am sure that certain of her hon. Friends, not least the shadow Secretary of State for the Environment, would not agree with her in the view that she expressed today.
      I think that it would be unwise to try to counter these dangers by giving the Secretary of State a final say on these matters. The appointing and dismissing will be done by the PTA which—apart from in Scotland—after the abolition of the metropolitan councils will be composed of district councillors nominated by constituent district councils. They will have to account for all their actions, including those of appointment and dismissal, as PTA members both to their nominating councils and to the local electors.
      Indeed, in matters such as this where any decisions could have a serious effect—this may well be the view that some Labour councils take in doing things against the interests of the ratepayers—on a majority of electors, I think that that accountability is likely to be more real.
      Appointments to the passenger transport executive, as with other passenger transport authority decisions, will be local matters, and I think it is right that the PTA should be accountable for them locally. We would not want to impose central Government upon that framework. Indeed, I think that such a move in itself would dilute local accountability and perhaps even discourage passenger transport authorities from taking a responsible approach. In particular, if things went wrong, under the provisions suggested by my hon. Friend they would undoubtedly say that it was not their fault but the fault of the Secretary of State because he had endorsed the appointments or the dismissals.
      In answer to one of the very real fears that my hon. Friend the Member for Lancashire, West expressed, I must say that passenger transport executive members cannot be directed to act contrary to the law. The duties of the PTE are quite clear. They are to secure services to meet the area's requirements and in a financial sense to break even.

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      While I appreciate the concern of my hon. Friend and welcome the fact that he has raised the matter today, I think that there are safeguards against some of the dangers that he has outlined. Equally, in the other areas it is proper that the local passenger transport authorities should be locally accountable and able to take decisions for themselves.
      In the light of what I have said, I hope that my hon. Friend, after his valuable contribution to the debate, will withdraw the amendment.
      Mr. Hind: I am obliged to my hon. Friend for the clear and precise view that he has expressed. I join him in hoping that the local representatives will make sensible and proper decisions on a local basis. It was not my intention to denigrate local representatives in any way. Indeed, I am a strong supporter of local government.
      It must be borne in mind that local authorities are subject to Parliament. Parliament makes the law, and all powers that are passed to local authorities are devolved from Parliament. Accordingly, each local authority must obey the law. I fully accept, as I am sure most of my hon. Friends do, that the majority of elected representatives are conscientious and obey the law in carrying out their functions properly. The rule of law is the most important factor in this matter and I emphasise it today to lay down a marker for the future.
      I fully agree that there are those—a minority element — who unfortunately support the view of the Opposition, as they showed when they arrived in their busloads last night at Hackney town hall. They could influence the situation. As a consequence of what has been said by my hon. Friend, I am sure that they will realise that that is not a course of action that they should follow, and accordingly there will be safeguards in the courts to deal with that matter.
      I beg to ask leave to withdraw the amendment.
      Amendment, by leave, withdrawn.
      Mr. Roger Stott: I beg to move amendment No 168, in page 49, line 23, after 'area', insert ` (a),.
      Mr. Speaker: With this it will be convenient to discuss the following amendments:
      No. 169, in page 49, line 26, at end insert—
      `and (b) to ensure the co-ordination of public passenger transport services in the area.'.
      No. 170, in page 49, line 27, after '(1)% insert ` (a) '.
      No. 171, in page 49, line 29, at end insert—
      '(2A) The Passenger Transport Executive for any area shall secure and maintain systems the co-ordination of local services with railway passenger services ferry services provided or secured by the Executive to meet the public transport requirements within the area'.
      No. 172, in page 49, line 34, after 'subsection', insert
      `and the description of systems which the Executive may secure and maintain under subsection (2A) above'.
      No. 173, in page 49, line 36, leave out 'that subsection' and insert 'those subsections'.
      No. 174, in page 50, line 23 after '(6)', insert
      'Except as required in pursuance of the duty imposed by subsection (1) (b) of this section'.
      Mr. Stott: I suspect that this will be one of the last chances for us to endeavour to inject some sanity into a Bill that is riddled with lunacy. We have spent four months in Committee trying to show the Government that if they
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      are determined to push through this measure, at the very least there should be some reserve element given to the passenger transport executives so that they can have overall control and responsibility for the co-ordination of the transportation system in their areas. So far, we have not had those guarantees from the Government. They refused to accept the amendments that we tabled, and so we have had to table the amendments again on Report.
      The amendments do not seek to undermine the basic thrust of the Bill. The Minister knows full well that Opposition Members are opposed to the whole wretched concept of the Bill. We are endeavouring yet again to draw to the Minister's attention the serious and real damage that will be caused if the PTEs and the joint boards are unable to have control in the way outlined in the amendments.
      The fare levels of most, if not all, of the metropolitan counties are charged on buses and are so organised that the fares structure and system is uniform throughout the county. Co-ordination of fares by the PTE and PTA will be possible under clause 55(5), which permits any measure to promote the operation of commercial services to meet public transport requirements and to increase the convenience of the use of public transport. However, this depends on the willingness of all operators to participate. Clause 85 enables the PTA to establish a county-wide travel concession scheme for the elderly, the blind, children and disabled people.
      With numerous operators under no obligation to accept county-wide tickets, it is unlikely that the present system, which operates in many metropolitan councils and other places, such as metrocard, day rover, saverstrip and off peak travel concessions applying to bus and to rail services can survive. Operators will probably be unable to reach agreement on revenue sharing because of differences in fluctuating fares scales.
      The present fares systems are all based on a countywide fares scale. For example, when I visited Bradford last Friday I was informed by Mr. Reed of West Yorkshire passenger transport executive that the saverstrip, the 12-ride multiple journey ticket, offers a uniform discount on a small number of bus fares which are in the lop steps. It is a complicated formula, but that is its objective. With a wide variety of fares scales, this would no longer be possible. Similarly, metrocard, offering unlimited travel across the county, will probably be unworkable if there are large variations in fares between different operators.
      The powers in the Bill will enable the continuation of county-wide concessionary fares schemes, particularly as we have been assured by the Secretary of State, following an amendment that we made yesterday, that operators must participate in such schemes. However, there will be considerable problems over determining reimbursement. That will require information being gathered about the level of concessionary scheme patronage, a subject that we debated at length yesterday. The local PTEs and PTAs will also need some control over the way in which operators are given routes and operate them.
      As I explained, I visited West Yorkshire PTE on Friday. I went to Bradford and discussed the matter with the busmen and their trade union representatives and members of the professional staff. I was extremely impressed by their presentation of the issues involved. That is an extremely good PTA providing public transport to meet the needs of the people.
      I note that the hon. Member for Dewsbury (Mr. Whitfield), who was a member of the Standing

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      Committee, is not in his place. That is a shame because he was the only Conservative Member on the Committee with a constituency in a metropolitan area. I should have thought that he would be interested enough in our debates to have been present. In his area, county-wide fare systems have been shown to be of substantial benefit both to operators and to passengers.
      Under the West Yorkshire system, the tickets available include a saverstrip, which is a bus and rail multi-journey ticket offering 12 rides for 10p each. That type of ticket is used by 40 million passengers per annum and has a peak take-up of 20 per cent. Metrocard is a bus and rail travel card which is used by 23 million passengers per annum and has a peak take-up of 30 per cent. Off-peak maximum fares—that is, 30p for adults and 15p for children—are available at off-peak times and weekends. The system has increased passenger journeys by 19 million annually. I could go on giving details of how the system has created many improvements.
      All of that—through ticketing, Travelcard, the ability of people to travel on buses and trains without buying separate tickets, of being able to buy a strip of tickets to cover 12 journeys, with the strip being punched into a machine—will be in jeopardy as a result of the Bill. Only by introducing amendments such as those which we propose shall we safeguard a system of logistical transportation planning that has been built up in the last decade.
      My hon. Friend the Member for Sunderland, North (Mr. Clay) will explain what is happening in Tyne and Wear, an area of the country which has developed a metro system and where the transportation system generally is second to none. He, like I, believes that that system will be in jeopardy unless we can enshrine safeguards in the statute. After all, that is our job; we make the law, and we should ensure that there is no dubiety in its interpretation. I trust, therefore, that the amendment will be accepted. PTEs should have power to co-ordinate their transportation systems in their areas in future as they do now.
      In our long debates in Committee—
      Mr. Dixon: Which were shortened by the guillotine.
      Mr. Stott: My hon. Friend is right, and today we shall have to make do with what time is available.
      During our debates in Committee the metropolitan counties were often criticised because, it was claimed, they had been content to pay ever-increasing sums by way of revenue support to buy in passengers without seeking reductions in costs and improvements in efficiency. That is not true of most of them.
      It is certainly not true of west Yorkshire. I am informed by the PTA there that patronage has increased by 8 per cent., compared with a typical decline nationally of 3 to 4 per cent.; that fares have fallen by 20 per cent. in real terms; that revenue support has dropped by 23 per cent.; that unit costs have gone down by 7 per cent.; and that total costs have gone down by 10 per cent. in real terms. Revenue has risen by 5 per cent. in cash terms and the PTE has reduced its number of operational properties from 36 to 28. That has happened in west Yorkshire under a system of properly co-ordinated transportation planning.
      Mr. Brandon-Bravo: I do not question the hon. Gentleman's statement about what is happening in west Yorkshire and about revenue support having declined. I think that he will agree, however, that his hon. Friend the
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      Member for Sunderland, North (Mr. Clay) refused to give way to me earlier because he knew that his halo would become tarnished. In his part of the country it was decided not to increase fares, even in line with inflation, although to have done so would have meant increasing the passenger figures.
      Had the fares been increased in line with inflation, Tyne and Wear would have had between £15 million and £20 million in additional revenue with which to improve even further the local system. That is what my hon. Friends and I mean by sensible local management. That is not available in that area because of the colour of the council.
      6.45 pm
      Mr. Stott: I will leave my hon. Friend the Member for Sunderland, North to deal with that intervention.
      Repeatedly, Ministers and Conservative Members claimed in Committee that the Bill was designed to stop planners telling people what services they could have and, instead, to let the people have the services that they wanted. Indeed, the Secretary of State said, referring to franchising:
      "It allows the network to be laid down by the planners but does not permit the customers to say where they want to go and when, and with what frequency, price and standard of service". —[Official Report, Standing Committee A, 30 April, 1985; c. 1641.]
      Not once have Conservative Members spelt out what transport planners really do. They speak as though an overlord imposes bus times and routes that the public do not want. Have any of them considered what actually happens?
      The planning of bus services involves discovering what the people need and then meeting that need. That is the duty and responsibility of the PTEs. The executives have market surveys, ask people what they want and examine the running speeds of buses and the siting of route furniture. They take cognisance of public opinion and try to provide the services that the people want. That is sensible transportation planning.
      If we go ahead with deregulation, restructuring and competition, as will occur if the Bill reaches the statute book without some of the amendments that my hon. Friends and I propose, we shall have absolute chaos. Not only are Labour Members convinced of that, but some Conservative Members believe it, too.
      To mitigate at least some of the consequences of this awful legislation, we have tabled this series of amendments to ensure that an element of local transportation planning may be maintained. Only by that means shall we have co-ordinated services for the benefit of the customers, about whom we are just as concerned as are Conservative Members.
      Dr. Marek: My hon. Friend should be careful. I expect that the reply he will get from the Minister is that the market will respond to what the people want. That is not the case because the market will take on the profitable routes and will not care about the routes that are not profitable. Would my hon. Friend dwell on that point? If planning takes account of what the people want and is done properly, there can be a properly integrated service. The market will not provide that. Can my hon. Friend spell that out?
      Mr. Stott: My hon. Friend anticipates me; I was about to conclude my remarks by doing precisely that.

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      The Bill will remove the voice of the passengers from the planning of bus services. There will be no more consultation and no more independent surveys but just brand marketing of busy routes. Market forces produce nothing to look after people; they just impose what an operator thinks he can make money on. Market forces remove all sense of caring and, more important, reliability and stability, which are essential ingredients for those passengers whose jobs or way of life are dependent upon them. That is the point that my hon. Friend the Member for Wrexham (Dr. Marek) was making, and I subscribe to that view. [Interruption.] Does the Parliamentary Under-Secretary of State for Scotland wish to come to the Dispatch Box to contradict what I have said? No. Then I shall ignore his mutterings.
      Mr. Brandon-Bravo: Before the hon. Member finishes, will he address himself to clause 55(2)? It refers to a new section to be inserted in the 1968 Act. Subsection (1) provides:
      "it shall be the duty of the Executive for any passenger transport area …."
      Subsection (3) of the new section says:
      "The Authority for any passenger transport area shall from time to time formulate general policies …."
      Why does he think that that does not cover completely the whole of what he is seeking to do in these unnecessary amendments?
      Mr. Stott: I apologise to the House for the action replay of what took place in Standing Committee, but this often happens when a Bill is contentious and has been in Standing Committee for a considerable time. We tabled these amendments because we did not get satisfaction from the Minister in Committee. We did not accept the arguments that the Minister used in Committee to counter our arguments. Therefore, we are taking this final opportunity—it is the final opportunity for the House of Commons—to try to write some sanity into a Bill that is riddled with lunacy. That is what we are attempting to do — nothing more, nothing less. Our proposals do not destroy the basic thrust of what the Government intend to do. We are trying to fashion a better Bill. That is the purpose of the amendments. I hope that the Minister will find it possible to accept them.
      Mr. Stephen Ross: I am pleased to support the hon. Member for Wigan (Mr. Stott). The answer to the hon. Member for Nottingham, South (Mr. Brandon-Bravo) is that only yesterday the House approved, against the wishes of the Opposition, the deletion of certain sections of the Transport Act 1968 which called for co-ordinated and integrated services. It is a tragic shame that those sections have been deleted. We are trying to do something about it now.
      We have heard vivid descriptions from the Minister and the Secretary of State about what they expect to happen in Tyne and Wear. They contemplate that if an operator wishes to run a bus service from Whitley Bay to the centre of Newcastle that will be OK. However, they think that he will not do that but will run the service to the nearest railway station because that will be more profitable. I doubt whether that will happen.
      I remember the senior Conservative councillor who appeared before the Select Committee on Transport when it was considering the bus legislation. With tears in his
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      eyes he said, "I have worked for the Tyne and Wear metro for 20-odd years. Now my Government are about to destroy what we have achieved." That is on record for the Minister to read, if he wishes.
      I am sorry to weary the House with yet more stories of the Sealink saga but I will not miss this opportunity because in amendment No. 171 we are asking for co-ordination not only with railway services but with ferry services. I must give the House a warning. The Government let my constituents down when they sold Sealink because they did not write into the contract of sale a requirement for co-ordination of services.
      Only today there arrived on my desk another letter—unfortunately I have not got it with me—complaining about the lack of co-ordination between Sealink and British Rail. A new constituent who has moved from Kent was travelling on 3 May for the bank holiday weekend. He was supposed to connect with the 8 o'clock boat from Lymington. The railway company had even rung up from Brockenhurst to tell Sealink that the train would be late and to ask it it hold the boat. Did it hold the boat? No. The boat went and that man was stranded because there was no later boat. He had to find accommodation for the night. He wants me to take up the matter with the Minister, but what is the point because the Minister will not answer for Sealink which is a private ferry service? If it wants to run the service at 8 o'clock and not wait for passengers who are coming on the train it is entitled to do so. I have already taken up the matter with the local manager.
      My mail contains such letters daily. They are increasing all the time. If we do not insist in legislation that services should be co-ordinated and integrated this will continue. There will be services where co-ordination will not happen.
      Mr. David Mitchell: So that I may understand clearly what the hon. Gentleman is saying about the ferry that sailed without waiting for the train, does he feel that all the people who were on the ferry, with a timetable that they had been told the ferry would run to, should have arrived late because there was a mishap on a train?
      Mr. Ross: I did not say that there was a mishap on the train. I said that the train arrived late. That was the last boat of the night, and it should have waited. It would have waited if it had been under British Rail control. There is a limit — perhaps up to half an hour. That would not have held people up very long. I would expect that. That is co-ordination. With a population of 100,000 people, and many more coming for a holiday weekend, they do not expect to see the boat going without them, particularly if the company has been asked to hold the train.
      There always has been co-ordination. If the boat had gone, it would have come back and run a special service, but that did not happen on this occasion because the company would have lost money. When we start privatising some sections of the public transport service this is the sort of thing that will happen. It will happen with bus services and on metros. Even the hon. Member for Nottingham, South may find in years to come that his mail contains examples of services not being co-ordinated.
      Mr. Brandon-Bravo: I am sorry to intervene again, but surely the hon. Member is not suggesting that he has never been left on a British Rail platform because the train he was supposed to connect with had already left?
      Mr. Ross: Not the last one.
      Mr. Brandon-Bravo: Yes, the last one.
      Mr. Ross: I can recall a number of instances of being put on a goods train, but one is cut off when there are five miles of sea. There is not the alternative of getting a taxi or even flying. The position is different. I believe the example I have given to be true. That is why I feel so intensely that we are at risk of breaking up what has been a very good system.
      We have heard about West Yorkshire and we know about Tyne and Wear. There have been connections of services. For over 80 years it has been the practice for ferries to wait for trains unless they have been too late. In those cases they have run a special service. That is at risk and that is why I support the amendment.
      Mr. Clay: I was fascinated by the intervention of the Under-Secretary of State in the speech of the hon. Member for Isle of Wight (Mr. Ross) when he asked sarcastically whether the hon. Member thought that the ferry should have waited for this passenger. We have heard a great deal about Hereford and Worcester all through the debate on the Bill. I have been to Hereford and it is clear that the one remaining operator in the city centre waits for the last passenger. That is why there is no timetable on the bus stand in the town centre. The operator does not run to time; he parks his bus and waits until it is full before he leaves. That is the most profitable way of operating and that is why he does it. That is the only way in which he can operate a service with the ludicrously uncommercial fares that he charges, which have forced the National Bus Company to reduce its fares. Conservative Members have taken great delight in that forced reduction of fares while we have been discussing the Bill.
      The Hereford service is unplanned and unco-ordinated. It is a sordid cowboy operation and that is why there is only one private operator left in the area. I suspect that he will not be there for very much longer.
      Mr. David Mitchell: In the example given by the hon. Member for Isle of Wight (Mr. Ross) he argued that the boat should have waited. Is the hon. Member for Sunderland, North (Mr. Clay) complaining because in Hereford the private operator's bus waits? Perhaps he will settle the argument with the hon. Member for Isle of Wight. It seems that there is disagreement over which form of service is desirable.
      Mr. Clay: I am arguing with the Minister and not with the hon. Member for Isle of Wight. In a sarcastic intervention the Minister implied that vehicles should not wait for late passengers. The success of the cowboy operation in Hereford, such as it is, is based on waiting. There is no timetable. The operator waits until his bus is full before he drives off. The Minister asked the hon. Member for Isle of Wight to consider the position of other passengers. If I go shopping in Hereford and I study a timetable to decide which bus I want to use for my return journey, I do not expect to sit in the bus for 15 or 20 minutes until the bus is full. That is an example of the ludicrous nonsense that is to be found in experimental areas.
      My right hon. and hon. Friends are arguing for co-ordination and that is what the amendment is designed to achieve. We wish to ensure that the nonsensical operation in Hereford does not continue. We want proper ticketing systems, for example.
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      I hope that the hon. Member for Nottingham, South (Mr. Brandon Bravo) is now familiar with the Tyne and Wear system, but against that background his comments on fare increases were somewhat naive. My hon. Friend the Member for Wigan (Mr. Stott) has said that Tyne and Wear and many other metropolitan counties have PTEs that offer many different systems to the public. Single journey tickets are beoming increasingly a minority means of travel. The Tyne and Wear PTE is introducing a carnet system. In addition, there is a full range of travel cards, including day rovers, weekly travel cards, monthly travel cards, annual travel cards, two-zone and three-zone cards, a countrywide zone, off-peak tickets and all-day tickets. When there is a fare increase, some fares increase and some are held at the current level.
      The Tyne and Wear PTE system has been trying to move passengers on to travel cards as the system is more efficient. If a passenger steps on a bus and displays his card, the bus can proceed more quickly along its route than if the passenger has to buy a ticket. I presume that that is what we all want to achieve.
      Mr. Brandon-Bravo: I accept all the glorious compliments that the hon. Gentleman is paying to the Tyne and Wear system. In an earlier intervention I merely said that if fares had risen since 1982 generally in line with inflation and no more, the Tyne and Wear PTE would have had £15 million to £20 million of extra revenue with which to make the system even better. Will the hon. Gentleman respond now to that argument?
      Mr. Clay: Yes, I will. The Tyne and Wear PTE's calculations produced a result different from that which the hon. Gentleman has put before us. It undertakes processes known as planning and market research, which Conservative Members find appalling. Within the county of Tyne and Wear there have been 55,000 redundancies in the past four years, mainly as a result of Government policies. There is a population of 1·2 million and with such a devastatingly high level of redundancies it is clear that the average person's income is not increasing to meet inflation. It is remarkable even to maintain ridership during a redundancy holocaust. The Select Committee on Transport heard evidence that for every redundancy that is created 150 passenger trips a year are lost. As I have said, there have been 55,000 redundancies in Tyne and Wear over the past four years. However, ridership has increased, which is a reversal of the national trend.
      The success of the Tyne and Wear PTE has not been achieved by holding fares at the same level and not by reducing them either. The PTE has been selective in increasing fares. Travel cards have been introduced and discounts have been offered to the unemployed. The PTE has examined the market. It has studied how people want to travel and it has produced a system that suits the travelling public.
      Whenever my right hon. and hon. Friends have talked about co-ordination and integration there has been abuse from Conservative Members. They suggest that planners are the most evil people under the sun. Such an attitude is extraordinary from a Government who are so committed to capitalism. The very foundation of the capital system is the multinational company. Are the Government saying that multinationals do not plan and do not engage in market research? Do ICI or Marks and Spencer say that they do not know what their next product will be, how many

      1059
      examples of it they will produce and where they will sell it? Do they not know where they want their new outlets to be or which outlets they will close? Are they unsure about the number of supermarkets that they want to build and from where they will buy their products? Large companies employ more and more staff on extremely high salaries to plan and engage in market research.
      The metropolitan counties have adopted the sophistica-tion of large companies and have introduced their techniques to the provision of public passenger transport. They have adopted market research and innovation. They are producing a new product and co-ordinating it. Apparently Conservative Members find this either laughable or despicable. They fail to understand that the system that they claim to find so worth while in Tyne and Wear will be damaged unless the modest aims of the amendment are added to the Bill.
      We have been told repeatedly by the Secretary of State and the Under-Secretary of State that the metro system took a considerable amount of public investment and that if it is as good as we believe the bus services that compete with it will fail. It will not take a great loss of ridership on the metro to put the entire system in danger. The system is dependent on bus services because 60 per cent. of its passengers use a bus before or after their metro journey. It is a system of fixed costs and if the ridership declines slightly the service cannot be reduced slightly. The fact is that the money has been spent. It is not, as the Under-Secretary of State suggested in Committee, a free gift. Interest charges must be paid even if the entire system is sold tomorrow for scrap and closed down. Interest charges will continue and the cost of the rolling stock will have to be met. The system will require the same number of signallers, the same permanent way and the same controllers irrespective of the frequency of the metro cars.
      If the metro loses 5 per cent. of its passengers, it is not possible to reduce the service by 5 per cent. It is recognised within public transport that there is a fatal spiral. If an operator loses passengers, he has to increase his fares. When he increases his fares he loses more passengers. If he is left with fewer passengers, he has to increase his fares again. The metro will be liable to that danger. Many people from Tyne and Wear have tried to explain that to the Minister but he has failed constantly to understand their submissions.
      I urge the House to try to understand the need for the metropolitan areas, especially those which have pioneered integration, to be allowed the powers that the amendment would give them so that whatever happens to the National Bus Company, the PTEs and the private operators that enter the system and try to compete there will be a network of public transport that is highly planned, co-ordinated and popular with a ticketing system that allows the travelling public conveniently to use the entire system. There has been an enormous amount of investment, both of capital to build the system and of human lives to make it work. There have been years of negotiation between different bus companies, because the system is not a monopoly. It operates between the PTE, the National Bus Company and the private operators. All those private operators support the system and are opposed to the damaging effects that the Bill will have.
      The area is completely united, as the hon. Member for Isle of Wight pointed out. Senior Conservative politicians
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      in the area are terribly afraid of the damage that the Bill will do, and are committed to opposing it. For all those reasons, we should at least pass the amendment, which gives the PTA some continuing part in making sure that the co-ordination of services, the through ticketing system and the other benefits of bus-metro integration in Tyne and Wear can continue, and that similar systems in other metropolitan counties can also continue.
      Mr. Kenneth Hind: As I said in Committee, I have had my worries about the continuation of an integrated transport policy. In Committee, too often subsidy became mixed up with an integrated transport policy, which is basically a concept in transport. It has nothing to do with subsidies but is a method of running a bus and transport system.
      I have looked carefully at the Bill and formed the view that there is nothing in it that will prevent a PTA laying down an integrated policy for its area. I should be grateful if my hon. Friend the Minister would comment on this. In particular, I looked at clauses 55 and 59, which relate to the function of local councils in respect of passenger transport in areas other than those covered by their PTAs.
      Clause 59(1) says:
      "(1) In each non-metropolitan county of England and Wales it shall be the duty of the county council

      (a) to secure the provision of such public passenger transport services as the council consider it appropriate to secure to meet any public transport requirements within the county; and

      (b) to formulate from time to time general policies as to the descriptions of services they propose to secure under paragraph (a) above."

      The councils will apply their common sense to that, and sense means integration. It will be essential, with a system such as that of Tyne and Wear, in which millions of pounds of public investment have been made, to continue that service. That will appear sensible to the passenger transport planners, and to the private operators who will realise that they will not be competing against the PTEs' metro systems in Tyne and Wear and Merseyside. They will see where their business lies, and under the Bill it will be to make money running buses. They will realise that the way to do that is to run the buses to the railway stations. I hope that in Lancashire the NBC successor will run its buses to interchanges and railway stations on the Merseyside metro and railway stations.
      There has been much discussion of this matter, but, having looked at it carefully, I feel that we should be considering only one thing in the Bill—can we have an integrated system within the parameters laid down by my hon. Friend the Minister in drawing up the clause? The answer to that must be yes, and the PTEs and the PTAs must take the tools with which they have been provided by the Bill, exercise their common sense and realise that they can run such a system under the Bill. In that case, the amendment is unnecessary.
      7.15 pm
      Mr. Peter Pike: The speech of the hon. Member for Lancashire, West (Mr. Hind) shows clearly that, after some 200 hours of debate on the Bill, both in Committee and in the Chamber, many Conservative Members have failed to understand what the Bill will mean and what deregulation will imply. The county councils will have a duty to provide transport services within their areas. The hon. Gentleman pointed that out, but he failed to recognise that, whether those services can be run on a

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      commercial or a subsidised basis, any other person who wishes to operate a similar service can register to run one in competition. That may destroy the basis on which the county council has planned.
      New operators will be able to register a service for the whole of the day, or part of it, for all the route or part of it. That will cause chaos. Any plans that county councils may have for an integrated and co-ordinated system will not be possible once the Bill has been passed.
      Yesterday, we debated an amendment to stop undertakings agreeing a basis on which they may compete. The Minister opposed that because he felt that that would be unfair competition. That shows how the Government are thinking. County councils such as Lancashire have been trying to get more co-ordination. Although the amendment refers to PTAs, the real point with which we are concerned is the principle of running co-ordinated transport.
      Over the past few years, the Lancashire county council has made strenuous efforts to co-ordinate transport in, for example, Burnley and Pendle, where we have had an agency agreement for a number of years. The six bus operators within Burnley and Pendle co-ordinate their services to make the best use of the staff and resources. That is sensible planning.
      Lancashire county council has encouraged the use of the red rose rambler ticket, and many other different types of tickets. It has co-ordinated the dates on which fare increases will be applied throughout the county and has tried to co-ordinate a countywide basis for concessionary fares. It opened a railway station at Lostock Hall a couple of years ago, and that is a tremendous stride forward. It has encouraged British Rail, and as a result a long discontinued rail service from my constituency to Yorkshire has been reopened. That is a welcome move and we are hoping to see that develop so that we can have a better rail service between the two areas. I should like Lancashire county council to support the idea that British Rail should run a service to Manchester via the Yorkshire side of the county, thereby providing a more direct service. Lancashire county council and I are convinced that such proposals, which will provide a new railway station in my constituency, will not be possible if the Bill is passed.
      Deregulation will mean competition at peak hours and destroy the basis of the transport system. It will rob the present transport operators of finance. It will be a disaster. I am sorry if the Government cannot envisage the disaster that will result from the Bill. Labour Members will be proved right, and the Government will see the disaster when it is too late.
      Mr. David Mitchell: We have had an interesting, although not wholly new, debate on co-ordination. There are two possible forms of co-ordination — where the service is provided or controlled by a single body, and where the market is allowed to produce the services best tailored to meet public demand but provisions are retained for facilitating proper co-operation between diverse services—through joint timetabling, through ticketing, multi-journey tickets, and so on — with contracts provided at public expense for additional socially necessary services. The Government believe that the first of those choices imposes a dead hand on enterprise. The second is much to be preferred, and that is why it is in the Bill.
      1062
      I turn from the basic principle to the points made by the hon. Member for Wigan (Mr. Stott). The hon. Gentleman wants "overall control" — his words, not mine. How Socialists love power over other people's lives. The hon. Gentleman went on to say that the PTE provides the service that the public wants. The PTE provides the service that it thinks is good for people: the gentlemen in town hall know best.
      Mr. Stott: The hon. Gentleman was not listening.
      Mr. Mitchell: I was listening.
      Mr. Stott rose —
      Mr. Mitchell: I have only a few minutes in which to speak and I wish to deal with some of the hon. Gentleman's other points.
      The hon. Member for Wigan sounded a paean of praise for the West Yorkshire PTE, which he recently visited. I do not know how much the PTE told him. I accent that, as PTEs go, the West Yorkshire PTE is reasonably efficient. Did the PTE tell him that it has one of the lowest load factors of any PTE? That does not indicate great efficiency. Did the PTE tell him that the planned reduction in mileage in 1984–85 was 3·6 per cent.? If one extrapolates that rate of decline, in 29 years there will be no buses at all. Did the PTE tell him that? Did it tell the hon. Gentleman that 76 per cent. of the buses in that area are on one-man operation, instead of 91 per cent., as with the National Bus Company? Did the PTE give the hon. Gentleman that criterion of efficiency? Did it tell him that the costs per bus mile in west Yorkshire are 10 pe: cent. above those in the west midlands?
      I wonder what sort of picture the hon. Gentleman came away with. Did the PTE tell him that the National Bus Company's costs are, on average, between 20 and 25 per cent. below those of the West Yorkshire PTE? If the PTE told the hon. Gentleman those things, he would not have uttered that paean of praise. If it did not, the PTE did not give him a balanced picture of the position in west Yorkshire.
      The hon. Member for Wigan mocked the profit motive. What is wrong with a motivation of finding, pleasing and serving customers? If the hon. Gentleman thinks that the profit motive is so bad, I ask him to look at the magnificent services that Marks and Spencer and Sainsburys provide for the public. If removing the profit motive was the signal to marvellous success, would not the co-operative shops have swept the country and put Marks and Spencer out of business? They have not, because pleasing the customer is an enormous motivator when profit is made. That is what we want in the bus services. We want happy customers who are given a service that they want, and the profit motive will help to ensure that that happens. A profit is not made unless one provides the service that the people want, because if the service is not provided the company does not get the passengers.
      The essential argument of the hon. Member for Sunderland, North (Mr. Clay) was that there is a super system on Tyne and Wear which provides the service that the people of the area want. He went on, however, to make an extraordinary, illogical point. He said that the service should therefore be protected. If the system is providing the super services that the people of the area want, it does not need protection. Courage, mon ami: if one is providing

      1063
      what the public wants, one does not need the crutches and protection from competition for which the hon. Gentleman asked.
      I am sorry that my hon. Friend the Member for Hereford (Mr. Shepherd) is momentarily not in the Chamber. The hon. Member for Sunderland, North talked about a bus waiting in Hereford and not running until it was full. We had a trial area in Hereford, and we learnt the lessons of what was wrong. That was one of the lessons. The Bill therefore provides that a service must be registered and that a company must run according to its registered timetable. If it does not, penalties, including a fine of up to 25 per cent. of the company's fuel duty rebate — a severe penalty — are imposed. Eventually, the company might lose its operating licence. That does not happen at present. If the hon. Member for Sunderland, North is in any doubt, let him wait for a No. 11 bus. He will soon find that he will wait 20 minutes and then get three buses. At present, no penalty is imposed on the operators. Under this legislation penalties will be imposed on people in the areas outside London and, as soon as possible, in London who fail to run services as registered.
      The hon. Member for Sunderland, North showed that ICI, Marks and Spencer and other private sector companies undertake market research. What leads him to believe that the motivation for profit which drives Marks and Spencer to seek out surveys to ascertain where customers can be found will not also be a motivation for bus operators to undertake the same activities in the metropolitan counties? [Interruption.] The hon. Member for Wigan laughs. I suppose that if he ran a bus service, he would not bother to carry out those surveys. Is the hon. Gentleman saying that, or will he admit that, if he ran a bus service, he would be sufficiently shrewd and sensible to conduct surveys to ascertain where potential customers were? If the hon. Gentleman is sufficiently shrewd and sensible to seek to know where his potential customers are, he deserves to be a spokesman for his party. If he is not sufficiently shrewd, he has no right to occupy the seat he now occupies.
      Mr. Clay rose —
      Mr. Mitchell: The House knows perfectly well that the hon. Member for Sunderland, North was talking complete nonsense in suggesting that private operators would not have the necessary shrewdness to do what is done by private operators in a host of businesses, motivated by the profit motive and a desire to find and satisfy customers and use their services again as good will is built up.
      Mr. Clay: The Under-Secretary of State knows perfectly well that he is misrepresenting what I said. At the moment, PTEs plan and conduct market research. That has been denigrated by the hon. Gentleman and his colleagues as bureaucracy and undesirable. I simply made the point that the big firms which he supports and admires do the same. The hon. Gentleman implies that bus operators will not need to do that, because the mystical hand of the market will tell them where to go. They will not need to carry out market research. The Under-Secretary of State — not Opposition Members — has totally contradicted himself.
      Mr. Mitchell: The hon. Gentleman fails to recognise that what he refers to as the "mystical" power of the market
      1064
      is the motivation to ascertain where one's potential customers are and where the company can build up business. That is exactly what the private sector does.
      I hope that the House will reject the amendment and accept that we are providing a system that enables PTEs to facilitate proper co-operation between diverse services through joint timetabling, through ticketing, multi-journey tickets and the like. Facilitation rather than compulsion is the way. We want to enable the customer to be the king.
      Question put, That the amendment be made:
      The House divided: Ayes 162, Noes 244.

      Division No. 218]

      [6 pm

      AYES

      Archer, Rt Hon Peter

      Garrett, W. E.

      Ashdown, Paddy

      George, Bruce

      Ashley, Rt Hon Jack

      Gilbert, Rt Hon Dr John

      Ashton, Joe

      Godman, Dr Norman

      Atkinson, N. (Tottenham)

      Gould, Bryan

      Bagier, Gordon A. T.

      Gourlay, Harry

      Banks, Tony (Newham NW)

      Hamilton, W. W. (Central Fife)

      Beckett, Mrs Margaret

      Hancock, Mr. Michael

      Beith, A. J.

      Harman, Ms Harriet

      Bell, Stuart

      Harrison, Rt Hon Walter

      Benn, Tony

      Hattersley, Rt Hon Roy

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

      Healey, Rt Hon Denis

      Bermingham, Gerald

      Heffer, Eric S.

      Bidwell, Sydney

      Hogg, N. (C'nauld & Kilsyth)

      Blair, Anthony

      Home Robertson, John

      Boyes, Roland

      Howell, Rt Hon D. (S'heath)

      Bray, Dr Jeremy

      Howells, Geraint

      Brown, Gordon (D'f'mline E)

      Hoyle, Douglas

      Brown, Hugh D. (Provan)

      Hughes, Dr. Mark (Durham)

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

      Hughes, Robert (Aberdeen N)

      Brown, Ron (E'burgh, Leith)

      Hughes, Roy (Newport East)

      Bruce, Malcolm

      Hughes, Sean (Knowsley S)

      Buchan, Norman

      Janner, Hon Greville

      Caborn, Richard

      John, Brynmor

      Callaghan, Rt Hon J.

      Jones, Barry (Alyn & Deeside)

      Callaghan, Jim (Heyw'd & M)

      Kaufman, Rt Hon Gerald

      Campbell, Ian

      Kinnock, Rt Hon Neil

      Campbell-Savours, Dale

      Kirkwood, Archy

      Canavan, Dennis

      Lamond, James

      Carter-Jones, Lewis

      Leadbitter, Ted

      Cartwright, John

      Leighton, Ronald

      Clark, Dr David (S Shields)

      Lewis, Ron (Carlisle)

      Clarke, Thomas

      Lewis, Terence (Worsley)

      Clay, Robert

      Litherland, Robert

      Clwyd, Mrs Ann

      Lloyd, Tony (Stretford)

      Cocks, Rt Hon M. (Bristol S.)

      Loyden, Edward

      Cohen, Harry

      McCartney, Hugh

      Cook, Frank (Stockton North)

      McCrea, Rev William

      Cook, Robin F. (Livingston)

      McDonald, Dr Oonagh

      Corbett, Robin

      McKay, Allen (Penistone)

      Cowans, Harry

      McKelvey, William

      Craigen, J, M.

      McNamara, Kevin

      Crowther, Stan

      McTaggart, Robert

      Cunningham, Dr John

      McWilliam, John

      Dalyell, Tam

      Madden, Max

      Davies, Rt Hon Denzil (L'lli)

      Marek, Dr John

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

      Marshall, David (Shettleston)

      Deakins, Eric

      Martin, Michael

      Dixon, Donald

      Maynard, Miss Joan

      Dobson, Frank

      Meacher, Michael

      Dormand, Jack

      Meadowcroft, Michael

      Dubs, Alfred

      Michie, William

      Duffy, A. E. P.

      Mikardo, Ian

      Dunwoody, Hon Mrs G.

      Mitchell, Austin (G't Grimsby)

      Eadie, Alex

      Morris, Rt Hon A. (W'shawe)

      Eastham, Ken

      Morris, Rt Hon J. (Aberavon)

      Ellis, Raymond

      Nellist, David

      Evans, John (St. Helens N)

      O'Brien, William

      Fatchett, Derek

      O'Neill, Martin

      Faulds, Andrew

      Orme, Rt Hon Stanley

      Field, Frank (Birkenhead)

      Owen, Rt Hon Dr David

      Fisher, Mark

      Park, George

      Flannery, Martin

      Parris, Matthew

      Foot, Rt Hon Michael

      Patchett, Terry

      Forrester, John

      Pavitt, Laurie

      Foster, Derek

      Penhaligon, David

      Foulkes, George

      Pike, Peter

      Fraser, J. (Norwood)

      Prescott, John

      Freeson, Rt Hon Reginald

      Radice, Giles

      Freud, Clement

      Randall, Stuart

      Fry, Peter

      Redmond, M.

      Rees, Rt Hon M. (Leeds S)

      Strang, Gavin

      Richardson, Ms Jo

      Thorne, Stan (Preston)

      Roberts, Ernest (Hackney N)

      Tinn, James

      Robertson, George

      Torney, Tom

      Ross, Stephen (Isle of Wight)

      Wainwright, R.

      Rowlands, Ted

      Wallace, James

      Ryman, John

      Wareing, Robert

      Sedgemore, Brian

      Weetch, Ken

      Sheerman, Barry

      Welsh, Michael

      Sheldon, Rt Hon R.

      White, James

      Shore, Rt Hon Peter

      Wig ley, Dafydd

      Short, Mrs R.(Whampfn NE)

      Williams, Rt Hon A.

      Silkin, Rt Hon J.

      Wilson, Gordon

      Skinner, Dennis

      Winnick, David

      Smith, C.lsl'ton S & F'bury)

      Winterton, Nicholas

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

      Wrigglesworth, Ian

      Soley, Clive

      Steel, Rt Hon David

      Tellers for the Ayes:

      Stewart, Rt Hon D. (W Isles)

      Mr. Frank Haynes and

      Stott, Roger

      Dr. Roger Thomas.

      NOES

      Aitken, Jonathan

      Freeman, Roger

      Alexander, Richard

      Gale, Roger

      Amess, David

      Glyn, Dr Alan

      Ancram, Michael

      Goodhart, Sir Philip

      Atkins, Robert (South Ftibble)

      Goodlad, Alastair

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

      Gorst, John

      Baker, Nicholas (N Dorset)

      Gow, Ian

      Banks, Robert (Harrogate)

      Gower, Sir Raymond

      Beaumont-Dark, Anthony

      Green way, Harry

      Beggs, Roy

      Gregory, Conal

      Bellingham, Henry

      Griffiths, E. (By St Edm'ds)

      Biggs-Davison, Sir John

      Griffiths, Peter (Portsm'th N)

      Boscawen, Hon Robert

      Grist, Ian

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

      Hamilton, Hon A. (Epsom)

      Bowden, Gerald (Dulwich)

      Hamilton, Neil (Tatton)

      Brandon-Bravo, Martin

      Hannam, John

      Brinton, Tim

      Harris, David

      Brooke, Hon Peter

      Harvey, Robert

      Brown, M. (Brigg & Cl'thpes)

      Haselhurst, Alan

      Bryan, Sir Paul

      Havers, Rt Hon Sir Michael

      Buchanan-Smith, Rt Hon A.

      Hawksley, Warren

      Buck, Sir Antony

      Hayes, J.

      Budgen, Nick

      Hayhoe, Barney

      Burt, Alistair

      Hayward, Robert

      Butcher, John

      Heathcoat-Amory, David

      Carlisle, John (N Luton)

      Henderson, Barry

      Carlisle, Kenneth (Lincoln)

      Hickmet, Richard

      Carlisle, Rt Hon M. (Wton S)

      Hicks, Robert

      Carttiss, Michael

      Hind, Kenneth

      Cash, William

      Hirst, Michael

      Chapman, Sydney

      Hogg, Hon Douglas (Gr'th'm)

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

      Holland, Sir Philip (Gedling)

      Clark, Sir W. (Croydon S)

      Hordern, Peter

      Clarke, Rt Hon K. (Rushcliffe)

      Howarth, Gerald (Cannock)

      Clegg, Sir Walter

      Howell, Ralph (N Norfolk)

      Cockeram, Eric

      Hubbard-Miles, Peter

      Coombs, Simon

      Hunt, David (Wirral)

      Cope, John

      Irving, Charles

      Crouch, David

      Jackson, Robert

      Currie, Mrs Edwina

      Johnson Smith, Sir Geoffrey

      Dorrell, Stephen

      Jones, Gwilym (Cardiff N)

      Douglas-Hamilton, Lord J.

      Jones, Robert (W Herts)

      Dunn, Robert

      Joseph, Rt Hon Sir Keith

      Durant, Tony

      Kellett-Bowman, Mrs Elaine

      Dykes, Hugh

      Kershaw, Sir Anthony

      Evennett, David

      Key, Robert

      Eyre, Sir Reginald

      King, Roger (B'ham N'field)

      Fairbairn, Nicholas

      King, Rt Hon Tom

      Fallon, Michael

      Knight, Gregory (Derby N)

      Farr, Sir John

      Knowles, Michael

      Favell, Anthony

      Knox, David

      Fenner, Mrs Peggy

      Lamont, Norman

      Fletcher, Alexander

      Lang, Ian

      Fookes, Miss Janet

      Latham, Michael

      Forsyth, Michael (Stirling)

      Lawler, Geoffrey

      Forth, Eric

      Lawrence, Ivan

      Fox, Marcus

      Lee, John (Pendle)

      Franks, Cecil

      Leigh, Edward (Gainsbor'gh)

      Lennox-Boyd, Hon Mark

      Rowe, Andrew

      Lester, Jim

      Rumbold, Mrs Angela

      Lightbown, David

      Ryder, Richard

      Lilley, Peter

      Sackville, Hon Thomas

      Lloyd, Peter, (Fareham)

      Sayeed, Jonathan

      Lord, Michael

      Shaw, Sir Michael (Scaro')

      Luce, Richard

      Shelton, William (Streatham)

      Lyell, Nicholas

      Shepherd, Colin (Hereford)

      McCurley, Mrs Anna

      Shepherd, Richard (Aldndge)

      MacGregor, John

      Silvester, Fred

      MacKay, John (Argyll & Bute)

      Sims, Roger

      Maclean, David John

      Smith, Tim (Beaconsfield)

      Madel, David

      Soames, Hon Nicholas

      Major, John

      Speed, Keith

      Malins, Humfrey

      Spencer, Derek

      Malone, Gerald

      Spicer, Jim (W Dorset)

      Marland, Paul

      Spicer, Michael (S Worcs)

      Mates, Michael

      Squire, Robin

      Mather, Carol

      Stanbrook, Ivor

      Maude, Hon Francis

      Stanley, John

      Mawhinney, Dr Brian

      Steen, Anthony

      Maxwell-Hyslop, Robin

      Stevens, Lewis (Nuneaton)

      Mayhew, Sir Patrick

      Stevens, Martin (Fulham)

      Mellor, David

      Stewart, Allan (Eastwood)

      Merchant, Piers

      Stradling Thomas, J.

      Meyer, Sir Anthony

      Sumberg, David

      Miller, Hal (B'grove)

      Taylor, John (Solihull)

      Mills, lain (Meriden)

      Taylor, Teddy (S'end E)

      Mills, Sir Peter (West Devon)

      Temple-Morris, Peter

      Mitchell, David (NW Hants)

      Thomas, Rt Hon Peter

      Monro, Sir Hector

      Thompson, Donald (Calder V)

      Montgomery, Sir Fergus

      Thompson, Patrick (N'ich N)

      Moore, John

      Thornton, Malcolm

      Morrison, Hon P. (Chester)

      Thurnham, Peter

      Moynihan, Hon C.

      Townend, John (Bridlington)

      Murphy, Christopher

      Townsend, Cyril D. (B'heath)

      Neale, Gerrard

      Tracey, Richard

      Needham, Richard

      Twinn, Dr Ian

      Nelson, Anthony

      van Straubenzee, Sir W.

      Nicholls, Patrick

      Vaughan, Sir Gerard

      Norris, Steven

      Viggers, Peter

      Oppenheim, Phillip

      Waddington, David

      Oppenheim, Rt Hon Mrs S.

      Wakeham, Rt Hon John

      Osborn, Sir John

      Walker, Bill (T'side N)

      Pattie, Geoffrey

      Wall, Sir Patrick

      Pawsey, James

      Waller, Gary

      Peacock, Mrs Elizabeth

      Ward, John

      Pollock, Alexander

      Wardle, C. (Bexhill)

      Porter, Barry

      Watts, John

      Portillo, Michael

      Wells, Bowen (Hertford)

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

      Wheeler, John

      Powell, William (Corby)

      Whitfield, John

      Powley, John

      Whitney, Raymond

      Prentice, Rt Hon Reg

      Wiggin, Jerry

      Price, Sir David

      Winterton, Mrs Ann

      Proctor, K. Harvey

      Wolfson, Mark

      Rathbone, Tim

      Wood, Timothy

      Renton, Tim

      Yeo, Tim

      Rhodes James, Robert

      Young, Sir George (Acton)

      Rhys Williams, Sir Brandon

      Younger, Rt Hon George

      Ridley, Rt Hon Nicholas

      Ridsdale, Sir Julian

      Tellers for the Noes:

      Robinson, Mark (N'port W)

      Mr. Tristan Garel-Jones and

      Roe, Mrs Marion

      Mr. Michael Neubert.

      Rossi, Sir Hugh

      Division 219]

      [7.30 pm

      AYES

      Archer, Rt Hon Peter

      Foulkes, George

      Ashdown, Paddy

      Fraser, J. (Norwood)

      Ashley, Rt Hon Jack

      Freeson, Rt Hon Reginald

      Ashton, Joe

      Freud, Clement

      Bagier, Gordon A. T.

      Garrett, W. E.

      Banks, Tony (Newham NW)

      George, Bruce

      Beckett, Mrs Margaret

      Gilbert, Rt Hon Dr John

      Beith, A. J.

      Godman, Dr Norman

      Bell, Stuart

      Golding, John

      Benn, Tony

      Gourlay, Harry

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

      Hamilton, W. W. (Central Fife)

      Bermingham, Gerald

      Hancock, Mr. Michael

      Bidwell, Sydney

      Harman, Ms Harriet

      Blair, Anthony

      Harrison, Rt Hon Walter

      Boyes, Roland

      Hattersley, Rt Hon Roy

      Bray, Dr Jeremy

      Healey, Rt Hon Denis

      Brown, Gordon (D'f'mline E)

      Heffer, Eric S.

      Brown, Hugh D. (Provan)

      Hogg, N. (C'nauld & Kilsyth)

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

      Home Robertson, John

      Brown, Ron (E'burgh, Leith)

      Howells, Geraint

      Bruce, Malcolm

      Hoyle, Douglas

      Buchan, Norman

      Hughes, Dr. Mark (Durham)

      Caborn, Richard

      Hughes, Robert (Aberdeen N)

      Callaghan, Rt Hon J.

      Hughes, Roy (Newport East)

      Callaghan, Jim (Heyw'd & M)

      Hughes, Sean (Knowsley S)

      Campbell, Ian

      Hughes, Simon (Southwark)

      Campbell-Savours, Dale

      Janner, Hon Greville

      Canavan, Dennis

      John, Brynmor

      Carter-Jones, Lewis

      Jones, Barry (Alyn & Deeside)

      Cartwright, John

      Kaufman, Rt Hon Gerald

      Clark, Dr David (S Shields)

      Kirkwood, Archy

      Clarke, Thomas

      Lamond, James

      Clay, Robert

      Leadbitter, Ted

      Clwyd, Mrs Ann

      Leighton, Ronald

      Cocks, Rt Hon M. (Bristol S.)

      Lewis, Ron (Carlisle)

      Cohen, Harry

      Lewis, Terence (Worsley)

      Cook, Frank (Stockton North)

      Lloyd, Tony (Stretford)

      Cook, Robin F. (Livingston)

      Loyden, Edward

      Corbett, Robin

      McDonald, Dr Oonagh

      Corbyn, Jeremy

      McKay, Allen (Penistone)

      Cowans, Harry

      McKelvey, William

      Craigen, J. M.

      McNamara, Kevin

      Crowther, Stan

      McTaggart, Robert

      Davies, Rt Hon Denzil (L'lli)

      McWilliam, John

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

      Madden, Max

      Deakins, Eric

      Marek, Dr John

      Dixon, Donald

      Marshall, David (Shettleston)

      Dobson, Frank

      Martin, Michael

      Dormand, Jack

      Maynard, Miss Joan

      Dubs, Alfred

      Meadowcroft, Michael

      Duffy, A. E. P.

      Michie, William

      Dunwoody, Hon Mrs G.

      Mikardo, Ian

      Eadie, Alex

      Mitchell, Austin (G't Grimsby)

      Eastham, Ken

      Morris, Rt Hon A. (W'shawe)

      Ellis, Raymond

      Morris, Rt Hon J. (Aberavon)

      Evans, John (St. Helens N)

      Nellist, David

      Fatchett, Derek

      O'Brien, William

      Field, Frank (Birkenhead)

      Orme, Rt Hon Stanley

      Fisher, Mark

      Owen, Rt Hon Dr David

      Flannery, Martin

      Park, George

      Foot, Rt Hon Michael

      Patchett, Terry

      Forrester, John

      Pavitt, Laurie

      Foster, Derek

      Penhaligon, David

      Question accordingly negatived.
      It being after half-past Seven o'clock, MR. DEPUTY SPEAKER proceeded, pursuant to the order [1 April] and the resolution yesterday, to put forthwith the Questions on amendments moved by a member of the Government to the end of part IV of the Bill.
      Amendments made: No. 68, in page 50, line 40, at end insert—
      ' (d) in Scotland, a partner or (as the case may be) an employee of a partner of such an operator;'.
      No. 69, in page 50, line 44, after 'director', insert `, partner'.—[Mr. Ridley.]

    Schedule 3

      AMENDMENTS CONSEQUENTIAL ON SECTION 55
      Amendment made: No. 133, in page 119, line 19, leave out from 'from' to 'Schedule' in line 20 and
      insert
      '"or with the consent"' to "Act" (which refer to consents under'.—[Mr. Ridley.]

    Clause 57

      ORDERS EXCLUDING POWERS OF EXECUTIVES TO RUN BUS UNDERTAKINGS
      Amendments made: No. 70, in page 53, line 29, at beginning insert 'This section applies'.
      No. 71, in page 53, line 33, after 'area', insert ("the Executive")'.
      No. 72, in page 53, leave out from beginning of line 34 to 'Act' in line 4 on page 54 and insert—
      '(2) At any time after the Secretary of State has given to the Executive a direction under subsection (3) of that section the Secretary of State may by order provide that the Executive shall cease, on a day specified in the order, to be under the duty imposed by section 24(2) of the 1968'.
      No. 73, in page 54, leave out lines 7 to 20 and insert—
      '(3) Where an order is made under subsection (2) above, any duty of the National Bus Company and the Scottish Transport Group under section 24(2) of the 1968 Act to co-operate with the Executive (or with each other) shall cease on the day specified in the order to apply in relation to the Executive's area.
      (3A) Any order under subsection (2) above may include provision for the termination of any agreements made under section 24(2) to which the Executive are a party, on such terms and such dates as may be specified in relation to those agreements in the order (and different terms and dates may be so specified in relation to different agreements).
      (3B) At any time after the transfer required under section 56(8) of shares in or other securities of the initial company to the Passenger Transport Authority for the Executive's area has taken place the Secretary of State may by order provide that the Executive shall cease, on a day specified in the order, to have the powers under section 10(1)(i) and (viii) of the 1968 Act (powers to carry passengers by road and to let passenger vehicles on hire with or without trailers for the carriage of goods).
      (3C) Where an order is made under subsection (3B) above in relation to the Executive, section 16(2) of the 1968 Act (which relates to the provision of special information in the annual report of Authorities and Executives as to certain businesses of providing services for the carriage of passengers by road) shall cease to apply in relation to any accounting period of the Executive beginning on or after the day specified in the order.'.
      No. 74, in page 54, line 22, leave out from first 'of' to end of line 27 and insert—

      ' (a) section 24(2) of the 1968 Act; and

      (b) section 10(1)(i) and (viii) of that Act;

      on the date on which, by virtue of the cumulative effect of orders made under this section, there ceases to be any Passenger Transport Executive in Great Britain who are under the duty imposed by section 24(2) or have the powers under section 10(1)(i) and (viii).'.-[Mr. Ridley.]

    Clause 58

      DIVISION OF UNDERTAKINGS OF COMPANIES FORMED UNDER SECTION 56.
      Amendments made: No. 75, in page 54, line 34, leave out from beginning to `the' in line 35 and insert
      'Where in the case of any passenger transport area the transfer required under section 56(8) of this Act of shares in or other securities of the initial company to the Passenger Transport Authority for that area has taken place.'.
      No. 76, in page 54, line 36, leave out
      `the Passenger Transport Authority for that area'
      and insert 'that Authority'. — [Mr. Ridley.]

    Clause 60

      EXCLUSION OF POWERS OF CERTAIN COUNCILS TO RUN BUS UNDERTAKINGS
      Amendments made:> No. 77, in page 59, line 8, leave out 'section' and insert 'Part of this Act'.
      No. 78, in page 59, line 13, leave out `and'.
      No. 79, in page 59, line 20, at end insert 'and
      c references, in relation to any council operating a bus undertaking, to the council's bus undertaking are references to all activities carried on, whether by the council themselves or by any other authority or person in persuance of any such arrangements as are mentioned in paragraph (b) above or otherwise, in or for the purposes of the provision by the council of any such service. '. —[Mr. Ridley.]

    Clause 61

      FORMATION OF COMPANIES TO RUN COUNCIL BUS UNDERTAKINGS
      Amendments made: No. 80, in page 59, line 32, after `any', insert 'other'.
      No. 81, in page 60, line 2, leave out from 'if' to end of line 12 and insert
      'any service for the carriage of passengers by road provided by the council, being a service for which a PSV operator's licence is required, is provided under any agreement or arrangements provided for—

      (a) the provision or operation of any services for the carriage of passengers by road by any person acting on the joint behalf of that council and any other person; or

      (b) the joint provision or operation of any such services provided by the council in conjunction with any such services provided by any other person

      and (in either case) the joint ownership of any assets used or appropriated for use for the provision of any such services under the agreement or arrangements in question.
      (4) References in this Part of this Act, in relation to a council whose bus undertaking forms part of a joint undertaking, to the joint undertaking are references to all activities carried on, or (according to the context) to all property used or appropriated for use and all rights and liabilities subsisting for the purposes of any activities carried on, in pursuance of the agreement or arrangements by reference to which that council falls within subsection (3) above. '. — [Mr. Ridley.]

    Clause 62

      SCHEMES FOR TRANSFER OF INDIVIDUAL COUNCIL BUS UNDERTAKINGS TO COMPANIES FORMED UNDER SECTION 61
      Amendment made: No. 82, in page 60, line 24, at end insert
      ', except where any of the activities of the council's bus undertaking ("the separate activities") are carried on by the council otherwise than in pursuance of any such agreement or arrangements as are mentioned in section 61(3) of this Act; and in the latter case the reference in subsection (1)(a) above to property rights and liabilities of the council shall be read as limited to property used or appropriated for use and rights and liabilities subsisting for the purposes of the separate activities.'. — [Mr. Ridley.]

    Clause 65

      EXEMPTION FOR COUNCILS RUNNING SMALL BUS UNDERTAKINGS
      Amendments made: No. 83, in page 65, line 20, leave out `to which section 60(1) of this Act applies' and insert
      `which requires a PSV operator's licence'.
      No. 84, in page 65, line 24, after '60(1)', insert 'of this Act'.—[Mr. Ridley.]

    Clause 79

      INTERPRETATION OF PART IV
      Amendments made: No. 85, in page 77, line 33, at end insert—
      '(bb) references to—

      (i) a service for the carriage of passengers by road which requires a PSV operator's licence;

      (ii) the provision of any such service by any council; and

      (iii) the bus undertaking of any council operating a bus undertaking;

      shall be read in accordance with the relevant provisions of section 60(7) of this Act;'.
      No. 86, in page 77, line 36, after `(3)', insert 'and (4)'. —[Mr. Ridley.]

    Clause 80

      EXPENDITURE ON PUBLIC PASSENGER TRANSPORT SERVICES
      Mr. Fry: I beg to move amendment No. 87, in page 78, line 11, at end insert
      'provided that any such authority shall have the option of adopting a system of comprehensive competitive tendering'.
      I am pleased that I have the opportunity to initiate the debate on what I consider to be a genuine and middle-way attempt to ensure that the Bill is more workable. I should like the Minister to appreciate that I tabled the amendment in an attempt to provide a genuine alternative to the subsidy system outlined in the Bill. Competitive compulsory tendering was proposed by the Transport Select Committee in its second report during the 1984–85 Session. At the risk of wearying the House I shall read one or two extracts from it to explain the purpose of the amendment. Page 66 says of comprehensive competitive tendering:
      "This option consists of a co-ordinating authority being responsible for planning the provision of services, but being required to put all services, whether profitable or unprofitable, out to tender. That could be done on a gross cost basis, with all revenues accruing to the authority … or on a net cost basis, with competing operators offering either to pay for the privilege of providing a specified service or to undertake it for a declared subsidy. The profits from the sale of the profitable franchises could then be ploughed back into the payments for the unprofitable franchises. Either version makes the subsidy system more transparent … and fully retains the potential to use internal cross-subsidy within the bus sector without giving any individual operator a secure profits base from which to engage in predatory competition in other parts of the network."
      It is significant that such schemes have already been tried in Oslo, Paris and Munich, to name but three major continental cities. It is interesting to note that when the Select Committee took evidence from the guru of the Government's philosophy, Professor Beesley, and pressed him to give an example of anywhere in the world with a system such as that outlined in the Bill, he was hard pressed to find one. The amendment's proposals have been
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      tried elsewhere, but the Government's proposals are completely untried on the scale on which they are intended to operate.
      7.45 pm
      The House is entitled to ask why it is necessary to put forward an alternative. The answer is contained in an interesting report from Hertfordshire county council, before the recent county council elections, when it had a somewhat bluer tinge. That study examined the changes in transport supplementary grants, and the probable alteration as a result of the ending of cross-subsidy. It is interesting that the county council estimated that, because of the loss of cross-subsidy, it could need up to £2 million of extra revenue support, or would need to reduce its support by about £2 million. In any event, it forecast the danger of about a 30 per cent. loss of services should the Bill be put into operation. The cost of school transport, social services transport, district health transport and works transport would escalate. That one report shows the need to pause before accepting the Government's proposals on tendering.
      It may be no accident that a range of local authority organisations have expressed doubt about this aspect of the Bill. The Association of District Councils, which is Conservative-controlled, stated:
      "The basic weakness of the proposals stems from the fact rhat they are a product of political and economic theories with no practical input and will not stand up in practice."
      I seek to put forward a proposal that is based on practice and that is practical.
      The Association of Metropolitan Authorities in its recent publication states that the problems of the Bill
      "can be avoided by use of a suitable system of competitive tendering within a co-ordinated network of services."
      I ask the House to note the following words:
      "This is the solution being used by London Regional Transport (London is excluded from deregulation for the present, although the Bill gives the Secretary of State reserve powers to deregulate in London in due course)."
      The most significant comment comes from the Association of County Councils, which has deliberately set out not to oppose the Bill but merely to improve it. In a letter dated 17 May, the ACC stated:
      "We do not believe that the tendering system set out in the Bill can operate satisfactorily unless in appropriate cases the tendering authority can obtain protection for the tendered services against competition on the road from other operators."
      All those comments show the strength of feeling in local government. When the idea was put to my right hon. Friend the Secretary of State by hon. Members who represent Kent, they received replies which stated that such ideas were a franchise. The Government believed that the great danger was that such a franchise, once having been granted, would mean that the incumbent was protected from competition, and that the franchise conferred monopoly power and the scope for exploitation of the passenger. That was the answer given to my hon. Friend the Member for Maidstone (Sir J. Wells) and others on 7 March. Even if that were entirely true, the Government must explain why it is satisfactory to pursue such a policy in London and not elsewhere.
      The leader of Kent county council, Mr. Tony Hart, wished to rebut the arguments in that letter, especially the arguments produced in a document entitled "Problems with Franchising". Anyone who has read that document will understand Mr. Hart's comment that the arguments in

      1071
      it are merely an academic prediction. He pointed out that one of the most interesting remarks in the document appeared in paragraph 9, which states:
      "This paper"—
      a paper in the Bell Journal of Economics in 1976—
      "is the source of a considerable number of the comments made in the present paper."
      That shows that this interesting document has been culled from someone else's intellectual or academic exercise.
      In his letter to members of the Standing Committee of 29 March, Mr. Hart said that it was odd that the Government had leaned so heavily on that paper. He said that they quoted from it only selectively. He went on to quote from page 102 of the paper, which states:
      "I should point out that there are circumstances where I suspect that regulation or public ownership can be supplanted by franchise bidding with net gains."
      It gave the specific example of local service airlines. Even from that paper, which shows that the Government are hostile to the idea of an alternative method of tendering, it appears that their source is not secure.
      In his letter to members of the Committee, Mr. Hart came down firmly on the side of competitive tendering. He said that, as matters stand, under total deregulation,
      "Kent county council's revenue support could escalate from £3·2 million to £5 million, in order to retain the current levels of service."
      The interesting point that he makes is this:
      "Under a system of franchise tendering, it is estimated that for this county there could be a reduction in revenue support to under £3 million."
      The Government's objective to keep down the cost of revenue support can be achieved in another way, which will cause considerably less dislocation.
      There is a tendency to confuse franchising, as it has been interpreted in the Government's document, with comprehensive competitive tendering. But the two are different. Comprehensive competitive tendering would allow an authority to define the network of services that it considered necessary to meet the needs of the area. It would then divide those services into different sized packages that could be put out to competitive tender on a rolling cycle to ensure that, in any area, there were regular opportunities for operators to compete for packages or services.
      The specification of services in the package would be flexible enough to encourage operators to develop innovatory services. Where operators believed that they had spotted a gap in the services specified by the authority to develop a new market, they would still be able to apply to register the service with the traffic commissioner. The authority would have to demonstrate that it was against the public interest.
      Such a system would largely solve the problem with franchising that was identified by the Secretary of State and outlined in the pamphlet to which I referred. The problem of an authority being captured by an operator who would be protected from competition would not occur, because there would be a constant cycle of reletting of contracts.
      It is interesting to note that, far from that proposal being seen by many bus operators as an opportunity to make a great deal of money, the trade association of the operators —the Bus and Coach Council—is not happy about the ideas that I am putting forward. Indeed, it rejected proposals for comprehensive competitive tendering. That
      1072
      shows that the argument is not one of allowing the operators to be protected ad infinitum. Existing operators would be kept on their toes by new operators bidding for the smaller packages that can be operated by local authorities. It would be for the local authority to ensure that the packages suited companies that had only one bus. At the same time, because of the constant ringing of the changes with the contracts, there would be room for the innovation of new services.
      I commend that system to the House, because its great advantage is its flexibility. It is flexible because it is a genuine option. I suggest not that it should replace the proposals in the Bill, but that local authorities could use it if they wished. The proposal is flexible because the authority could introduce the scheme throughout its area or only in parts of it. It is flexible because it could be introduced and as easily withdrawn by allowing contracts to lapse and other operators to register their services.
      The Government's ideas on tendering are based on hope rather than certainty. Whatever one says about Hereford and Worcester—I do not wish to become involved in an argument about whether those schemes were successful —to say that we shall fundamentally change support on the basis of two experiments, one of which the Transport and Road Research Laboratory study said was inconclusive and one of which was debatable, may lead the Government into severe trouble in a year's time. If the Government are determined to innovate and if they wish to move from the present system, it must be right to experiment with at least two alternative systems to see which is the best. That was the view of the Select Committee.
      The last paragraph of the Select Committee report states:
      "We therefore favour comprehensive competitive tendering as a system capable of catching the largest proportion of the cost saving potential (as all routes go to competitive tender), consistent with an acceptable ability to maintain the benefits of integration and co-ordination, and a very explicit and transparent responsibility of the local political authority. The fact that the responsiblity and power was very explicit should, we think, encourage local authorities to show the kind of enterprise and skill which has been shown in this aspect of the behaviour of the County Council in Hereford. We therefore recommend that the Government should amend its proposals by retaining the overall responsibility of the local authority for the planning of public transport provision; by extending the obligation to undertake competitive tendering to cover all services; and by requiring all authorities to devise modes of operation of the regime which give proper scope for the development of innovatory services."
      8 pm
      That recommendation and others were not passed by one odd Conservative voting in favour of them. In fact, in the Division on that section of our report, three Conservatives voted for it and only one against. The one honourable exception was my hon. Friend the Member for Derbyshire, West (Mr. Parris). What was the amendment that he suggested, which the rest of us voted down? While not accepting the recommendation that I have just read out, he suggested that the idea of tendering on that basis was very useful as a backstop for the Government. Therefore, even he could see that there was a necessity for something to be there in case the Government ran into trouble.
      I say to the Under-Secretary that, if the Government can accept that there is an alternative way which can keep some of the best of the present system and, in terms of

      1073
      negative tendering, produce extra funds to subsidise many other services that are unprofitable at the moment, it would give a flexibility to the Bill which, I regret, has not been too apparent so far during our deliberations. I want flexibility. The Bill has to be made to work, so I think that the best alternative should be put in it. It is not obligatory; it is something that local authorities can pick up or lay down as they choose.
      Mr. Stephen Ross: I support the hon. Member for Wellingborough (Mr. Fry). He has taken most of my guns from me because his was the speech that I would have made on clause 1 yesterday had the appropriate amendment been called. However, I do not deny him that, because he has much more knowledge and expertise than me.
      Comprehensive competitive tendering is under attack from two directions—first, from those, including some hon. Members, who believe that almost any change in the status quo is an attack on our current bus services, and, secondly, from the Government, who took the unusual step of publishing a detailed rebuttal of the Select Committee's case for adopting CCT about a month or more ago under the heading "Problems with Franchising". That document has been perused by many people. They find it full of holes, as does the chairman of Kent county council, to whom the hon. Member for Wellingborough referred. While those supporting the present organisational arrangements for bus services hold their views strongly, and no doubt sincerely, it is clear that the status quo cannot continue. I accept that, as I did on Second Reading and in Committee. There is no doubt that the threat of competition has stimulated cost cutting and innovation. One has seen it in the railways in particular. Furthermore, while the public no doubt cherish the bus services, they are not all satisfied with the present arrangements.
      The Government's paper, "Problems with Franchising", is disingenuous. Many of the criticisms that it ascribes to such a system also apply to a significant extent to the Government's proposals for limited competitive tendering for loss-making services. The Government's argument seems to be, first, that franchises offer protection to the incumbent, as it is in the local authority's interest to maintain continuity of contract; secondly, that franchises are an abuse of monopoly power — that argument is poorly developed in the paper; thirdly, that the performance specifications in the contract cannot accurately reflect customers' wishes; fourthly, that invitations to tender are likely to be biased towards incumbency or variety; fifthly, that the criteria for finally awarding the contract will be artificial; sixthly, that the franchisees will tend to use imprecision in the contract as room for manoeuvre and/or to press for renegotiation; seventhly, that monitoring of franchisees' performance will create new bureaucracy; and finally, that new operators will find it difficult to win contracts.
      I wonder whether the Department of Health and Social Security is aware of those arguments against franchising hospital cleaning, for qualitatively they are true. However, in the case of buses, the pros and cons of comprehensive competitive tendering must be balanced quantitatively against those of the present system and the Government's proposals — in other words, deregulation plus limited competitive tendering. On that basis, CCT comes out a clear winner. It ensures the benefits of competition but minimises the danger. Furthermore, many of the problems
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      attributed to CCT can be overcome if the contracts are not homogenous, as the Government assume. Thus, there would be a mosaic of short contracts, of perhaps three years, and long contracts, of perhaps five years, covering large and small networks of services. Some contracts would cover a network of profitable routes only, the operator paying the local authority for the privilege of running the service exclusively. Other contracts would be for networks of loss-making services, for the provision of which operators would be paid by the local authority.
      Thus, at a stroke, a large proportion of cross-subsidy would become transparent to public inspection, as the cross-subsidy would be going through the local authority's books rather than remaining hidden within the operator's paper franchise. Clearly, some contracts would, for operating purposes, cover a mixed network of profitable and unprofitable routes. If the opacity of cross-subsidy is to be significantly reduced, the number of such internally subsidising contracts would need to be kept to a minimum. Cross-subsidy would not be totally eliminated by CCT, but even the Government accept that eradication is neither possible nor commercially desirable.
      For the success of CCT, it is essential that, first, local authorities must have a clear statutory obligation to co-ordinate transport provision—-unfortunately, we failed to get that written into the Bill under the previous amendment —and, secondly, that at the very least contracts should ensure that a minimum standard, agreed nationally, of frequency, reliability, network and price is attained.
      I call one other important witness in support of the idea of franchising — Dr. Quarmby, the former managing director of buses on London Regional Transport. 1 think that he is now running the Sainsbury fleet. In evidence to the Select Committee on 19 December 1984 he said:
      "Deregulation is likely to lead, at the end of the day, to less competition because it is likely to lead to the re-establishment of the territorial monopolies, of the kind we were familiar with 50 or 60 years ago. I think tendering within a planned framework is more likely to maintain real competition. In order for that to happen one has to parcel out routes in a way that reflects the ability of the supplying market to produce the service."
      I know of at least four county councils, perhaps more—1 know that the Association of County Councils also goes along with the idea—which would very much like to go down the path of comprehensive competitive tendering. Three of those councils are Hertfordshire, Essex and Kent. The councils should have that option. I go further and say that it is the right way forward. I support the amendment.
      Mr. Robert Adley: I voted with considerable reluctance for the Second Reading of the Bill because I recognised that, incontrovertibly, change was and is needed in the present bus licensing arrangements. The Bill is an expression of political will and I think that virtually all Conservative Members recognise the Government's courage in trying to achieve their objective in the Bill. My support for the amendment is based on a transport rather than a political view, and I support it for transport reasons, not for political reasons and certainly not for party political reasons. I do not believe that any public transport system can be run without an element of cross-subsidy.
      Like my hon. Friend the Member for Wellingborough (Mr. Fry), I believe that experimentation is necessary. The Government have rightly expressed the hope that new ideas will permeate the whole bus transport industry as a result of the Bill and I believe that that is likely to be the

      1075
      case. What I do not like is the attitude, "We support experiments in public transport provided that they are the experiments laid down in our legislation". To me, that smacks of Henry Ford's dictum that people could have any colour motor car so long as it was black.
      My hon. Friend the Member for Wellingborough has proposed the amendment with great conviction. I hope that my hon. Friend the Minister will recognise that the amendment is essentially modest in both spirit and wording. By no stretch of the imagination is it motivated or likely to be taken up by people inherently hostile to the Bill. I put it to my hon. Friend the Minister in these simple terms: if he wants my vote for the Third Reading of the Bill, will he please accept my hon. Friend's amendment?
      Mr. David Mitchell: The hon. Member for Isle of Wight (Mr. Ross) seemed rather bewildered by the brief that he was reading and I am sorry to say that I did not understand it any more than he did. I believe, however, that the point that he was trying to make was encapsulated in the speech of my hon. Friend the Member for Wellingborough (Mr. Fry) and supported by my hon. Friend the Member for Christchurch (Mr. Adley).
      The hon. Member for Isle of Wight quoted evidence from the Select Committee in support of his view, based on a package of profitable and loss-making routes so that the cross-subsidy from the profitable routes could be used to run the loss-making routes. In fact, that is the root of much of the trouble with the existing system and I would not wish it to be perpetuated.
      My hon. Friend the Member for Wellingborough, supported by my hon. Friend the Member for Christchurch, put the case for comprehensive competitive tendering—a form of franchising which, I grant, would be some improvement on the present system. There is, however, the inherent disadvantage that the pattern of services would be decided by the county transport planners and not by the market. It was scarcely surprising that my hon. Friend the Member for Wellingborough was able to pray in aid the views of the Association of County Councils and the Association of Metropolitan Authorities as the proposal would give them the decision-making power that they sought.
      With a franchising system, we would never know how much the market could do on its own. Cross-subsidy would be retained, thus losing passengers on the better routes and the lower fares and more frequent services that would come with free competition. Cross-subsidy is essential to the package proposed by my hon. Friends and would undoubtedly be seen by county and district councils as a way through, based on a continuation of the existing system of overcharging customers on the better routes and providing an inferior service in order to generate the profits needed for cross-subsidy to take place. I appreciate the moral compulsion behind my hon. Friends' case, but my hon. Friend the Member for Christchurch must know from his knowledge of transport that if one overcharges customers or provides substandard services to create profits for cross-subsidy one drives away customers. That is the economic reality at the heart of much of the failure of the present system.
      8.15 pm
      As both my hon. Friends know, cross-subsidy is a feature of a multitude of businesses, but in that case it is
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      commercial cross-subsidy — providing attractive loss leaders to bring customers into the main business. The reverse is true of cross-subsidy in the bus industry where it means damaging the main business to provide for minority customers. That is not commercial and it is totally damaging to the health of the industry. The chairman of the National Bus Company, in his report last year, identified excessive use of cross-subsidy as one factor leading to the early demise of efficient and profitable services.
      I understand what my hon. Friends are trying to do and I do not lack sympathy with them. I also accept that the proposal would be some improvement on the present system. Nevertheless, it would have the fatal flaw of perpetuating a system which drives away customers on the best routes. For every 10 per cent. increase in fares or reduction in the value of services there is a 3 per cent. loss in customers. The effect of my hon. Friends' proposal would thus be to perpetuate the weaknesses of the present system.
      Mr. Adley: My hon. Friend the Minister is proffering a one-option high-risk proposition in the Bill which we may all live to regret. I repeat the question that I asked before: how many major cities can he name in which the scheme that he is propounding in the Bill is in operation and working successfully?
      Mr. Mitchell: I shall be happy to deal with that in a moment.
      A franchising system would lack flexibility. Worst of all, once the franchise was awarded competitive pressure would be off. There would be no on-going pressure for efficiency, high productivity and control of costs. There was a dramatic change in Midland Red when it had to face open competition rather than a closed franchise. That company managed to improve its productivity by 25 per cent. If we adopted the franchise system proposed by my hon. Friends, that kind of pressure would be off once the franchise was granted. I accept that the amendment would make some improvement, but it would provide nothing like the revitalisation of the industry that is needed.
      It may help if I draw attention to some of the other consequences of my hon. Friend's proposal. The level of fares, the pattern of routes and the frequency of services would all be settled by the planners—perfect in theory, but in practice lacking the ability to change and to respond to the market.
      Mrs. Dunwoody: The Minister is back on his favourite theme about planners. Has it never occurred to him that planners who work for local authorities and have spent years obtaining proper qualifications are far more likely to be responsive to the needs of bus travellers than anyone planning for the needs of just one company? Why does he show such deep contempt for anyone who knows anything about transport?
      Mr. Mitchell: I assure the hon. Lady that I feel no such contempt. Perhaps she has not heard of consultants, who are available to provide specialised services to a multitude of operators and who form an inherent part of the private sector system for identifying markets and ascertaining what the public want.
      Invitations to tender and awards put a premium on the incumbent operator. I shall return to that point because, in practical terms, it is important. Moreover, it is

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      exceedingly difficult, if not impossible, properly to assess bids in the way that would be necessary in this case. How does one assess a cheaper, older vehicle and compare it with a smaller, newer fleet? How does one assess differential peak fares proposed by one operator and compare them with those proposed by another operator? As soon as a contract is awarded for the term period—the proposed franchise—the operator is protected from all of the normal business pressures to improve efficiency. And how does one police it? If there is a gradual deterioration, at what point does one say that the gradual deterioration is sufficiently bad that something must be done about breaking the contract? The reality is that there would be a drift which embodied many of the weaknesses of the present system. I accept that it would be an improvement upon the present system, but it would be nothing like the improvement to be obtained from an open, competitive market.
      What would happen in practice in a place like Manchester? How many other operators in Manchester would be prepared to compete with the passenger transport executive for these market franchises? What proportion of the market could conceivably be taken other than by the existing Manchester PTE? In that case, what would happen under the rolling system of replacement franchises when they are relet and the number of private sector operators is increased? Is my hon. Friend the Member for Wellingborough prepared to face the Manchester PTE bus workers and tell them that at the toss of a coin their jobs will be lost and they will be unemployed simply because a contract has been let like that? That would not be acceptable to a very high proportion of the bus workers in Manchester, but it would be the inevitable consequence of the high proportion of the contracts that the Manchester PTE would have to have in the first place because of the insufficient number of competing operators.
      My hon. Friend the Member for Wellingborough asked why competitive franchising is not good enough for the rest of the country when there is competitive franchising for London. I think he knows that the arrangements for London are only temporary. The interim franchising arrangement is better than the previous monopoly system, but it is not as good as the system that London will enjoy when the Bill is enacted.
      My hon. Friend also referred to Kent. He said that the revenue subsidy for Kent is now £3·2 million and that it will rise to £5 million when the Bill is enacted. What figure has my hon. Friend placed on the potential improvement in efficiency of the Kent operation? Does he expect a 5 per cent. or a 10 per cent. improvement in productivity because of competition? I shall be happy to give way to my hon. Friend because it will help to take the argument forward.
      Mr. Fry: The figures I gave for Kent were submitted by the Conservative leader of Kent county council. As my hon. Friend the Under-Secretary of State knows, Kent has been working on this proposal for some time. I do not know the entire basis of its calculations, but occasionally it is worth trusting some of the experts in the counties who are on our side to come up with the right figure.
      Mr. Mitchell: I do not doubt the wisdom of what my hon. Friend is saying, but I have to make two points to him. Kent is operating the same system as was operated by Norfolk before it went out to competitive tender. When
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      Norfolk went out to competitive tender, it saved over 60 per cent. of ratepayers' money. I understand the theory of my hon. Friend's argument, but he has failed to take account of the reality that as soon as there is competition operators' costs are brought tumbling down.
      Let me give another example to my hon. Friend. In Kent there is both a municipal undertaking and a National Bus Company undertaking. When the private sector challenged the National Bus Company, Surrey county council was not sure that it could believe the figures that it had been given. Therefore, it called in consultants to make an assessment. They said, "No, we do not think that it could be quite so good as the private operators say, but we think that it could be 20 per cent. below the operating costs of the National Bus Company." If my hon. Friend could demonstrate that the Kent figures to which he referred would stand up to a 20 or 25 per cent. improvement in productivity and would still result in an increase in the subsidy that would be required, I should concede the argument. However, my hon. Friend cannot do so.
      If one takes the turnover for Kent and expects a 20 or 25 per cent. improvement in productivity, one finds that there is an enormous difference in terms of the prospective amount of subsidy that would be required. If my hon. Friend the Member for Christchurch can show that, with the improvements in efficiency which have demonstrably been obtained, he cannot minimise this subsidy, then he has made a good point. If he cannot do that—and I do not believe that he can—I hope that he will join me in the Lobby in voting down the amendment.
      Mr. Fry: It is clear that the figures that have been bandied about for Norfolk were comparing like with like. The problem is that the level of services has not been entirely the same.
      My hon. Friend has slightly missed the point about the improvement in productivity in Kent. When tenders are competed for, an opportunity is provided for those who have increased their productivity to put in lower bids. As it is a competitive tender, it will allow certain costs to come down. The innovative entrepreneur will be encouraged. I fail to see why the system I have put forward should not lead to a considerable improvement.
      Mr. Mitchell: My hon. Friend was seeking to demonstrate that the existing system will lead to increased costs falling on the ratepayers of Kent. I have sought to demonstrate that that is not so.
      Mr. Fry: One does not know. Nobody knows.
      Mr. Mitchell: My hon. Friend says that in the case of Norfolk one is comparing like with like. It was, in fact, a case of comparing equivalent with equivalent. There were considerable cutbacks in Norfolk, but they took place before the county council went out to tender. If my hon. Friend examines in detail what happened when the county council went out to tender, he will discover that there was a substantial reduction—from £500,000 to £150,000—in the tenders for the equivalent routes. However, inherent in it was a very curious fact: that, faced with competition, the National Bus Company suddenly discovered that it could run a block of those routes without a subsidy, although previously it had said that it required a subsidy. That is a further argument to set against those that have been advanced by my hon. Friend. When the chips are

      1079
      down, competition will get the costs down and make marginal routes viable to an extent that my hon. Friend has not fully taken into account.
      My hon. Friend may have difficulty in withdrawing his amendment. I do not know how far he is committed. I hope that he will feel able to do so. In view of the arguments that I have deployed, I hope that my hon. Friend the Member for Christchurch will at least feel that his support for the amendment has been weakened.
      Mr. Adley: My hon. Friend was going to name the three cities.
      Mr. Mitchell: I apologise to my hon. Friend. I have failed to answer two points. My hon. Friend asked me to name the other cities which had introduced the system. I shall not name the other cities which have introduced this system because I am not afraid to be a pioneer. My hon. Friend is a great exponent of the railways and knows that in their day they were pioneers. If those who pioneered the success of the railways, which my hon. Friend cherishes, had adopted the chicken-hearted approach that my hon. Friend has tried to suggest, we should not have railways in this country today.
      8.30 pm
      My hon. Friend said that the Hereford and other trial areas were too small on which to base such a major change. But we have not built this Bill solely on those trial areas. We have built it on the known effects of competition where it has been introduced to replace monopoly. One example is the aviation industry, where internal air services have been improved, where there has been substantial investment, and whose services more travellers are now using. Another example is the long-distance coach services that have modern coaches, more investment, better quality services, such as video shows, lower fares, and more people travelling on them. Those are things that the customers like. We have no reason to believe that the principle that has been well tried in other areas will be found to be flawed when applied to the bus industry.
      Mrs. Dunwoody: I am not surprised that the hon. Member for Wellingborough (Mr. Fry) has been looking mildly bemused throughout the Minister's peroration. He was treated to the kind of monologue that we heard ad nauseam in Committee. The reality is that, when the Minister was asked to name one city, or even a suburb, in which the proposal has been tried and found to be successful, he was overcome with the most incredible inability to discover any area where it had worked.
      The Minister told his hon. Friend not to worry because the Government knew that it worked in competition with express coach services—omitting, as he always does, to say that he was not comparing like with like, that the express coach services do not go to all the places that they did previously and that the costs of running those services is largely borne by reduced revenue for British Rail. He sticks to his theory that if it works for the express coach services, it must work for everything.
      I do not believe that franchising is the ultimate answer, but that will not come as any surprise to Conservative Members. I would prefer to lose the Bill entirely—it is a disaster. Conservative Members, when they are being honest, realise that. They know that such a major change, which will produce utter chaos, will not be to the
      1080
      advantage of the Conservative party or any other party. If the Bill goes through — and heaven forfend that that should be so—anything that is slightly better than what is intended in the Bill may be an improvement.
      I find it amusing when Ministers get up with such vigour, if not sense, and defend their refusal to accept amendments. I have discovered something interesting. In the brave new world of 1961, a certain Mr. Nicholas Ridley, Member for Cirencester, proposed to the then Minister of Transport that bus services should be allocated to operators on the basis of franchising. I suppose that we should at least be grateful because we have absolute proof that it takes only 20 years for the Secretary of State to change his views, so we can wait around and, with any luck, will find a new public transport system in the next 20 years—although the right hon. Gentleman will not be left in charge of it for more than 20 minutes.
      It is amusing to read that the Secretary of State told a conference at Bristol university last year that since 1961 he had seen the error of his ways. I am afraid that that is not all consistent with his record either as a Treasury Minister or as a Transport Minister. If that is the case, there is always the hope that the worst sinner will eventually repenteth.
      The Opposition regard the whole theory of franchising as inadequate compared with our present system. The argument is not whether franchising would do as good a job as is being done at present, but whether franchising could ameliorate the chaos that will happen under the Bill. Certainly the Government are not prepared to talk sensibly about transport. On that basis we are prepared to listen to the arguments put forward by the hon. Member for Wellingborough, but, if this appalling Bill becomes law, we want it struck off the statute book as soon as possible.
      Mr. Parris: I apologise to my hon. Friend the Member for Wellingborough (Mr. Fry) for missing part of his speech. However, I heard him say, quite rightly, that the members of the Select Committee did not agree on every point. But all Members of all parties did agree that something was seriously wrong in the bus industry and that radical change was needed. Some of us thought that comprehensive competitive tendering was the answer, while others thought that the proposals in the Bill were the answer.
      In Committee I listened to Labour Members and wondered whether they accepted that something was seriously wrong in the bus industry and that radical change was necessary. They appeared to waver, and I thought that they would come down on the side of comprehensive competitive tendering—that is, franchising. However, the hon. Member for Crewe and Nantwich (Mrs. Dunwoody) has now rejected that and said that the Labour party does not think that franchising is the answer. I wonder whether Opposition Members accept that anything needs to be done in the bus industry. I wonder what their analysis of the problems may be and what their thinking is on possible solutions. From what the hon. Lady says, it appears that there is no thinking at all and that they have no solutions to put forward. I find that interesting.
      Mr. Fry: Some of the comments of my hon. Friend the Minister about this form of tendering assume that the remainder of the Bill has not happened. The very fact that bus services will be referred to the Office of Fair Trading is one way of ensuring that there is not a monopoly or that

      1081
      one operator does not take an unfair advantage. I must tell him—and I never thought that I would do this—that I call to my defence my right hon. Friend the Secretary of State, who I have heard say at least twice that he objects to cross-subsidy that cannot be discovered. He has said that if cross-subsidy is transparent, it is acceptable. I believe that the cross-subsidy in this system would be transparent. Now that transport support grant does not relate to revenue support, every local authority will want to keep down the amount of money that it will be using out of its rate support grant to subsidise public transport, so it will be demanding value for money.
      My hon. Friend may live to regret boasting about rates of improvement of 25 to 30 per cent. across the country. I accept that such improvements are possible in some places, but they are clearly not possible in other places. If he had listened to the evidence given to the Select Committee, he would realise that the experts were divided. Most of them said that, while there were improvements in some cases, in others improvements were not possible. If my hon. Friend thinks that he will obtain a 25 to 30 per cent. improvement in costs across the country, he is in for a sad shock.
      Mr. David Mitchell: My hon. Friend will be aware that one authority that took the view that no further improvement could be made in its efficiency and productivity was Plymouth. He will also be aware that, when Plymouth went to a firm of consultants, its report suggested a 20 per cent. potential for improvement. Yet Plymouth is one of the most efficient municipal operators in the country. If the most efficient operator has the opportunity for a 20 per cent. improvement in productivity on the basis of a consultant's external report, perhaps my hon. Friend would like to consider again whether there are many such areas. I do not ask for every authority, but I should be interested to have my hon. Friend's list of those which are so good that there is not this improvement. However, Plymouth stands out as one of the best.
      Mr. Fry: I do not deny that there are areas in which there could be considerable improvement, but I say that one cannot make such a generalisation. It is because I believe that the Government's stand is based on hope rather than knowledge that I think it would be valuable if the Bill were amended as I propose, to provide an alternative. I hope that my hon. Friend will not live to regret not having accepted the amendment. I think that he probably will.
      Mrs. Dunwoody: The Secretary of State for Transport, the right hon. Friend of the hon. Member for Wellingborough (Mr. Fry), rubbished the report of the consultants in Plymouth and said that it was not accurate and that the figures in it could not be accepted. Would the hon. Gentleman mind asking his right hon. Friend why it is that, when the report states that Plymouth will have to pay a considerable amount more to supply its existing level of services, he does not like the figures, but, when he wishes to argue with his hon. Friend the Member for Wellingborough, he suddenly finds it an extremely convincing report and one that should be accepted?
      Mr. Stephen Ross: The report states:
      "We believe that we have demonstrated, in Plymouth's case, that there is a strong likelihood that this will not be true if the proposals are implemented in their present form."
      1082
      In other words, there will be savings, and it is likely to cost the local authority considerably more if it implements the schemes as proposed by the Government. That is the overall conclusion of the document.
      Mr. Mitchell: There are certain fundamental flaws in the report. It assumes, for example, that there will be no cross-subsidy, but every commercial undertaking has cross-subsidy.
      Mrs. Dunwoody: The hon. Gentleman is trying to get rid of it.
      Mr. Mitchell: Not commercial cross-subsidy. The report assumes that there will be no increase in the patronage on the loss-making services as a result of competition. However, neither of those arguments will stand up to careful analysis.
      If I may help my hon. Friend the Member for Wellingborough, I think that what is not at issue is that there is a potential for a 20 per cent, increase. We do not disagree with that. If we and the consultants are agreed, perhaps my hon. Friend will accept that at least there is a strong probability that such a potential for improvement in productivity exists.
      Dr. Marek: I apologise to the hon. Member for Wellingborough (Mr. Fry) for having missed the first part of his opening remarks.
      As a first choice, comprehensive competitive tendering for any such scheme is not one for which I would opt. On the other hand, I do not have the luxury of choosing an integrated transport system. I am not particularly interested in whether there is cross-subsidy. If there were a choice between its being hidden or perceived by the public, I would always go for the latter, because there is nothing to hide and the public should be informed if there is a cross-subsidy. I am sure that most people in a town would recognise that bus services must extend to the outskirts and make provision for everybody in the town rather than, as will happen if the Bill is enacted unamended, bus services being provided in the centre of the town and the outskirts generally having a poor bus service, if they have one at all.
      However, as I said, I do not have the luxury of opting for an integrated transport service. In the circumstances —I do not know whether I speak for my hon. Friends— I support the amendment and, if the hon. Gentleman presses it to a vote, I shall support him.
      8.45 pm
      It is a pity that such a Bill has been presented to Parliament. The Bill was based originally on the Hereford trial area. It was vaunted throughout the country that it had succeeded beyond the wildest dreams of the Government who had proposed the scheme. In the last two days, I have noticed a change in the attitude of the Government. They have said that they learnt a great deal from the Hereford trial area, and it is no longer a fantastic success. It is regrettable that the country at large will have to learn from the experiment that the Government are now foisting on it.
      Question put, That the amendment be made: —
      The House divided: Ayes 91, Noes 225.

      Division 219]

      [7.30 pm

      AYES

      Archer, Rt Hon Peter

      Foulkes, George

      Ashdown, Paddy

      Fraser, J. (Norwood)

      Ashley, Rt Hon Jack

      Freeson, Rt Hon Reginald

      Ashton, Joe

      Freud, Clement

      Bagier, Gordon A. T.

      Garrett, W. E.

      Banks, Tony (Newham NW)

      George, Bruce

      Beckett, Mrs Margaret

      Gilbert, Rt Hon Dr John

      Beith, A. J.

      Godman, Dr Norman

      Bell, Stuart

      Golding, John

      Benn, Tony

      Gourlay, Harry

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

      Hamilton, W. W. (Central Fife)

      Bermingham, Gerald

      Hancock, Mr. Michael

      Bidwell, Sydney

      Harman, Ms Harriet

      Blair, Anthony

      Harrison, Rt Hon Walter

      Boyes, Roland

      Hattersley, Rt Hon Roy

      Bray, Dr Jeremy

      Healey, Rt Hon Denis

      Brown, Gordon (D'f'mline E)

      Heffer, Eric S.

      Brown, Hugh D. (Provan)

      Hogg, N. (C'nauld & Kilsyth)

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

      Home Robertson, John

      Brown, Ron (E'burgh, Leith)

      Howells, Geraint

      Bruce, Malcolm

      Hoyle, Douglas

      Buchan, Norman

      Hughes, Dr. Mark (Durham)

      Caborn, Richard

      Hughes, Robert (Aberdeen N)

      Callaghan, Rt Hon J.

      Hughes, Roy (Newport East)

      Callaghan, Jim (Heyw'd & M)

      Hughes, Sean (Knowsley S)

      Campbell, Ian

      Hughes, Simon (Southwark)

      Campbell-Savours, Dale

      Janner, Hon Greville

      Canavan, Dennis

      John, Brynmor

      Carter-Jones, Lewis

      Jones, Barry (Alyn & Deeside)

      Cartwright, John

      Kaufman, Rt Hon Gerald

      Clark, Dr David (S Shields)

      Kirkwood, Archy

      Clarke, Thomas

      Lamond, James

      Clay, Robert

      Leadbitter, Ted

      Clwyd, Mrs Ann

      Leighton, Ronald

      Cocks, Rt Hon M. (Bristol S.)

      Lewis, Ron (Carlisle)

      Cohen, Harry

      Lewis, Terence (Worsley)

      Cook, Frank (Stockton North)

      Lloyd, Tony (Stretford)

      Cook, Robin F. (Livingston)

      Loyden, Edward

      Corbett, Robin

      McDonald, Dr Oonagh

      Corbyn, Jeremy

      McKay, Allen (Penistone)

      Cowans, Harry

      McKelvey, William

      Craigen, J. M.

      McNamara, Kevin

      Crowther, Stan

      McTaggart, Robert

      Davies, Rt Hon Denzil (L'lli)

      McWilliam, John

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

      Madden, Max

      Deakins, Eric

      Marek, Dr John

      Dixon, Donald

      Marshall, David (Shettleston)

      Dobson, Frank

      Martin, Michael

      Dormand, Jack

      Maynard, Miss Joan

      Dubs, Alfred

      Meadowcroft, Michael

      Duffy, A. E. P.

      Michie, William

      Dunwoody, Hon Mrs G.

      Mikardo, Ian

      Eadie, Alex

      Mitchell, Austin (G't Grimsby)

      Eastham, Ken

      Morris, Rt Hon A. (W'shawe)

      Ellis, Raymond

      Morris, Rt Hon J. (Aberavon)

      Evans, John (St. Helens N)

      Nellist, David

      Fatchett, Derek

      O'Brien, William

      Field, Frank (Birkenhead)

      Orme, Rt Hon Stanley

      Fisher, Mark

      Owen, Rt Hon Dr David

      Flannery, Martin

      Park, George

      Foot, Rt Hon Michael

      Patchett, Terry

      Forrester, John

      Pavitt, Laurie

      Foster, Derek

      Penhaligon, David

      Pike, Peter

      Stewart, Rt Hon D. (W Isles)

      Prescott, John

      Stott, Roger

      Radice, Giles

      Strang, Gavin

      Randall, Stuart

      Thome, Stan (Preston)

      Redmond, M.

      Tinn, James

      Rees, Rt Hon M. (Leeds S) >

      Torney, Tom

      Robertson, George

      Wainwright, R.

      Rooker, J. W.

      Wallace, James

      Ross, Stephen (Isle of Wight)

      Wareing, Robert

      Rowlands, Ted

      Weetch, Ken

      Sedgemore, Brian

      Welsh, Michael

      Sheerman, Barry

      White, James

      Shore, Rt Hon Peter

      Williams, Rt Hon A.

      Short, Ms Clare (Ladywood)

      Wilson, Gordon

      Silkin, Rt Hon J.

      Winnick, David

      Skinner, Dennis

      Wrigglesworth, Ian

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

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

      Tellers for the Ayes:

      Soley, Clive

      Mr. Frank Hayes and

      Steel, Rt Hon David

      Dr. Roger Thomas.

      NOES

      Aitken, Jonathan

      Goodlad, Alastair

      Alexander, Richard

      Gow, Ian

      Amess, David

      Gower, Sir Raymond

      Ancram, Michael

      Greenway, Harry

      Atkins, Robert (South Ribble)

      Gregory, Conal

      Baldry, Tony

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

      Banks, Robert (Harrogate)

      Griffiths, Peter (Portsm'th N)

      Bellingham, Henry

      Grist, Ian

      Bendall, Vivian

      Hamilton, Hon A. (Epsom)

      Best, Keith

      Hamilton, Neil (Tatton)

      Body, Richard

      Hampson, Dr Keith

      Boscawen, Hon Robert

      Hannam, John

      Bottomley, Peter

      Harris, David

      Bowden, Gerald (Dulwich)

      Harvey, Robert

      Brandon-Bravo, Martin

      Haselhurst, Alan

      Bright, Graham

      Havers, Rt Hon Sir Michael

      Brinton, Tim

      Hawksley, Warren

      Brooke, Hon Peter

      Hayes, J.

      Brown, M. (Brigg & Cl'thpes)

      Hayhoe, Barney

      Buchanan-Smith, Rt Hon A.

      Hay ward, Robert

      Buck, Sir Antony

      Henderson, Barry

      Burt, Alistair

      Hickmet, Richard

      Butcher, John

      Hicks, Robert

      Carlisle, John (N Luton)

      Hind, Kenneth

      Carlisle, Kenneth (Lincoln)

      Hirst, Michael

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

      Hogg, Hon Douglas (Gr'th'm)

      Carttiss, Michael

      Holland, Sir Philip (Gedling)

      Cash, William

      Holt, Richard

      Chapman, Sydney

      Hordern, Peter

      Chope, Christopher

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

      Clark, Sir W. (Croydon S)

      Howarth, Gerald (Cannock)

      Clegg, Sir Walter

      Howell, Ralph (N Norfolk)

      Coombs, Simon

      Hubbard-Miles, Peter

      Cope, John

      Irving, Charles

      Crouch, David

      Jackson, Robert

      Currie, Mrs Edwina

      Jenkin, Rt Hon Patrick

      Dicks, Terry

      Johnson Smith, Sir Geoffrey

      Dorrell, Stephen

      Jones, Gwilym (Cardiff N)

      Douglas-Hamilton, Lord J,

      Jones, Robert (W Herts)

      Dunn, Robert

      Joseph, Rt Hon Sir Keith

      Dykes, Hugh

      Kellett-Bowman, Mrs Elaine

      Eyre, Sir Reginald

      Kershaw, Sir Anthony

      Fallon, Michael

      Key, Robert

      Farr, Sir John

      King, Roger (B'harn N'field)

      Favell, Anthony

      King, Rt Hon Tom

      Fenner, Mrs Peggy

      Knight, Gregory (Derby N)

      Fookes, Miss Janet

      Knowles, Michael

      Forsyth, Michael (Stirling)

      Knox, David

      Forth, Eric

      Lamont, Norman

      Fox, Marcus

      Lang, Ian

      Franks, Cecil

      Latham, Michael

      Fraser, Peter (Angus East)

      Lawler, Geoffrey

      Freeman, Roger

      Lawrence, Ivan

      Fry, Peter

      Lee, John (Pendle)

      Gale, Roger

      Leigh, Edward (Gainsbor'gh)

      Gardner, Sir Edward (Fylde)

      Lennox-Boyd, Hon Mark

      Garel-Jones, Tristan

      Lester, Jim

      Glyn, Dr Alan

      Lewis, Sir Kenneth (Stamf'd)

      Lightbown, David

      Ryder, Richard

      Lord, Michael

      Sackville, Hon Thomas

      Luce, Richard

      Sainsbury, Hon Timothy

      Lyell, Nicholas

      St. John-Stevas, Rt Hon N.

      McCurley, Mrs Anna

      Sayeed, Jonathan

      Macfarlane, Neil

      Shaw, Giles (Pudsey)

      MacGregor, John

      Shelton, William (Streatham)

      MacKay, John (Argyll & Bute)

      Shepherd, Colin (Hereford)

      Maclean, David John

      Shepherd, Richard (Aldridge)

      Madel, David

      Silvester, Fred

      Major, John

      Sims, Roger

      Malins, Humfrey

      Skeet, T. H. H.

      Malone, Gerald

      Smith, Tim (Beaconsfield)

      Marland, Paul

      Soames, Hon Nicholas

      Marshall, Michael (Arundel)

      Speed, Keith

      Mates, Michael

      Spencer, Derek

      Mather, Carol

      Spicer, Jim (W Dorset)

      Maude, Hon Francis

      Spicer, Michael (S Worcs)

      Mawhinney, Dr Brian

      Squire, Robin

      Maxwell-Hyslop, Robin

      Steen, Anthony

      Mayhew, Sir Patrick

      Stevens, Lewis (Nuneaton)

      Mellor, David

      Stewart, Allan (Eastwood)

      Merchant, Piers

      Stradling Thomas, J.

      Meyer, Sir Anthony

      Sumberg, David

      Miller, Hal (B'grove)

      Taylor, John (Solihull)

      Mills, lain (Meriden)

      Taylor, Teddy (S'end E)

      Mills, Sir Peter (West Devon)

      Tebbit, Rt Hon Norman

      Mitchell, David (NW Hants)

      Temple-Morris, Peter

      Moate, Roger

      Thomas, Rt Hon Peter

      Monro, Sir Hector

      Thompson, Donald (Calder V)

      Montgomery, Sir Fergus

      Thompson, Patrick (N'ich N)

      Moore, John

      Thornton, Malcolm

      Morrison, Hon C. (Devizes)

      Thurnham, Peter

      Morrison, Hon P. (Chester)

      Townend, John (Bridlington)

      Murphy, Christopher

      Townsend, Cyril D. (B'heath)

      Neale, Gerrard

      Tracey, Richard

      Needham, Richard

      Twinn, Dr Ian

      Nelson, Anthony

      van Straubenzee, Sir W

      Neubert, Michael

      Vaughan, Sir Gerard

      Nicholls, Patrick

      Viggers, Peter

      Norris, Steven

      Waddington, David

      Oppenheim, Phillip

      Wakeham, Rt Hon John

      Oppenheim, Rt Hon Mrs S.

      Waldegrave, Hon William

      Osborn, Sir John

      Walden, George

      Page, Richard (Herts SW)

      Walker, Bill (T'side N)

      Parris, Matthew

      Wall, Sir Patrick

      Pattie, Geoffrey

      Waller, Gary

      Pawsey, James

      Ward, John

      Peacock, Mrs Elizabeth

      Wardle, C. (Bexhill)

      Pollock, Alexander

      Watson, John

      Porter, Barry

      Watts, John

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

      Wheeler, John

      Powell, William (Corby)

      Whitfield, John

      Powley, John

      Whitney, Raymond

      Prentice, Rt Hon Reg

      Wiggin, Jerry

      Proctor, K. Harvey

      Winterton, Mrs Ann

      Rathbone, Tim

      Winterton, Nicholas

      Renton, Tim

      Wolfson, Mark

      Rhodes James, Robert

      Wood, Timothy

      Ridley, Rt Hon Nicholas

      Yeo, Tim

      Ridsdale, Sir Julian

      Young, Sir George (Acton)

      Rifkind, Malcolm

      Younger, Rt Hon George

      Roe, Mrs Marion

      Rossi, Sir Hugh

      Tellers for the Noes:

      Rowe, Andrew

      Mr. Peter Lloyd and

      Rumbold, Mrs Angela

      Mr. Tony Durant.

      Division No. 220]

      [8.47 pm

      AYES

      Adley, Robert

      Ashton, Joe

      Archer, Rt Hon Peter

      Beith, A. J.

      Ashdown, Paddy

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

      Bermingham, Gerald

      Lester, Jim

      Bidwell, Sydney

      Lewis, Ron (Carlisle)

      Boyes, Roland

      Litherland, Robert

      Bray, Dr Jeremy

      Loyden, Edward

      Brown, Gordon (D'f'mline E)

      McKay, Allen (Penistone)

      Brown, Ron (E'burgh, Leith)

      McKelvey, William

      Callaghan, Jim (Heyw'd & M)

      McNamara, Kevin

      Campbell, Ian

      McTaggart, Robert

      Campbell-Savours, Dale

      Madden, Max

      Canavan, Dennis

      Marek, Dr John

      Carlile, Alexander (Montg'y)

      Marshall, David (Shettleston)

      Cartwright, John

      Meadowcroft, Michael

      Clark, Dr David (S Shields)

      Michie, William

      Clarke, Thomas

      Millan, Rt Hon Bruce

      Cocks, Rt Hon M. (Bristol S.)

      O'Brien, William

      Cohen, Harry

      O'Neill, Martin

      Corbett, Robin

      Owen, Rt Hon Dr David

      Deakins, Eric

      Park, George

      Dixon, Donald

      Patchett, Terry

      Dubs, Alfred

      Penhaligon, David

      Duffy, A. E. P.

      Pike, Peter

      Dunwoody, Hon Mrs G.

      Richardson, Ms Jo

      Evans, John (St. Helens N)

      Rooker, J. W.

      Fisher, Mark

      Rowlands, Ted

      Flannery, Martin

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

      Foot, Rt Hon Michael

      Silkin, Rt Hon J.

      Foulkes, George

      Stewart, Rt Hon D. (W Isles)

      Freeson, Rt Hon Reginald

      Stott, Roger

      Fry, Peter

      Strang, Gavin

      Golding, John

      Thomas, Dr R. (Carmarthen)

      Gould, Bryan

      Thompson, J. (Wansbeck)

      Hamilton, W, W, (Central Fife)

      Thorne, Stan (Preston)

      Hancock, Mr. Michael

      Torney, Tom

      Harrison, Rt Hon Walter

      Wainwright, R.

      Hattersley, Rt Hon Roy

      Wallace, James

      Haynes, Frank

      Wareing, Robert

      Home Robertson, John

      White, James

      Howells, Geraint

      Wilson, Gordon

      Hughes, Sean (Knowsley S)

      Winnick, David

      Hughes, Simon (Southwark)

      Wrigglesworth, Ian

      Janner, Hon Greville

      John, Brynmor

      Tellers for the Ayes:

      Kirkwood, Archy

      Mr. Stephen Ross and

      Lamond, James

      Mr. Malcolm Bruce.

      Leighton, Ronald

      NOES

      Alexander, Richard

      Eyre, Sir Reginald

      Amess, David

      Fallon, Michael

      Ancram, Michael

      Farr, Sir John

      Atkins, Robert (South Ribble)

      Favell, Anthony

      Beaumont-Dark, Anthony

      Fenner, Mrs Peggy

      Bellingham, Henry

      Fookes, Miss Janet

      Benyon, William

      Forsyth, Michael (Stirling)

      Best, Keith

      Forth, Eric

      Body, Richard

      Fox, Marcus

      Boscawen, Hon Robert

      Franks, Cecil

      Bowden, Gerald (Dulwich)

      Fraser, Peter (Angus East)

      Brandon-Bravo, Martin

      Freeman, Roger

      Bright, Graham

      Gale, Roger

      Brooke, Hon Peter

      Garel-Jones, Tristan

      Brown, M. (Brigg & Cl'thpes)

      Glyn, Dr Alan

      Buck, Sir Antony

      Goodlad, Alastair

      Burt, Alistair

      Gow, Ian

      Butcher, John

      Gower, Sir Raymond

      Carlisle, Kenneth (Lincoln)

      Greenway, Harry

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

      Gregory, Conal

      Carttiss, Michael

      Griffiths, Peter (Portsm'th N)

      Cash, William

      Grist, Ian

      Chope, Christopher

      Gummer, John Selwyn

      Clark, Sir W. (Croydon S)

      Hamilton, Hon A. (Epsom)

      Clegg, Sir Walter

      Hamilton, Neil (Tatton)

      Coombs, Simon

      Hampson, Dr Keith

      Cope, John

      Hannam, John

      Crouch, David

      Harvey, Robert

      Dicks, Terry

      Haselhurst, Alan

      Douglas-Hamilton, Lord J.

      Havers, Rt Hon Sir Michael

      Dunn, Robert

      Hawksley, Warren

      Durant, Tony

      Hayhoe, Barney

      Dykes, Hugh

      Hayward, Robert

      Henderson, Barry

      Parris, Matthew

      Hickmet, Richard

      Pawsey, James

      Hicks, Robert

      Peacock, Mrs Elizabeth

      Hind, Kenneth

      Pollock, Alexander

      Hirst, Michael

      Porter, Barry

      Hogg, Hon Douglas (Gr'th'm)

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

      Holland, Sir Philip (Gedling)

      Powell, William (Corby)

      Holt, Richard

      Powley, John

      Hordern, Peter

      Prentice, Rt Hon Reg

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

      Proctor, K. Harvey

      Howarth, Gerald (Cannock)

      Rathbone, Tim

      Howell, Ralph (N Norfolk)

      Renton, Tim

      Hubbard-Miles, Peter

      Rhodes James, Robert

      Hunt, David (Wirral)

      Ridley, Rt Hon Nicholas

      Irving, Charles

      Ridsdale, Sir Julian

      Jackson, Robert

      Roe, Mrs Marion

      Jenkin, Rt Hon Patrick

      Rossi, Sir Hugh

      Johnson Smith, Sir Geoffrey

      Rowe, Andrew

      Jones, Gwilym (Cardiff N)

      Rumbold, Mrs Angela

      Jones, Robert (W Herts)

      Sackville, Hon Thomas

      Joseph, Rt Hon Sir Keith

      Sainsbury, Hon Timothy

      Kellett-Bowman, Mrs Elaine

      St. John-Stevas, Rt Hon N.

      Kershaw, Sir Anthony

      Sayeed, Jonathan

      Key, Robert

      Shaw, Giles (Pudsey)

      King, Roger (B'ham N'field)

      Shaw, Sir Michael (Scarb')

      King, Rt Hon Tom

      Shelton, William (Streatham)

      Knight, Gregory (Derby N)

      Shepherd, Colin (Hereford)

      Knowles, Michael

      Silvester, Fred

      Knox, David

      Sims, Roger

      Lamont, Norman

      Skeet, T. H. H.

      Lang, Ian

      Smith, Tim (Beaconsfield)

      Latham, Michael

      Speed, Keith

      Lawler, Geoffrey

      Spencer, Derek

      Lawrence, Ivan

      Spicer, Jim (W Dorset)

      Lee, John (Pendle)

      Spicer, Michael (S Worcs)

      Leigh, Edward (Gainsbor'gh)

      Squire, Robin

      Lewis, Sir Kenneth (Stamf'd)

      Steen, Anthony

      Lightbown, David

      Stevens, Lewis (Nuneaton)

      Li 1 ley, Peter

      Stewart, Allan (Eastwood)

      Lloyd, Peter, (Fareham)

      Stradling Thomas, J.

      Lord, Michael

      Sumberg, David

      Luce, Richard

      Taylor, John (Solihull)

      McCurley, Mrs Anna

      Taylor, Teddy (S'end E)

      Macfarlane, Neil

      Tebbit, Rt Hon Norman

      MacKay, John (Argyll & Bute)

      Temple-Morris, Peter

      Madel, David

      Thomas, Rt Hon Peter

      Malins, Humfrey

      Thompson, Donald (Calder V)

      Malone, Gerald

      Thompson, Patrick (N'ich N)

      Marland, Paul

      Thornton, Malcolm

      Marshall, Michael (Arundel)

      Thurnham, Peter

      Mates, Michael

      Townend, John (Bridlington)

      Mather, Carol

      Townsend, Cyril D. (B'heath)

      Maude, Hon Francis

      Tracey, Richard

      Mawhinney, Dr Brian

      Twinn, Dr Ian

      Maxwell-Hyslop, Robin

      van Straubenzee, Sir W.

      Mayhew, Sir Patrick

      Vaughan, Sir Gerard

      Mellor, David

      Viggers, Peter

      Merchant, Piers

      Waddington, David

      Meyer, Sir Anthony

      Wakeham, Rt Hon John

      Miller, Hal (B'grove)

      Waldegrave, Hon William

      Mills, lain (Meriden)

      Walden, George

      Mills, Sir Peter (West Devon)

      Walker, Bill (Tside N)

      Mitchell, David (NW Hants)

      Wall, Sir Patrick

      Moate, Roger

      Waller, Gary

      Molyneaux, Rt Hon James

      Ward, John

      Monro, Sir Hector

      Wardle, C. (Bexhill)

      Montgomery, Sir Fergus

      Watson, John

      Morrison, Hon C. (Devizes)

      Watts, John

      Morrison, Hon P. (Chester)

      Wells, Bowen (Hertford)

      Murphy, Christopher

      Wheeler, John

      Neale, Gerrard

      Whitfield, John

      Needham, Richard

      Whitney, Raymond

      Nelson, Anthony

      Wiggin, Jerry

      Neubert, Michael

      Winterton, Mrs Ann

      Nicholls, Patrick

      Winterton, Nicholas

      Oppenheim, Phillip

      Wolfson, Mark

      Oppenheim, Rt Hon Mrs S.

      Wood, Timothy

      Osborn, Sir John

      Yeo, Tim

      Page, Richard (Herts SW)

      Young, Sir George (Acton)

      1085

      Younger, Rt Hon George

      Mr. Mark Lennox-Boyd and Mr. John Major.

      Tellers for the Noes:

      Question accordingly negatived.
      It being after Nine o'clock, MR. DEPUTY SPEAKER proceeded, pursuant to the order [1 April] and the resolution yesterday, to put forthwith the Questions on the amendments moved by a member of the Government to the remainder of the Bill.

    Clause 81

      OBLIGATION TO INVITE TENDERS FOR SUBSIDISED SERVICES
      Amendment made: No. 89, in page 79, line 38, leave out from 'below' to 'a' in line 40 and insert
      ', any such invitation—

      (a) must be issued generally, in such manner as the authority issuing the invitation consider appropriate for bringing it to the attention of persons who may be interested; and

      (b) must also be issued individually to all persons who have given to that authority'.— [Mr. Ridley.]

    Clause 85

      TRAVEL CONCESSION SCHEMES
      Amendments made: No. 91, in page 84, line 16, after 'area', insert
      ', or in Scotland the area of an islands council. '.
      No. 92, in page 84, line 18, after 'case', insert '(i)'.
      No. 93, in page 84, line 18, leave out 'and' and
      insert—

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

      (iii)'.

      No. 94, in page 84, line 20, at end insert—
      'For the purposes of paragraph (b)(ii) above, a service for the carriage of passengers by road at separate fares is a service which requires a PSV operator's licence if vehicles used in providing the service are used in such circumstances that a PSV operator's licence is required in respect of that use.'.
      No. 95, in page 84, line 30, at beginning insert
      'Subject to subsection (4A) below'.
      No. 96, in page 84, line 34, after 'service', insert
      'qualifying for fuel duty grant'.
      No. 97, in page 84, line 34, at end insert—
      '(4A) The Secretary of State may, on the application of the authority or authorities responsible for administration of a scheme under this section, exempt the authority or authorities in question from the obligation under subsection (4) above in relation to any description of services; and the Secretary of State may at any time withdraw or vary any exemption granted under this subsection. '.
      No. 99, in page 85, leave out lines 15 to 17.
      No. 100, in page 85, line 18, leave out second 'section' and insert 'sections'.
      No. 101, in page 85, line 19, after '86', insert `
      (Compulsory participation in travel concession schemes) and(Further provisions with respect to participation notices)'.
      No. 102, in page 85, line 24, after 'area', insert 'in England and Wales'.
      No. 103, in page 85, line 26, at end insert—
      '(9A) For the purposes of this section and sections 86, (Compulsory participation in travel concession schemes) and (Further provisions with respect to participation notices) of this Act, a registered local service is a service qualifying for fuel duty grant if grants under section 92 of the Finance Act 1965 (grants
      1086
      to operators of bus services towards duty charged on bus fuel) are for the time being payable in respect of fuel used in operating services of the description to which it belongs.'.
      No. 104, in page 85, line 38, at end insert—
      '(lOA) An exemption may not be granted under subsection (4A) above on the application of a Passenger Transport Executive unless the application was made with the consent of the Passenger Transport Authority for that Executive's area. '. — [Mr. Ridley.]

    Clause 86

      REIMBURSEMENT FOR TRAVEL CONCESSIONS UNDER SCHEMES
      Amendments made: No. 105, in page 86, line 17, leave out 'each such operator' and insert
      `all operators of registered local services qualifying for fuel duty grant'.
      No. 106, in page 86, line 28, at end insert—
      '(4) Section 85(10) of this Act shall apply, with any necessary modifications, in relation to arrangements adopted by the authority or authorities responsible for administration of any such scheme with respect to the reimbursement of operators participating in the scheme as it applies in relation to the scheme. '. — [Mr. Ridley.]

    Clause 91

      UNREGISTERED AND UNRELIABLE LOCAL SERVICES: REDUCTION OF FUEL DUTY GRANT
      Amendment made: No. 110, in page 89, line 10, leave out from 'service' to 'or' in line 12 and insert
      `in contravention of section 6 of this Act;'. —[Mr. Ridley.]

    Clause 92

      INTERPRETATION OF PART V AND SUPPLEMENTARY PROVISIONS
      Amendment made: No. 111, in page 90, line 8, after 'that', insert—
      ('cc) "registered local service" means a local service registered under section 6 of this Act;'. — [Mr. Ridley.]

    Clause 93

      EXCLUSION OF REFERENCES OF QUESTIONS WITH RESPECT TO CERTAIN BUS SERVICES TO MONOPOLIES AND MERGERS COMMISSION
      Amendments made: No. 112, in page 90, line 25, leave out from 'section' to end of line 27 and insert
      '11 of the Competition Act 1980 (references of public bodies and certain other persons subject to statutory controls to the Monopolies and Mergers Commission), in subsection (3) (which lists the persons who may be the subject of such a reference)'.
      No. 113, in page 90, line 38, at end insert—
      '(I A) In Part I of Schedule 5 to the Fair Trading Act 1973 (which lists certain goods and services in respect of which references under section 14 of that Act to the Consumer Protection Advisory Committee or under section 50 or 51 of that Act to the Monopolies and Mergers Commission are excluded or, as the case may be, subject to restrictions not applicable in other cases) —
      (a) for paragraph 4 (which at the passing of this Act refers to the carriage of passengers by road or rail) there shall he substituted the following paragraph—
      "4. The carriage of passengers by road in Northern Ireland"; and

      1087
      (b) in paragraph 5 (which at the passing of this Act refers to the carriage of goods by rail), after the word "goods" there shall be inserted the words "or passengers".'.
      —[Mr. Ridley.]

    Clause 94
      RECONSTRUCTION OF THE TRANSPORT TRIBUNAL
      Amendment made: No. 114, in page 91, line 8, leave out subsection (3).—[Mr. Ridley.]
    Clause 95
      RAILWAYS BOARD'S ROAD PASSENGER TRANSPORT SERVICES
      Amendment made: No. 116, in page 92, line 31, leave out '36' and insert '37'. — [Mr. Ridley.]
    Clause 107

      STAMP DUTY
      Amendment made: No. 117, in page 103, line 44, after `transfer', insert
      `authorised by section 48(1) or (as the case may be)'.— [Mr. Ridley.]

    Clause 109

      REGULATIONS AND ORDERS
      Amendments made: No. 118, in page 104, line 17, leave out 'Parts I and' and insert 'Part I or'.
      No. 119, in page 105, line 11, after 'Regulations', insert 'or rules'.
      No. 120, in page 105, line 15, after 'regulations', insert `or rules'.
      No. 121, in page 105, line 15, after 'be)', insert `to which'.-[Mr. Ridley.]

    Clause 114

      TRANSITIONAL PROVISIONS, SAVINGS, AMENDMENTS AND REPEALS.
      Amendment made: In page 109, line 18, at end insert—
      '(4) Paragraph 4 of the Schedule to the Restrictive Trade Practices (Services) Order 1976 is revoked.'. — [Mr. Ridley.]

    Clause 115
      SHORT TITLE, COMMENCEMENT AND EXTENT
      Amendment made: No. 123, in page 109, line 33, after '(1)(a)', insert 'and (1A)'. — [Mr. Ridley.]
    Schedule 4

      CONSTITUTION, POWERS AND PROCEEDINGS OF THE TRANSPORT TRIBUNAL
      Amendments made: No. 134, in page 125, line 30, leave out from 'determination' to second 'of in line 31.
      No. 135, in page 125, line 32, after 'under', insert
      'Part V of the 1968 Act,'.
      No. 136, in page 125, line 34, leave out 'licensing authority or'.
      No. 137, in page 125, line 41, leave out 'licensing authority or'.
      No. 138, in page 126, line 1, leave out from 'absence' to 'shall' in line 2 and insert
      'such one of the other judicial members as the president or (if the president is unable for any reason to exercise the power conferred on him by this sub-paragraph) the Secretary of State may direct'.
      No. 139, in page 126, line 4, leave out sub-paragraph (2).
      No. 140, in page 126, leave out lines 12 to 20.
      No. 141, in page 126, line 36, at end insert—
      `(cc) the number of members of the tribunal to constitute a quorum;'.
      No. 142, in page 127, line 10, leave out '(or licensing authority)'.
      No. 143, in page 127, line 41, leave out from `Schedule' to end of line 42. — [Mr. Ridley.]

    Schedule 5

      TRANSITIONAL PROVISIONS AND SAVINGS
      Amendments made: No. 144, in page 134, line 27, at end insert—
      '(5A) Any person who, immediately before section 94 of this Act comes into force, is a member of the special panel mentioned in subsection (4)(a) of that section, shall be treated as if he had been appointed by the Lord Chancellor, on the coming into force of that section, as a chairman of the Transport Tribunal under paragraph 2(1)(a) of Schedule 4 to this Act.
      (5B) Sub-paragraph (5A) above applies in relation to any such person whether or not he would be qualified for such appointment in accordance with paragraph 2(2) of that Schedule; and, subject to paragraphs 3 and 6 of that Schedule, the terms and conditions applicable to any such person's tenure of office as such a chairman shall be the same as those applicable to his office immediately before section 94 of this Act comes into force.
      (5C) Any person other than the president of the Transport Tribunal who is a member of the tribunal at the time when that section comes into force shall be treated as if he had been appointed as such a member by the Secretary of State under paragraph 2(1) (b) of Schedule 4 to this Act for a term ending when his current term of office expires, and otherwise on the same terms and conditions as those applicable to his office immediately before that section comes into force.'. — [Mr. Ridley.]

    Schedule 6

      MINOR AND CONSEQUENTIAL AMENDMENTS
      Amendments made: No. 145, in page 135, line 15, after `of,' insert 'or'.
      No. 146, in page 136, line 38, after 'vehicle', insert 'licence'.
      No. 147, in page 137, line 48, at end insert—
      '(5A) In section 53(1) (payment of expenses) for the words "for the purposes of Part I, II or III or section 45 of there shall be substituted the words "under paragraph 7 of Schedule 2 to". '. — [Mr. Ridley.]

    Schedule 7

      REPEALS
      Amendments made:
      No. 148, in page 141, line 7, column 3, at end insert `Section 24(3)'.
      No. 149, in page 141, line 18, column 3, at end insert `Section 59(3)'.
      No. 150, in page 142, line 23, column 3, at beginning insert—
      'In section 1(3), the word "II.'.
      No. 151, in page 142, line 43, column 3, leave out from beginning to end of line 44.
      No. 152, in page 143, line 5, leave out 'and'.
      No. 153, in page 143, line 8, after 'end', insert 'and paragraph (d)'.
      No. 154, in page 143, leave out line 31 and insert
      'In section 76, the words from "except" to the end.'.
      No. 155, in page 143, line 34, at end insert "'community bus service";'.—(Mr. Ridley.]
      9.2 pm
      Mr. Ridley: I beg to move, That the Bill be now read the Third time.
      We have reached the end of a long consideration of a Bill which I entirely accept is complex although its purpose is simple. Its purpose is to provide better services for the customer and to achieve better value for money for the ratepayer and the taxpayer. In turn, this will secure a better future for the industry and for those who work in it. The Bill will achieve this by removing the obstacles to enterprise, initiative and efficiency while retaining the essential framework of safety controls and provision for social needs.
      It is a radical Bill. I am surprised at the absence of radicals on the Opposition Benches. Radical reform is necessary to free the industry from the stifling effects of restrictive licensing and the debilitating effects of network subsidy which have brought the industry to such a perilous state. They frustrated the industry in making the adjustments necessary to meet the needs of passengers in the 1980s.
      We introduced competition into the long-distance coach sector in 1980. We were told then that complete deregulation would lead to all sorts of difficulties and problems. Some even suggested that it would lead to the demise of express coach services altogether. In fact, the result has been better services, lower fares and more passengers. The passengers now using long-distance coaches will all agree that deregulation has benefited them. That is even admitted by those in the industry. A report of an interview with Mr. McLaughlin, the chairman of the independent sector of the Bus and Coach Council, appears in the most recent edition of Coaching. He was asked about long-distance coaching deregulation and he said:
      "No, I was not happy about coach deregulation initially but I have changed my views now. Like anything else, we learnt to live with it and to adapt to change. Am I enthusiastic about the Bus Bill?"
      that is the Bill that we are now considering
      "Yes, I am. That is not just for the independents alone but for the good of the whole country. One part cannot do without the others anyway, so we have got to work together."
      That is the truth. The 1980 legislation was fought tooth and nail by many of the same Opposition Members who have fought this Bill, yet I have heard no one on Second Reading, in Committee or on Report suggest that we should reintroduce regulation for express coaches. Not even the hon. Member for Crewe and Nantwich (Mrs. Dunwoody) has suggested that. Passengers on local services deserve the same benefits. If we fail to act now, bus services will continue to decline. Other forms of transport, more successful in meeting the needs of the customer, will gain an even larger share of the total travel market. Those who would suffer from declining services would be those living in the four out of 10 households who do not have cars as well as the many other groups—for example, housewives, children and the elderly—who rely on the bus to get about.
      1090
      The Bill will give enterprise and competition the chance to serve the passenger. The Bill does not mean that safety standards will be put at risk. It does not mean that operators will be allowed to run dangerous or unreliable services. It does not mean an end to subsidy for uneconomic services in rural areas or anywhere else. It does not threaten the continuation of concessionary fares schemes, as we proved last night. Indeed, the return of a Labour Government would be the only threat to concessionary fares, and that is an extremely unlikely event.
      The Bill has been fought tooth and nail by the vested interests. The Labour party in particular has tried to mislead the public by putting round scare stories. It will have spent vast sums of public money on its propaganda. However, the Bill as introduced contained virtually all the necessary safeguards. We have since introduced a number of further improvements, many of them in response to initiatives by my hon. Friends in Committee. We have, indeed, fashioned a better Bill.
      The Opposition's performance in Committee and on Report has been lamentable. It has been predictably defensive and negative as well as incompetent. After 34 sittings in Committee and two days of debate on Report we still do not have an idea of the Opposition's policy towards the industry. Do they believe in a system of franchising like the Select Committee on Transport? They offer it as a policy tentatively and then shy away front it. Even the hon. Member for Crewe and Nantwich seemed to withdraw from it even further this evening. We must presume from what she said tonight that the Opposition want to retain the present system of restrictive licensing. They have not produced a scrap of evidence to show why a policy which has so patently failed the nation in the past offers any hope for the future. They have held up to us the model of the metropolitan areas where subsidy and Socialist planning are the guiding principles. Subsidy is used to make good the lack of efficiency and responsiveness which is now proved to be the result of a planned and protected system that has produced a financial burden that cannot be sustained by the nation.
      The prime example of this is south Yorkshire. I hope that the hon. Member for Sheffield, Central (Mr. Caborn) is in his place because I am told constantly by him and his hon. Friends that the south Yorkshire public transport system is very popular with those who use it. I am not surprised. At 3p a mile it has to be the best bargain going. But of course it is an illusion. The south Yorkshire public transport system is not cheap. The costs per PTE bus mile are higher than those in any other metropolitan area, let alone the shire counties where costs per bus mile are lower still. But who pays? It is the ratepayer and the taxpayer. Some of the subsidy has, of course, come out of the rates and taxes of people who use the buses. For those people, the cheap fares are just a trick with mirrors. They have to pay far more in rates and taxes than they save on bargain fares. Most of the cost of fares support is paid by those who do not use the buses, but have no choice but to pay for them through their rates and taxes. In south Yorkshire only 23 per cent. of the costs of the public transport system are paid for directly by the users through their fares. The result is that people have lost the link between the services that they enjoy and their cost. That is a system in which the principal beneficiaries are the bus operators whose inefficiencies can be passed on to the ratepayer. This is objectionable in principle; the sums involved are not

      1091
      trifling. From south Yorkshire county council's inception in 1974 to the end of the financial year 1983–84, the cost of fares support has been £445 million. Let Labour Members laugh at that.
      The cost has escalated from £4·8 million in 1974–75 to £79 million in 1984–85. Over the same period, south Yorkshire rates have had to rise from 17.8p to 83.3p in the pound. The taxpayer has pitched in more every year. This is money taken from ordinary taxpayers and ratepayers which could have been spent on improved living standards. It is money taken from businesses and industries in south Yorkshire, which can result only in loss of jobs. Killing industries and destroying jobs to provide cheap travel is a marvellous example of Socialism in action.
      My hon. Friend the Under-Secretary of State for Scotland is here. In Strathclyde, we find the opposite policy—although these are both Socialist councils—of bus fares being deliberately kept high to protect rail services. The fare in south Yorkshire to travel three miles is lop; the equivalent fare in Strathclyde is 55p. Differences of that order distort the market and prevent the public from making the economic choices which suit them. It is the sort of madness that happens when Socialist planners rule supreme.
      The Bill offers a better way forward—one which is sustainable and which the nation can afford. The challenge of competition is a challenge which we are confident that the industry will seize. We reject the negative ideas of those who can only suggest more regulation, more state ownership and more subsidy as a solution to the problems of the industry. There is no point in taking the easy option and tinkering at the margins with a system that has so clearly failed and less point still in the Labour party's policy of sitting on its hands and hoping for the best.
      In this Bill, we have put forward a radical, imaginative and well-constructed package of measures to revitalise an ailing industry. The Bill is overwhelmingly in the interests of the travelling public. I confidently commend it to the House.
      9.13 pm
      Mrs. Dunwoody: Let us be clear. Whatever the Bill is about, it is certainly not about improving facilities for the bus passenger. From the tired and rather bored performance that we have just had from the Secretary of State, we have assumed that it is about something much more simple—the prejudices of a Secretary of State who has probably never been on a bus in his life and assumes that to use public money to provide public services is wrong. He thinks that it is not wrong to use public money to provide something like Trident, but that it is wrong to use public money to make sure that anyone who wants to get to school, go shopping or get to work on time uses a bus. That obsession with and deep hatred of the need to provide proper state services are what the Bill is all about.
      The Secretary of State has suddenly discovered that, for the past 30 years, public transport, especially bus services, has steadily declined. Between 1951 and 1981 the proportion of passenger miles travelled on the buses decreased from 41 per cent. to a mere 8 per cent. Ever downwards twists the spiral—cuts and public services on offer have forced the fortunate to invest in cars and deprived the unfortunate of any public transport.
      1092
      Action was long overdue. I suppose that the Government can rightly claim that this destructive trend must be reversed. Today we are debating their grand strategy for rolling back the shrinking frontiers of public transport. We could congratulate the Government on their determination, because they are only about 10 years too late. That is the time that has elapsed since Labour councils began successfully tackling the vital problem of decline. For the past decade, Labour local authorities have combined low fares, high service levels and investment in new technology and integration to free travellers and entice them out of their cars.
      Since 1975, the south Yorkshire authority, which is so much the object of scorn of the Secretary of State, who has about as much commitment to transport as this desk has to intelligent conversation, has frozen fares and produced a real fall of 55 per cent. in the cost of public transport. The right hon. Gentleman never mentions that. The result has been a 10 per cent. increase in passenger journeys at a time when national bus patronage has declined by 23 per cent.
      Tyne and Wear, which understands what integration is about, has invested a considerable amount of money in joining bus and rail in an effective system, producing a 10 per cent. increase in patronage when national patronage has declined by 11 per cent. Mersey county council has increased patronage by 20 per cent. following its 1981 12 per cent. fares cut. Today 75 per cent. of Liverpool city centre shoppers are using the public transport network to do their shopping. In west Yorkshire, the bus and rail fare structures have yielded benefits six times the cost of the changes. West Midlands PTE has combined integration and Travelcard schemes to hold up bus patronage by between 7 per cent. and 13 per cent. The GLC's Travelcard and low fares policies have increased demand for public transport by 16 per cent. while reducing car commuting by 10 per cent.
      Anyone who thought that Conservatism was about learning from the lessons of the past and other people's experiences would be forgiven for assuming that the Government's master plan for reviving public transport would expand the benefits of Labour's success to the rest of the country. It is clear from looking at the White Paper on buses and at the Transport Bill that the Government have a very different idea of Conservatism and a different plan for the revival of public transport.
      Of course, it is always possible to improve on the enormous success of Labour councils. It is even possible that this success can be improved on by a completely different method and approach, because that is supposedly what we are offered in the Bill. However, if there is to be a radically different approach to the decline, the Government have a responsibility to think carefully about the problems and alternatives.
      Emergency action is all very well in a crisis, but when there is a clearly successful solution to the problem of decline, it is inexcusable to destroy policies without carefully considering how the alternatives will work. Yet that is exactly what is happening in this disastrous Bill. The Government threw out the normal procedure of consultation before publication of plans in a White Paper. When they did consult, the time allowed was often as short as two months, and those were the late summer months when staff shortages made it unlikely that either the local authorities or the transport undertakings — let alone

      1093
      individual travellers — would be able to give proper responses. Nevertheless, the responses poured in—more than 7,000 of them, and virtually all of them were hostile.
      Mr. Ridley: How does the hon. Lady know?
      Mrs. Dunwoody: The Secretary of State must think the whole world is as blind, deaf and uncaring as him. Hon. Members who merely read their correspondence know what the responses were and that the right hon. Gentleman is utterly uninterested. It is of course possible that 7,000 people and innumerable organisations are wrong and that only the Secretary of State is right. He has argued throughout that everybody who opposes the Bill must be part of a vested interest. His definition of a vested interest was interesting and included the women's institutes, people in rural areas, local authorities, people who use buses to get their children to school, groups of women and people who work in the bus industry. My goodness, all these vested interests, all these appalling people who dare to need some form of public transport. That did not worry the Government. They ploughed ahead without any thought for anyone under any circumstances.
      Mr. Sydney Bidwell: And the all-party Select Committee on Transport, the majority of which opposed the substance of the Bill.
      Mrs. Elaine Kellett-Bowman: Vested interests.
      Mrs. Dunwoody: Another vested interest, as the hon. Member for Lancaster (Mrs. Kellett-Bowman) says—a vested interest where Conservative Members are in the majority, people who dare to learn something about transport. Even worse, they dare to take information and evidence from people in the country who were appalled by the Bill. Of course we can dismiss the Select Committee. If we cannot dismiss the Select Committee's evidence, we can always rubbish the Chairman on the basis that he exercised the Chairman's right to ensure that the report was printed in the proper way.
      The Government were not concerned about the general public or anybody interested in the Bill. They nevertheless had some difficulties, and publication was delayed. During the three months in Committee that followed, it became clear that the Government had not bothered to consider any of their theories in detail. It was not until the Committee's 32nd sitting that the Government realised the glaring holes in their plans for concessionary fares. It was not until Report that the Government decided that they must ban co-operation between British Rail and Strathclyde passenger transport executive. The Bill is so ill considered that, after the consideration of 125 amendments in Committee, of which 122 were tabled by the Government, they had to introduce 136 amendments and new clauses on Report just to shore up the more glaring inconsistencies and drafting errors.
      Far worse than that, however, the Government have not accepted one amendment which would improve local authorities' ability to pay for concessionary fares. Nor have they accepted one amendment today which would give people who have worked, or who currently work, in the bus industry any guarantee about their pension entitlement. It is a good job that there are controls on parliamentary language, or I should call that an outright fraud.
      For any Government to treat people in the bus industry as the Secretary of State is treating them in regard to their
      1094
      pension entitlement is a disgrace of which any civilised Government should be ashamed. Still the Secretary of State is not prepared to accept the genuine worries of current pensioners, those who will have to make the system work after the National Bus Company disappears or those who will have to find a decent pension entitlement.
      A policy which ignores proven success in transport management and is not even considered in detail is highly unlikely to succeed. It is always conceivable that the Government have come up with a general theory so powerful and persuasive that, despite all its flaws, it will slot into the system and produce the enormous success about which we have heard so much throughout the Committee stage. If that is true, the Government have a responsibility to tell us why the policy is not to be applied to the capital city. Few people realise that we have a Secretary of State who on the one hand says, "The only way that we shall have an effective transport system ts to produce open competition, to remove subsidies, to act on the basis of wholly inadequate schemes, such as the Hereford trial area, and to proceed on the basis that open competition is the answer.", and on the other says, "The capital city will be excluded from all the advantages that are inherent in the Bill." What hypocrisy!
      If this is such a good transport measure, why will the people of London not get the same advantages as the people in my rural area? Why will the people of London not be deprived, as we shall be? Why will they not be subjected to the same pressure? In case it is believed that somewhere along the line there must have been a great demonstration, it should be known that none of the experiments carried out under the 1980 transport legislation was conducted in Scotland. It is interesting that the Scottish Consumer Council, in its comments on the White Paper, observed that while it
      "normally sees great merit in increasing competition"
      there is no practical experience in Scotland of the deregulation being proposed.
      According to the Scottish Consumer Council,
      "to move from a position of total regulation to total deregulation … The risks are high, and the consequences of failure could be costly."
      No wonder my hon. Friend the Member for Glasgow, Maryhill (Mr. Craigen) probed the Under-Secretary of State for Scotland in Committee about the Strathclyde predicament after deregulation. His ministerial colleague went off the track when he answered the question about the future of the Blackpool trams. It is hardly surprising that he left us in considerable doubt about whether the Government understand what will happen, even in their areas.
      There is considerable doubt whether the proposals for the Strathclyde buses and the financial safeguards for Glasgow's underground system will be adequate. There are unsatisfactorily answered queries about the three municipal bus services in Scotland—Lothian, Grampian and Tayside. The Government even managed to miss out concessions on the ferries, which is of some importance in Scotland, although they promised us that somewhere along the line they would do something about it.
      Mr. Ancram: If the hon. Lady had read the amendments tabled tonight and passed by the House, she would have found that we had done something for the ferries and the airways to the islands.
      Mrs. Dunwoody: I am glad that on Report the Minister has suddenly discovered that he has ferries and islands other than those which he knew of in Committee. Only when my hon. Friend the Member for Maryhill raised the Bill's implications did the Minister realise that there were difficulties about concessionary fares. We are glad that even now, at the last minute, the Minister has got round to doing something about that.
      Mr. Gavin Strang: Will my hon. Friend make the point to the Under-Secretary of State for Scotland that he has wholly failed to persuade the Conservative administration in Lothian of the merits of the measure, and that the chairman of the transport committee and the leader of the council remain opposed to the measure, which will do immense damage to the bus service in Edinburgh?
      Mrs. Dunwoody: Lothian is not unusual in that. The Bill is not being greeted with wild acclaim by Conservatives, especially not by those in the country who know something about the provision of transport. They recognise the basic fallacy. According to the Government, the decline in the number of bus passengers is due entirely to regulation, not to the rise in car ownership, nor to other problems. They believe that regulation is the great difficulty. In the 1985—
      Mr. Steen: Will the hon. Lady give way?
      Mrs. Dunwoody: I am trying—
      Mr. Steen: Does the hon. Lady object to the increase in the number of people who own cars? Does she say that they should all go by bus?
      Mrs. Dunwoody: I knew that I should not have given way to the hon. Gentleman. Had he paid more attention to our proceedings, he would have known what the Bill was about.
      With the Transport Bill 1985, the Government have boldly set out to conquer regulation once and for all. However, they will create even more anomalies. While buses are deregulated, British Rail routes will be converted to regulated bus routes. The most glaring inconsistency is that London Regional Transport—which the Secretary of State believes represents everything that is bad in public transport—is exempted from the immediate effects of the Bill. The Government believe that the transport system that most urgently requires attention could not survive the surgeon's knife of deregulation. It is an extraordinary theory, and it makes nonsense of everything that we have been told during the passage of the Bill.
      It is important for hon. Members to understand how the Government have managed, where so many others have failed, to understand that the problems of bus services are not unacceptably high fares, the fact that in many areas buses do not arrive at the correct time, or the lack of timetabling or integration to link buses and trains; the only appalling problem is the evil of regulation.
      The Government cannot have come to that conclusion by considering the systems in other countries. The only place where anything like this system has been tried is Santiago, in Chile. Even there it took seven years to achieve its objectives, not one year as the Bill proposes. Furthermore, in Santiago, every operator is obliged to continue providing the service that he initiated as long as even one passenger asks for the route to be retained. I regret that neither I nor the Government can tell the House
      1096
      whether the scheme is popular, because the Chilean Government have methods of ensuring public acceptance of their schemes which even this Government have not yet managed to implement.
      We must understand that the deregulation of coach services, which is what the Government have proposed throughout the passage of the Bill, is not the panacea that has been suggested. As the Select Committee on Transport said, allowing coaches to compete with the rail service deprived British Rail of £7·5 million a year—money that had to be found from transport support. In addition, the NBC was planning a major expansion of coach services before deregulation was proposed.
      We always hear about the trial areas, and the Government's attitude to them is interesting. The Transport and Road Research Laboratory concluded that in Norfolk the changes were due to financial restriction, and that in Devon the results of the exercise were disappointing. Only in Hereford do the Government see any evidence in support of deregulation. However, the chaos and panic in Hereford were an example of what happens when a transport system is changed without proper regard for the things that matter.
      The Bill will be a disaster for the transport industry. It is not based on careful thought, and it will not improve the lot of the bus passenger. It was not conceived by a Government who care about those who use buses. It is something much simpler. The system was evolved because the Government had one aim in mind—the desire to destroy the entire bus service and to save money. That was the point at which they began. First, they asked themselves, "How can we cut the bus subsidy?" They discovered that the easiest way was to deprive the country of buses; the easiest way to do that was to deregulate and to say, "Competition will provide a good, planned transport system, and we need not give subsidies to local authorities or to other operators."
      Within a short time the House and the country will see the real effects of the plans that the Secretary of State has in mind. It is not surprising that so little support can be found in the country. It is not surprising that the effects of the Bill have been felt even before it has reached the statute book. It played a major part in the results of the shire county elections, and Conservative Members know it. They have become exceedingly edgy. The longer the Committee went on and the more that the absolute disasters of the Bill became clear to Back-Bench Conservative Members, the greater was the loss of support.
      Not even the Secretary of State can pretend that he has any friends in the House of Commons. However, what frightens us is something much more important. In destroying the bus system, he will discover that he has no friends in the country. As always, the cost will be borne not by him and his friends, but by the people. His name will be remembered as probably the most destructive Secretary of State for Transport that we have ever had.
      Several Hon. Members rose —
      Mr. Speaker: Order. Before I call Back-Bench Members, I should say that, unfortunately, there are only 15 minutes left for Back-Bench speeches, so I ask for brief contributions.
      9.36 pm
      Mr. Stephen Ross: As I said on Second Reading, some competition is desirable in the bus industry because all is not well, and I accept that. However, this measure is far too drastic. Some regulation is still vital. Unfortunately, co-ordination, planning and integration are all left out of the Bill.
      Possibly the greatest mistake is that registration has gone to the commissioners, not to the county councils. I believe that that will prove to be an error. Undoubtedly the Secretary of State had representations from Hereford and Worcester county council that registration should have been with the council. After all, that case has been quoted to us time after time, but it was decided to give registration to the commissioners. That will lead to all sorts of problems.
      Despite what the Under-Secretary said on amendment No. 87, moved by the hon. Member for Wellingborough (Mr. Fry), I still believe that comprehensive competitive tendering is preferable to a total free-for-all. Unfortunately, due to the guillotine, we have not even debated the taxi clauses. They are nightmarish and not properly thought through. They will mean many more problems for local authorities, let alone the police, who will be called in to prevent the fights and fisticuffs on many taxi stands in the months and years ahead.
      My hon. Friends and I are not dogmatically opposed to privatisation, but the units into which the National Bus Company is likely to be split must be large enough. It is wrong for the Secretary of State not to give us adequate assurances on pensions, which should have been written into the Bill. He has a direct responsibility, and he knows full well that not just those presently employed in the industry but the retired busmen and their widows are affected, and those are the people who are coming to see us at our surgeries on Saturday mornings. Why does not the right hon. Gentleman follow the example of the water authorities? When the National Water Council was wound up, I believe that the Yorkshire water authority took over responsibility for the pensions of those employed in the water industry. I cannot understand why that cannot be done. The pension scheme should be maintained in its entirety.
      The Under-Secretary talked about the No. 11 bus, and how long he has to wait, if he ever gets on it, and said that three or four would come together. He suggested that if London were blessed with the benefits of the Bill, the operators of those buses would be fined if they did not run to time. I wonder whether the Secretary of State has looked up Whitehall or down Millbank in the past three days. It has been totally jammed. At times one can count up to 40 coaches, if not more, and buses galore. How on earth can there be any freedom of bus services in London if he does nothing to deal with congestion?
      The greatest gift that the Secretary of State could bestow on the nation, apart from leaving office, would be to tackle the congestion in our towns and cities. That is the real problem, and the Government should have tackled it when they first came to power. There will now be even greater delays. Any criticism of south Yorkshire pales into insignificance compared with the cost in time and money of the hours spent waiting to get through Earls Court or Wandsworth and similar areas in other cities. Until the
      1098
      Government tackle that problem they will never get their system to work. That is what is wrong with the Bill—the Secretary of State has got his priorities all wrong.
      9.40 pm
      Mr. Fry: The Select Committee report was being decided when the Bill when into Standing Committee, and it has made a significant contribution to the debates. My hon. Friend the Member for Lancaster (Mrs. Kellett-Bowman) shouted, "Vested interests" when the Select Committee was mentioned earlier, and I have no doubt that she was getting at me. If she and others would read the report and study the voting in the Divisions, they would know that only twice did a Conservative Member vote with the Opposition. On one occasion the Conservative Member was myself and on the other it was my hon. Friend the Member for Birmingham, Yardley (Mr. Bevan). In one Division after another, several Conservative Members agreed with the majority view. My hon. Friend the Member for Lancaster would also discover that at no time did I vote on any clause in connection with the NBC. Moreover, I consistently voted in support of the local authority role, although the NBC did not approve of it. I hope that my hon. Friend will reflect on that.
      Briefly, because I put my name to the Select Committee report and because I believe in that report, my right hon. Friend the Secretary of State will not be surprised to hear that I cannot support him in the Lobby today. I said on Second Reading that if the Bill were sufficiently amended I would consider voting for it in its later stages but that otherwise I would have to vote against it. Because I put my name to the Select Committee report, because I am concerned about pensions, about tendering and about the role of local authorities, I hope that I am wrong and that my right hon. Friend the Secretary of State is right, but as I believe that the Bill is based too much on theory and not enough on practice I have great fears on that score and I regret to have to tell my right hon. Friend that I shall be voting against Third Reading.
      Several Hon. Members rose —
      Mr. Speaker: Order. It may be for the convenience of the House if I repeat that the Under-Secretary of State will seek to rise at 9.50 pm. Perhaps hon. Members will bear that in mind.
      9.43 pm
      Mr. D. N. Campbell-Savours: Unlike those who considered the Transport Act 1980, members of the Standing Committee on this Bill had the benefit of hindsight. In 1980 we could only predict but the record of those debates shows that all that has happened in the succeeding five years was predicted in detail at that time. In the 34 sittings of the Standing Committee on this Bill, my hon. Friends had the benefit of being able to refer to the Hereford and Worcester trial areas and to other experiences such as the case of Yeowarts in west Cumbria, the way in which the Minister overruled the traffic commissioner and the two appeals to the divisional court and the higher court to try to remove Yeowarts from the streets of Whitehaven.
      In considering the Bill we should also consider the consistency shown by political parties on these matters. For the past three months, there has been a clear deception going on in British politics. We know where the Tories stand. They stand firmly for deregulation and they have

      1099
      advocated it at every stage of the Bill. We know where Labour Members stand. We are wholeheartedly against the principle of deregulation and my hon. Friends drew attention to that throughout the 34 sittings of the Standing Committee.
      There remains another force in British politics—the Liberal party. It has been involved in a cruel deception. If one looks at the record of the Liberal party on deregulation—one finds it in the amendments and new clauses tabled on the Transport Bill 1980 when we discussed trial areas and the principle of deregulation—one sees that on every occasion the Liberal party voted with the Government in support of deregulation. I have here the new clauses and the amendments that were moved on that occasion.
      Mr. Stephen Ross: We supported trial areas.
      Mr. Campbell-Savours: The hon. Gentleman would do well to refer to the remarks of his hon. Friend the Member for Truro (Mr. Penhaligon) who said about trial areas and deregulation on that occasion that, on the whole, the proposals outlined by the Government were reasonable and would do no harm, although only time would tell what good they would do.
      The Liberals have supported deregulation. They voted against new clause 6 in the 1980 Act: carriage services competing with operators holding road service licences. The new clause would have prevented contract carriage services from starting up on revenue-supported routes without the approval of the traffic commissioners and the revenue-support-paying local authorities. During the proceedings in 1980 on the Transport Bill the Liberal spokesman advocated and voted for—
      Mr. Speaker: Order. We must not deal too much with 1980. This is 1985.
      Mr. Campbell-Savours: On that occasion, the Liberals voted in the clause stand part debate in favour of a measure to set up trial areas and deregulation. Every hon. Member knows that it was because of the Government's experience in the trial areas that a national deregulation policy is to be introduced. The position of the Liberal party must be closely identified with that of the Government. When these matters are examined up and down the country, people would do well to stick to the facts and recognise that it is only in the form of parliamentary debates—
      Mr. Ross: Will the hon. Gentleman give way?
      Mr. Campbell-Savours: The hon. Gentleman has spoken repeatedly tonight and he features repeatedly in the record of the Committee proceedings.
      I believe that the Labour party is entitled to set the record straight. The people of this country need to know the truth. The truth is that the Liberals support deregulation. They stand with the Tories. They supported trial areas. They supported the measures contained in the 1980 Act, which will lead to this monstrous piece of legislation being carried tonight by the Government.
      9.48 pm
      Mr. Colin Shepherd: It is not often that I find myself in agreement with the hon. Member for Workington (Mr. Campbell-Savours), but I have to remark on the
      1100
      duplicitous attitude of the Liberal party towards the Bill. I have lived for four years with the trial area in Hereford. The people of Herefordshire like what they have been living with for the past four years. [Interruption.] That is exactly the response I expected to get from Liberal Members. It may interest them to know that through the officers of the city council they have tried their damnedest to torpedo the trial area but not one Liberal councillor—and it is a Liberal-controlled city council— has gone into print and said that he disapproves of it. The Liberals dare not do so because they know that the people of Hereford like it.
      May I also take to task the hon. Member for Crewe and Nantwich (Mrs. Dunwoody). She has spoken about this being an election issue. It was not an election issue. During the county council elections this issue was not raised.
      Mr. Simon Hughes: That is not true.
      Mr. Shepherd: I know that the hon. Member for Southwark and Bermondsey (Mr. Hughes) came to Hereford and did his best for his party, but it did not do it much good. This issue was not raised on the doorsteps a great deal. It was not given the prominence that we had expected and that would have been justified by the amount of money spent by the Labour party in Lancashire. The hon. Member for Crewe and Nantwich must recognise that the £130,000 of ratepayers' money that was spent in Lancashire counted for not one jot or tittle when it came to counting the votes. They lost control.
      Mr. Simon Hughes: Does the hon. Gentleman accept that there were two principal issues in Hereford and Worcester in the election — education and transport? There are far too many empty buses in the city, while in the rural areas of the border counties of England and Wales there are almost no buses. The officers of the city and all the parties are opposed to the proposals.
      Mr. Shepherd: I cannot agree with the hon. Gentleman. He might have heard what he wanted to hear, but I was listening with my ears out on stalks. The people of Hereford are determined that competition will continue in their streets. They have even sent me petitions to that effect. The buses are running in rural areas and more people are being served every bit as well as they have been served previously, on balance. That was shown in the report by the School of Advanced Urban Studies at Bristol university, but that dispassionate advice has been disregarded by the Opposition.
      The country can take confidence from the lessons that have been learnt in Hereford. We are not seeking to duplicate precisely what happened there. My hon. Friends can take comfort from the fact that what we have learnt we have incorporated in the Bill. A new challenge is facing the industry—it is a constructive challenge; a reversal of trends. We will see more and more innovations as time goes on, which can only be to the benefit of the travelling public.
      9.51 pm
      Mr. David Mitchell: Almost the only matter upon which the House has agreed during our lengthy debates on the Bill has been the vital importance for many of our

      1101
      fellow citizens of the bus services of this country, particularly for the pensioners, the students and the lower-paid travelling to and from work.
      The debates have taken place against the background of an industry in a state of chronic decline. Thirty years ago 42 per cent. of all journeys were by bus. Today the figure is only 8 per cent. During the past 10 years there has been a 28 per cent. fall in the number of people travelling by bus. At the same time there has been a loss of jobs in the industry, which I should have thought would have worried Opposition Members; it certainly worries Conservative Members.
      The National Bus Company alone lost 10,000 jobs between 1969 and 1972, another 500 by 1975, another 6,000 by 1978, another 11,000 by 1981 and another 2,000 by 1983. The industry is in chronic decline; the number of jobs in it is reducing. The Labour party's answer is simply to go on increasing subsidies — subsidies that have risen in 10 years from £10 million to no less than £522 million of taxpayers' and ratepayers' money. It is against that background that any Government who failed to take action would rightly incur the wrath of the country as the bus industry became a sunset industry.
      The cause of the decline had been local monopoly and easy subsidy.
      Mrs. Dunwoody: Nonsense.
      Mr. Mitchell: I shall give the hon. Lady an example of just how easy some of that subsidy is. I shall quote a bus operator, who said:
      "I know an operator in the Fens who runs a daily village service which may carry one passenger per week. He is keeping quiet, running his vehicle and drawing his subsidy. I, as part of a larger subsidised service, had an early morning run which never carried a single passenger."
      That is an example of easy subsidy.
      Mrs. Dunwoody: The hon. Gentleman has spent almost the entire Committee stage producing bits of gossip with no names and no evidence. No one will believe him. If he cannot do better than that, he had better start again.
      Mr. Mitchell: I am delighted to give the hon. Lady the reference—the magazine Coachmart of 12 April 1985. Monopolies protect operators from the normal business pressures to keep down costs, to become efficient and to attract the customers. Because there is no alternative service to which one can go, a monopoly automatically has those effects. Indeed, if one looks at the pecking order of inefficiency, one goes from the PTEs to the National Bus Company and, the most efficient of all, the private sector.
      It is not without importance that we have learnt during the passage of the Bill of the 25 per cent. improvement in productivity that the Midland Red Bus Company achieved when it was faced with competition. It is not without significance that we learnt that in Norfolk it was possible to obtain for £150,000 the services which had previously cost £500,000. That is the scale of savings that can be achieved when competition is introduced.
      One is not surprised that an industry in this form, trapped and cocooned in monopoly and subsidy, has had a 30 per cent. increase in its fares above the rate of inflation in the last 10 years. Those 10 years have seen the move from two-man operation to one-man operation in the bus industry and should have seen a reduction in costs; yet the fares have increased 30 per cent. more than the rise in the cost of living. For those reasons, it is right that the
      1102
      Government should seek to tackle the problem by bringing the monopolies to an end and introducing competition. That is the main purpose of the Bill.
      The hon. Member for Crewe and Nantwich asked again why this did not apply to London. I reassure her that Londoners will soon enjoy the advantages of the Bill, as will the rest of the country. The hon. Lady, carrying on her campaign of distortion, said that the Bill provided a free-for-all. That is another distortion because she knows perfectly well that the Bill is based upon a considerable number of requirements to comply with regulations, such as those relating to registration. I will quote from the nicely named "Hitchhiker's guide to the Transport Bill" produced by the South Yorkshire passenger transport executive. It calls itself "Benny's Buses", and it states:
      "We run when it suits us."
      That is another example of the scare-a-day and the distortion to which the Bill has been subjected.
      A failure to run a registered service when it is registered will result in penalties falling upon the operators. We have been told of these endless scares and of the cowboy operators and unsafe vehicles, yet every operator will need an operator's licence and must have servicing facilities available for his vehicles. [Interruption.]
      Mr. Randall: The Minister has never been on a bus.
      Mr. Mitchell: The hon. Gentleman says that I have never been on a bus. Not only have I been on buses, but I have been on buses in Hereford. [Interruption.] I found that the people of Hereford would not go back to a monopoly.
      Mr. Randall rose —
      Mr. Mitchell: Predictably the debate has illustrated the fundamental division in our political life between those who believe in regulation, state planning and public sector monopoly and those on the Government Benches who believe in the benefits of competition and putting the customer first. It is the customer, the bus passenger, who will benefit from the Bill. I invite the House to give it a Third Reading.
      9.59 pm
      Dr. Marek: The Minister said that he had been on a bus in Hereford. I am pleased that he had, because the opportunity of doing that will not be available to him—[Interruption.] — for much longer. The Hereford experiment has not been a success. There is no competition in Hereford any longer, except on one route, no new routes have been established—
      Mr. Mitchell rose —
      Hon. Members: Sit down.
      Mr. Speaker: Order. The Minister has made his speech.
      Dr. Marek: Two operators are before the courts in Hereford at the present time. That is the legacy that the Government are foisting on the country by the Bill, and I urge hon. Members in all parts of the House to vote against its Third Reading.
      Mr. Simon Hughes: I missed the point that the hon. Member for Hereford (Mr. Shepherd)—
      -It being Ten o'clock, MR. SPEAKER proceeded, pursuant to the order [1 April] and the resolution yesterday, to put forthwith the Question already proposed from the Chair.

      1103
      Question put, That the Bill be now read the Third time:—
      The House divided: Ayes 246, Noes 170.

      Division No. 221]

      [10 pm

      AYES

      Aitken, Jonathan

      Hayhoe, Barney

      Alexander, Richard

      Hayward, Robert

      Amess, David

      Henderson, Barry

      Ancram, Michael

      Hickmet, Richard

      Arnold, Tom

      Hicks, Robert

      Atkins, Robert (South Ribble)

      Hind, Kenneth

      Beaumont-Dark, Anthony

      Hirst, Michael

      Bellingham, Henry

      Hogg, Hon Douglas (Gr'th'm)

      Benyon, William

      Holland, Sir Philip (Gedling)

      Best, Keith

      Holt, Richard

      Body, Richard

      Hordern, Peter

      Boscawen, Hon Robert

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

      Bowden, Gerald (Dulwich)

      Howarth, Gerald (Cannock)

      Brandon-Bravo, Martin

      Howell, Ralph (N Norfolk)

      Brooke, Hon Peter

      Hubbard-Miles, Peter

      Brown, M. (Brigg & Cl'thpes)

      Hunt, David (Wirral)

      Buchanan-Smith, Rt Hon A.

      Irving, Charles

      Buck, Sir Antony

      Jackson, Robert

      Burt, Alistair

      Jenkin, Rt Hon Patrick

      Butcher, John

      Johnson Smith, Sir Geoffrey

      Carlisle, Rt Hon M. (Wton S)

      Jones, Gwilym (Cardiff N)

      Carttiss, Michael

      Jones, Robert (W Herts)

      Cash, William

      Joseph, Rt Hon Sir Keith

      Chope, Christopher

      Kellett-Bowman, Mrs Elaine

      Clark, Sir W. (Croydon S)

      Kershaw, Sir Anthony

      Clarke, Rt Hon K. (Rushcliffe)

      Key, Robert

      Clegg, Sir Walter

      King, Roger (B'ham N'field)

      Coombs, Simon

      King, Rt Hon Tom

      Cope, John

      Knight, Gregory (Derby N)

      Crouch, David

      Knowles, Michael

      Dicks, Terry

      Knox, David

      Dorrell, Stephen

      Lamont, Norman

      Douglas-Hamilton, Lord J.

      Lang, Ian

      Dunn, Robert

      Latham, Michael

      Durant, Tony

      Lawler, Geoffrey

      Dykes, Hugh

      Lawrence, Ivan

      Fallon, Michael

      Lee, John (Pendle)

      Farr, Sir John

      Leigh, Edward (Gainsbor'gh)

      Favell, Anthony

      Lester, Jim

      Fenner, Mrs Peggy

      Lewis, Sir Kenneth (Stamf'd)

      Fletcher, Alexander

      Lightbown, David

      Fookes, Miss Janet

      Lilley, Peter

      Forsyth, Michael (Stirling)

      Lloyd, Peter, (Fareham)

      Forth, Eric

      Lord, Michael

      Fox, Marcus

      Luce, Richard

      Franks, Cecil

      Lyell, Nicholas

      Fraser, Peter (Angus East)

      McCurley, Mrs Anna

      Freeman, Roger

      Macfarlane, Neil

      Gale, Roger

      MacKay, John (Argyll & Bute)

      Gardner, Sir Edward (Fylde)

      Maclean, David John

      Garel-Jones, Tristan

      Madel, David

      Glyn, Dr Alan

      Malins, Humfrey

      Goodlad, Alastair

      Malone, Gerald

      Gow, Ian

      Maples, John

      Gower, Sir Raymond

      Marland, Paul

      Greenway, Harry

      Marshall, Michael (Arundel)

      Gregory, Conal

      Mather, Carol

      Griffiths, Peter (Portsm'th N)

      Maude, Hon Francis

      Grist, Ian

      Mawhinney, Dr Brian

      Grylls, Michael

      Maxwell-Hyslop, Robin

      Gummer, John Selwyn

      Mayhew, Sir Patrick

      Hamilton, Hon A. (Epsom)

      Mellor, David

      Hamilton, Neil (Tatton)

      Merchant, Piers

      Hampson, Dr Keith

      Meyer, Sir Anthony

      Hannam, John

      Miller, Hal (B'grove)

      Harris, David

      Mills, lain (Mariden)

      Harvey, Robert

      Mills, Sir Peter (West Devon)

      Haselhurst, Alan

      Mitchell, David (NW Hants)

      Havers, Rt Hon Sir Michael

      Moate, Roger

      Hawksley, Warren

      Molyneaux, Rt Hon James

      Hayes, J.

      Monro, Sir Hector

      Question accordingly agreed to.
      Bill read the Third time, and passed.

Royal Ordnance Factories Trading Fund
10.13 pm
The Parliamentary Under-Secretary of State for Defence Procurement (Mr. John Lee): I beg to move,
That the draft Royal Ordnance Factories Trading Fund (Revocation and Repeal) Order 1985, which was laid before this House on 3rd May, be approved.
The House will recall that the royal ordnance factories operated under a trading fund from 1974 until 2 January 1985. On that date, the assets and liabilities of the fund were passed to the successor company, Royal Ordnance plc, under the terms of a scheme made under the Ordnance Factories and Military Services Act 1984. A copy of the scheme was laid before the House on 9 January 1985.
The new company is now responsible for all the operations previously conducted under the trading fund, including research and development activities, principally on rocket motors for which the ROFs took responsibility in April 1984. The new company owns all the assets previously covered by the trading fund and operates under the Companies Act as a normal trading public limited company. For the time being, it is wholly owned by the Government. The ROF trading fund has, for all practical purposes, ceased. In these circumstances, it becomes necessary to revoke the order which created the ROF trading fund in 1974 and this is the effect of the section headed "Revocation" in the draft order before us.
A further effect of the draft order is to repeal the section of the Government Trading Funds Act 1973 which gave the enabling power to create a trading fund specifically for the royal ordnance factories. With the transfer of responsibility to the company and the consequent wit ding-up of the order which created the trading fund, there is no point in retaining on the statute book an enabling power which has served its purpose and is redundant. The power for this repeal was contained in section 15(1) and (2) of the Ordnance Factories and Military Services Act 1984, subject to affirmative resolution of the House.
There is one residual action still to be completed arid this is the production and audit of the closing accounts of the trading fund. The accounts themselves have been produced and are presently being examined by the national audit office. I understand that it expects to complete its work leading to certification by the Comptroller and Auditor General within a few weeks. A direction for the production of the accounts has been made under the Exchequer and Audit Departments Act 1921 and there is, therefore, no need to await the closing account before making this order and formally winding up the trading fund.
It is not the purpose of this evening's debate to go over again the many issues that were raised during the passage of the Ordnance Factories and Military Services Act last year. Time has moved on. The new company is now finding its feet in a truly commercial environment. The disciplines and opportunities of the market are now available and many of the constraints which inevitably existed during the trading fund period have been removed. The future success of the company must lie in developing its overseas markets. The competitive domestic environment in which it now operates and the removal of the hampering effect of Civil Service procedures and practices

1107
provide the best way of achieving a healthy and successful future, although, sadly, there have been some redundancies.
It remains our intention to remove all the remaining constraints associated with public sector status as soon as we can. We will introduce private capital into the company as soon as practicable and, although no final decisions have been taken on either the timing or the method of privatisation, our preferred course remains, as we have said before, a public flotation of the whole.
I understand that the Public Accounts Committee has this afternoon been considering a report from the Comptroller and Auditor General on the process leading from trading fund status to incorporation of Royal Ordnance plc. I await the outcome of the Committee's deliberations, but, from my point of view, the exercise to date, involving a lot of hard work to unravel many complexities, has been a considerable success. I am sure that the remaining steps to full privatisation will be equally successful and that the company will enjoy a healthy future. As another step on this road, I commend the draft order to the House.
10.17 pm
Mr. Kevin McNamara: This is the penultimate act in the vandalising of a great national institution and an important national asset—the royal ordnance factories — and the winding up of its trading fund for Royal Ordnance plc. The problem for the Government is that all the difficulties that we foresaw when the matter was first introduced, and the fears that we expressed then, are now being realised, to the detriment both of the country and of the ROF employees. These problems are underlined by the Comptroller and Auditor General in his report. He comes to a conclusion that the Labour party has known from the outset. At paragraph 3.17, he says:
"It would have been possible to introduce most of these measures while continuing to operate as a trading fund".
He is saying that this measure is not for the benefit of the country or the industries but to satisfy the ideological qualms of the mistress of No. 10 Downing street, and give the Secretary of State the opportunity of saying that he has got rid of a certain number of civil servants.
The Minister did not refer to the outstanding matters of concern to the employees. For example, he did not speak of industrial relations and the relationship between the new company and the employees.
Despite ministerial assurances that the consultation procedures would bring the new organisation up to date with the Whitley council rules, at company and official level there are not yet agreed procedures between the Royal Ordnance plc and the trade unions. Even though some procedures still exist at factory level — the leftovers of the old Whitley system—six months after this enterprise, there is not yet any agreed solution. The trade union side feels that the new company does not want to give the trade unions any information and that it wants considerably to reduce the amount of consultation.
It is the duty of the Under-Secretary of State—while the Secretary of State still controls 100 per cent. of the shares — to ensure that there is a proper system of industrial relations and negotiated procedures between the
1108
two sides of the industry before anything is sold off. I expect the Under-Secretary of State to give that undertaking when he replies.
It is scandalous that there is still no agreement on pensions. The Government have yet to honour their "no detriment" commitment to their former employees. The Government are asked to give a copper-bottomed guarantee to the transferred employees in the ROFs that, for the purposes of pension arrangements in the new company, they will be treated no less favourably than if they had remained in the Civil Service, especially with respect to the index-linking of their pensions.
The Minister gave that undertaking. Later, in Committee, the Government admitted that there was detriment. They suggested that they would give £2 million to solve the problem. As the Minister knows, that is not acceptable, according to the best legal and other advice to the trade union side. At one time, the MOD hinted darkly that it might have to go to court to solve the matter, and that would incur expenses. The trade unions have said to the Ministry, which has yet to reply, "Let us all take the matter to binding arbitration." If £2 million is too much, the trade unions will accept that decision. If it is not enough, are the Government prepared to accept binding independent arbitration? The Under-Secretary of State does not reply.
The Secretary of State for Employment (Mr. Tom King): Make your own speech.
Mr. McNamara: I am coming in a minute to the right hon. Gentleman. He should stop interrupting now, because he will be in trouble.
Mr. King: Make up your own speech.
Mr. McNamara: If the Secretary of State wants to interrupt, let him do so. Stand up if you want to interrupt.
Mr. Deputy Speaker (Mr. Ernest Armstrong): Order. The hon. Member for Kingston upon Hull, North (Mr. McNamara) must not address me in that way.
Mr. McNamara: I always give way to you, Mr. Deputy Speaker. If the Secretary of State for Employment, who has been very touchy on these matters, wants to interrupt me, let him do so, instead of muttering from a sedentary position. The right hon. Gentleman is not prepared to do so.
Does the Treasury prevent the Under-Secretary of State from advancing the offer of £2 million? Is it the Treasury that refuses to let the amount be increased? If not, will the hon. Gentleman say that he will meet this point?
On competition policy and preferred schemes, we know, from what the Prime Minister said yesterday about the acquisition of TNT from Warsaw sources, what she means about the Department's policy of greater competition. We now understand what she meant when she said:
"I can do business with Mr. Gorbachev."
She means, "I can get TNT from him." On all the ordnance factory gates from Warsaw to Moscow there will be the royal coat of arms, with the legend in the Cyrillic and Roman alphabets emblazoned for all to see: "By appointment. Purveyors of gunpowder, TNT and high explosive to Her Majesty's armed forces. Holders of the Thatcher award for greater competition."
Why does the Under-Secretary of State stop there? Why does he not invite the Russians to invest directly in some

1109
sort of munitions factory? Why not just cut out the Belgian middle man and save on transport costs? Why not do it all? We now know what the Secretary of State means by preferred source arrangements. The preferred source of TNT for our Armed Forces is the Eastern bloc. The Government prefer to give hard currency to, and to build up the economies of, Warsaw pact countries than to preserve jobs in Bridgwater. Capital costs of a new £7 million factory and the jobs of more than 100 workers are to go because of the Ministry's preferred source policy.
Mr. Lee: Could I just ask the hon. Gentleman to calm
down slightly? The order involved TNT, which we did not produce in Britain until about 1976, worth about £60,000.
Mr. McNamara: Well done.
Mr. Brian Sedgemore (Hackney, South and Shoreditch): How many roubles?
Mr. McNamara: The Government are closing a high explosives factory in Bridgewater.
Mr. Tom King: Really?
Mr. McNamara: The right hon. Gentleman can read it here, in the Comptroller and Auditor General's report.
Mr. King: Closing it down? When?
Mr. McNamara: The report says:
"Although the expected life of the plant was of the order of 30 years, the ROFs have decided that with the cessation MOD's preferred source policy and the introduction of a fully competitive environment, the TNT prices can no longer bear the depreciation charge and remain competitive. The ROFs therefore propose to write off the remaining book value of the plant. This will avoid future depreciation charges for the plant and enable Royal Ordnance plc to quote for MOD and other contracts in line with international prices."
Mr. King: The hon. Gentleman said that it was closing down.
Sir Antony Buck: That paragraph caused some anxiety, but it is quite different from any
suggestion of closure. The factory is being made price-effective.
Mr. McNamara rose —
Mr. Deputy Speaker: Order. There are far too many comments from a sedentary position. We shall get on much better if hon. Members who wish to intervene stand in their place.
Mr. McNamara: Particularly the Secretary of State.
Sir Antony Buck: I should be grateful if the hon. Gentleman would deal with my point. There is no suggestion of the factory closing down.
Mr. McNamara: It seems to me from what the Comptroller and Auditor-General said that the Government have written off a book value of £7 million because of abolition of the preferred source policy. The factory will not be able to compete and will no longer supply these types of explosives. If I am incorrect, the Minister will be able to say so later.
We also learn from the report that the Government will not go ahead with a 420 gallon propellant mixer. That is
1110
another £2·1 million down the drain. The managing director is now earning £44,600 a year just to watch the writing off of assets and the cutting of the better policies of the Ministry. The Minister's City friends have received £13 million and one lucky firm has won £100,000 from the Government to improve the company's image. It needs half a dozen face lifts.
The greatest criticism of the Government comes from the Comptroller and Auditor General, in paragraphs 4.6 to 4.8 of his report. He states that, although he will have power to examine all the nationalised industries, and all their works, dealings abilities and decisions, he will not have the same power over the 100 per cent. state-owned Royal Ordnance plc. He says that there are no provisions for him to have access to the records of the company. Therefore, he may examine the records of the nationalised industries, ask them the proper questions and meet their officials, but he has not access to the records of a 100 per cent. Government-owned company.
The Comptroller and Auditor General, who is appointed with the agreement of the House to protect the public interest, states in his report that he will not be able to do so. In paragraph 4.12 he goes further:
"until the method and timing of the disposal of the Secretary of State's interest in the Company have been decided and this has taken place, I shall be unable to comment on the arrangements adopted to control the associated costs and to ensure a fair return to the taxpayer overall."
In other words he can examine the stable only after the horse has bolted.
That means that the Government, again with the connivance of their City friends, can make the changes, decisions and arrangements that they want, and that the books will be open to merchant bankers and people who may be interested in buying the shares, but not to the Comptroller and Auditor General, or to the House. We shall have no say in what is arranged and done, but that is what we have come to expect of the Government, especially this Department, in dealing with the House. They deal in half-truths, they do not tell us the whole story, they are afraid to give the picture and they behave with considerable equivocation on all matters.
When the Minister replies, is he prepared to come clean with the House and tell us when the decision is to be made by the Government? Will it be this year or next year? He said that the Government still had their major option—to float the lot. Has he had any advances from the firms which are nibbling around about buying up the subsidiaries or assets? Has Sir Frank Cooper in his new position come and said that there are little bits of the ROFs that he would like to buy? The House and the Comptroller and Auditor General are entitled to answers to those questions well before the Government reach their decision to sell. We are entitled to know what is in the interest of taxpayers and if their interests will be protected fully.
This is a sorry day for country, for employers and for the Armed Forces. None of them wants to see those assets sold in the market place. We want to maintain preferred sources, and to ensure that when we are in difficulties the Armed Forces can go to an assured supplier for armaments, and that these companies remain in public control. That is why we shall vote against the order tonight.
10.33 pm
Mr. Lewis Carter-Jones: Will the Minister at last reply to the question of the pensions rights of the workers in the ordnance factories? There has been a history of questions to him. He visited the royal ordnance factory in my constituency and the matter dominated discussions at managerial, staff and industrial worker levels. He made it clear then that eventually they would know their true position regarding pension rights. On Second Reading, in Committee, on Report and on Third Reading, our questions have not been answered. The Minister promised that he would inform the House before the trading fund ceases. The trading fund will probably cease tonight, or at least when the document is signed. At this late hour, will he clarify once and for all the pension rights of ROF employees? His promises demand that he clarify the matter in the House tonight.
The second worrying matter is that the royal ordnance factories have been in public hands for more than 400 years. It has been unfairly and incorrectly assumed—I am sure that Conservative Members will agree with me on this—that the organisation is concerned only with low technology. In reality, the organisation produces a substantial amount of high technology, although the argument is that private companies will take over the factories and update the low technology operations. The Minister knows as well as anyone else that the royal ordnance factory at Patricroft produces a tremendous amount of high technology material. The skill and research has been developed and paid for by public funds.
Before private companies buy shares in an organisa-tion, they will wish to know something about what it produces. I believed that much of the production at Patricroft was secret, but if companies wish to bid for the shares, someone must tell them what is there. They must be told what they are buying, because they will not buy a pig in a poke.
Mr. Robert Atkins: What about British Aerospace?
Mr. Carter-Jones: That did not come under the heading of secret documents and weapons, and I am sorry that the hon. Gentleman did not realise that.
Sir Antony Buck: Does the hon. Gentleman accept that for many years private firms have been dealing with highly secret weapons, including Vickers and British Aerospace? Most of us consider that there is nothing different in these proposals from what has happened in private enterprise in the past.
Mr. Carter-Jones: Although I respect the hon. and learned Gentleman, I cannot agree with him on that point. Some of the material produced by royal ordnance factories is highly secret. We are talking about secret materials and processes that are owned by the state being handed over to the private sector, and I am worried about it. The Minister knows that many developments at ROF Patricroft should not go to the private sector. They should not even be bidded for.
One could talk about many items, but one is expected to be quiet. I know of many developments at ROF Patricroft which are highly secret— [HON. MEMBERS: "Ssh!"] An hon. Member who has a royal ordnance factory in his constituency must more or less promise that he will
1112
not tell what happens there. I would tell some people, but no one in the House of Commons, because they would go out immediately and pass on the information.
I ask the Minister to remember those two factors. First, the Government should not dismiss royal ordnance factories as being purely places of low technology. Secondly, will he be a very hon. Gentleman tonight and fulfil his promises to clarify the position of the pension rights of the ROF work force?
10.39 pm
Mr. Paddy Ashdown: It is always a pleasure to follow the hon. Member for Eccles (Mr. Carter-Jones), who speaks with a good deal of authority and knowledge on these matters. He touched on the age of the royal ordnance factories, and I shall return to that in a moment.
I congratulate the hon. Member for Kingston upon Hull, North (Mr. McNamara) on his speech. As he did so many times in Committee, he covered the general areas in a comprehensive fashion, which we all wanted to be outlined in the debate. Therefore, I shall not have to repeat some of the things that he said and detain the House more than is necessary.
The explanatory note thoughtfully provided on the statutory instrument makes the subject of the debate perfectly clear. It says that the order
"repeals the reference to the Royal Ordnance Factories as a Crown service".
This is therefore, a historical moment, a moment in which 400 years of service will be removed by the stroke of the Government's privatisation policy, a moment in which we see the penultimate act in the ending of 400 years' service of a group of organisations that have served the British Crown and the British forces in an exemplary fashion—
Mr. Robert Atkins: And will continue to do so.
Mr. Ashdown: Perhaps they will if they are given the chance. However, as I shall seek to show, they may not be given that chance.
Even Henry VIII, that last great privatiser, the man who flogged off public institutions to his friends, would not have sought to privatise the royal ordnance factories. Indeed, it was he who created them as a Crown service. From that point until now, they have served our armed forces and the Crown superbly—from the Armada right through to the Falklands campaign, when the Government and the Minister congratulated them on that service.
Why are we seeking to break that ancient tradition? Is there any reason for it, apart from the Government's own blind ideology? That is shown more clearly in the order and the series of actions that have gone before it and those that will follow than in anything else that the Government have done. It is a clear case of the Government's ideology being superior to common sense and the security of the nation.
Mr. Andrew Rowe: There are always dangers in praying in aid 400 years or more of history. It is worth saying that the assets that Henry VIII sold off had not been in the state's hands until he, by arbitrary action, made them so. Their sale created the conditions in which Elizabethan England was able to prosper in a way that otherwise would not have been possible. Therefore, I cannot see why the hon. Gentleman thinks that what he has just said in any way assists his case.
Mr. Ashdown: I take the hon. Gentleman's point. We are talking about ordnance factories, not monasteries. However, I believe that most people would regard that flogging off to Henry VIII's friends as less than totally honourable at the time, as many of us regard the current flogging off of public assets to people whom many regard as the Government's friends in the City as not totally honourable at present.
The burden of my case will not be along that line. My case is that this policy is folly. By this statutory instrument, together with the other actions that the Government have proposed and will undertake, the Government will endanger a fine organisation and a fine record. They will diminish job security and endanger the pension rights of the vast majority of the work force that has served the Crown so well in this and previous generations. They will, as has already happened, cause the destruction of a number of jobs. But, above all, they will diminish and therefore undermine the effectiveness of our armed forces. They will undermine the integrity of that organisation. Of this let there be no doubt. It is this Government, not some pacifist Left winger in the Labour party, who, by moving this statutory instrument and the others that go with it, are damaging Britain's security. One is entitled to ask, for what?
Dr. Alan Glyn: A great deal of criticism has been made, quite rightly, about pensions. The hon. Member for Eccles (Mr. Carter-Jones) mentioned that. But nobody has produced a solution that he believes is the right solution for the future of pension rights.
Mr. Ashdown: With great respect, we have constantly called for the kind of statement called for by the hon. Member for Kingston upon Hull, North (Mr. McNamara). Such a statement from the Government would do much to reassure the work force. In the last analysis, the key is arbitration. If the Minister will agree to go to arbitration, the matter can be solved in a way that will reassure many people. I can see no harm in that. It is certainly fairer and more honest.
Why are the Government taking this action, which will undoubtedly undermine the integrity of our defence forces?
Mrs. Anna McCurley: Why does the hon. Gentleman think that the integrity of our defences would be damaged? After all, if a state of emergency prevailed in this country, we would requisition and do whatever was necessary. [HON. MEMBERS: "Oh!"] The hon. Gentleman is talking absolute nonsense.
Mr. Ashdown: I hope that anyone thinking of buying the royal ordnance factories will take careful note of the hon. Lady's comments about requisitioning. If she will he patient for a moment, she will discover how the Government's action will undermine our defence forces.
Is the Government's motive to introduce greater competition? The answer to that question must be no because the factories and production facilities will be bought by firms like Vickers which are already in the market, so there will be less rather than more competition and there will he more domination by the larger private firms.
Mr. Lee: We have said time and again that the most likely, form of privatisation is the flotation of the whole Royal Ordnance plc.
Mr. Ashdown: The Minister says that that is the most likely, but he has been less than clear about it and he changed his mind several times in the debates in Committee on this. Is he now saying that it will definitely be privatised as a single organisation?
Mr. Lee: I have not changed my mind at all. As the many hon. Members present who were on that Standing Committee know, Ministers repeatedly made it clear that the most likely form of privatisation was the flotation of the ROFs as a whole. I hope that the hon. Gentleman, as a man of some integrity, will acknowledge that fact.
Mr. Ashdown: I shall acknowledge what the Minister has now said if he will give an undertaking that it will in fact happen. At present, it is merely conditional. He has said that it is the most likely outcome. Is he now making a clear, unequivocal statement that that is the way in which the flotation will take place?
Mr. Lee: No.
Mr. Ashdown: The Minister seeks to reassure the House, but in the last analysis he will give no clear undertaking about the way in which this great institution is to be carved up and hived off.
Is the Government's aim to ensure security of supply for our armed services? The answer to that is also no, as the hon. Member for Kingston upon Hull has shown. We know that 11,000 medium artillery shells for the British services are now to be manufactured abroad. [Interruption.] The Secretary of State for Employment laughs, but the Prime Minister herself admitted yesterday that those shells are to be produced not by the royal ordnance factories but by the Belgian armaments organisation PRB—a state-owned concern, incidentally —which was required to put in the cheapest possible quotation. The cheapest possible quote required it to use not — [Interruption.] The right hon. Member for Bridgwater (Mr. King) may well intervene from a sedentary position— let it be noted— because a royal ordnance factory in his own constituency would have produced the TNT or the RDX to fill the shells. But that is not what happened. Because the Government chose to adopt the cheapest option, the TNT has been purchased from the cheapest producer, Poland, which is a Warsaw Pact country. Next time it could be—and perhaps it will be — purchased from the Soviet Union or Romania because they are flooding the market with cheap TNT.
Is it not ludicrous that 11,000 medium artillery shells to be supplied to the British Army rely for their effectiveness upon a Warsaw pact explosive? The Prime Minister said yesterday that this was the fault of PRB, but that is not so. The Government have called for the cheapest supply, from whatever source. This meant that PRB had to go to the Warsaw pact for its supply. That is not surprising because the Government's policy is to encourage the cheapest possible quote. It will be music in Moscow's ears to hear that our capacity to supply our own ammunition has been diminished by this act and the Royal ordnance factory in Bridgwater has announced today that 140 of its skilled workers are to be made redundant. Our armaments industry and the service provided to our armed forces is therefore weaker.

1115
We are dependent not upon our in-house supplies but upon supplies from our potential enemies. Is it not ludicrous that we are about to spend £10 billion upon the purchase of the trident missile in an attempt to achieve nuclear independence from our NATO friends, while the result of this will be that we shall be dependent upon our potential enemies in the Warsaw pact for even the explosives to be used in the shells suppplied to our armed forces?
Mr. Lee: I had expected better of the hon. Gentleman. A £16,000 order for TNT indirectly went to Poland, because the order was given from Belgium. The shells do not have a war role; they have a training role. Can the hon. Gentleman explain how a £16,000 order that has gone elsewhere will result in the loss of about 150 jobs at Bridgwater?
Mr. Ashdown: The Under-Secretary of State asks a very good question. No doubt ROF Bridgwater has looked ahead and seen that it will be required to exist in precisely the same commercial climate as caused that order to be filled with TNT from Poland. Consequently it has reached the conlusion that it cannot survive at its present level and that therefore it will have to reduce its capacity and ability to meet orders of that kind.
Mr. John Golding: Would not the hon. Gentleman be on stronger ground, following the report of the Comptroller and Auditor General, if he said that the abolition of the preferred source policy of the Ministry of Defence and the introduction of a fully competitive environment has undermined ROF Bridgwater? That is the strength of the attack that can be made against the Government. The Secretary of State for Employment is here tonight because he is frightened stiff by what the Government have done to his constituency. He knows that it is that, not the single order, which is putting the fear of God into his electors in Bridgwater—because of the effect upon employment.
Mr. Ashdown: The hon. Gentleman has made the case very well, but all I am saying is that this single order is the harbinger of precisely that policy, the policy which has caused the situation in Bridgwater.
For that reason, it should be understood that this Government, by this act and others associated with it, are weakening the United Kingdom's defence capacity. What Bridgwater suffers today no doubt other ROFS will suffer in future. In consequence, the nation's security is further weakened.
I leave aside the swingeing criticisms made in the report. They are telling enough and no doubt the Under-Secretary will answer them when he replies. I shall also leave aside job losses—if that is what had to happen to make our defences stronger, so be it. But those jobs are sacrificed and others are placed in jeopardy, while workers are having their pensions and conditions placed in danger —not to make Britain stronger, but to diminish our security. That is the charge that we level at the Government—a charge on which they stand indicted by the events leading to the Polish TNT, the job losses in Bridgwater and the further job losses and insecurity that will arise from this order. That is why we shall vote against it tonight.
10.56 pm
Mr. Peter Pike: I was surprised to hear the Under-Secretary say that the most favoured method of disposal was a public flotation. In Committee a year ago we tabled an amendment that would have ensured that the assets had to be sold as an entity, but the Government were not prepared to accept that. The Under-Secretary might say that this is the favoured approach, but no one will believe that until it is in black and white. The Bill has now passed, but I reiterate that the Under-Secretary was not prepared to say that that was the method to be used; all he would say was that it was the most favoured method.
The future of pensions also caused great controversy in Committee last year. I am not in the least surprised that, one year later, that item has still not been resolved. Whether or not the Government like it, if they honoured their public commitment about no detriment to pensions, the cost would be more than they would realise from the sale of the assets.
In Committee last year the Under-Secretary outlined the Government's position. At the following sitting the Minister of State had to give his interpretation of what the Under-Secretary had said. If the Under-Secretary's words had been taken literally, it would have cost the Government a great deal of money. That is why they are not prepared to state their commitment clearly and firmly. It is right that the unions should pursue that point to obtain the safeguard to which they are entitled. They are entitled to full protection of pension rights earned in the past and the same conditions for the future.
Even if the Government met the more modest commitment with which they are now trying to get away, they would have to pay into the pension fund £240 million —yet the disposal of the assets will bring in little more than that. There will be no benefit to the country. In Committee last year we said time and again that on profitability, improvements in productivity, quality and the reliability of the ROFS over many years, there was no case for the industry to be privatised. Redundancies were announced almost as soon as the Act received its Royal Assent last year. There will be more redundancies because of the way that the Government intend to treat the ROFS.
I am aware of a situation in which the royal ordnance factories submitted a figure for doing a particular job. The Ministry of Defence told Huntley Engineering, which was willing to make the same product, the price at which the ROFS were prepared to make the product. Then, surprise, surprise, Huntley Engineering got the contract because it tendered at a lower price. If the Minister says that that is the proper way of conducting business and of guaranteeing the future for ROFs, it does not satisfy me.
I do not acccept the Government's case that this will introduce more competition. I believe that it was right to have a base of competition from the state-controlled side of the industry. Removal of the state side of the industry will not improve competition.
I believe that the Government have made a mistake in the legislation. I hope that they will not invite in private capital, but will continue to hold all the shares in the ROF parent company. I believe that that is the best way forward. It will allow the country to control what is an important part of our defence. It will be a tragedy if we allow this to go out of the public sector and into the private sector.
11.1 pm
Mr. John McWilliam: I was disappointed in the glancing reference in the Minister's speech to the fact that there would be some redundancies. There have been many hundreds of redundancies in my constituency and in the constituencies of many hon. Members merely to clean up the trading fund before it was wound up and went to the auditors. I believe that this was done deliberately. Hundreds of redundancies occurred, and this happened not only because the Government, in a cavalier manner, decided to give a shell order to the Belgians, who happen to use some eastern European TNT. I do not know how many zlotys or roubles that cost the Government, nor do I care particularly about the protestations of Conservative Members that it was just a little bit. The Government resisted the amendments that we tabled in Committee to stop the Politburo using a front organisation to take over the ordnance factories. The Government deliberately blocked those amendments, and there is now nothing in law to stop the Politburo acquiring the ROFS.
Mr. Lee: This seems to be an evening of exaggeration by the Opposition. We made it clear in earlier proceedings that foreign ownership would not be allowed to exceed in total 15 per cent. of the share capital, and a special share will be issued to the Secretary of State which will enable him to block any possible foreign ownership of the ROFS.
Mr. McWilliam: While I am grateful to the Minister for raising that point, why then did he block the amendment that we tabled in Committee on the basis of a rather weak provision that could be subverted by a Minister who might not be as patriotic as the present Minister is? He has the power to ignore it or to use his golden share. Our amendment said that there had to be a limit on foreign shares, and it was resisted by the Government. It is not good enough for Conservative Members to mutter about this.
Sir Antony Buck: I did not have the privilege of serving on the Standing Committee,. The Minister seemed to answer the point in full when he said that there could not be more than a 15 per cent. share under foreign control. The hon. Gentleman is an internationalist and should appreciate that that means that there will be British control all the way through.
Mr. McWilliam: Had the hon. and learned Gentleman been a member of the Committee, he would have heard the case that we adduced on this issue at that stage and the weak reply of the Government, who, because of their majority, carried the day.
The way in which the Minister dismissed the question of redundancies did not deal with the circumstances at Birtley and the FH70 ammunition order. That order has been given to Rheinmetall, some employees of which are awaiting trial for sending ammunition to Argentina with end user certificates for Spain—ammunition that was used against our forces in the Falklands.
Mr. Atkins: The hon. Gentleman should know what he is talking about. I say that because in the past he has given evidence that he knows what he is talking about. He should know that the FH70 deal is a tripartite deal in respect of which we did more than our share of the work, and, according to the terms of that contract, the work share had to return to Germany and Italy. He distorts the matter
1118
by suggesting that a deal has been struck by which something has been given to the Germans at the expense of our workers, and he knows it.
Mr. McWilliam: The hon. Gentleman does not deny that the order went to Rheinmetall or that employees of that organisation are awaiting trial for sending arms with end user certificates to Argentina, South Africa and Chile. Nor are we getting our fair share of the Tornado, but I will not deal with that now. In the balance of expenditure in tripartite deals between ourselves, Germany and Italy, including the FH70, the Tornado and all the other systems, we are worse off than we should be.
Mr. Atkins: That is not true.
Mr. McWilliam: The hon. Member for South Ribble (Mr. Atkins) can protest all he likes, but the figures, as stated in written answers, bear out what I say.
Mr. Roland Boyes: A number of my constituents work in the Birtley factory, which is in my hon. Friend's constituency, and we appreciate the efforts that he has made to protect the jobs of the employees there. Does he agree that one of the most ludicrous aspects of this whole affair is the fact that the pension rights of those who will continue to work at the factory have not been safeguarded before this stage and, therefore, before the order will come into operation?
The Comptroller and Auditor General's report on this matter is based on a series of assumptions. For example, the report refers in paragraph 3.15 to what might happen "should the estimate" and "should the economic assumptions" prove correct, in which case, it says, the exact sum "will be decided later." Is my hon. Friend as concerned as I am over the fact that many people who have given valuable service to the nation and the royal ordnance factories will find themselves disadvantaged by the Government's activities tonight?
Mr. McWilliam: I am grateful for my hon. Friend's intervention. Many people who work at Birtley live in his constituency. Clearly they are as concerned about their pensions as they are about the loss of their jobs. The constituency of my hon. Friend the Member for Durham, North (Mr. Radice) is equally affected by the same factory. I cannot understand why the Government have not agreed to go to arbitration. We argued the point for quite a long time in Committee. The Government were not prepared to accept the weight of the argument that we put. They are now faced with the reality of the reduced pensions that people will get as against what they are entitled to.
It is inexplicable that the Minister will not come to the Dispatch Box and say that he agrees to arbitration. Why will he not do so? The staff would like him to do so. We would like him to do so and no doubt many of his hon. Friends who have royal ordnance factories in their constituencies would like him to do so. But he will not do it because he is constrained by the Treasury. Indeed, he is so constrained that he has decided to reduce the pension entitlement of people who work in the royal ordnance factories.
The Minister said that the auditor will close the accounts. A matter of great concern to the House and to the royal ordnance factories arises from the accounts. I have raised in questions to the Minister the new information technology computer system that is to be

1119
installed in the royal ordnance factories. Before they were privatised I asked the Minister why they had advertised for a systems controller whose expertise was in system network architecture and IBM when the system in the factories was ICL. The fact that Mr. Fred Clarke, the present director of the royal ordnance factories, is ex-IBM must lead me to conclude that something is wrong somewhere. It should have been advertised properly, but it was not. That should not have happened while the royal ordnance factories were still part of the industrial Civil Service. The excuse that they were subsequently to be privatised is not enough for me. It was wrong that the whole system should be changed. I want to be sure that when the auditor produces the final accounts he also produces the accounting to explain why it was reasonable to change a whole computer system because of the uncertain future of the royal ordnance factories.
Mr. Norman Buchan: Is it not the case that privatisation adds to unemployment in constituencies such as mine, where the Bishopton factory is? Unemployment is already high because of the closure of Linwood and the collapse of the textile industry. Important as the profound effect upon the telecommunications aspect is, redundancy—
Mr. Deputy Speaker: Order. The hon. Gentleman must not make a speech.
Mr. Buchan: There are semicolons towards the end of the sentence. The effect of the unemployment does not seem to have been realised by the Conservative party in Scotland.
Mr. McWilliam: I am grateful to my hon. Friend for his intervention. Bishopton has employees from his constituency and from the constituency of the hon. Member for Renfrew, West and Inverclyde (Mrs. McCurley). They have suffered job losses because of the FH70 order among other things. I have explained why I consider the FH70 order to be unnecessary.
Mr. Boyes: The excellent contributions from Opposition Members are demonstrating more than adequately that the debate is about jobs, pension rights, national security, Britain's future and buying TNT from other countries. Is my hon. Friend as curious as I am to know why the Government have stopped their Back Benchers from participating in the debate? Has he any theories about that?
Mr. McWilliam: I have my views, but I leave my colleagues to draw their own conclusions. I am still concerned that Mr. Fred Clarke, ex-deputy managing director of IBM, United Kingdom division and managing director of the royal ordnance factories, has run an IBM system into the factories. That needs investigating. I have drawn the matter to the Minister's attention and he has done nothing about it. That will do nothing to solve the unnecessary redundancy problems which Ministers are causing. The introduction of the IBM system needs investigating and we need an answer very soon if not tonight. If the Minister does not deal with the matter tonight, the Public Accounts Committee should.
11.17 pm
Mr. Bruce George: It is rather unfortunate that at this important stage in the history of the
1120
ordnance factories, and having consigned with a lot of noise, public transport to the free enterprise rubbish heap, they are not being given the benefit of one speech from a Conservative Back Bencher before they are packaged ready for sale to the private sector. We have only whining and screaming from Conservative Members in response to serious argument. Perhaps the comments that have been made by my hon. Friends in the past few minutes will sting the Trappist monks on the Government Benches into some form of speechifying. However, those of us who were members of the Committee which considered the Ordnance Factories and Military Services Bill feel that we have been here before. Throughout the 25 sittings in Committee there was barely a speech from Conservative Members.
Mr. Golding: Does my hon. Friend realise that his remarks have provoked a Trappist nun on the Conservative Benches, the hon. Member for Renfrew, West and Inverclyde (Mrs. McCurley) to seek the advice of the Minister? Perhaps the hon. Lady wants to know what one point she can make in defence of the order.
Mr. Deputy Speaker: Order. I remind the House that the debate will finish at 11.43 pm and that we are hoping to hear the Minister's reply.
Mr. George: I am saddened by the air of jocularity that is prevailing in what should be an austere debate. As the hon. Member for Yeovil (Mr. Ashdown) has said, we are witnessing the passing into limbo of an organisation that has served the state for hundreds of years. For those of us who were on the Committee—
Mr. Carter-Jones rose —
Mr. George: I would rather carry on because, despite the humour from the Tory Benches, I have some serious points to make.
Those of us who were on the Committee a year ago were conscious of the fact that the Bill was ill-thought-out, and that the Government were making it up as they were going along. In the Defence Committee hearing on the White Paper a few weeks ago, the Secretary of State said—and this is almost a management principle of the Government—that one does not make a decision until one has to. That is the mind of a man who cannot see a parapet without ducking behind it, and this has been translated into a management principle. One would have thought that, 18 months after the Bill was introduced, and a number of years since the perverse idea was first concocted, the Government would have had to make decisions. One can understand how a uniquely inept Government might not have made up their mind when the Bill was passing through Parliament, despite the long Committee stage, but, 18 months after the end of the Committee, many questions need to be answered.
One would have hoped that at this late stage some of the questions put time and again would be answered. They are questions on pension rights and on how the company will be sold off. The Minister has told us that it may be possible that it will be sold off as a single entity, but by now we should know for sure.
The Government are honour bound to their former employees and the tax-paying public to give some answers. I am not making frivolous points. I am not joining those who have condemned the use of TNT. I think that it is a brilliant idea, because our troops will be training

1121
under the realistic conditions of having Warsaw pact shells exploding over their heads. I am surprised that no Tory Member has brought up that argument; it has been left to me. However, my hon. Friends may deprecate my attempts to get the Government off the hook.
The hon. Member for Yeovil had to fulfil an important engagement elsewhere and explained that that is why he would not be here now. He asked why the Government were so intent on selling off the ordnance factories. He gave some ideas. Partly it is to do with their ideology that if an enterprise is in the public sector it must be sold off as quickly as possible, however efficient it is. This knee-jerk response to public enterprise is hardly laudable, and one day the boot may be on the other foot.
Despite this response, the Government are privatising the ROFS for another reason—and this will not be music to the ears of Tory Members. The Minister knows that he and his colleagues have been given an impossible task by the Prime Minister—to maintain existing defence commitments, and even increase them by such things as Fortress Falklands and a small rapid deployment force, when the Government know that resources to meet those commitments will diminish.
When Conservative Members face the electors at the next election, they will be in a more invidious position than Labour Members—although we have some problems on the defence front, and deservedly so—because the Conservative party is ostensibly the party of defence. Ten years ago, in an article in the "NATO Journal" the hon. Member for Aldershot (Mr. Critchley), who is not present—he is probably holding a press conference—said:
"The Tory party shouts a lot about defence. It does not think much about defence."
The silence from Conservative Members is testimony to the 10 years since that article was written. Those words are as valid today as they were in 1976.
This is the Government's dilemma. It is not simply a matter of the Government rewarding their mates in the City or showing an ideological knee-jerk. This is an impossible attempt to square the circle that the Government created for themselves—the problem of how to increase commitments with diminished resources. Any Secretary of State who can do that will be deified, but there is no likelihood of the present Secretary of State being deified. If the Government cannot increase resources to meet increasing commitments, the only way out is for them to cut commitments surreptitiously, while not admitting it—for example, by reducing the fuel and ammunition available. The Government try, through a fictional concept of privatisation, to squeeze greater efficiency out of the system to pay for the commitments which they are unable to meet. Therefore, they resort to 19th century philosophies of industry, harking back to the Victorian age—ostensibly one of great efficiency—and trying to squeeze efficiency out of the system through competition to meet their commitments. The Government will not be able to achieve that aim, because not only will the free market not be more efficient than the public sector but in future it will be much less efficient.
I can put the hon. Member for Renfrew, West and Inverclyde (Mrs. McCurley) wise on this point: the free market will lead to a number of companies going bankrupt. The defence sector cannot be treated in the same
1122
way as the manufacture of washing powder or other consumer goods. Defence is too important to be left solely to the free market.
We cannot create 1914 or 1939 conditions, build up the necessary industries almost from scratch and hope that the Channel and the slow build-up of hostilities will allow us to achieve our objective. In a conflict involving this nation's future, we will not be able to recreate those companies which will soon no longer exist. We will be in desperate straits if we think that Britain can go to the Soviet Union or Belgium or to a country that decided not to participate in a conflict in which we are engaged.
The order may appear to be technical and unimportant to the outsider. The Under-Secretary of State said that this was a technical matter and we should not rake over past arguments. He does not want to hear those arguments that were adduced in the past.
I note that the hon. Member for Yeovil has returned from his engagement. He willingly—I was going to say "manfully", but I do not want to be accused of sexism—sat through the proceedings of the Standing Committee and made a great contribution. It is unfair for hon. Members to criticise the hon. Gentleman's brief absence from debate.
The Government will be in a profoundly embarrassing position. They rely on a free market which will fail to deliver the goods.
Hon. Members who think that they have done a wonderful day's work, having passed the Transport Bill and, after passing the order, having kicked into touch an important manufacturing entity, will rue this evening. The order might not seem momentous, but it is an example of the inevitable transition of a public enterprise that has served the country well into the private sector, where many of the companies will wither and die in the face of the competition to which they will be exposed.
11.30 pm
Mr. John Golding: My speech will be brief because of the length of Conservative Members' speeches. Is it not a disgrace that, when so many jobs, pensions and livelihoods are at stake, Conservative Members who represent ordnance workers do nothing to put the point of view of those workers? Does that not show once again that workers need trade unionists in the House to put their case in Parliament?
Pensions are one of the most important matters that affect workers in ordnance factories. They were for many years paid worse than workers in comparable jobs in outside industries. They suffered low pay because they believed that, serving the state, they had security of employment and secure pensions. This legislation has threatened both. Such people will have worked for low rates of pay and, having served the state well, be privatised and find that the Government are too mean to underwrite and guarantee their pensions.
I do not agree with those of my hon. Friends who say that the Government should go to arbitration. The Government should give way now. Ordnance factory workers are asking for what the Government were prepared to give the workers I represent in British Telecom—a guarantee that existing staff will have index-linked pensions. They have said that they cannot give such a guarantee to ROF workers. Where is the justice in that?

1123
The Minister should get to his feet and tell the country, "I have at last responded to my conscience and I am now prepared to underwrite the pensions of ROF workers."
11.33 pm
Mr. Lee: The House has had many debates on privatisation, but I do not think that I have heard so many gross exaggerations and near-untruths as today. Opposition Members have given an appalling list of exaggerations. I shall attempt to deal with some of them.
The hon. Member for Kingston upon Hull, North (Mr. McNamara) asked what access the Comptroller and Auditor General would have to the books of Royal Ordnance plc. Access will be precisely the same as for any nationalised industry, including other Government-owned companies such as British Leyland and Rolls-Royce. The company's accounts will be published and the Comptroller and Auditor General will have access to all the information which the Ministry of Defence has for its monitoring of the company.
Mr. McNamara: Why then did the Comptroller and Auditor General find it necessary to point out in his report that he would not be able at any time to make observations about the Government's decisions to sell and the terms and conditions of that sale until after the sale had taken place?
Mr. Lee: That is not the hon. Gentleman's original point. His point was that the Comptroller and Auditor General would not have access and that we were protecting Royal Ordnance plc artificially. That is not so. The position is the same as for nationalised industries.
The hon. Member for Burnley (Mr. Pike) raised questions about Huntley Engineering, and made a particular allegation. If he would care to write to me about it, I shall certainly have it investigated. I am not aware of that particular case. I confess that I find such an allegation surprising, as on at least two major projects Huntley Engineering and Royal Ordnance plc have forged extremely good working relationships to their mutual benefit, each contributing their particular and separate expertise.
The hon. Member for Eccles (Mr. Carter-Jones), who is not present, talked specifically about secrets at ROF Patricroft. I did not understand what he was getting at, nor did my hon. and learned Friend the Member for Colchester, North (Sir A. Buck). Obviously, the ROFs have commercial and national secrets in areas of advanced technology, but the same is true of the privatised British Aerospace, Plessey and a range of our defence contractors. I do not see any logic in the hon. Gentleman's point.
The hon. Member for Blaydon (Mr. McWilliam) made many allegations, the most serious and personal of which may have been of an impropriety by Fred Clarke, the chairman—not the managing director—of Royal Ordnance plc. I am not sure whether he would be willing to repeat those allegations and insinuations outside the House. The hon. Member for Greenock and Port Glasgow (Dr. Godman), who has a substantial IBM plant in his constituency, did not intervene to defend that company.
Dr. Norman A. Godman: I suspect that the hon. Gentleman was persuaded to bring me into the debate by his hon. Friend the Member for Renfrew, West and Inverclyde (Mrs.
1124
McCurley). He should have a care with such advice. The hon. Lady put down an early-day motion congratulating Trafalgar House on promoting employment prospects for Scott Lithgow on precisely the day when Scott Lithgow announced 615 redundancies.
Regarding the Minister's comments, I confirm that IBM plays a major role in my constituency. I hope that my constituents who are employed at ROF Bishopston can have the same confidence in their future as IBM employees. The Minister should underwrite the pension rights of my constituents.
Mr. Lee: The point was not answered, but that was an interesting intervention.
Mr. McWilliam: The Minister challenged me to repeat outside the House the allegation I made. I draw his attention to the fact that it has been well trailed in the computer press outside the House, and not challenged by the people involved. I am at a loss to know why he is not aware of the matter.
Mr. Lee: What the hon. Gentleman said tonight is on the record.
Mr. Sedgemore: What does that mean?
Mr. Lee: It means precisely what it says.
Recently, and as a result of a competition which included the royal ordnance factory at Bridgwater, an order for 11,000 25-pound shells for training purposes was placed with the Belgian firm PRB. I should stress that there is no war role for the ammunition; therefore, it makes sense to opt for the cheapest source of supply. The shell is filled with explosive TNT, for which there are many sources in Europe, and in this case it is conceded that PRB obtained the supply from Poland. However, of the total cost of the shell, only 3 per cent. is accounted for by TNT. On a total contract value of less than £750,000, the value of TNT was about £16,000. To put that in perspective, it represents only a small part—perhaps 3 per cent. —of Bridgwater's current output of that basic explosive, and represents less than one man's job for one year. To imply that that order caused about 150 redundancies is a wild exaggeration. My right hon. Friend the Secretary of State for Employment, the hon. Member for Bridgwater, has been watching the position closely, and is just as worried as the hon. Member for Yeovil (Mr. Ashdown), if not more so. But my right hon. Friend understands the reality of the position.
Mr. Ashdown: Will the Minister give the House a clear undertaking that this error—or whatever it was—to give the supply of the British Army's TNT to the Warsaw pact will not occur again? If he cannot give that undertaking, we must assume that it could and will occur again, and that this is the model to be followed in the future. Therefore, our capacity to produce TNT for our services will be diminished. Will he give an undertaking that the Warsaw pact will never again supply British forces with explosives for their weapons?
Mr. Lee: Again, the hon. Gentleman is grossly exaggerating. I will not and cannot give that specific assurance.
Bridgwater is expected to be the production centre for rocket propellants to power LAW 80, Skyflash and ALARM, and there are also prospects of collaborative work which the Ministry of Defence is helping considerably.

1125
During the passage of the Ordnance Factories and Military Services Act 1984, much time was spent discussing the future pension provisions of many ROF and Ministry of Defence personnel transferred to the new Royal Ordnance plc. The transferees could not remain in the Civil Service pension scheme, because they would no longer be civil servants, but we gave a commitment that the new arrangements would not be detrimental to their interests. An independent firm of consulting actuaries was brought in to advise, and an index-linked scheme was drawn up. We accepted that the employers' contributions ceiling should be set at such a level as to cover the more pessimistic economic assumptions identified by the actuaries. We also accepted that there was—
It being one and a half hours after the commencement of proceedings on the motion, MR. DEPUTY SPEAKER put the Question pursuant to Standing Order No. 3 (Exempted business).
The House divided: Ayes 210, Noes 143

Division No. 221]

[10 pm

AYES

Aitken, Jonathan

Hayhoe, Barney

Alexander, Richard

Hayward, Robert

Amess, David

Henderson, Barry

Ancram, Michael

Hickmet, Richard

Arnold, Tom

Hicks, Robert

Atkins, Robert (South Ribble)

Hind, Kenneth

Beaumont-Dark, Anthony

Hirst, Michael

Bellingham, Henry

Hogg, Hon Douglas (Gr'th'm)

Benyon, William

Holland, Sir Philip (Gedling)

Best, Keith

Holt, Richard

Body, Richard

Hordern, Peter

Boscawen, Hon Robert

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

Bowden, Gerald (Dulwich)

Howarth, Gerald (Cannock)

Brandon-Bravo, Martin

Howell, Ralph (N Norfolk)

Brooke, Hon Peter

Hubbard-Miles, Peter

Brown, M. (Brigg & Cl'thpes)

Hunt, David (Wirral)

Buchanan-Smith, Rt Hon A.

Irving, Charles

Buck, Sir Antony

Jackson, Robert

Burt, Alistair

Jenkin, Rt Hon Patrick

Butcher, John

Johnson Smith, Sir Geoffrey

Carlisle, Rt Hon M. (Wton S)

Jones, Gwilym (Cardiff N)

Carttiss, Michael

Jones, Robert (W Herts)

Cash, William

Joseph, Rt Hon Sir Keith

Chope, Christopher

Kellett-Bowman, Mrs Elaine

Clark, Sir W. (Croydon S)

Kershaw, Sir Anthony

Clarke, Rt Hon K. (Rushcliffe)

Key, Robert

Clegg, Sir Walter

King, Roger (B'ham N'field)

Coombs, Simon

King, Rt Hon Tom

Cope, John

Knight, Gregory (Derby N)

Crouch, David

Knowles, Michael

Dicks, Terry

Knox, David

Dorrell, Stephen

Lamont, Norman

Douglas-Hamilton, Lord J.

Lang, Ian

Dunn, Robert

Latham, Michael

Durant, Tony

Lawler, Geoffrey

Dykes, Hugh

Lawrence, Ivan

Fallon, Michael

Lee, John (Pendle)

Farr, Sir John

Leigh, Edward (Gainsbor'gh)

Favell, Anthony

Lester, Jim

Fenner, Mrs Peggy

Lewis, Sir Kenneth (Stamf'd)

Fletcher, Alexander

Lightbown, David

Fookes, Miss Janet

Lilley, Peter

Forsyth, Michael (Stirling)

Lloyd, Peter, (Fareham)

Forth, Eric

Lord, Michael

Fox, Marcus

Luce, Richard

Franks, Cecil

Lyell, Nicholas

Fraser, Peter (Angus East)

McCurley, Mrs Anna

Freeman, Roger

Macfarlane, Neil

Gale, Roger

MacKay, John (Argyll & Bute)

Gardner, Sir Edward (Fylde)

Maclean, David John

Garel-Jones, Tristan

Madel, David

Glyn, Dr Alan

Malins, Humfrey

Goodlad, Alastair

Malone, Gerald

Gow, Ian

Maples, John

Gower, Sir Raymond

Marland, Paul

Greenway, Harry

Marshall, Michael (Arundel)

Gregory, Conal

Mather, Carol

Griffiths, Peter (Portsm'th N)

Maude, Hon Francis

Grist, Ian

Mawhinney, Dr Brian

Grylls, Michael

Maxwell-Hyslop, Robin

Gummer, John Selwyn

Mayhew, Sir Patrick

Hamilton, Hon A. (Epsom)

Mellor, David

Hamilton, Neil (Tatton)

Merchant, Piers

Hampson, Dr Keith

Meyer, Sir Anthony

Hannam, John

Miller, Hal (B'grove)

Harris, David

Mills, lain (Mariden)

Harvey, Robert

Mills, Sir Peter (West Devon)

Haselhurst, Alan

Mitchell, David (NW Hants)

Havers, Rt Hon Sir Michael

Moate, Roger

Hawksley, Warren

Molyneaux, Rt Hon James

Hayes, J.

Monro, Sir Hector

Montgomery, Sir Fergus

Speller, Tony

Moore, John

Spencer, Derek

Morrison, Hon C. (Devizes)

Spicer, Jim (W Dorset)

Morrison, Hon P. (Chester)

Spicer, Michael (S Worcs)

Moynihan, Hon C.

Squire, Robin

Murphy, Christopher

Steen, Anthony

Neale, Gerrard

Stevens, Lewis (Nuneaton)

Needham, Richard

Stevens, Martin (Fulham)

Nelson, Anthony

Stewart, Allan (Eastwood)

Neubert, Michael

Stradling Thomas, J.

Nicholls, Patrick

Sumberg, David

Norris, Steven

Taylor, John (Solihull)

Oppenheim, Phillip

Taylor, Teddy (S'end E)

Oppenheim, Rt Hon Mrs S.

Tebbit, Rt Hon Norman

Osborn, Sir John

Temple-Morris, Peter

Page, Richard (Herts SW)

Thomas, Rt Hon Peter

Parris, Matthew

Thompson, Donald (Calder V)

Pattie, Geoffrey

Thompson, Patrick (N'ich N)

Pawsey, James

Thornton, Malcolm

Peacock, Mrs Elizabeth

Thurnham, Peter

Pollock, Alexander

Townend, John (Bridlington)

Porter, Barry

Townsend, Cyril D. (B'heath)

Portillo, Michael

Tracey, Richard

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

Twinn, Dr Ian

Powell, William (Corby)

van Straubenzee, SirW.

Powley, John

Vaughan, Sir Gerard

Prentice, Rt Hon Reg

Viggers, Peter

Proctor, K. Harvey

Waddington, David

Rathbone, Tim

Wakeham, Rt Hon John

Renton, Tim

Waldegrave, Hon William

Rhodes James, Robert

Walden, George

Rhys Williams, Sir Brandon

Walker, Bill (T'side N)

Ridley, Rt Hon Nicholas

Wall, Sir Patrick

Ridsdale, Sir Julian

Waller, Gary

Rifkind, Malcolm

Ward, John

Robinson, Mark (N'port W)

Wardle, C. (Bexhill)

Roe, Mrs Marion

Watson, John

Rossi, Sir Hugh

Watts, John

Rowe, Andrew

Wells, Bowen (Hertford)

Rumbold, Mrs Angela

Wheeler, John

Ryder, Richard

Whitfield, John

Sackville, Hon Thomas

Whitney, Raymond

Sainsbury, Hon Timothy

Wiggin, Jerry

Sayeed, Jonathan

Winterton, Mrs Ann

Shaw, Giles (Pudsey)

Winterton, Nicholas

Shaw, Sir Michael (Scarb')

Wolfson, Mark

Shelton, William (Streatham)

Wood, Timothy

Shepherd, Colin (Hereford)

Yeo, Tim

Shepherd, Richard (Aldridge)

Young, Sir George (Acton)

Silvester, Fred

Younger, Rt Hon George

Sims, Roger

Skeet, T. H. H.

Tellers for the Ayes:

Soames, Hon Nicholas

Mr. John Major and

Speed, Keith

Mr. Mark Lennox-Boyd.

NOES

Archer, Rt Hon Peter

Callaghan, Jim (Heyw'd & M)

Ashdown, Paddy

Campbell, Ian

Ashley, Rt Hon Jack

Campbell-Savours, Dale

Ashton, Joe

Canavan, Dennis

Atkinson, N. (Tottenham)

Carlile, Alexander (Montg'y)

Bagier, Gordon A. T.

Carter-Jones, Lewis

Beckett, Mrs Margaret

Cartwright, John

Beith, A. J.

Clark, Dr David (S Shields)

Bell, Stuart

Clarke, Thomas

Benn, Tony

Clay, Robert

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

Clwyd, Mrs Ann

Bermingham, Gerald

Cocks, Rt Hon M. (Bristol S.)

Bidwell, Sydney

Cohen, Harry

Blair, Anthony

Concannon, Rt Hon J. D.

Boyes, Roland

Cook, Frank (Stockton North)

Bray, Dr Jeremy

Cook, Robin F. (Livingston)

Brown, Gordon (D'f'mline E)

Corbett, Robin

Brown, Hugh D. (Provan)

Corbyn, Jeremy

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

Craigen, J. M.

Brown, Ron (E'burgh, Leith)

Crowther, Stan

Bruce, Malcolm

Cunningham, Dr John

Buchan, Norman

Davies, Rt Hon Denzil (L'lli)

Caborn, Richard

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

Callaghan, Rt Hon J.

Deakins, Eric

Dixorr Donald

Madden, Max

Dobson, Frank

Marek, Dr John

Dormand, Jack

Marshall, David (Shettleston)

Dubs, Alfred

Martin, Michael

Duffy, A. E. P.

Maynard, Miss Joan

Dunwoody, Hon Mrs G.

Meadowcroft, Michael

Eadie, Alex

Michie, William

Eastham, Ken

Mikardo, Ian

Ellis, Raymond

Millan, Rt Hon Bruce

Evans, John (St. Helens N)

Mitchell, Austin (G't Grimsby)

Fatchett, Derek

Morris, Rt Hon A. (W'shawe)

Field, Frank (Birkenhead)

Morris, Rt Hon J. (Aberavon)

Fields, T. (L'pool Broad Gn)

Nellist, David

Fisher, Mark

O'Brien, William

Flannery, Martin

O'Neill, Martin

Foot, Rt Hon Michael

Orme, Rt Hon Stanley

Forrester, John

Owen, Rt Hon Dr David

Foster, Derek

Park, George

Foulkes, George

Patchett, Terry

Fraser, J. (Norwood)

Pavitt, Laurie

Freeson, Rt Hon Reginald

Penhaligon, David

Freud, Clement

Pike, Peter

Fry, Peter

Prescott, John

George, Bruce

Radice, Giles

Gilbert, Rt Hon Dr John

Randall, Stuart

Godman, Dr Norman

Redmond, M.

Golding, John

Rees, Rt Hon M. (Leeds S)

Gould, Bryan

Richardson, Ms Jo

Gourlay, Harry

Roberts, Ernest (Hackney N)

Hamilton, W. W, (Central Fife)

Robertson, George

Hancock, Mr. Michael

Rooker, J. W.

Harmaa Ms Harriet

Ross, Stephen (Isle of Wight)

Harrison, Rt Hon Walter

Rowlands, Ted

Healey, Rt Hon Denis

Sedgemore, Brian

Heffer, Eric S.

Sheerman, Barry

Hogg, N. (C'nauld & Kilsyth)

Shore, Rt Hon Peter

Home Robertson, John

Short, Ms Clare (Ladywood)

Howells, Geraint

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

Hoyle, Douglas

Silkin, Rt Hon J.

Hughes, Dr. Mark (Durham)

Skinner, Dennis

Hughes, Robert (Aberdeen N)

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

Hughes, Roy (Newport East)

Soley, Clive

Hughes, Sean (Knowsley S)

Steel, Rt Hon David

Hughes, Simon (Southwark)

Stewart, Rt Hon D. (W Isles)

Janner, Hon Greville

Stott, Roger

John, Brynmor

Strang, Gavin

Jones, Barry (Alyn & Deeside)

Thompson, J. (Wansbeck)

Kirkwood, Archy

Thome, Stan (Preston)

Lamond, James

Tinn, James

Leadbitter, Ted

Torney, Tom

Leighton, Ronald

Wainwright, R.

Lewis, Ron (Carlisle)

Wallace, James

Lewis, Terence (Worsley)

Wareing, Robert

Litherland, Robert

Welsh, Michael

Lloyd, Tony (Stretford)

White, James

Loyden, Edward

Williams, Rt Hon A.

McCartney, Hugh

Wilson, Gordon

McDonald, Dr Oonagh

Winnick, David

McKay, Allen (Penistone)

Wrigglesworth, Ian

McKelvey, William

McNamara, Kevin

Tellers for the Noes:

McTaggart, Robert

Mr. Frank Haynes and

McWilliam, John

Dr. Roger Thomas.

Division No. 222]

[11.43 pm

AYES

Alexander, Richard

Harris, David

Amess, David

Haselhurst, Alan

Ancram, Michael

Havers, Rt Hon Sir Michael

Atkins, Robert (South Ribble)

Hawksley, Warren

Beaumont-Dark, Anthony

Hayes, J.

Bellingham, Henry

Hayward, Robert

Benyon, William

Henderson, Barry

Best, Keith

Hickmet, Richard

Boscawen, Hon Robert

Hind, Kenneth

Bowden, Gerald (Dulwich)

Hirst, Michael

Brandon-Bravo, Martin

Hogg, Hon Douglas (Gr'th'm)

Brooke, Hon Peter

Holland, Sir Philip (Gedling)

Brown, M. (Brigg & Cl'thpes)

Holt, Richard

Buck, Sir Antony

Hordern, Peter

Burt, Alistair

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

Butcher, John

Howarth, Gerald (Cannock)

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

Hubbard-Miles, Peter

Carttiss, Michael

Hunt, David (Wirral)

Cash, William

Hunt, John (Ravensbourne)

Chope, Christopher

Jackson, Robert

Clark, Sir W. (Croydon S)

Johnson Smith, Sir Geoffrey

Clegg, Sir Walter

Jones, Gwilym (Cardiff N)

Coombs, Simon

Jones, Robert (W Herts)

Cope, John

Kershaw, Sir Anthony

Crouch, David

Key, Robert

Dicks, Terry

King, Roger (B'ham N'field)

Dorrell, Stephen

King, Rt Hon Tom

Douglas-Hamilton, Lord J.

Knight, Gregory (Derby N)

Dunn, Robert

Knowles, Michael

Durant, Tony

Knox, David

Dykes, Hugh

Lamont, Norman

Fallon, Michael

Latham, Michael

Farr, Sir John

Lawler, Geoffrey

Favell, Anthony

Lawrence, Ivan

Fenner, Mrs Peggy

Lee, John (Pendle)

Fletcher, Alexander

Leigh, Edward (Gainsbor'gh)

Forsyth, Michael (Stirling)

Lennox-Boyd, Hon Mark

Forth, Eric

Lester, Jim

Fox, Marcus

Lewis, Sir Kenneth (Stamf'd)

Franks, Cecil

Lightbown, David

Fraser, Peter (Angus East)

Lilley, Peter

Freeman, Roger

Lloyd, Peter, (Fareham)

Fry, Peter

Lord, Michael

Gale, Roger

Luce, Richard

Gardner, Sir Edward (Fylde)

Lyell, Nicholas

Garel-Jones, Tristan

McCurley, Mrs Anna

Glyn, Dr Alan

Macfarlane, Neil

Goodlad, Alastair

MacKay, John (Argyll & Bute)

Gow, Ian

Maclean, David John

Greenway, Harry

Major, John

Gregory, Conal

Malins, Humfrey

Griffiths, Peter (Portsm'th N)

Malone, Gerald

Hamilton, Hon A. (Epsom)

Maples, John

Hannam, John

Marland, Paul

Mates, Michael

Shepherd, Colin (Hereford)

Mather, Carol

Silvester, Fred

Maude, Hon Francis

Sims, Roger

Mawhinney, Dr Brian

Skeet, T. H. H.

Maxwell-Hyslop, Robin

Soames, Hon Nicholas

Mayhew, Sir Patrick

Speed, Keith

Mellor, David

Spencer, Derek

Merchant, Piers

Spicer, Jim (W Dorset)

Meyer, Sir Anthony

Squire, Robin

Miller, Hal (B'grove)

Stevens, Lewis (Nuneaton)

Mills, lain (Meriden)

Stevens, Martin (Fulham)

Mitchell, David (NW Hants)

Stewart, Allan (Eastwood)

Moate, Roger

Stradling Thomas, J.

Montgomery, Sir Fergus

Sumberg, David

Moore, John

Taylor, John (Solihull)

Morrison, Hon C. (Devizes)

Temple-Morris, Peter

Morrison, Hon P. (Chester)

Thomas, Rt Hon Peter

Moynihan, Hon C.

Thompson, Donald (Calder V)

Murphy, Christopher

Thompson, Patrick (N'ich N)

Neale, Gerrard

Thornton, Malcolm

Needham, Richard

Thurnham, Peter

Nelson, Anthony

Townend, John (Bridlington)

Nicholls, Patrick

Townsend, Cyril D (B'heath)

Norris, Steven

Tracey, Richard

Oppenheim, Phillip

Twinn, Dr Ian

Osborn, Sir John

van Straubenzee, Sir W.

Page, Richard (Herts SW)

Vaughan, Sir Gerard

Parris, Matthew

Viggers, Peter

Pattie, Geoffrey

Waddington, David

Pawsey, James

Wakeham, Rt Hon John

Pollock, Alexander

Waldegrave, Hon William

Porter, Barry

Walden, George

Portillo, Michael

Walker, Bill (T'side N)

Powell, William (Corby)

Wall, Sir Patrick

Powley, John

Waller, Gary

Prentice, Rt Hon Reg

Ward, John

Proctor, K. Harvey

Wardle, C. (Bexhill)

Rathbone, Tim

Watson, John

Renton, Tim

Watts, John

Rhys Williams, Sir Brandon

Wells, Bowen (Hertford)

Ridsdale, Sir Julian

Wheeler, John

Rifkind, Malcolm

Whitfield, John

Roe, Mrs Marion

Winterton, Mrs Ann

Rossi, Sir Hugh

Winterton, Nicholas

Rowe, Andrew

Wolfson, Mark

Rumbold, Mrs Angela

Wood, Timothy

Ryder, Richard

Yeo, Tim

Sackville, Hon Thomas

Young, Sir George (Acton)

Sainsbury, Hon Timothy

Younger, Rt Hon George

Sayeed, Jonathan

Shaw, Giles (Pudsey)

Tellers for the Ayes:

Shaw, Sir Michael (Scarf)

Mr. Ian Lang and

Shelton, William (Streatham)

Mr. Michael Neubert.

NOES

Archer, Rt Hon Peter

Clarke, Thomas

Ashdown, Paddy

Clay, Robert

Ashton, Joe

Clwyd, Mrs Ann

Atkinson, N. (Tottenham)

Cocks, Rt Hon M. (Bristol S.)

Banks, Tony (Newham NW)

Cohen, Harry

Beckett, Mrs Margaret

Cook, Robin F. (Livingston)

Beith, A. J.

Corbett, Robin

Bell, Stuart

Corbyn, Jeremy

Benn, Tony

Cowans, Harry

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

Craigen, J. M.

Bermingham, Gerald

Crowther, Stan

Blair, Anthony

Cunningham, Dr John

Boyes, Roland

Dalyell, Tarn

Bray, Dr Jeremy

Davies, Rt Hon Denzil (L'lli)

Brown, Gordon (D'f'mline E)

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

Brown, Hugh D (Provan)

Deakins, Eric

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

Dixon, Donald

Brown, Ron (E'burgh, Leith)

Dobson, Frank

Bruce, Malcolm

Dormand, Jack

Buchan, Norman

Dubs, Alfred

Caborn, Richard

Duffy, A. E. P.

Callaghan, Jim (Heyw'd & M)

Dunwoody, Hon Mrs G.

Canavan, Dennis

Eadie, Alex

Carter-Jones, Lewis

Eastham, Ken

Clark, Dr David (S Shields)

Ellis, Raymond

Evans, John (St. Helens N)

Marshall, David (Shettleston)

Fatchett, Derek

Martin, Michael

Field, Frank (Birkenheadj)

Maynard, Miss Joan

Fields, T. (L'pool Broad Gn)

Meadowcroft, Michael

Fisher, Mark

Michie, William

Flannery, Martin

Millan, Rt Hon Bruce

Foot, Rt Hon Michael

Mitchell, Austin (G't Grimsby)

Forrester, John

Morris, Rt Hon J (Aberavon)

Foster, Derek

Nellist, David

Foulkes, George

O'Brien, William

Fraser, J. (Norwood)

O'Neill, Martin

Freeson, Rt Hon Reginald

Park, George

George, Bruce

Patchett, Terry

Gilbert, Rt Hon Dr John

Pavitt, Laurie

Golding, John

Penhaligon, David

Gould, Bryan

Pike, Peter

Harman, Ms Harriet

Prescott, John

Harrison, Rt Hon Walter

Radice, Giles

Hattersley, Rt Hon Roy

Randall, Stuart

Haynes, Frank

Redmond, M.

Healey, Rt Hon Denis

Rees, Rt Hon M. (Leeds S)

Heffer, Eric S.

Richardson, Ms Jo

Hogg, N. (C'nauld & Kilsyth)

Robertson, George

Home Robertson, John

Rowlands, Ted

Howells, Geraint

Sedgemore, Brian

Hoyle, Douglas

Sheerman, Barry

Hughes, Dr. Mark (Durham)

Shore, Rt Hon Peter

Hughes, Robert (Aberdeen N)

Short, Ms Clare (Ladywood)

Hughes, Roy (Newport East)

Short, Mrs H (Whampfn NE)

Hughes, Sean (Knowsley S)

Silkin, Rt Hon J.

Hughes, Simon (Southwark)

Skinner, Dennis

Janner, Hon Greville

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

John, Brynmor

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

Jones, Barry (Alyn & Deeside)

Soley, Clive

Lamond, James

Stott, Roger

Leadbitter, Ted

Strang, Gavin

Leighton, Ronald

Thompson, J. (Wansbeck)

Lewis, Ron (Carlisle)

Thome, Stan (Preston)

Lewis, Terence (Worsley)

Tinn, James

Litherland, Robert

Wareing, Robert

Lloyd, Tony (Stretford)

Weetch, Ken

Loyden, Edward

Welsh, Michael

McCartney, Hugh

Williams, Rt Hon A.

McDonald, Dr Oonagh

Winnick, David

McKelvey, William

McNamara, Kevin

Tellers for the Noes:

McTaggart, Robert

Mr. John McWilliam and

Madden, Max

Dr. Norman A. Godman.

Marek, Dr John

Question accordingly agreed to.
Resolved,
1128
That the draft Royal Ordnance Factories Trading Fund (Revocation and Repeal) Order 1985, which was laid before this House on 3rd May, be approved.

BANKRUPTCY (SCOTLAND) BILL [LORDS]
Order for Second Reading read.
Ordered,
That the Bill be committed to a Scottish Standing Committee. —[Mr. Archie Hamilton.]

BANKRUPTCY (SCOTLAND) BILL [LORDS] [MONEY]
Queen's Recommendation having been signified—
Ordered,
That, for the purpose of any Act resulting from the Bankruptcy (Scotland) Bill [Lords], it is expedient to authorise—

1. The payment out of moneys provided by Parliament of—

(1) any amount of outlays and remuneration payable by the Accountant in Bankruptcy where the funds in the debtor's estate are insufficient to meet that amount;

(2) any administrative expenses incurred by the Secretary of State;

(3) any increase attributable to the Act in the sums so payable under any other Act.

2. The payment into the Consolidated Fund of—

(1) any payments received by the Secretary of State from the Accountant in Bankruptcy in respect of an unclaimed dividend or unapplied balance;

(2) any amount handed over to the Secretary of State when a distribution of the estate is proposed after an amount has been paid by the Accountant in Bankruptcy out of moneys provided by Parliament in respect of outlays and remuneration.— [Mr. Archie Hamilton.]

HOUSING (CONSEQUENTIAL PROVISIONS) BILL [LORDS]
Ordered,
That the Lords Message [21st May] communicating the Order, That the Housing (Consequential Provisions) Bill [Lords] be referred to a Joint Committee on Consolidation, &c., Bills, be now considered.—[Mr. Archie Hamilton.]
Lords Message considered accordingly.
Resolved,
That this House concurs with the Lords in the said Order.— [Mr. Archie Hamilton.]

River Wye
Motion made, and Question proposed, That this House do now adjourn.—/Mr. Archie Hamilton.]
11.55 pm
Mr. Colin Shepherd: I am most grateful to my hon. Friend the Minister of State, Welsh Office, for coming to the House to take part in a debate on a very important subject for our part of the country. I am delighted to see in their places my hon. Friends the Members for Gloucestershire, West (Mr. Marland) and for Leominster (Mr. Temple-Morris). The fact that my hon. Friend the Minister of State also has the River Wye going through his constituency and therefore knows it very well gives me confidence that this subject will receive the attention that it deserves.
There is a poignant point that I want to make at this juncture. I received a letter from my late hon. Friend the Member for Brecon and Radnor (Mr. Hooson) two days after he died. I know how deeply he felt about this matter because the headwaters of the River Wye ran through his constituency.
The problems to which I wish to refer relate to the whole extent of the River Wye. It is a unique river. For the whole of its length it is a site of special scientific interest and for most of its length it passes through areas of outstanding natural beauty. It is a major asset to my county, Herefordshire, and it gives enormous pleasure to thousands of people through a variety of activities: angling, rowing, canoeing, rafting, birdwatching, or just enjoying nature. People take part in these activities in a spirit of quiet enjoyment.
It has been well known for a long time that there is no co-ordinating authority. These activities have grown up alongside one another, yet with a growing sense of unease that the balance between them may not be sustainable. Until last year the stresses and strains of conflicting interests were accommodated by each recognising the legitimate aspirations of others with, thankfully, an ever-increasing level of understanding, although it would not be entirely correct to say that the use of the River Wye is at present an idyll of harmony.
Those who fish point out that they pay substantial sums of money for their pleasure. In the south Herefordshire district council territory alone they pay £65,000 in rates. If that is extrapolated to cover the entire length of the Wye, we must be talking of well over £160,000 in rates, not to mention about £3,500 in fishery rates to the water authority, on top of which there is another £1,500 in environmental charges—not to mention a cool £52,000 in licensing fees.
Those who enjoy the competitive sport of rafting point with some hard-earned pride to the £50,000, plus, that they raise for so many deserving charities. Those who promote canoeing holidays on the Wye can point to the benefits accruing to the community by the development of the tourist trade. My hon. Friend the Minister of State knows very well that the Wye valley is world renowned in this respect. In addition, the community has an additional interest in the financial aspects of the Wye, in that the declining levels of fish caught, for whatever reasons, are leading to successful appeals against rateable values by fishery owners. It is not unlikely that within a short time
1130
there will be a drop in rate income of about 50 per cent.,., which will leave another £80,000 to be borne by other ratepayers.
In 1981 the Welsh water authority recognised the drift of things and made an application for the functions of any navigation authority still in existence to be transferred to it. I was told in response to my inquiries at that time by my right hon. and hon. Friends at the Welsh Office that the matter was complicated and that the Welsh Office was having to examine Acts of Parliament going back as far as 1674. I was assured that before any irrevocable decisions were taken:
"there will be ample notice and opportunity given to all interested parties to enable them to prepare and present their points of view."
I heard nothing further until after I wrote again in January 1983, when I was told that counsel's opinion was being sought and that progress was slow. However, I was assured by my hon. Friend the Parliamentary Under-Secretary that he was pursuing the matter further with his officials.
I heard nothing further until I wrote again in March this year, when I was informed that in the light of counsel's opinion the Welsh water authority was having to reconsider its application and decide what action it might need to take. I was also told that the Welsh water authority had commissioned the Middlesex polytechnic to report upon the uses of the River Wye by various recreational groups, and that it had decided to defer making any final decisions until it had considered that report.
What could have been described in 1981 as a routine evolutionary problem has, since last year, erupted into a major and potentially revolutionary problem. I refer to the advent of hovercrafting as a recreational activity on the River Wye. In 1984 six craft were launched from Hohne Lacey and travelled up and down the river from Ross-on-Wye to north of Hereford.
I have no doubt that from the hovercrafters' point of view, it is an attractive place to exercise an excitingly new, advanced, technological recreation. Indeed, in the magazine of the Hovercraft Club of Great Britain it was described in glowing terms. For those who have hitherto utilised the river with quiet enjoyment, this has caused consternation. It became clear to them that the craft were extremely noisy—their drivers wear ear muffs—that they disturb the river and its banks, and I have heard reports that salmon fry have been washed up and left high and dry on the banks. The craft are a serious potential danger to other river users.
It has been observed that, when operating at low speed, the wash is substantial and does not appear to lessen at all until speeds of 20 knots are reached. I dread to think of the hazard to a wading angler or a novice canoeist. The anglers point out that there is frequently a drastic reduction of the swan population where there is an abundance of noisy, powered craft, and they stress that the healthy population of swans on the Wye is, in all probability, due to the absence of powered craft along great stretches of it.
The Royal Society for the Protection of Birds points out that the Wye carries a number of important breeding colonies of kingfishers, dippers and, as my hon. Friend is probably aware, in recent years we have been privileged to see the return of peregrine falcons breeding at Symonds Yat, not a mile from my home. All of those would not lake kindly to an abundance of hovercraft. In addition, farmers

1131
and fishermen alike are concerned about the prospect of oil pollution—something not so far experienced on the Wye, one of the cleanest rivers in the country.
Almost more alarming than anything else was the unco-operative attitude of hovercraft drivers on their first run, who were reported by anglers of the Hereford and District Anglers Association to have had complete disregard for anglers and their tackle. A grain of encouragement can be drawn from the revised stance of the Hovercraft Club of Great Britain, which has indicated that in the light of the present consternation it will not now be organising the proposed weekend expeditions on the Wye this year, and that it does not wish to be seen to operate in such a manner as to be a danger to other users of the river or, indeed, its members.
I welcome that wholeheartedly, but I must reflect with some caution that the Hovercraft Club of Great Britain is but a proprietors' club, interested in promoting hovercrafting. It has no regulatory controls over hovercrafting or over its members or non-members.
We therefore must come to terms with this new situation that has arisen in respect of the River Wye. The door to hovercrafting on the Wye has been shown to be wide open, and it is an activity that is fundamentally inimical to the River Wye as a site of special scientific interest, as an area of outstanding natural beauty and as a recreational asset to so many activities based, as I have said before, on quiet enjoyment. We need to know the precise position concerning navigation on the Wye. I have grave disquiet about the referral of the problem by the Welsh water authority to the Middlesex polytechnic. It has all the hallmarks of a delaying tactic — a kicking for touch, a playing for time. I do not think that that time exists.
Despite the assurances of the Hovercraft Club of Great Britain, the threat of hovercrafting will not go away by itself. Regardless of what the Middlesex polytechnic reports, progress towards resolution of today's problems will have to be based upon the present legal situation. A clear exposition of that position may well give rise to the kind of lateral thought necessary to achieve a satisfactory and fair reconciliation of conflicting interests, and allay the reasonable concerns of many people and organisations.
Finally, I should like a reassurance that there will be an opportunity to enable all interested parties to put their points of view openly before any change is made, as was promised to me in 1981. I think that we owe this to all the interests on the River Wye. If this can be done, I know that it will be appreciated. I think that it will be helpful for the longer term evolution of the quiet enjoyment of the River Wye for many people.
12.6 am
Mr. Paul Marland: I thank my hon. Friend the Member for Hereford (Mr. Shepherd) for allowing me to participate in the debate. The problem that he has outlined is of considerable interest to my constituents also. My intervention in the debate will come as no surprise to my hon. Friend the Minister who has been subjected to a positive snowstorm of paper on behalf of my constituents to try to find some solution to the problem outlined by my hon. Friend the Member for Hereford.
As I represent Gloucestershire, West, the River Wye borders quite a large proportion of my constituency. I have
1132
received complaints from the village of Brockweir about the less sociable sports which are now taking place in the River Wye. The complainants have been asking me to whom they should refer in order to try to arrange some framework of law in which everybody can enjoy the sports in which they wish to participate. So far, nobody seems to want to be responsible for working out some arrangements whereby people can live together. The local authority disclaims responsibility, and the Welsh water authority and the Inland Waterways Association Ltd. say that it is not up to them to lay down the law as to who does what on the River Wye. I am confident that, if we can create a framework of law, the majority of these sports can live together. If they are regarded as anti-social by some people who are anxious to pursue the tranquillity of the area, as my hon. Friend has outlined, the noisier sports can surely take place in a different part of the river.
I am grateful for the opportunity to be allowed to participate in the debate, and I hope that my hon. Friend the Minister will be able to throw some light on this difficult problem.
12.10 am
The Minister of State, Welsh Office (Mr. John Stradling Thomas): I am grateful to my hon. Friend the Member for Hereford (Mr. Shepherd) for the opportunity that this debate gives me to put a number of matters into their correct context, which, as he said, is a necessary precursor to getting the issues sorted out.
I congratulate my hon. Friend on the capable way in which he marshalled the facts relating to the multiplicity of interests involved to ensure a fair and reasonable use of the river, with each following their particular interests with the minimum of disturbance to other users.
I confirm what my hon. Friend—and my hon. Friend the Member for Gloucestershire, West (Mr. Marland)— said about there being a multiplicity of interests. Not only is there the age-old use of an exceptionally fine game fishery, but also that of coarse fishing. Such quiet pursuits can obviously be disturbed by the passage of craft of one sort or another, such as a ferry—to which reference was not made, but there is one — a leisure cruiser, or by rowing, canoeing, raft racing—with the added benefit of raising funds for charity—and, in the lower reaches of the river, water skiing, which is of particular interest to myself and my hon. Friend the Member for Gloucestershire, West, and the even more vexed question of the modern invention of the hovercraft.
I do not dispute the claims of my hon. Friends that these will have a varying effect on the natural life found in the river and along the banks. The amount of use which a particular interest makes of the river will determine the level and severity of any nuisance or damage.
The nub of the problem is the element of control which is perceived to be needed to ensure that no one user causes irreparable damage or accidentally usurps the rights of other users. Like its predecessors — the Wye river authority — the Welsh water authority has examined carefully how it should exercise its responsibilities in relation to the River Wye. The Water Resources Act 1963, which provided for the establishment of river authorities and, inter alia, the protection and proper use of inland water, recognised that for the protection of water resources a river authority may need to make byelaws to prohibit the use, or regulate the manner in which the waters may be

1133
used, for boating, swimming or other recreational purposes, which functions are now exercised by water authorities.
The provisions of that Act specified that such byelaws would not apply to any tidal waters, or to any inland water in respect of which functions are exercisable by a navigation authority, harbour authority or conservancy authority. I am spelling these matters out carefully because I want them to be on the record so that we can proceed to a satisfactory solution.
Byelaws made by a water authority under the 1963 Act are subject to procedural provisions before confirmation by my right hon. Friend the Secretary of State. These would almost certainly involve the holding of a local inquiry at which all interested persons could give their views.
In the case of the River Wye, there is an existing navigation authority which precludes the Welsh water authority from making byelaws for that stretch of the river over which the functions of the navigation authority could be exercisable.
In 1809, a navigation authority known as "The Company of the Proprietors of the Rivers Wye and Lugg Navigation and Horse Towing-path" was created by local Act of Parliament. Despite extensive research, it would seem that that company, although it has long ceased to exercise any functions, cannot in law be assumed to be dissolved. Indeed, my Department has sought counsel's opinion on the matter.
However, the Welsh water authority can seek an order under section 82 of the 1963 Act to have transferred to it the functions of a navigation authority. Thus, in February 1981, as my hon. Friend the Member for Hereford said, and no doubt as a result of his zealous efforts on behalf of his constituents, the Welsh water authority made application to my right hon. Friend the Secretary of State for Wales for an Order under section 82 of the 1963 Act to have transferred to it the functions and property of the navigation authority. That has given rise to a substantial volume of correspondence from interested persons and organisations seeking to object to the proposals.
Before the provisions of schedule 10 to the Water Resources Act 1963 were set in motion — that is, publicising the intention to make a transfer order, an action which could well entail the subsequent holding of a public local inquiry into any objections—my Department late in 1983 drew the authority's attention to counsel's opinion which indicated some limitation as to the authority's power within the context of section 79(3) of the Water Resources Act 1963 for the byelaws which it might have in mind. Counsel also drew to the attention of the Department the probability that there may well also exist certain common law rights in respect of use of the river. At this point the House will be aware of the complexity of the matter.
The Welsh water authority, having noted the limitations, chose to reconsider its original application for the section 82 order and in early 1984 commissioned the Middlesex polytechnic to carry out a survey of all recreational use of the River Wye. I do not think this was dilatory or in any way delaying tactics. The facts have to be established before we can proceed through the legal jungle. The water authority now awaits the final report, which it is scheduled to consider later in the year. The
1134
authority is quite reasonably exploring all possibilities of areas of conflicting interest before deciding what action it can reasonably take.
I am well aware of the criticism levelled at both the authority and my Department for the length of time being taken to process what some might see as a simple operation. After that part of my speech, I do not think the House will regard it as a simple operation; I know hon. Members realise that it is complex. My hon. Friends will appreciate, if they had not done so before today, that the matter is one of the more complex problems that the authority has had to consider; indeed, its predecessor bodies had in years gone by not come to grips with the problem, and I do not entirely blame them.
We as a Department also appreciate the complexities. However, for the water authority, not only is there the question of drafting suitable byelaws, always assuming it has the power so to do; also, it has to consider the question of cost, which could arise under three headings. First, how much will it cost it to have the necessary byelaws approved? That cost could well include public inquiries. Secondly, even assuming that my right hon. Friend was able to approve the appropriate byelaws, in order to he effective there would be the cost of implementation. My hon. Friend referred to the fact that many riparian owners find some of the charges high already. Thirdly, if the authority assumes the functions of the navigation authority, it could be faced with additional costs related to those very functions—for example, maintenance of channels and towpaths.
The Welsh water authority has sensibly made inquiry of other water authorities who have navigation functions and found that the cost, after deduction of income, can be considerable. These costs would have to be recovered from consumers generally and thus have the effect of increasing water charges.
In addition to the possibilities of seeking powers under the 1963 Act, both the authority and the Department have examined other legislation which might enable control to be exercised over activities on the river. At present. there appear to be no other byelaw-making powers readily available to the water authority. Action may be considered by the authority under the Salmon and Freshwater Fisheries Act 1975 if there is wilful disturbance to spawning fish. My Department has also been examining possible powers which may be available to other bodies to control the various uses which are made of the river. Hereford city council has a Private Bill, shortly to be considered by the House, to re-enact and extend local enactments and to make provision with regard to the health, local government and improvement of the city. As one element of that Bill, it is seeking powers to make byelaws over that stretch of river that lies within the limits of the city.
Under the Local Government, Planning and Land Act 1980, local authorities may in certain circumstances be able to make byelaws regulating the use of boats within their area. This is of course a matter for each district council to consider.
Under the Local Government (Miscellaneous Provisions) Act 1976, certain powers may also be available to local authorities to regulate boating in coastal waters adjacent to their area.
Powers existing under the Local Government Act 1933 which enabled local authorities to make miscellaneous byelaws for good rule and government. Indeed, these

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powers were used by the then county of Monmouthshire and borough of Monmouth, which I have the honour to represent, to make byelaws in 1948 to control the manner in which vessels used the River Wye within their respective boundaries. These byelaws would still appear to be in force today and could be exercisable by the Monmouth district council under provisions of the Local Government Act 1972, sections 235 and 262. From contacts with my Department it would seem that Gwent county council is also investigating the existence and possible use of these byelaws. I can say that my Department is actively researching with other Government Departments the existence of other local byelaws which may affect the River Wye.
Another source of legal provision which may lead to the making of byelaws is through the National Parks and Access to the Countryside Act 1949. Hon. Members may recall that in 1978 the River Wye was notified as a site of special scientific interest. I am advised that re-notification under the Wildlife and Countryside Act 1981 has yet to be completed, but the SSSI status remains unaffected.
However, I make no apology for having to introduce once again a limitation. The 1949 Act powers are vested in local authorities in areas of outstanding natural beauty. That provision might provide a means of controlling hovercraft on the stretches of the river so designated, but such byelaws can be made only where the local authority is the riparian owner or where the land adjacent to the river or the waterway itself is subject to an access agreement order. There would be a need for the Home Office to confirm any byelaws made and Welsh Office Ministers would be involved if there had to be an access order. At this time, it would not be proper for me to comment further. However, my officials will be pursuing this and other relevant aspects.
Two specific problems have regularly been drawn to my attention. The first is a problem over water skiing in the lower reaches of the Wye, which border the constituency of my hon. Friend the Member for Gloucestershire, West and my own. The Gloucester harbour trustees have jurisdiction in the upper reach of the
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River Wye tideway to Bigs weir and it may be possible for them to make byelaws under their existing powers for the regulation of the river in that part. My Department has already written to the harbour trustees seeking clarification of its powers and I will write to my hon. Friend the Member for Gloucestershire, West when my inquiries are completed.
Secondly, there is the problem of hovercraft using the non-tidal stretch of the river. I am pleased to say that following discussions between the Welsh water authority and the chairman of the board of the Hovercraft Club of Great Britain, the club has agreed not to hold any events on the Wye in view of the biological and scientific importance of the river. I am sure that all Members will join with me in welcoming this most responsible and enlightened attitude on the part of the hovercraft club. Indeed, this sort of joint voluntary approach is a much more sensible solution to the problem of conflicting interests among users of the River Wye. Each of us as a user should respect the wishes, or rights, of other users to enjoy the privileges of this beautiful river, be it for fishing, boating, rowing, canoeing, swimming or other similar uses. That is to exercise self-control—perhaps through an owners' grouping — and reach agreement on limitations as to times of use, number of occasions of use and the planning of activities having regard to the balance that needs to be maintained between man and nature. I would encourage all users to have due regard to the enjoyment of others using this beautiful river and ask them to seek ways in which responsible co-operative use of the river can be extended.
I have advised the House that there is a complex problem to be solved. I have said that the solution is not easy to find and I hope that hon. Members will accept my assurance that the Welsh water authority and Welsh Office ministers are well aware of the difficulties. Nevertheless, officials will continue to search for a satisfactory solution, which will be of benefit to all those having rights of use and those wishing to use the recreational facility provided by one of our supreme natural assets.
Question put and agreed to.
Adjourned accordingly at twenty-five minutes past Twelve o'clock.

ATTORNEY-GENERAL
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Preamble
The House met at a quarter-past two of the clock: The LORD CHANCELLOR on the Woolsack.
Prayers—Read by the Lord Bishop of Chelmsford.

Lord Elliott of Morpeth
Sir Robert William Elliott, Knight, having been created Baron Elliott of Morpeth, of Morpeth in the County of Northumberland and of the City of Newcastle upon Tyne, for life—Was, in his robes, introduced between the Lord Nugent of Guildford and the Lord Eden of Winton.
The Lord Bishop of Manchester
Stanley Eric Francis, Lord Bishop of Manchester—Was (in the usual manner) introduced between the Lord Bishop of Chelmsford and the Lord Bishop of Carlisle.

Nicaragua
2.37 p.m.
Lord Kennet: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they have noted that the Nicaraguan Government has sent away 100 Cuban military advisers, and whether they have any evidence of Nicaraguan attempts to destabilise neighbouring governments within the last six months.
The Minister of State, Foreign and Commonwealth Office (Baroness Young): My Lords, we have seen reports that 100 Cuban military advisers recently left Nicaragua. But we remain deeply concerned by the substantial number that remain and by Nicaraguan policies aimed at destabilising neighbouring governments.
Lord Kennet: My Lords, do the Government not have an ambassador accredited to the Government of Nicaragua? If so, why do they have to rely on seeing reports, presumably in the press? Is there not a First Secretary resident in Managua who can inquire about the matter and make an authoritative report to the Government? Secondly, what are the policies which seek to destabilise the governments in neighbouring countries to Nicaragua?
Baroness Young: My Lords, our ambassador who is resident in Costa Rica also looks after Nicaragua. However, we have diplomatic representation itself in Managua. Naturally, we have reports, both from the ambassador and from our representative in the capital of Nicaragua itself. On the second point that the noble Lord raised, he will know that the Honduran ambassador at the United Nations Security Council on
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10th May reported the arrest the previous week of six Sandinista Front members who confessed that they had been trans-shipping and hiding weapons in Honduras for the use of subversive Honduran groups being trained at present in Nicaragua. Some of them had been involved in such activities since 1979.
Lord Cledwyn of Penrhos: My Lords, will the noble Baroness be kind enough to say briefly what is the policy of Her Majesty's Government towards Nicaragua, and specifically with regard to making loans to Nicaragua? Did she see the article in the Observer newspaper on 12th May which purported to publish Foreign Office documents showing that, while on the face of it the Government were anxious to make loans and to help Nicaragua, they were in practice blocking loans to that country?
Baroness Young: My Lords, regarding the policy of Her Majesty's Government towards Nicaragua and Central America, we wish to see an early and comprehensive negotiated settlement of the regional tensions. To that end, we have consistently supported the Contadora proposals. On the second point about aid to Nicaragua, the view is that all these matters, and indeed loans to Nicaragua, have been decided on technical grounds.
Lord Cledwyn of Penrhos: My Lords, I wonder whether the noble Baroness will answer my question. I asked whether the Government are in favour of making loans to Nicaragua, and whether there was any merit in the report in the Observer newspaper which published exchanges and letters from her department. Is it the case that we are making loans to Nicaragua and that we are in favour of doing so? Or are we blocking these loans?
Baroness Young: My Lords, we have supplied £450,000 in bilateral aid to Nicaragua since 1980. Community aid to Central America in 1983 totalled £25 million, of which Nicaragua received about £9 million, the largest share. As the noble Lord will be aware, we contribute to the Community budget about 22 per cent. As to the Observer article, I can confirm that we are not blocking aid. We consider all new multilateral projects on their technical merits and in relation to the recipient countries' standing with the international financial institutions.
Lord Avebury: My Lords, the noble Baroness says that the Government support the Contadora proposals. Does she not agree that they contain an injunction against the use of the territory of any state in the region for hostile action against its neighbours? Will she therefore condemn the use by the American State Department of Honduran and Costa Rican territory for the operations of many thousands of armed terrorists who are killing and destroying property in Nicaragua?
Baroness Young: My Lords, I can confirm that we support the Contadora process. What we have said, and I have said on many occasions in your Lordships' House, is that we support the aims of United States policy in Central America; namely, to promote democracy, political stability, national security and economic development.
Lord Kennet: My Lords, do the Government support the means by which the United States pursues that aim; namely, the financing and supplying of insurgents to carry on a civil war, which has cost about 8,000 lives over the past four or five years, against the Government of Nicaragua, which is now democratically elected?
Baroness Young: My Lords, in answer to the first question that he asked, the noble Lord will know the situation in Central America is very complex. I have set out the Government's position on this matter.
Lord Oram: My Lords, does that Government position include a refusal to support the United States embargo on trade with Nicaragua?
Baroness Young: My Lords, with regard to the United States Administration, we have not been asked by them to join in imposing sanctions.

The Strategic Defence Initiative
2.43 p.m.
Lord Molloy: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question is as follows:
To ask Her Majesty's Government what further communications they have received from the United States Government concerning the star wars research programmes.
Baroness Young: My Lords, we remain in close touch with the United States Administration regarding the latter's strategic defence initiative research program me.
Lord Molloy: My Lords, I thank the noble Baroness for that reply. Does she not think that both Houses of Parliament and the people should know what these communications are? Can she say why we are being kept in the dark? Is she further aware that the new wisdom enunciated by Sir Geoffrey Howe, the British Foreign Secretary, has taken root in many political parties in NATO countries and has also been deeply admired in the United States itself? It may be a consequence of the success of the wisdom of Sir Geoffrey Howe that the Government are not too keen to tell us what is happening.
Baroness Young: My Lords, the British Government's position on SDI is clear. It is set out in the four points agreed between the Prime Minister and President Reagan at Camp David just before Christmas. As the noble Lord has said, my right honourable and learned friend the Secretary of State set out our position in his speech in March. Nothing is being hidden on these two public documents. They make quite plain our view on this important matter.
Lord Kennet: My Lords, have the Government anything more to say yet in answer to the question, "Who is to answer the 15 questions set out in the Foreign Secretary's speech of 15th March?" to which the noble Baroness has alluded?
Baroness Young: My Lords, I do not think that I can add anything in answer to the noble Lord's question following upon the important debate that he raised in this House last week.
Lord Molloy: My Lords, is the noble Baroness aware that the fundamental questions posed by the British Foreign Secretary have been commented upon in Europe among our allies and in the United States? As there have been official comments on the vital points that he made and the questions of paramount importance that he posed, can the noble Baroness assure the House that we shall be given the answers to the Foreign Secretary's questions which the House and the country ought to know?
Baroness Young: My Lords, my right honourable and learned friend set out a number of questions on matters that need to be considered. They are being considered not only in this country but also in other countries in Europe. They are matters among others that we are discussing with our allies.

Funeral Costs and VAT
2.46 p.m.
Lord Graham of Edmonton: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they have any plans to remove VAT from funeral costs.
Lord Brabazon of Tara: My Lords, the services of funeral undertakers are already exempt from value added tax. The Government have no plans to extend the existing relief.
Lord Graham of Edmonton: My Lords, I thank the noble Lord for that reply. However, is he aware that, following the latest imposition of VAT on newspaper obituary notices, funeral furnishing costs for coffins, fittings, floral tributes, motor expenses and monumental inscriptions add to the list of funeral charges that bear VAT? Is the noble Lord aware that the death grant of £30—the woefully inadequate death grant—is exceeded by the amount of VAT that the Treasury claws back? When will the Government increase the death grant or abolish VAT, or preferably do both?
Lord Brabazon of Tara: My Lords, VAT exemption associated with burials and cremations applies to the services of the undertaker, including making arrangements for cremation or burial, disposal of ashes, transport, the supply of the coffin and associated goods. However, as the noble Lord says, it does not cover discretionary expenditure on flowers, wreaths, gravestones and other items. Successive Governments have looked at this matter since 1973 and have decided not to extend the relief. The death grant is under review in the current social security review, and noble Lords will have to await the outcome of that.
Lord Morris: My Lords, from the point of view of the deceased, where lies any value added?

Less Favoured Area Scheme
2.48 p.m.
Lord Stanley of Alderley: 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 when they hope to inform those who have applied for inclusion in the extended Less Favoured Area Scheme of their decision to be included or excluded, and what criteria or constraints will be used to determine such applications.
The Minister of State, Ministry of Agriculture, Fisheries and Food (Lord Belstead): My Lords, farmers have until 31st July to make representations against exclusion from the Less Favoured Areas. Each representation will be tested against the land quality, economic and demographic criteria which Less Favoured Areas are required to satisfy. Any subsequent adjustments to the LFA line will then have to be agreed by the European Commission, and I cannot therefore yet predict when we shall be able to tell farmers of the outcome of their representations.
Lord Stanley of Alderley: My Lords, I should like to thank my noble friend for that Answer. I should also like to ask whether it is true that there is a 1 per cent. ceiling put on this extra land that could be included in the Less Favoured Areas, and that if this 1 per cent. is exceeded we have to go to Brussels. I should further like to ask whether this ceiling, or possible ceiling, is in fact being transferred by the Government to the assessors, so that the assessors are taking (shall I say?) a very mean view of including other farmers in the area.
Lord Belstead: My Lords, let us be clear that the extension of the Less Favoured Area Scheme in the United Kingdom was 1.2 million hectares last year, within a total of 9.8 million hectares. It was a very considerable extension. But my noble friend is asking me about appeals from those who wish to be included and who have not been included. It is the case that if the European Commission—at that level—is to decide any extra representations, those have to be within 1½per cent. of a member state's territory: otherwise, we have to make our representations to the Council of Agriculture Ministers. Finally, let me make it clear to my noble friend that we are considering all representations.
Lord John-Mackie: My Lords, we all know the difficulties in deciding where the line of the Less Favoured Areas should begin. I have had experience in EC work and in the ministry. Does the advisory committee help the assessor? I know that that is the case with local farmers. It helps the situation considerably if the advisory committee helps or advises the assessor, who has a very difficult job.
Lord Belstead: My Lords, farmers who are unhappy about the exclusion of their area may write to their divisional office giving appropriate details and asking for reassessment. With the exception of Northern
292
Ireland, where all representations will be considered by an independent panel, representations will be considered initially by officials. However, any farmer whose representation is rejected on land quality grounds, will be able to make a further appeal to the regional panel of his area.
Lord Gibson-Watt: My Lords, while commending the action of the Minister of Agriculture in getting the Less Favoured Areas in Britain greatly extended, will my noble friend agree that, as in the case of the hill cattle subsidy some years ago, to get the delineation of the boundaries correct is an extremely difficult exercise? Therefore, will his right honourable friend have consultations with such other bodies and perhaps the regional representative which he has in each region?
Lord Belstead: My Lords, it is precisely because of the reason which my noble friend has outlined that we have set up the representations procedure to enable these problems to be resolved. Let me repeat that that procedure includes the absolute right of a farmer who is unhappy with a decision to go to the regional panel if he has been rejected on land quality grounds.
Lord Bruce of Donington: My Lords, will the noble Lord give the House some indication as to the amount included in the Community budget for 1984–85 or any payments under this head? Will he give some further indication of any amount that may have been earmarked for the United Kingdom?
Lord Belstead: My Lords, I must apologise to the noble Lord but I do not know the answer to his first question and, if I may, I shall write to the noble Lord and put my reply in the Library because I think that it is of importance to the House to know the answer to the question and I apologise for not knowing it.
As regards the noble Lord's second question, 53 per cent. of the United Kingdom is now designated as being less favoured and that, of course, is of very great importance to us when one bears in mind that the vast majority of the farming businesses in the Less Favoured Areas would have found it exceedingly difficult to continue to trade if they had not benefited both from the capital allowances and from the hill livestock compensatory allowances.
Lord Stanley of Alderley: My Lords, is it true that the original designation of these areas was based on very old maps and also on a very old ministry land classification map which does not now correctly reflect productivity?
Lord Belstead: My Lords, the exercise was undertaken with very great care. The case which we put to the Council to extend the Less Favoured Areas in this country, which, as I have said, was a very successful operation, was the result of what was called the "marginal land survey", which began in 1980. That involved looking at poor quality land near to, or contiguous with, the original LFAs. It included desk work, relying on maps and local knowledge, but it also involved physical inspection on the ground. Therefore, I hope that I have made it clear to my noble friend that the map work was only a part of what was a very closely done exercise.
Lord Ross of Marnock: My Lords, the Minister has said that 53 per cent. of the United Kingdom is now classified as less favoured. Will he give us the proportions? Will he tell us the proportion of the 53 per cent. which is applicable to Scotland?
Lord Belstead: My Lords, it is getting towards 90 per cent. Some 5,717,000 hectares were originally designated in Scotland as less favoured, and another 74,000 were added as an extension of Less Favoured Areas last year. I have to admit to the noble Lord, Lord Ross, that I do not have the exact percentage, but it is very near the percentage that I hazarded. It is very high indeed and I am very glad that that is the case.

Business
Lord Denham: My Lords, it may be for the convenience of the House if I say a word at this point about the arrangements for this afternoon's short debates standing in the name of the noble Lord, Lord Parry, and my noble friend Lord Chelwood. It is customary in short debates that the mover is allowed approximately 15 minutes and that the Minister should rise to reply not less than 20 minutes before the scheduled end of the debate. In the case of the short debate in the name of the noble Lord, Lord Parry, that means that all other speeches should be limited to a maximum of 14 minutes, and in that of my noble friend Lord Chelwood, 10 minutes. If any noble Lord should speak at greater length it will be at the expense of subsequent speakers in that particular debate.

Tourism and the Economy
2.56 p.m.
Lord Parry Lord Parry rose to call attention to the significance to the changing economy of Britain of the support given to the British Tourist Authority and to the national tourist boards for England, Scotland, Wales and Northern Ireland; and to move for Papers.
The noble Lord said: My Lords, my father, who was a Baptist minister in West Wales, used to tell the story of one Member of your Lordships' House—Lord Kilsant—causing consternation in a little inn, The Boar's Head, at Templeton when he asked to stay the night. There was no service of any kind inside the hotel and the stablelad was pressed into service. He was rehearsed in what he had to do in the morning. He had to go up the stairs carrying the boiling water for his Lordship's shave, tap on the door and say, "It's the boy with your water, my Lord". In fact through his nervousness and lack of training he arrived at the door, hammered on it and announced, "Tis the Lord with your water, my boy"! It was, I think, a turning point in the economy of Wales—a small milestone when, in the rural areas, one skill became at least partly another!
The Motion standing in my name on the Order Paper gives me the opportunity:
"To call attention to the significance to the changing economy of Britain of the support given to the British Tourist Authority and to the National Tourist Boards for England, Scotland, Wales and Northern Ireland; and to move for Papers".
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In retrospect, the Motion should have read:
"To call attention to the significance of tourism to the changing economy of Britain",
and then:
"and to the support given to the British Tourist Authority and to the National Tourist Boards".
Perhaps those noble Lords who are to speak in the debate, with their very real expertise, may feel Free to treat the Motion in that manner. I thank them very much for putting their names forward. I wish to thank them and I also wish to refer to the fact that the noble Lord, Lord Montagu of Beaulieu, would have been among the speakers this afternoon were it not for the fact that Her Royal Highness the Duchess of Gloucester is opening an extension to Britain's tourism at Beaulieu—another "act of faith" in the changing economy of Great Britain and the importance of tourism to it.
Nineteen eighty-four was Orwell's year. It is the year to which some of us in our youth were taught to look forward to misery and mayhem and to the loss of our freedom. In fact there were moments during 1984 when we all felt from our respective points of view that very real things that we very much cherished were at stake. During 1984 we had the creeping paralysis of unemployment and the awful palsy of the coal strike. However it was during that very difficult year of 1984 that this country earned £15 million a day from the tremendous industry of tourism about which we are to speak. I wish to read some figures into the debate so that people will understand why it is that some of us feel that not sufficient attention is paid to the achievements of the tourism industry in Britain and to the work that is done by people involved in the trade.
In 1984 13·8 million overseas visitors came to Britain. They spent £4,194 million in this country. They spent nearly £1,125 million with British air and shipping lines on fares for travel to and from Britain. Britain's total foreign currency earnings from tourism in 1984 were more than £5,300 million, and that of course adds up to the fact that I have already given that the equivalent of all but £15 million a day from tourism was reaped for this country during the past year. Every day, my Lords! Overseas visitors are estimated to have spent some £1,150 million on accommodation alone in Britain in 1984, and to have spent another £620 million on eating out. That brings a smile to those involved in the business. Another £190 million was on entertainment, and yet another £480 million on transport within this country.
There is, furthermore, little doubt that in 1985 the earnings will top £16 million a day. I want to compare that briefly and in passing with North Sea oil revenue. Our much vaunted and much mortgaged North Sea oil brings in a similar amount of money to that raised by tourism. But much of it is already earmarked for export abroad, when so much of the product of the indigenous tourist industry recycles within the economy and is totally at home here.
If we look in real terms—and it is time for one of the institutions to do the sums—at the money raised by tourism against the money raised from North Sea oil, with all the benefits reaped by other countries from that investment, then we shall find that in real terms tourism is beginning to overhaul North Sea oil as a revenue producer for this nation.
The money spent by overseas visitors spreads throughout the whole country. I want to pick this up as my noble friend—although he sits on the other side of the Aisle—Lord Mackie of Benshie might wish to refer to it because we laid the trail for this in an earlier discussion on the rural areas. I had hoped that the noble Lord, Lord Gibson-Watt, might have been in his place—he was a moment earlier—so that I could say that there was no conflict between us when we were talking about the development of the rural economy.
More than £1,500 million annually is spent directly in the nations of England, Scotland, Wales, and the region, the province, of Northern Ireland. What is more, a large proportion of the money spent by overseas visitors in London goes on making arrangements for travel and accommodation in other parts of Britain. More than one third of all the money spent in Britain by overseas visitors each year goes on shopping for manufactured goods.
Where is the dichotomy between the redevelopment of the manufacturing industry of Britain and the impact upon it of tourism revenue? Of course there is no conflict. I hope that no one will believe that anyone arguing for the development of tourism and support for the service sector of the economy in this House or elsewhere is simultaneously arguing for the decline of the heavy industrial base or the manufacturing product. They are complementary.
One of the biggest beneficiaries from tourism—and I am sad about that—is the national exchequer. In 1984 overseas visitors are estimated to have paid more than £600 million in value added tax—and we had an amusing intervention earlier on VAT—and in taxes on such things as liquor, tobacco, and petrol. That is nearly as much as the Government receive from the road tax fund each year. That is the contribution which tourism is making to Britain's economy at this immensely difficult time.
Last year the Government gave the British Tourist Authority approximately £16.8 million to promote travel to Britain from abroad. How does that compare, one wonders, with the vast amounts of money which are taken out of the real economy in support of industries which perhaps are not able to bring home the bacon, or the egg, in quite precisely the same way. The British Tourist Authority raised over £10 million from its own publishing and promotional enterprises to promote Great Britain overseas.
Some 1.3 million people throughout the whole of Britain depend directly, or indirectly, upon tourism for their livelihoods. And each year tourism creates some 50,000 new jobs. Its role as a job creator is one of the most important aspects about it, and those jobs spread throughout the length and breadth of Britain. Not only does tourism currently employ four times as many people as the motor car industry in Britain, it earns four times as much in foreign currency. Tourism earns more than twice as much foreign currency each year as the export of new British civil and military aircraft. I am sure that that is a surprise. It earns more than three times as much as the export value of British iron and steel.
In fact, tourism earns as much for Britain each year as the combined overseas sales of Britain's passenger cars, her aircraft, her beverages, her tobacco products,
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and her textiles. Within Britain one overseas visitor spends as much as five British holiday makers. That is no comment on the British holiday maker, but it is a fact. The average foreign visitor spends over 50 per cent. more in Britain than the average Britain spends abroad.
Britain's biggest single market for overseas visitors is Western Europe. Over seven million European visitors came here in 1983. They spent £1,271 million in Britain. The largest single contingent of European visitors in 1983 came from France. They were 1,516,000, and they spent £170 million here. It is not my habit as a rule to read figures of this nature into a debate, but I believe that the figures I am reading are so impressive that they should be understood not simply by your Lordships but by every man, woman and child who is worried about the future of the economy of Great Britain. After Europe, the United States of America provides the most visitors to Britain each year. In 1983, 2,317,000 American visitors spent £784 million here.
The following remarks may give your Lordships a little relief from all that pounding of heavy statistics. Visitors list these main reasons for coming to Britain. They come to meet the people; they come to see the countryside; they come to enjoy historic associations; they come to see colourful pageantry—and your Lordships' House has stood well this afternoon in colourful pageantry. They come for business conferences; they come to see old buildings; they come to study the English language; they come to go to the theatre, and to see the arts.
How many times have we debated in this House grants to the theatre and to the arts? How many times have we debated tourism? In the whole of my nearly 11 years in this House, my Lords, it is three times. We have debated the sustenance of the arts over and over again; and there would probably be no theatre in London today if it were not for the tourists who come and patronise it, and the captive loads of visitors who are deposited outside the theatres in their coaches night by night.
They come to visit historic houses; they come for rural functions; and—cheering again for our manufacturing industry—shopping for world-famous British products. They like British courtesy and hospitality. We may be selling ourselves short, my Lords. They like British courtesy and hospitality; they love the pubs and the countryside, the greenness of the grass. They do not mind the weather and although it may surprise you, my Lords, they like the food.
I want to draw attention quickly—I have three minutes left so I can do little more than wave some things about—to these matters. First, if your Lordships want to follow up those facts, if you want to use them the British Tourist Authority—I nearly said British "Tory" Authority, forgive me, my Lords—will be glad to let you have the details. The paper was published in April 1985.
I have here a short paper on tourism in Wales. I shall just read one quotation from it. It is the Welsh Office's own memorandum on the importance of tourism. It says:
"Tourism is a major provider of jobs and contributes significantly to the economy of Wales. It is the Secretary of State's strategy that tourism opportunities should be actively developed in co-ordination

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with those in other sectors of the economy and that the efforts of interested bodies and the resources available are harnessed to the best advantage taking account of the need to preserve and enhance the natural and historic attractions of Wales".
Your Lordships would not expect me to put Wales down in one go. I am going to quote from the Welsh Tourist Board regarding touring in' Wales. They estimate conservatively that employment in the tourist industry is now of the order of 90,000. They say that to give some idea of relative scale, this is double—and it is more than double—the combined employment in the coal and steel industries (some 23,000 jobs, as I remember) with which Wales is traditionally mainly associated in popular perception. They continue:
"Income generated by tourism in Wales in 1983 was in the order of E510 million. This includes an estimated £450 million spent by the 12 million British residents who spent a holiday, took an overnight business trip or came on a visit to friends or relatives during the year".
If your Lordships want to liven the evening, read Croeso i Gymru, Welcome to Wales—
Lord Cledwyn of Penrhos: My Lords, clywch, clywch!
Lord Elwyn-Jones: Clywch, clywch, my Lords!
Lord Parry: I am delighted with the way that the Welsh language is spreading along the Front Bench! I read here, my Lords (I nearly said "my friends": I am sure your Lordships are):
"Blaenavon is a bedpan of the world".
Lord Stoddart of Swindon: Tut, tut, my Lords!
Lord Parry: This was said by a Welshman. It is a print off from The Economist. It says:
"It stands on the eastern rim of the South Wales coalfield. The landscape is rainswept and windswept and scarred. Yet 120,000 visitors come there each year to put on helmets and lamps for a tour of the Big Pit. Their guide is one of the redeployed former miners at the pit, which was closed in 1980. Underground, the tourists are asked to douse their lamps to appreciate how fearfully dark and lonely it is in the bowels of the earth. Above ground, they visit the pithead baths… Yet when the Wales Tourist Board in 1978 put together a posse of statutory agencies and local authorities to establish an independent charitable trust to develop and manage the Big Pit museum, hoots of laughter filled the valleys. Turning it and other industrial 'eyesores' into tourist traps was seen as a waste of public money. The sceptics stand confounded. It is only by such bold initiatives that Wales will protect and increase its share of tourist spending".
I could quote from The British Hotels, Restaurants and Caterers Association saying similar things about the need for a Tourism Act-style development for the areas of Britain that are in difficulty. I should prefer to turn quickly in my last seconds to the words of Duncan Bluck, the current chairman of the British Tourist Authority. He was speaking to the British Tourism Society on 29th April, almost anticipating this debate.
Lord Ponsonby of Shulbrede: My Lords, the Tourism Society.
Lord Parry: The Tourism Society, my Lords. What did I say?
Lord Ponsonby of Shulbrede: The British Tourism Society.
Lord Parry: My Lords, the words of the president guide me. Duncan Bluck forecast 17 million overseas visitors by 1988 and a revenue of more than £8 billion annually. He went on:
"By the end of the century we shall certainly be welcoming more than 25 million overseas visitors a year".
He had some guiding words, too, for friends in high places:
"Whilst Government acknowledge the importance of this great tourism industry, this acknowledgment certainly is not always so obvious in their funding policies, particularly of the statutory tourist boards. We are talking about an enormous industry with an overseas visitors spend, as I have mentioned, of the order of £6 billion per annum in 1985 and probably a similar figure in domestic tourist spend".
He also had a personal word for the noble Lord the Minister without Portfolio, Lord Young of Graffham, who is to reply to the debate. He said:
"We particularly welcome Government's recent decision to form a ministerial committee chaired by Lord Young which will look at the barriers to the growth of the industry and hopefully come up with fresh proposals. The fact that this influential group is due to report in July also shows the degree of urgency and priority which would have been highly unlikely a year or so ago. The setting up of the group recognises a reality. The reality is, as I have mentioned, that we are talking about an enormous and successful industry which can continue to create wealth and jobs throughout Britain provided it is properly supported. We must not allow this opportunity to pass us by without fully exploiting the opportunities that it will create".
I have one question. Will the noble Lord, as soon as he comes to the conclusion of his examination towards the end of July, give us Government time so that we can have a sustained debate on this matter of the greatest potential industry in the service sector? I believe that, while the world does not owe us a living, there is one out there waiting for us to pick up. I beg to move for Papers.
3.16 p.m.
Lord Mackie of Benshie: My Lords, Lord Parry deserves great credit for initiating this debate, but he deserves greater credit for the way in which he has expounded the case. Figures are not normally very amusing, but he has battered the Front Bench with very effective figures one after another, all proving an excellent case. He diverged a little towards the end, when he started to speak about Wales, but as I shall talk particularly about Scotland perhaps he had a right to spend a few minutes so doing.
The case of the colliery as a tourist attraction was particularly interesting to me because for many years I was chairman of a small glass factory in Scotland. We quickly found that the tourist was the most important customer we had. We eventually found that a third of our whole income was coming from tourists. As they came to the factory and bought direct, it was probably the most profitable of all the income we received in that factory. Originally, this factory was up in Wick—a long way away. One of the things we have to do for tourism is to try to spread it away from the main centres, or make it in addition to the main centres.
It is interesting that the Scottish figures show that we take about £1,000 million a year, and, of that, £250 million comes from overseas visitors. This is not nearly our share of the total if the total is £5,000 million, as the noble Lord, Lord Parry, said. There is a large job to do to make people realise that there is not only London: there is a vast stretch of very attractive

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hinterland to which tourists can go and to which people increasingly want to go to enjoy the peace of the countryside, to take part in the life of the countryside and not merely to enjoy the attractions of lying on a beach in the sun. More and more this has become important. It certainly is important to Scotland, and will be even more important when we consider the decline in agricultural income, which is inevitable in view of the surpluses we have in Europe today. With this decline there has to be some substitute. Without doubt all the agricultural policy-makers are looking at a countryside which must be supported, or, rather, which must support itself, in some way other than simply by agriculture.
Tourism is enormously important in this respect. Already in Scotland the farmhouse scheme has had a certain amount of success and a large number of people in remote estates derive much of their income from the letting of empty cottages. This could be extended enormously—again, it needs Government help and the scheme needs education—for in Scotland there are large numbers of farm cottages which are empty and which could provide excellent holiday homes and bring in much needed income to those farms.
The tourist boards have much to do throughout the whole country making our areas really attractive to tourists. On odd occasions we still have the attitude which the noble Lord, Lord Parry, illustrated by what he said about the boy bringing up the hot water. In that respect I do not understand why, in Scotland, we do not have an official inspection scheme and a standard mark which says that not only the hotel accommodation but the bed and breakfast holiday accommodation is up to a certain standard. It is absolutely essential that we have a national inspection scheme before anybody receives the mark of approval. I know many areas which have excellent services, but there are others which can give a generally attractive area with good tourist services an extremely bad name. That is an essential part of the work of the tourist boards.
I come back to the question of extending the area to which tourists go, particularly to the hinterland. It was a good thing that the Government eventually saw the common sense of allowing the Scottish Tourist Board to promote Scotland overseas itself. But I think that more money needs to be spent on particular promotion. I do not think that one can ever "blanket promote" for Britain and attract the whole of the business that is there to be had. I think that one has to allow the specialists, whether in Wales or Scotland, to spend and to promote overseas themselves. We have always had in Scotland the anomaly of the Highland Development Board being able to do so while the Scottish Tourist Board has not.
Now the anomaly has been put right and, as always, the cry, I suppose, is that the Government should spend more money. But in this case the Government should spend more money because it is absolute nonsense not to invest in something which is going to bring in money. In this case we are not giving a handout; we are actually doing something which has already created a very large industry and an industry which can be a great deal bigger. With our appalling
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record in the export of manufactured goods and our dependence on oil I think that the case has been made very strongly that this is not a handout, that this is money well spent and that without putting some money out, we will not take any in.
The budget for the Scottish Tourist Board, I think, is about £5 million, to which I suppose must be added the grants that it pays out; but if that is bringing in £250 million of foreign business, let alone the £1,000 million of total turnover, it is a very small sum to pay for that amount of extra business.
I think that the arguments put forward by the noble Lord have been extraordinarily well made. I hope that the Minister is not going to give the usual answer that, of course, we have got to save money; because in this case we have got to spend, and we will get it back. Already the figures show that it is coming back and the case appears to me to be totally logical. I feel that the noble Lord the Minister cannot possibly give any other answer than that the case has been made and that the money will be forthcoming to promote this excellent industry.
3.22 p.m.
Lord Forte: My Lords, personally I welcome the purpose of the Motion of the noble Lord, Lord Parry, in drawing attention to the significance to the changing economy of this country of the various tourist boards and I thank him for giving us an opportunity to consider this important subject. I thank him also for his very entertaining speech.
I have worked in this industry for over 50 years. I believe I can now claim that I know something about it. My message to your Lordships today is simple. It is this. The tourism and leisure industry, as we have heard from the noble Lord, Lord Parry, has become vitally important to the economy of the country. I am not here in your Lordships' House today to advocate indiscriminate expenditure—in fact, it would be very much against my principles—but to say that to miss the opportunities that tourism presents, either by financial constraints or unnecessary control, would be absolute folly. Apart from the wealth that tourism creates within itself it, in turn, generates wealth in many other areas of the economy. Tourism must now be recognised, as we have heard, as one of Britain's finest investments. We could well be welcoming overseas visitors here long after the oil wells of the North Sea are dry and forgotten
I wish to emphasise the case for encouraging enterprise, renewed effort and greater initiative by all those concerned in the tourist business as well as ensuring that the tourist boards are enabled to perform their proper function in this connection. Some might accuse me of having a vested interest; indeed, I have. But I could say, so, too, has the country: it is in everybody's interest for Britain to have a prosperous and healthy tourist industry. Everybody is now climbing on the bandwagon; it is becoming fashionable. But it was not so long ago that the industry's role was regarded with some scepticism.
It is a good and healthy industry. Its record in recent years is a wonderful story of success. Investment, private investment, has been massive. The result, as your Lordships may know and as you have heard—the noble Lord, Lord Parry, unfortunately has stolen all my figures, for I think they come from the same

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source—is that 13·8 million overseas visitors were given hospitality here last year, and in 1985 we can expect, I am told, a record 14·5 million. If you will allow me to say so, I believe that over the years the industry has risen well to the challenge.
What does this mean for the country? Last year tourism contributed—and these are figures that your Lordships have heard many times already—over £5,000 million in foreign currency earnings, and, apart from this, the even greater sum of £6,000 million from domestic sources. This again demonstrates the efficiency and capability of the industry. It is over £11 billion.
Now I turn to jobs. Some 1.4 million people are directly employed in tourism, and they are among the finest working population of this country. I say so without fear of contradiction, though with due respect to other industries. They are working 365 days of the year, day in and day out, from early morning till late at night, to serve the needs of the industry. Without them, there would be no tourist industry; it would not exist. I would also add that it has been said that, for every one person employed in the industry, five more are employed indirectly outside it and because of it. New jobs are being created at the level of about 50,000 per annum. And it is not just new jobs, either. There are first-time jobs for youngsters leaving school and college; and I am very proud to say that my own company provides training and career opportunities for up to 2,000 young people every year.
I ask your Lordships' indulgence to dwell for a moment on the beneficial effects of a successful tourist industry on other areas; and I am not including some of the more obvious professional services, such as those of the solicitor, the banker, the accountant, the architect and many others. This industry, in fact, generates employment and wealth in virtually every other area of service and manufacture.
Our shopping list is vast. We need everything from coffee pots to computers, fittings and furnishings of every conceivable kind, kitchen equipment, cutlery and crockery and vehicles. We buy and use almost everything produced, supplied and grown in this country. We use every form of power and we must be the largest retailer of newspapers.
Just as an example, what would the dairy industry do without us? My company alone, a fraction of the industry, a mere fraction, reckons to use 41 million pints of milk and 90 million eggs annually—a lot of milk and a lot of eggs. Imagine then, my Lords, the total requirements of 39,600 hotels, motels and boarding houses, 76,000 licensed premises and the tens of thousands of restaurants.
Ours is a national industry, working in the national interest, largely within the framework of free enterprise. The dividends to the country are enormous and cannot be overstated. Moreover, the industry, in a relatively short time, has become a great national asset. The tourist boards referred to in the Motion are central to the successful marketing of our national product. They have done a very good job, and are doing a very good job; and if they are to perform their function properly, they need all the support that we can give them. That means, of course, financial support; they must be adequately funded.
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At present the British Tourist Authority's grant in aid, as your Lordships have heard, amounts to £16.96 million, which is virtually £17 million; that is only £160,000 higher than last year. The English Tourist Board receives £8.8 million, which is only £40,000 higher than last year. It may sound a lot of money perhaps, but, as I have indicated, the investment gives an excellent return. In real terms the allocation of funds to the boards has dropped over recent years, due of course to our usual enemy—inflation.
I would assure your Lordships that the industry generally believes that the case for more is justified; that is, the case for more money for the boards, and of course I would support the statement made by the noble Lord, Lord Parry, to that effect. Who pays? It seems that the Government always pay, and in many cases they do; but in this case the industry itself pays out very heavily in all kinds of rates and taxes. It is a major contributor to the Exchequer. My company alone last year—and I repeat that we are a fraction of the industry—paid in levies for rates, taxes and duties a total of over £140 million. That is not an inconsiderable sum. Therefore, the industry helps to pay.
Members of the industry in many ways support the various tourist boards, and will continue to do so, even moneywise. We feel that we get a return for our money, but we would not wish to see the boards grow into unwieldy bureaucracies. What we must have are tourist boards which will adopt a positive and active approach and react quickly when necessary.
Finally, it is easy for me to talk about what others should do without acknowledging the responsibility of those engaged in the industry itself. We do have a responsibility to give value for money to our visitors, and I believe we do give value for money. At a time when the market was clearly in our favour and we could have taken advantage of the situation we did not do so.
How else does our tourist traffic keep increasing? Currency fluctuations have indeed helped, but such advantages have also been enjoyed by our European competitors or partners—call them what you will—and in the main we have done better than they have; in many cases much better.
Therefore, we can look at the prospects for the future with confidence. We are talking about millions of airline seats in British carriers, millions of shoppers in British shops, millions of theatregoers in British theatres, millions of visitors to our museums, our art galleries and our stately homes, and, of course, millions of meals in British establishments and millions of bed nights in British hotels. Therefore I hope we shall see enhanced currency earnings, more and more jobs, and substantial profits, too, for the industry and the country. Travel is one of the great freedoms of our world today. Let us enjoy it and, as a country, take full advantage of its opportunities.
3.34 p.m.
Viscount Brentford: My Lords, I, too, should like to thank the noble Lord, Lord Parry, for introducing this Motion today. I feel rather like a minnow following a whale, if I may say so, speaking immediately after my noble friend Lord Forte, who has made an enormous contribution to the tourist industry. My own contribution is absolutely minute in that we open our

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home to foreign paying guests and therefore have a very small trickle of tourists, unlike the thousands and thousands he has. But I have this involvement and we have had experience of the British Tourist Authority. We believe that they do a fantastically good job and they have first-class people who work hard. They have proved to be extremely helpful in the setting up of our very small business.
The Government have been emphasising the growth of service industries over the past months. We have all heard and read about this, and I believe it is very important. Surely, tourism is one of the service industries that is growing very fast indeed. Whether or not this is the age of the train I would not comment upon, but it is certainly the age of the tourist, in my experience. We have heard not only how financially advantageous is this for the country, but also that it is so very positive for the growth of employment. I am amazed, in running our home, just how many regular employees we have who are being paid for by tourists. Some of them, certainly, are seasonal, but others are employed for 12 months of the year, and they would not have the jobs if it were not for the tourists. If that is true of us, in our very small way, how much more true is it of the bigger and far more effective agents of tourism? For these reasons I believe that this debate is very apposite, particularly now when the tourist season is just getting under way. It is very labour intensive and therefore very important.
I should like to refer to the United States, which is where my wife and I have had most experience of the BTA. There are there four offices, the largest of which is in New York. My wife walked into the Chicago office of the BTA on one occasion and there was a man in charge and one young lady manning the whole office. So while the young lady was talking to visitors the man in charge had to be the telephonist because there was nobody else to do it. But they were doing a first-class job, though people sometimes had to wait a long time.
The New York office has working in it some 20 people and it is far and away the largest. But even there there are times when everybody is engaged on the telephone or in talking to people and so new inquirers ringing up cannot get through on the telephone and new callers just have to sit in a queue and wait. I am sure, from my experiences in the States, that more American tourists would come to this country if it was easier for them to get the information they require from the BTA in the United States.
Everybody so far has asked the Government to provide a little more hand-out. I should like to emphasise what the noble Lord, Lord Mackie, said: that we are not asking the Government to give money away; we are suggesting that they should invest it, because they would get a very good rate of return on that investment. They have been receiving money from the sale of other investments recently and will be receiving other capital sums in the same way. Just a very small extra investment would produce a very good return for the Government accounts.
As I have said, there are four offices of the BTA in the United States, in New York, Chicago, going round Los Angeles on the West Coast, and Dallas. I should like to recommend that there should be another office
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between New York and Dallas; somewhere such as Atlanta. There is an enormous area there where Americans are a long way from any BTA office. Just a few more staff in the United States, I believe, would produce a very good return for this country.
It is sometimes said that American tourists will come here because of the weak pound. In my experience that is only a partial truth, because other currencies are also weak against the dollar. We have a lot to sell, but we need to market ourselves, and I am talking particularly about the United States, which is the one place where I have experience of marketing. I believe we need to do that.
I should also like to say that I must apologise for the fact—which I regret—that I shall not be able to be present to listen to my noble friend the Minister's reply at the end, because I have to depart in order to open a block of flats for old people. But I shall read with great interest afterwards what he has to say.
I should like to make a point about Wales—and I say this with great fear and trepidation in view of the Welsh experience of the noble Lord, Lord Parry. In my conversations with the foreign tourists with whom I have contact, they seem to me to go first and foremost to London; and then to Scotland or the West Country. I live in the South-East and I am trying to do battle to show them that—although it is impossible to drive down to it—the South-East is still not a forgotten area. I have asked why they do not go to somewhere like Wales where there is a great need for increasing employment and financial input. It is not the distance, because I do not believe that Wales is very much further away from London than Scotland.
But I should like to recommend that there be an increasing measure of co-operation in trying to promote that fabulous Principality of Wales to foreign tourists. It would also help, I am sure, the intervening area of the West Midlands through which tourists would go, and there are wonderful sights like Caernarvon Castle. I do not know whether my noble friend Lord Forte has a hotel nearby where American tourists could stay, but they want places of interest to visit and they want to meet the people. I believe that there could be much more done to sell an area like that to foreign tourists. It needs the opening up of hotels. It needs the opening up of people's homes—because we find that Americans and others enjoy meeting the people in the area where they are and staying in their homes, not sitting by themselves at dining room tables in hotels all the time.
I believe that there could be improvements made in roads. I regret that that would undoubtedly cost money. But I should like to see more co-operation between the BTA, hotel industries, road authorities, and other people in order to sell those areas of this marvellous island which are not so well frequented by tourists as others are.
We are today discussing a success story; and what fun it is to do that. I hope to see tourism continue to expand in this country and the BTA continue to provide the first-class service that it is now giving to this industry.
3.43 p.m.
Lord Stodart of Leaston: My Lords, I should like first to join with others who have thanked the noble

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Lord, Lord Parry, not only for initiating this debate but for giving us those extremely impressive figures which were fortified by my noble friend Lord Forte. It occurred to me when he told us of the consumption of milk—I did a rapid calculation—how fortunate he was that he had not decided that his hotel industry should be self supporting and keep a sufficient herd of cows to supply this milk, because, if he had come up against the quota which has been imposed, he would have been in dead trouble.
It is perhaps not insignificant that of those taking part in this debate one-third of the number are from Scotland. That may be necessary in order to compete with the eloquence of Wales. Indeed, it has alas!, on occasions been true, I fear that it has taken three Scotsmen to every Welshman at Cardiff Arms Park, if not at Murrayfield. But we shall do our best.
It is true that tourism is enjoying—and will enjoy, I suppose, due to the exchange rate—its best ever season. From what I and others have read it is even better than last year's record. How very encouraging it is, as my noble friend Lord Brentford has remarked, when things really are going with a swing. I felt some of the enthusiasm within the office of the Scottish Tourist Board when I looked in this morning. They seemed to be busy; they are radiating enthusiasm; and the industry has without doubt really taken off.
I suppose that my interest in Scottish tourism stems from 1960 when I took part in a tour that was organised—and the noble Lord, Lord Ross of Marnock, will remember these names—by Mr. William Nicholson and the late Lord Fraser of Allander. In those days there was no statutory Scottish Tourist Board. The tourist board was, if I remember the noble Lord's description of it, self-perpetuating. There was no Highlands and Islands Development Board in those days. Mr. Nicholson laid the foundations for the tourist industry in Scotland as it exists today; and I pay tribute to him now, if it be needed. He kindled Lord Fraser's interest and as a result of that Aviemore now exists as a conference centre and ski resort.
I clearly remember on that tour going to hotels that are now given praise in international guides and which were quite literally then only being built or, if they had got past the building stage, people were putting up the wallpaper. Even then there was an air of enthusiasm. The noble Lord will probably remember that the enthusiasm went to the heads of Scottish Ministers, who fell for the idea of what was known as a Kur-tax; a tax on staying at a hotel every night, as happens, and I think has happened for a long time, in Switzerland. So far did Scottish Ministers fall for this that a Bill was introduced, and it was only after the Bill had been introduced and had had a Second Reading, I think in the Scottish Grand Committee, that the indignation of the hotel industry exploded. As far as I remember, though I have not looked this up, it was the only Bill which ever had a Second Reading and was withdrawn—I do not know if it even went to Committee stage—because of the total opposition to it.
In Scotland we have always had beautiful scenery. That is not to disparage Wales, because, when I was a Minister at the Ministry of Agriculture, one of my
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pleasures every year was to spend two days in Wales. They were the two days I looked forward to most because the scenery there is unparalleled. In addition, in Scotland now we have a very good railway system bringing people from South to North, with their cars if they want them, or, if they do not bring their cars, there are cars parked beside the platform or at the airports to take them on to a marvellous road system. Everything now seems to be knitting together in a way that I find absolutely splendid. How wise it is of the two boards—the Scottish Tourist Board and the Highlands and Islands Development Board—to have organised their network around the lower tier of local government and to have, over and above that, insisted on the trade interests holding a majority stake in the area tourist boards.
For example, the size of Strathclyde would have made it totally impossible to do for the City of Glasgow in the tourist field what the district council of Glasgow has done for itself. I am bound to say, although I represented a constituency of the City of Edinburgh for 15 years—and the City of Edinburgh has undoubtedly been a very big tourist draw—that Edinburgh has to look to its laurels, because Glasgow has put itself on the map touristically in a very big way in the last two or three years.
Another point about the wisdom of having the tourist network down within the lower tier is that within the regions—Lothian region is an example—there are different districts where the tourist potential is totally different. Therefore, it is difficult for the region to do the job nearly as well as if it is down closer to the ground.
As I said, I visited the Scottish Tourist Board office this morning and the whole organisation seems to me to be first-class. The brochures put out for the different districts in—what one would hardly have imagined 20 years ago—not only good English, but in French and German as well, struck me as being absolutely excellent.
There are two things still to be done, one of which was mentioned by the noble Lord, Lord Mackie. I think that hotel classification is essential. I believe, from what I heard this morning, that it is on the way. The other point is that direct flights into Scotland would help the tourist trade immensely. I believe that at the moment only two airlines cross the Atlantic to Prestwick. I dare say that it is a question of economics, but I have never been convinced.
It has been said to us that Scotland is virtually a spin-off from London. People come first to London and then perhaps after that they can be persuaded to go to Scotland. I am not at all so sure that, once one has been through what I do not think are the greatest pleasures of landing at Heathrow, one wants to go back to Heathrow again in order to get to Scotland, but I may be wrong. I think that if we had more flights into Prestwick there would develop a market for people who really want to go to Scotland in the first place.
I started by saying, as others have done, that this is likely to be a record year. I think we have to be careful. I always remember the words of a friend who opened a small hotel which turned out to be extremely successful—and still is. I remember her saying:
"One bad meal takes 50 good ones to recover your reputation".
So let us not rest on our laurels.
3.54 p.m.
Lord Ross of Marnock: My Lords, we are all very grateful indeed to the noble Lord, Lord Parry, for introducing this debate and for that welter of impressive figures that he gave us. When I heard the noble Viscount, Lord Brentford, suggest that they needed more tourists in Wales, I began to wonder, after having listened to the noble Lord, Lord Parry, where they were going to put them. I hope that his arithmetic was better than that of the noble Lord, Lord Stodart. He said that a quarter of the people speaking in this debate were Scots—
Lord Stodart of Leaston: A third.
Lord Ross of Marnock: I have it written down. But if the noble Lord says it is a third, let him have a third. However, there are 10 speakers and five of them are Scots. I hope he does not forget that the noble Lord, Lord Forte, is a Scotsman. He, like many another Scotsman, delved his field very successfully in England.
We have a very big stake so far as tourism is concerned, and when we talk about the changing economic climate it seems to be all bad news. There are the railway workshops in Glasgow and all the other places that have closed down or are closing down. We pride ourselves that we had a pulp mill in the Highlands, the aluminium smelter was there and all of this we felt would add up to a new prosperity. The importance of tourism is that it can bring jobs, and can bring people who spend money to areas where it is so much needed. If we have one hotel opening and employing 50 people, that is a great industry in certain parts of Scotland. I do not think that the Scots can complain.
We had a debate on the Highlands and Islands Development Board itself and another one just under two years ago on tourism in Scotland, because we had a Bill before us. The Scottish Tourist Board was given new powers—I think that the noble Viscount, Lord Brentford, will be interested in this—for direct representation and spreading the word of tourism in Scotland overseas for the first time. I think that the sum involved was £200,000.
I look at what Scotland is to get next year. By the way, it is not £5 million. They are getting £9·2 million this year, excluding the Section 4 factor. But next year they are to get only £8·8 million, which is a 5 per cent. decrease. Almost the same is true of England. I think that they are virtually standing still. So the need for that support which has been urged here, and which seems to be taken up and accepted here, has not yet got through to the Government.
The places that need it most are, unfortunately, the places that are furthest away. That has implications for Scotland, for Wales and for the North of England. It has implications for the railways, for road passenger transport and for all sorts of other things which are outside the tourist board's immediate concern. So there has to be co-operation between the whole lot of them if we are to get the best out of tourism. I do not think we always do.
I was in Arran just a week ago. They were not talking about the high-faluting things that we talk
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about. They were talking about the cost of the ferry from Ardrossan to Brodick. They were talking about the timetable and how one ferry was to be taken out at the start of the summer. I am glad to say that that decision was changed as a result of the objections of local people. But there has to be far more concern shown by those who are not consciously dependent on the tourist industry, about getting together with the local people to see how they can help.
People used to go down from Glasgow to Arran for the day. I am a member of the Brodick Country Park, representing the National Trust of Scotland, and I sent my wife to get the tickets. When she came back she said, "I was standing beside a husband and wife and the husband said 'We will not be coming many times to Arran for a day now' ", and he told her the cost for a husband, wife and two children. We want a little more imagination shown by those who run the ferries, to make it possible for people still to go off for a day to some of the islands without it costing almost as much as a month's holiday.
As regards the Highlands and Islands, the noble Lord, Lord Stodart, will remember that he was very pleased with their organisation of tourism. They got about 15 area tourist organisations, with their local offices, in touch with the trades and with the local authorities and everything was going well. He said, "This is the pattern for the whole of Scotland". We had a Bill and we made that the pattern for the whole of Scotland. I think it started early in 1983. I was appalled to read a report on the Highlands and Islands by the Scottish Select Committee in which the Scottish Tourist Board actually argued with the Government and with the Higlands and Islands Board because it wanted to take over all those authorities which really pioneered the work that it is now doing. I thought it was impossible.
The Government are greatly to blame for this because the Government suggested it. The words are quoted in that report of December 1982. The Minister of State and Mr. Martin of the Scottish Economic Planning Department suggested that it was the Government's way forward for the Scottish Tourist Board to take over this part of the Highlands and Islands Board's work. I am glad to say that in evidence to the Select Committee the noble Lord, Lord Gray, modified that view and said that this would not be done—I want the Government to stress that this is their position—unless the local people wanted it done, unless the local area boards in the Highlands wanted it done, unless the local authorities wanted it done and unless the Highlands and Islands Board thought that the time was right. It is nonsense that at a time like this, when there is a chance to do so much in Scotland, one can have this type of argument with time being wasted by people who should know better. That is the one sad point that I wanted to mention.
I want to emphasise the point made by the noble Lord, Lord Stodart, that Edinburgh must look to its laurels. Glasgow, with the courage that came from the generosity of a private individual and help from the Government, put up a new museum, the Burrell. It is incredible but it is true that more people have gone to that museum in one year than to all the museums and national galleries in Edinburgh put together. People are coming to a wonderful building architecturally to

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see the Burrell Collection, which is displayed in the building. It shows what, with some imagination, can be done.
I hope that we in Scotland will appreciate the money spent on tourism and on attractive buildings. If you have to build something, make it attractive and not something that sickens you when you see it twice. I am not going to mention any buildings in Edinburgh of recent times—even those occupied by Ministers—which let us down from an architectural point of view. There are buildings that are worth visiting for themselves. I am glad to say that we are beginning to see the Victorian architecture of Glasgow cleaned up, just as we have cleaned the Houses of Parliament.
What a difference it makes! The money spent by the local authorities in that way is giving a new look to Glasgow. It is part of Glasgow's tourism. I do not believe that people realise that they can be in the centre of Glasgow one minute and half an hour later they can be at the Loch Lomond side. It is a tourist centre. People are now beginning to appreciate it. Apart from that we have not only the Burrell Collection but the Kelvingrove. I do not know about other people who are interested in art but I remember going to Vienna to see just one picture. It was the only place I could go to see it. The same is true of Glasgow. It has probably the finest collection of impressionist paintings in Britain. If you want to see Salvador Dali's picture, The Crucifixion of St. John, it is in Glasgow and you will not need to pay a penny to see it. All these things are worth while.
Sectional interests are also catered for. I am glad to say that they are getting down to it in Scotland. Golfing holidays are available, and the Highlands and Islands Board is working hard in respect of marine holidays. Winter sports holidays in Scotland are also being promoted. I am glad that the noble Lord, Lord Mackie of Benshie, mentioned these aspects because it did spring from Lord Fraser of Allander, Sir Hugh Fraser as he then was.
I want to echo something that was said by the noble Lord, Lord Forte. It is not enough to get people to visit Scotland or any part of England; you have to persuade them to visit again. In other words, they have to be impressed during their first visit by the hospitality and by the friendship. We cannot do very much about the weather; but even rain in Scotland is a blessed thing at times. There is the scenery in Islay and in Skye, and the changing weather and the changes of scene. That is part of the beauty of the whole thing. We have all these potential magnets for the tourists but we have to sell them to the tourists. I hope that the Scottish Tourist Board and the Highlands and Islands Board will stop jockeying for position, and that the Scottish Tourist Board will stop empire building and get down to the job properly to sell Scotland and increase the tourist value to the country.
Viscount Massereene and Ferrard: My Lords, before the noble Lord sits down, will he not agree that the beauties of Scotland must be protected because if you get hundreds of thousands of tourists straying all over the hills they spoil what they come to see? There have been many instances of that.
Lord Ross of Marnock: My Lords, the number of people we have in the Highlands area is 24 to the square mile. I think that we are able to absorb quite a few tourists without them spoiling it. I have heard the noble Viscount on this subject not only in relation to Scotland but to a village in England that is nearer to his heart.
4.7 p.m.
Lord Auckland: My Lords, I should like to associate myself with the tributes paid to the noble Lord, Lord Parry, for the characteristically erudite speech with which he opened this very important debate. I have had lying fallow on the Order Paper for about three years a debate on the hotel and tourist industry, but I think the noble Lord, Lord Parry, has presented the case with rather more conviction with his own experience than I would have done.
I think that we are in danger of playing the nationality game because for my own part I was born in London and christened in Scotland, but my mother and grandparents were all Scots. I declare a family interest in which I am completely non-financially involved in that I have relatives on my side and on my wife's side in both the hotel and catering industry in England and in Scotland.
I should like to devote my few remarks mainly to the hotel industry. I should first of all like to pay tribute to one person in particular, the chairman of the London Tourist Board, Sir Christopher Lever, whom I have known for some years being a Livery man myself. I knew him particularly during his year of office as Lord Mayor of London when he spoke so expertly on the very important subject of tourism.
One very important aspect of this is communications in the hotel industry. Of course tourists have to stay somewhere. It is usually in hotels or in boarding houses or, as the noble Lord, Lord Mackie, said, in cottages which do a thriving trade, do it very reasonably, and do it particularly well in Scotland with its characteristically splendid cooking. It is the reasonableness of cost that needs to be emphasised.
The manager or proprietor of a hotel is more than a front man or front woman. Very frequently overseas tourists, particularly Americans, who are very friendly people, want to meet the manager or proprietor. Visitors like to meet the owner or manager of the premises in which they are staying, and that is understandable. Obviously it is not always possible to do this, particularly in a big hotel. But we were enriched by the speech of my noble friend Lord Forte, with his lifelong experience in hotels. It is the friendliness which one experiences in the hotels he and his family run which makes them so inherently successful.
The other point I should like to dwell on for a moment concerns catering. In this country we have in hotels Spanish weeks, Italian weeks, French and German weeks, and so on. I should like to ask my noble friend the Minister, if he is willing and if it is within the purport of his reply, to say whether British weeks are sufficiently sponsored overseas. After all, British tourists go to France, Germany and America. Sometimes they would like to sample the way in which British food is offered in those countries. In Denmark,

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there is, or there was 12 years ago, when I was last there, in Copenhagen one restaurant which served British food, and it was extremely well patronised. That kind of two-way traffic is all-important.
Another matter which has not been touched upon but which is very important is safety. I declare an interest as honorary vice-president of the Royal Society for the Prevention of Accidents. More and more tourists, particularly Americans, visit our country, bringing with them young families and old people. Much has to be done in British hotels, compulsorily, of course, as regards safety precautions. For example, fire doors have to be installed. This places a large cost on the owners or proprietors of hotels.
I have a question to ask my noble friend. I have not given him notice of it and so he may not be able to reply this afternoon. I should like to know whether any grants or loans are available for people setting up new hotels, in particular people who are doing so privately as opposed to hotel chains, such as those owned by the Rank Organisation. Hotel chains, too, are put to great expense when they are required to fit safety devices. It is absolutely right that they should be required to do so, but if no help is given to them, so often the cost is passed on to the consumer and all the benefits tend to be lost. This is an important point to consider when we are discussing hotels overall.
In conclusion, I should like to pay tribute to those people who have produced the reports of the various tourist boards. These are concise and to the point. This is particularly so of the small leaflet Plain Facts of Tourism, which should be taken as an example of how facts and figures can be presented concisely instead of in large volumes. This debate is to be welcomed and I hope that the subject will be discussed again before too long; tourism is universally regarded as being one of our growth industries.
4.15 p.m.
The Earl of Dundee: My Lords, I join with other noble Lords in congratulating the noble Lord, Lord Parry, on introducing this debate. As he was recently chairman of the Welsh Tourist Board, the House is particularly fortunate in being able to have the benefit of his advice and experience today.
Sometimes it is contended that regardless of how the British economy may change, the role of tourism remains fairly static and limited; thus good results and increased revenues from tourism are explained away as simply reflecting the present disparity between the pound and the dollar. And it is argued that current favourable trends, which are claimed to be cyclical, do not show that British tourism is moving forward but instead that the industry is only regaining the position it held in the early 1970s.
It is further alleged that since United Kingdom travel expenditure abroad still exceeds income from abroad—and the travel account balance of payments deficit for 1984 was still about £0.2 billion—then tourism cannot as yet have made a significant impact on the Btritish economy. However, these observations, although quite useful in themselves and when taken separately, when taken together do not amount to a case which undermines at all the present significance of British tourism.
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Regarding tourist income from the United States, the lion's share is coming to Britain. As my noble friends Lord Forte and Lord Brentford both observed, this is despite the fact that the dollar is hardly any weaker against the European currencies. And in each successive year over the past 10 years Britain has retained 60 per cent. of the number of visitors from the United States for the previous year. More to the point, when considered against other sectors of the economy, as noble Lords have already illustrated, tourism emerges better than almost all the rest, accounting for more than 1 million employees and showing a 1984 cost of job creation per capita in the region of just under £5,000.
Nor is it anything but desirable that United Kingdom travel expenditure abroad should continue to grow. This does not work against the interests of tourism expenditure in Britain. And it is not inconsistent that the BTA's minimum forecast of successive annual increases of 50,000 jobs per year and of 17 million visitors to Britain by 1988, representing £8 billion in annual revenue.
If it is agreed that tourism is a major growth industry, it should be asked what part the Government can now play to stimulate that growth, and hence also, as this Motion implies, how far the present level and nature of support received by the statutory bodies should be altered, if at all. It is to be welcomed very much that the Government have launched an interdepartmental tourism policy review, chaired by my noble friend Lord Young of Graffham, and that this review is designed to remove obstacles to the industry's rapid expansion. However, this year has seen a drop in real terms in the financial support given to the BTA and the ETB. Can my noble friend the Minister indicate whether, arising out of his current review, this drop in financial support might be corrected? In the absence of a ministry for tourism, can my noble friend further indicate what system of arbitration may be able to operate in this and in future years to protect financial levels for the industry?
The main purpose of the review itself is to identify new methods of encouraging the industry. Regarding the need to assist the development of hotels, restaurants and tourist attractions in towns and inner city areas, can my noble friend reveal what measures the Government are prepared to adopt to ease excessive town planning regulations which conflict with that aim?
More obvious restrictions confronting tourism reflect the case for extending the opening hours of national museums and galleries and improving the speed and efficiency of immigration and Customs controls at ports of entry. In regard to liquor licensing restrictions, there is now plenty of evidence to suggest that flexible drinking hours do not lead to bad behaviour. This is so whether one finds oneself in Scotland, on the continent of Europe, or even in the refreshment areas of your Lordships' House. However, in considering the question of drinking—and as my noble friends Lord Forte and Lord Stodart of Leaston have reminded us—we should take into account also the consumption of milk.
Turning to the question of good communications within the tourist industry, there is of course the priority that the trade should become fully aware of

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the quality and standards demanded by the consumer. The Scottish Tourist Board has already embarked on a scheme of voluntary registration. This enables the verification of accommodation and more detailed grading, to which the noble Lord, Lord Mackie of Benshie, and my noble friend Lord Stodart of Leaston have referred. That in turn can assist a larger turnover of business and hence also lead to lower prices for the consumer. Can my noble friend the Minister affirm that the adoption of similar schemes to the one initiated by the Scottish Tourist Board will be encouraged as soon as possible for the rest of Britain?
The Highlands and Islands Development Board also has an excellent record in relation to tourism, and it is in no small way owing to the efforts both of that agency and the STB that Scottish tourism is in the healthy state that it is. However, there is always the danger of too much complacency within the trade. One of the main objectives should be to raise the percentage of occupancy over the different types of accommodation that are offered both in and out of season. Another should be to give more guidance to small tourist-related businesses in Scotland on what facilities they should try to develop.
Then there is the importance of training and education in tourism. The ETB is now taking steps to improve publications and information on career opportunities. Does my noble friend agree that the Government should take some direct initiatives? What plans do the Government have to promote to a greater extent education and training in tourism in schools and in centres of further education?
If we consider the part which the Government and the statutory bodies can both play to help British tourism, there are many areas for action and co-operation, which include maintaining financial support, removing unnecessary restrictions, raising quality and standards and improving training and education. Provided that those matters are tackled, the British tourist industry will continue to make a major contribution to the economy, to the creation of jobs and to the opportunities for leisure and recreation.
4.22 p.m.
Lord Ezra: My Lords, I am a little reluctant to intervene in this debate, especially as my name is not mentioned on the list of speakers, because I am neither a Scot nor directly involved in the tourist industry. However, I am very interested in our balance of payments, and I happen to be a member of your Lordships' Select Committee on Overseas Trade. We had the benefit of the evidence from the British Tourist Board on the great contribution that the tourist industry is making to our balance of payments. I am also keen to intervene because the noble Lord, Lord Parry, who so eloquently introduced the debate, is a colleague of mine on the "Keep Britain Tidy" group; and the noble Lord, Lord Forte, who made such an important contribution, is a great supporter of that campaign, the objective of which is to improve the quality of the land in which we live for those who live here and to make it more attractive for those who visit us.
I have one point that I should like to put to the Minister, and it is this. I believe that the
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encouragement of tourism can be linked with the encouragement of our trade in manufactured goods. Are we satisfied that we have a sufficient supply of adequate exhibition centres in this country? We have the important exhibition centre in Birmingham, we have the old established exhibition centres in London, and there are a number of others. But I believe that if we were to improve the quality and quantity of our exhibition centres to vie with a number of such centres on the Continent, we could as part of our tourist operation attract people here not only for their holidays but also for business reasons: to come to see our products displayed in the best conditions.
We could provide them with a good holiday in the process and show them some of the wonderful sights in Wales, Scotland and elsewhere which have been so lauded today in our debate. I believe, therefore, that the promotion of tourism can be given an additional dimension if we take a close look at how it can be linked with the promotion of our trade in manufactured goods.
I thank your Lordships for allowing me to intervene although my name was not on the list of speakers and to make the additional point of how we can add to the benefits already provided by tourism.
4.24 p.m.
Lord Ponsonby of Shulbrede: My Lords, as other noble Lords have done, I should like to thank my noble friend Lord Parry for introducing the debate today. His experience as chairman of the Wales Tourist Board has contributed much to our discussion, and his contribution to its work has done much to improve the tourist attraction of the Principality. His forceful presentation of the industry's progress, I feel, was just the right tone to set for our debate today. This is the first debate specifically on tourism since I was fortunate, like my noble friend today, to secure a place in the ballot some seven years ago. The problem then was the same as it is now: the Government do not sufficiently recognise the size of the contribution that tourism has made and is making, not only to our overseas earnings but also to employment within the United Kingdom.
The question which must, with some starkness, face the present Government, with the political philosophy that they hold, is why they should give any money to the tourist industry. Why should not the private sector fund the national effort to promote tourism? I would answer the question in this way. The tourist industry is widely fragmented, involving thousands of operators, many of whom are very small and who cannot come together in a meaningful way to promote the industry. Secondly, it is a national industry—a national asset that we cannot do without. The Government have a duty to see that the economic climate is one in which the industry can flourish. It is an economic climate which, I would say, is fiercely competitive in an international field.
That not only involves the Government in giving grant-in-aid to the national boards, but also in encouraging the industry in the country. For example—and the noble Earl, Lord Dundee, quoted this—the Government need to take action on hotel building, particularly in central London. As the Minister will well know, all three central London

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boroughs have had a ban on new hotel building for some years—in the very areas where we need more reasonably-priced hotel beds to be available. I wonder whether it is possible for the Minister to ease the path of such planning consents in the central area; or, indeed, if the hotels cannot be built in the central area, to see whether money can be made available for local authorities outside the central area, whose spending is inevitably capped at the present time, so that they have the wherewithal to attract hotels to their areas. I particularly have in mind the infrastructure necessary if we are to encourage hotel building in areas where hoteliers do not immediately want to build.
I should like to say a word about the Government's grant-in-aid to the British Tourist Authority. Many noble Lords have already mentioned the fact that it has increased by roughly 5 per cent. in cash terms over the past four years to £17 million in the current financial year, 1985–86. But, of course, in real terms that amounts to a substantial decrease. The figures conceal the fact that there has been a decline in the value of the pound in this period. The British Tourist Authority now has to spend 44 per cent. of its grant-in-aid, as opposed to 28 per cent. four years ago, on its overseas offices. Even with that increased share of its budget being devoted to overseas marketing, the amount in fact available to maintain its operation overseas, and particularly in the United States of America, is considerably down. The effect of this has been that the number of staff in its overseas offices has had to be cut and, for example, it has had to cut its overseas advertising campaign by some £600,000.
Perhaps I may put the amount of Government support to industry in some kind of context. The noble Lord, Lord Parry, commented that overseas visitors were expected to contribute some £600 million to the Treasury in VAT receipts in 1985. The Government pay only about 10 per cent. of that to the tourist industry. The noble Lord, Lord Forte, commented that his company contributed some £110 million in rates and taxes last year. The Government contribute only about half of that to the tourist industry at the present time. Lack of money within the industry means that a number of jobs are not being done. Inspections of smaller hotels, as has been mentioned by a number of noble Lords, are not being adequately carried out for these reasons. Policies of telling people about new attractions, which have again been spoken about by a number of noble Lords, are not being carried out.
In this particular debate, I am in a minority, not being a Scotsman or a Welshman, but being a Londoner. What concerns me particularly is the image of London, which I regard as being very important since it determines the choice which visitors make for their holidays. Suggestions that London has dirty hotels, is overpriced and does not care, are not good for tourism. The Government must be concerned that London has the ability to maintain standards and to maintain its image.
Those people who complain about crowds should remember that without tourists London would not be the same place. Tourism is a part of our infrastructure. If the tourists' support of many aspects of London life were withdrawn, London would be that much poorer. In London 380,000 jobs directly depend on tourism.
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Forty per cent. of theatre tickets are bought by tourists. Twenty per cent. of taxi rides are paid for by tourists. If these particular sales were not being made, there is a danger that those services would not be available to Londoners as a whole. As has been said, nationally 1·3 million jobs depend on tourism. As the noble Earl, Lord Dundee, said, this will increase each year by 50,000 if tourist spending increases by three per cent. Of course, this includes jobs only in hotels, restaurants, public houses, nightclubs, tourist attractions, and so on, but not in related services like manufacturing goods which are bought by tourists.
The structure of the national tourist boards is as was laid down in 1969 by the Development of Tourism Act. It has created a number of problems, some of which the present Government have tried to overcome by the amalgamation of the roles of the chairman of the British Tourist Authority and the English Tourist Board. It is certainly to be hoped, although the two organisations continue with separate chief executives, that this will lead to a lesser amount of duplication of their work. It does not underestimate the feeling that I understand is being felt by the other national boards towards the combined BTA/ETB network, that these two boards working so closely together will mean that the English Tourist Board is likely to benefit disproportionately by the amount of grant money available to it.
However, the figures do not bear out this particular fear. The proportion of grant-in-aid, including Section 4 money, allotted to the Scottish Tourist Board and the Wales Tourist Board has gradually increased over the years, while that allotted to the English Tourist Board, and for that matter to the BTA, has decreased. I understand that part of the reason for this is that the Scottish and Welsh offices are responsible for the funding of the STB and the WTB, whereas the Department of Trade and Industry, where funds are more scarce, are responsible for the funding of the ETB and the BTA.
There has been a very competitive situation among the national boards for some time. Each board has tried to prove itself better and more forceful than the other with the result that the same job was being done more than once. During my time as chairman of both the London Tourist Board and the London Convention Bureau, my experience taught me that there was a danger in more than one organisation trying to do the preliminary work which was necessary before a conference or convention could be arranged and handed over to the private sector for processing. It led to a considerable degree of confusion within the industry. This is something that has to be dealt with. The new arrangements have already led to a cutting of duplication. Work is being done more effectively within the BTA and the ETB. This needs to be extended to the regional boards.
The present Government have adopted, as one of their themes, the theme of taking services nearer to the people. This is not a view with which I disagree, although I disagree with the extent to which I believe the Government have achieved anything in this area. I see as important the need to put more emphasis on the work of the regional boards.
Almost every year, since I first became involved with the work of the London Tourist Board in 1970,

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the amount of grant-in-aid paid to the board as a proportion of the amount of grant paid to the English Tourist Board has decreased. This is the case with the work of the other regional boards. The English Tourist Board in the past has given priority to its own work over and above that due to the regional boards. I am glad to see that there is some reversal of the trend now and that money is to be diverted to the regional boards for hotel registration and verification. The English Tourist Board is hard at work on this aspect and it is hoped that a strong scheme will emerge.
I hesitate to mention this on what would appear to be a holiday from discussing the Local Government Bill, but another factor which faces the work of the regional hoards is the effect of the loss of local government funding and the problem of local government support in the future arising from the abolition of both the GLC and the metropolitan authorities. If funding in London is left to the individual boroughs on a voluntary basis, there will be little funding available to the tourist board (which of course has been recently renamed the London Visitor and Convention Bureau).
This is because the inner London boroughs feel that they have enough tourists, and that the London Visitor and Convention Bureau should be encouraging tourists to go into the outer London areas and not encourage them to come into central London, or servicing them in central London. However, the outer London boroughs are, in many cases, doubtful about the advantages which they themselves would reap from having more tourists in their particular areas. As we have said, there are a great number of jobs at stake in London and it is important that this should be put on a proper basis in the future and should not be neglected during the passage of the Local Government Bill.
In the past, I have spoken about the need for a Minister of Tourism. I have not changed my mind on this. I feel that the main reason for having a Minister of Tourism is so that the Government of the day can show that they regard tourism as a serious contributor to our national well-being, and also the fact that the Government of the day regard tourism as something important and not as an ephemeral contributor to our national welfare.
Perhaps I may take what may appear to be a trivial example in relation to London. One of the sights which tourists flock to see in London every day is the changing of the Guard. This happens every 24 hours during the summer schedule, but during the winter schedule it happens only once every 48 hours. I am told that the Ministry of Defence has decided that this year the winter schedule should start in early August. I am sure that if the noble Lord the Minister who is to reply had the responsibility of being the Minister of tourism, he would promptly and politely have made it clear to the Secretary of State for Defence that such a decision was not in the general tourist interest. I should add that every other year the winter schedule has started very much later than it is proposed this year.
I apologise for focusing these remarks on London, but London is, of course, the part of the country that I know best. It is the focal point for the tourist industry. Over 85 per cent. of our overseas visitors use
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London and the immediate area around it as their point of entry into the United Kingdom. Over two-thirds of them stay in London for some part of their visit. It is true now, as always, that for the rest of the country to benefit adequately from the tourist industry, the position of London is crucial. It is therefore, I think, regrettable that the only British tourist information centre in St. James's should have been closed at the instigation of the present Government. We have in London an England centre at Victoria Station. We have separate Wales and Scotland information centres in London, but no centre where information can be obtained about all of Britain. Proposals were put forward for an all-Britain centre near Piccadilly. Those have fallen through for lack of funds. Should not this be reviewed in the interests of spreading tourism throughout the United Kingdom?
I have reread the contribution that I made to the debate in 1978. I see that I then said:
"Because we have just experienced a bumper inflow of tourists, we must not be lulled into a false sense of security about the future health of the tourist industry. We must remember that constant efforts are needed if we are to remain an attractive venue for overseas visitors". [Official Report. 25/1/78; col. 401.]
That is as true today as it was then. In fact, the number of overseas visits declined in 1979, partially owing to the strength of the pound at the time, partially owing to bad publicity and partially as a reaction to 1977 and 1978. Thankfully, our foreign currency earnings are now, in cash terms, about twice what they were in 1977. However, in real terms they have hardly recovered in London to that figure. We must be vigilant on behalf of the industry. We must remember that tourism is a fickle industry. Nothing should be taken for granted. Noble Lords will recall that three or four years ago tourists were flocking into Miami. Now very few British tourists go there.
Noble Lords will also be aware that the drop in the number of tourists expected to go to Spain this year is about 20 per cent. So we do not need reminding that we cannot automatically expect to see an increase in the number of visitors each year. I hope that the debate today will have been helpful to the noble Lord, Lord Young of Graffham, who is to reply, in his inquiry to determine the statutory or other obstacles that hinder enterprise and employment development in the tourist and leisure industries.
4.44 p.m.
The Minister Without Portfolio (Lord Young of Graffham): My Lords, I am grateful to the noble Lord, Lord Parry, for his enthusiasm and his restraint in introducing the Motion. His enthusiasm was infectious. Indeed, I do not think that I should burden your Lordships' House with any more figures. The noble Lord has given all that are required to show the enormous growth in tourism. His restraint was even more commendable. For fully 12 minutes of his 15-minute speech he spoke of the United Kingdom and fell into temptation only in the last three minutes to talk about Wales. He fell finally from grace utterly, in my book, in talking in the last few seconds about money. I am grateful that we have had such a useful and timely debate, in the view of my colleagues and myself on the committee that I chair, to look at the progress and the course of possible future development of tourism within the United Kingdom.

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Tourism on the scale that we know it today is a comparatively new phenomenon. The development of air travel in the 1960s and the 1970s has opened up the international market in a way perhaps paralleled only by the manner in which the introduction of the railways in this country opened up domestic travel. I recall occasionally, I must confess with a little nostalgia, those days 25 years' ago when London in August was deserted. Most of the restaurants were shut. We could certainly park our cars. London was almost a desert. Indeed, in those days the Oxford Street shops used to see their sales decline sharply in the middle of July and recover only in September. It is only the enormous growth of tourism that has brought about such a tremendous change.
The fact that strikes me most vividly is that since those days in the mid-1950s the number of tourists coming to the United Kingdom has increased by 14 times. United States citizens holding passports number barely 8 per cent. What will this country be like if and when 16 per cent. of Americans hold passports and then 24 per cent? Will they come to this country, or will they pass us by on the way to Europe? This is a matter to which we should give considerable thought. I am not sure that this has anything to do with the amount of financial support that the Government give to tourism. We have heard of enormous figures. We have heard of the comparatively small scale of Government spending that has generated those figures.
The noble Lord, Lord Mackie of Benshie, said that Scotland had not had its fair share. I have looked up the figures. I find that in 1984–85 the Scottish Tourist Board and the Highlands and Islands Development Board had in excess of £15 million. We, the poor English board, had £17·5 million. So, in proportion, Scotland has, I think, had rather more than its fair share.
Lord Mackie of Benshie: My Lords, I said that Scotland did not get its fair share of overseas business and that it must attract such business. I did not say that we did not get a fair share of Government money.
Lord Young of Graffham: My Lords, I do not wish to debate individual points. I wonder even then about this. It seems to me that Scotland has enormous advantages that are now being used. I am aware that the River Thames now contains salmon. I do not believe, however, that we would choose to go fishing in the Thames. Many of the evident attractions of Scotland have led, for example, to the growth of the electronics industry there. But that is another story. If, however, we are talking about the money that the Government spend, we should not simply be concentrating our attention on the amount spent through Section 4 grants or through the various tourist boards.
I had the privilege, while at the Manpower Services Commission, of introducing the Community Programme. It spends £600 million a year. This will be up shortly to about £1 billion. Many outdoor museums today owe their existence to the Community Programme. They are becoming substantial tourist attractions in their own right. Ironbridge Gorge industrial museum has contributed enormously as a result of the Community Programme and the Youth Training Programme. Ellesmere Port boat museum
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and the Manchester museum of science and technology and railway preservation societies around the country are other examples. During my time with the commission I visited innumerable industrial museums which are now becoming tourist activities in their own right. This shows once again that tourist attractions are not confined to any particular part of the United Kingdom. They are not confined to any part of the United Kingdom with supposed benefits of climate. They can be seen to be spread universally.
I am grateful to my noble friend Lord Forte and I pay tribute to his 50 years in the industry. I am looking forward to being 50 years a customer of the industry. I greatly appreciated my noble friend's description. I thought at one time that he said "a land flowing with milk and eggs". My noble friend Lord Forte demonstrated beyond any doubt the way ahead in tourism. He told us that he had introduced training for young people and that some 2,000 young people a year are benefiting. I hope very much that the two-year youth training scheme will enable that situation to be accelerated.
However, I suspect that the real difficulty that we shall have in tourism, and, indeed, the real opportunity that will be presented to us by tourism, will lie in the ways in which we are able to develop the education and training systems. We must once and for all lay to the ghost that service is somehow equivalent to servile. We must recognise for all time that the profession of a waiter is an honourable profession, that giving good service in a restaurant or hotel is an honourable way in which to earn a living. We must recognise, just as we do with exports overseas, that if we are to win and build up a real tourist industry in this country, we must earn it, and we must earn it through service.
My noble friend Lord Brentford talked of the United States and of the activities of the British Tourist Authority in that country. Of course it is a marketing organisation and not a direct selling organisation as such. It is through the travel agents that the various packages and information about this country are delivered. However, all the advertising, all the packaging and all the marketing will be wasted if visitors who come over here have bad experiences and go home and tell their friends. It is service and quality of service which restored the fortunes of the Jaguar Motor Company by ensuring that they had a product of good quality. It is service and the quality of people's stay in this country which will cause the word to be spread back in the United States, in Europe, in the lands overseas, and that will bring people to this country far more than will any amount of advertising.
We have heard much of figures. The exact number of those employed in tourism and the leisure industries is difficult to measure because the estimates vary. However, when looking at tourism I hope that we shall also look at and take into account leisure itself and the internal tourism of those of us who go away for one day, two days or even on day trips. That type of tourism is an enormous job generator.
Much was said during the course of the debate about the future of industry in this country. I suspect, hope and anticipate that industry will be a great wealth producer in this country. However, neither I nor many of us foresee that it will be a great employer. It is the

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wealth which will be generated and which will be spread, I hope, through the service sectors, through restaurants and through hotels which will benefit not only tourism but also our own native people as well as employment.
My noble friend Lord Stodart drew attention to the dangers of a hotel tax. Part of my job is to look at the burdens that are placed on, and the obstacles that are put in the way of tourism. I hope that we shall never be tempted to consider placing too many obstacles in the way of attracting people to come here. My noble friend also drew attention to the growth and development of Glasgow and said words which have been repeated as a theme many times throughout the debate: namely, let us not rest on our laurels. We have seen a great growth in tourism. Whether that growth continues, as I know it can, depends upon all of us and not—and this is the theme to which I should like to return—necessarily upon the amount of money which the Government will give to the tourist boards to help the industry to do it.
The noble Lord, Lord Ross, drew attention to the great importance of jobs in rural areas and particularly in those areas which the wave of industry has now passed by. The noble Lord is absolutely right. A hotel employing 50 people in an area of great scenic beauty is a permanent source of employment not only to those 50 who live in the hotel, but also to the many others who work on estates, in shops and in restaurants around that area. I suspect that such places are much more likely to be an enduring source of employment than those industries which have their time and then go. I hope that we shall see throughout the length and breadth of the land the continuation of the enormous growth in country hotels and tourist projects. We have the great advantage of having not only a beautiful country and a well developed countryside but also probably one of the world's great commercial languages which is of as much help in attracting tourism and foreigners to this country as it is of help to our businessmen overseas. I hope that we can put the two together and see them develop.
My noble friend Lord Auckland asked whether we have "British weeks" abroad. I have seen British weeks abroad. Indeed, they are still continuing. I very much hope that they will play a part. However, as I have said time and time again, it is a small part of the task of actually marketing tourism in this country. The noble Lord drew attention to the cost and difficulties of regulation. Every regulation has a price. The price may be worth paying. However, excessive regulations certainly have a price and the price probably lies in someone else's job. Part of my task is to look at the obstacles which are placed in front of those who are engaged in the hotel and tourist industries and to see whether they are truly needed. In another place only this week the restriction on shops' hours was debated. I hope that in the course of time that will be seen to be not only a great job generator but also an attraction for the tourist industry.
The question of fire precautions has been mentioned. I do not think that this is an appropriate time to debate the essential nature of fire precautions, save to say that we must ensure that we have suitable and adequate precautions for the protection of our
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tourists. However, we must also ensure that there is not so much bureaucracy that we slow down the working of the system and lay too much cost on those new industries and new businesses which are starting. I hope that when I and my colleagues consider the situation we shall be able to have a good look not necessarily at fire regulations, but at the many regulations that actually exist and see whether or not there are some which can, with safety, be relaxed. It is a question, time and time again, of getting the correct balance between licence and the liberty of the individual—not allowing the licence to abuse our fellow man. I suspect that if we look more and more at the opportunities which are offered in this country, we shall find that they are developing fast.
I have already made reference to the number of country hotels which have expanded and grown in the last few years. I was very grateful to the noble Lord, Lord Ezra, for mentioning another aspect; namely, conference and exhibition centres. We already have a great new exhibition centre in Birmingham—though I suspect that it is not now quite so new—which is going very well. I recently read that some of the London centres were talking of expanding. I hope very much that perhaps the Docklands 'could even have an opportunity to expand. I know that the market for conference and exhibition centres is growing fast and I suspect that they will become available before much longer. We have a valuable opportunity.
However, I slightly regret that no one this afternoon has mentioned that other activity which has been so much a source of not only tourism but also leisure activities generally. I am referring to the many large amusement centres that now exist throughout the country. This area has grown immensely and is achieving standards of professionalism comparable with any country in the world. I know that there have been plans for some of these centres in the London area and if they go ahead, there will be great employment opportunities. I hope very much that they proceed.
I now come to one of the problems which was raised by the noble Lord, Lord Ponsonby, that of planning. Incidentally, perhaps I may say how grateful I was for the remarks of the noble Lord opposite, for at least I felt that we two were holding the Standard of England among so many speakers from Wales and Scotland. Planning is a difficulty and a problem. There are some authorities which still perhaps, and alas, do not recognise the real employment potential of tourism in hotels. I suspect that there will be a shortage of hotels before too long; but let us remember that the last time the Government interfered with the market and encouraged hotels there was considerable over-provision for a period. I suspect that it would be as well to see that we have slow but steady growth in the provision of hotels.
I hope that the great growth of tourism in the past few years has shown that there is a demand for hotels. Many small ones have been built in London, and I hope many more will be. We must ensure that where there is a demand for hotels but the planning system causes delays we do our best to ensure that within the system planning permissions are granted where appropriate as quickly as possible.

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This has been an interesting debate. It has brought forward many messages which I shall certainly pass to my colleagues—messages from which I hope we shall learn. I hope that we shall see a growth in income and employment in tourism which is an honourable industry in which to work, and I hope too, that the nation will see it as a real activity.
If I am to make a forecast—and it is silly for someone standing at a Dispatch Box to make a forecast—it is that when your Lordships' House again looks at this matter, either this year or next year, we shall again be talking about an increase in figures. The figures will continue to increase for as long, and only as long, as we remember that it is service and only service, which brings back tourists, provided that they have an enjoyable time when they are here.
I hope that the training and employment measures on which the Government have embarked, together with the great encouragement which your Lordships' House has today given to tourism, as well as the Government's review will be seen and noticed, and that tourism will continue to grow.
Lord Parry: My Lords, the noble Lord, Lord Young, who has just sat down, has described this debate as useful and timely. I think it has certainly been a pleasant and well-informed one. There has been no contribution this afternoon which has fallen in any sense below the standard of the challenge to us to get the funding and the preservation of this industry, and its expansion, correctly in balance.
I was perhaps being a little too reluctant to mention Wales, or I should have mentioned the Sun Centre in Rhyl. I accept the noble Lord's rebuke. That great institution there is the largest attracter of visitors in the whole of Wales, and it is vastly important. I also fell, in pure monetarist terms, slightly below the noble Lord's level in mentioning money at all. I only do it because it is a necessary dimension when one is talking to Governments. We have to talk money, and to talk about good government and the good use of money, because investment in redevelopment is as important as controlling the money supply to cure historical ills. I think we need not go any further into that.
I would not want to go down the whole list of people speaking in the debate; that would be no use to us at this stage. I say "Thank you" to everyone for the quality of the contributions. Nor am I going to neglect the fact that the noble Viscount, Lord Massereene and Ferrard, intervened to ask: are we going to go on counting heads, and, when we substitute feet for heads, are we not going to do damage to the environment? It was absolutely right and important that that intervention should have been made.
We have to see that the tourists' contribution to the economy and the presence of the paying guests in the country do not disturb the quality of life for those who live here, nor detract from the culture which has been built up over the generations. That is absolutely right, and the history of the industry proves that it has that message as much to heart as anyone in the country, and works with the grain of conservation and preservation.
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In thanking your Lordships for a splendid debate I ask your Lordships' permission to withdraw my Motion for Papers.
Motion for Papers, by leave, withdrawn,

The Arab-Israeli Dispute and the EC
5.4 p.m.
Lord Chelwood Lord Chelwood rose to call attention to the case for the European Community to make more effort to narrow the gap in the Arab-Israeli dispute; and to move for Papers.
The noble Lord said: My Lords, it is three years, almost to the precise day, since I was last lucky in the ballot and we debated this very subject. Since then we have to admit that little progress, if any, has been made towards peace in the Arab-Israel dispute. Rather, I fear, the reverse.
The West Bank and Gaza settlements have been added to and consolidated. Lebanon has been invaded, with the death of over 15,000 people, at least half of them women and children, and with presumably double that number wounded. How little resemblance there is today to the Palestine of 1947, when we washed our hands of the mandate and America engineered partition! So much territory has been occupied or annexed by Israel as a result of the 1948 and 1967 wars; and there are still—and this is an awful figure—six out of ten Palestinians (of whom there are over four million altogether) who are refugees or in exile.
It was ten years before the 1967 war that President Eisenhower asked a very pertinent question. He asked:
"Should a nation which attacks and occupies foreign territory in the face of United Nations' disapproval be allowed to impose the conditions of its withdrawal? If so,"
he said,
"I fear we will have turned back the clock of international order".
That was a very good question.
I am well aware, as we all are, of the size and difficulty of this problem. It is a daunting one. There are no easy answers at all. But meanwhile the situation is both hardening, I suggest, and fermenting. The only way that it will ever be solved is step by step, and not in one fell swoop. There must be a great danger in further drift. The parties, as they are so often called, will not come together on their own. I simply do not believe that. There have to be external catalysts. I propose to speak about the situation today and in the immediate future, with only an occasional backwards glance where it seems to be relevant.
First, I must mention, of course, the European Community's Venice Declaration of five years ago. No praise can be too high for the work that my noble friend Lord Carrington did to get the nine countries together to make this declaration. The work was brilliantly done. I think we can all congratulate him on that. Yes, the Nine said, they wished "to promote the implementation of the two principles universally accepted by the international community". That is, of course, Israeli security and Palestinian self-determination. Yes, they declared their readiness to participate in a "comprehensive settlement" under "binding international guarantees". Yes, they said they would determine the form of their next initiative. And since then, my Lords? There has been plenty of

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rhetoric but little else. Therefore, the Community's credibility in the eyes of many people is much less than it should be in this context.
We were warned of the danger, I think by my noble friend Lord Soames, when he was a commissioner, that the Community might become a political pygmy—the noble Lord, Lord Gladwyn, will remember this—and be an economic giant. It did not look like going that way, but it is looking a bit like it now, I am sorry to say.
Certainly only America can turn the key, but we can oil the lock. The Community has a deeply vested interest in solving the Arab-Israeli dispute, the tap-root cause of which is surely the agony of the Palestinian people. Moral obligations apart—how one can put them apart I do not know—the Community has crucial political and economic interests in the Middle East which are being put at growing risk through inaction. We think, of course, of the free flow of Gulf oil, among other things, which matters so much to Europe and really not a bit to the United States.
Britain alone enjoyed a £3 billion trade surplus with the Arab countries last year, with our exports close to £5 billion. Exports like that mean a lot of jobs. I do not know the Community figures, but I am sure that they are very impressive. So, far from giving America a lead, as I see it there has been some positive backsliding from the principles of the Venice Declaration.
Briefly, I should like to give five examples to my noble friend who is to reply. The European Community froze a 40 million dollar aid package in 1982 after Israel invaded Lebanon and sought 10 assurances from Israel, none of which was given. I was told this in reply to a parliamentary Question. But this loan was released one year later because Israel and Lebanon signed a peace agreement which proved worthless not within hours but within days. Secondly, Israel's invasion led to the Community saying that it would ban the export of military equipment to that country and review its policy after Israel's withdrawal. But when I asked a Written Question in the House recently about whether the retention of a buffer zone by Israel occupied by the South Lebanese Army, as it is called, would amount to withdrawal—we should not forget that the SLA is under Israeli command—the question was evaded. The answer was definitely evasive and I press my noble friend to be kind enough to tell me whether the retention of such a zone will mean that Israel has withdrawn from Lebanon.
Thirdly, I am sorry sometimes that there is so much talk on our part about freezing the West Bank settlements. They will have to be frozen if there is to be a withdrawal and they are illegal. The Venice Declaration talks about them being withdrawn. Now we are talking about them being frozen, but not about them being withdrawn. I am sure there is no backsliding in that respect but I should like confirmation of it.
Next, the Community will have to sign a trade agreement and renew it with Israel after enlargement. Israel depends heavily on exports to Europe and I hope she will not automatically get everything she wants without a very careful look indeed at the way in which Israel is defying mandatory Security Council resolutions at a time when Europe is discriminating
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against exports from the occupied part of Palestine, on the West Bank, produced by the Palestinians. I should like a comment on that. I do not see why it should be absolutely automatic that all these advantages should flow to Israel without looking carefully al it. I remember well when there was agreement with Turkey that it was put into reverse for good reasons which were understandable at the time.
Finally, was it not really a mistake for the Government not to vote for the Security Council resolution on 5th March which outspokenly condemned Israel's treatment of the civilian population in Southern Lebanon? The reason given for not doing so was not at all convincing, and we found ourselves in a somewhat equivocal position. I suggest that it is high time that the Community sought to narrow the gap between Israel and her Arab neighbours and thus give a lead to America which I think would be privately welcomed at the highest levels in Washington as well as by the governments of all the moderate Arab countries. If political co-operation is in the doldrums in the Community, as I fear, why cannot Britain and France as permanent members of the Security Council give a more positive lead?
I turn now briefly to the tragic situation in Lebanon: torn to shreds by internal dissent, deliberately stoked up by Syria and Israel to suit their own expansionist purposes. This highlights another serious problem to which the Community seems also to have an equivocal attitude. I am thinking about UNIFIL's role. Its mandate was defined in Security Council Resolution 426 which was proposed by the United Kingdom. It requires that force to confirm the withdrawal of all Israeli forces from Lebanese territory and then to control all movements in its area of operations fully to restore Lebanese sovereignty. The force is required to assist the Lebanese Government to establish its authority in the south in peace and security. The Lebanese Government wish for this and has said so recently; but Israel said that they would be better off without UNIFIL. It was Mr. Rabin who said that. Yet at the same time Israel insists on a buffer zone and threatens a "scorched earth" policy (Mr. Rabin's words again) to support their mercenary force, the SLA, if they are in the difficulties which they are bound to be in.
I think, and I hope noble Lords agree with me, that UNIFIL is in a humiliating, intolerable and very dangerous position. I ask my noble friend when she comes to reply to take the lead with our European Community partners to ensure either that UNIFIL, can carry out its very important mandate, which would provide Israel and Lebanon with the security to which they are fully entitled and which they deserve, or to use their influence to ensure that that force is not kept in this very difficult situation. There are good precedents for United Nations peace-keeping in the Middle East in the Golan Heights and in Sinai. We are apt to forget what a good job is being done in those two areas and I hope those precedents can be followed.
The path to peace is strewn with failed plans and hopes unfulfilled. I shall not go through all of them, but today much the most significant move of all has come from King Hussein with Yassir Arafat which, when read in conjunction with the Fez agreement, offers some hope for the future. This initiative of the

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king is still on the table—only just, though—proposing a Jordanian-Palestinian federation, not all that different from the 1982 Reagan plan for Palestinian self-government in association with Jordan. There are not great differences between them. It is true that both these plans were scornfully rejected by Israel but I fear that was to be expected in the circumstances.
How courageous and statesmanlike King Hussein and the Crown Prince have been. I admire them enormously and I think we all do. Now that President Mubarak backs their initiative it must be the right moment for the Reagan plan to be re-activated in a revised form. That was promised in 1983 when we were told by the State Department that it had been put on the "front burner", but the stove obviously was not alight.
How self-defeating and shortsighted it would be for the PLO or the Palestine National Council to reject such an American move, if it were made, because it failed to meet all their rights and aspirations at once. They have done this far too often. Step by step must be the right way, and in any case the Palestine National Council, whether or not it is regarded as the sole representative of the Palestinian people, cannot commit Palestinians after they have regained some form of self-government. So we should not make too much of this. When the day comes that the Palestinians have some form of self-government there will be no PLO because there will be nothing to liberate.
I am urging Her Majesty's Government to use every scrap of influence they can to persuade the White House to renew the Reagan initiative before it is too late. This is without doubt a highly propitious moment. All the moderate Arab countries are in a settling mood. Syria at present is completely out of step. The "peace for territory" movement in Israel gets stronger every day. There was a public opinion poll the week before last when 60 per cent. of those consulted said that they were in favour of negotiation with the Palestinians in order to exchange territory for peace. The Israelis learnt a bitter lesson in Lebanon. Israel's economy is flat on its back with inflation running at 750 per cent., judging by last week's figures. That is almost incredible. Defence expenditure is crippling, but Mr. Peres is a man of honour who could take advantage of the mood of his people and lead them out of their present political and social turmoil.
President Reagan will never be freer to adopt policies guided solely by his country's national interests and international obligations. There are obvious reasons for that. American aid for Israel is on such a mind-boggling scale that as The Times put it recently,
"Israel is in a condition of total dependence".
Finally, although it is easy to over-estimate Russian influence in the Arab-Israel dispute, there are some straws in the wind that are disturbing even in Jordan, and in Kuwait as well, that as Western moves towards a peaceful settlement collapse one by one, Moscow is quick to seize its advantages cashing in on our failures.
I come towards my conclusion, sticking strictly to my time. I make no apology at all for my criticisms of American and EC policies. I hope that I have been fair
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and I hope that I have been constructive because I did not wish to overstate the case. But I am very critical and I am very disappointed. I want to see a joint initiative by the United States and the Community supported to the hilt, at least by Britain and France as permanent members of the Security Council if not by the whole Community, in a major effort towards a step-by-step peace between Israel and her neighbours. This would require a joint working party, I suggest, at the very highest levels.
I end by telling your Lordships what President Reagan said a few months ago on the 40th anniversary of the Yalta Agreement. He said this:
"We do not deny any nation's legitimate interest in security. But protecting the security of one nation by robbing another of its national independence and traditions is not legitimate. In the long run, it is not even secure".
I think that he was absolutely right, although he was speaking in another context. President Reagan we all know to be a man of very high principles and great courage and I conclude by saying that I think that we in your Lordships' House are entitled to look to him for a lead for action.
My Lords, I beg to move for Papers.
5.21 p.m.
Lord Caradon: My Lords, I think that we should all be grateful to the noble Lord, Lord Chelwood, for having raised this issue, which I think is inadequately discussed in our House. I think that it is very necessary that we should recognise the great danger that exists in the Middle East, the danger of local conflict and indeed the possibility of a wider war. Therefore, I think it is right and necessary that we should look to the contribution of Europe; and if we look back on recent years then I think we can only conclude that the record of Europe has been one of inactivity and, indeed, shameful inactivity. Therefore, I think that it is extremely opportune that this should be raised now in the context of the European contribution.
The argument that I should like most to urge upon your Lordships is that this is an international danger and that there is no possibility of a successful settlement without an international intervention. It has been recently suggested that all we need is to bring the two parties together. It is suggested that the representatives of the Arabs or the Palestinians should be decided by Israel—which seems to me rather a strange approach to a proposal for a joint discussion between both sides. But I would suggest that the possibility of agreement if both sides are brought together is practically non-existent. The reaching of a settlement by joint discussion between both sides is, in my opinion, not within the realms of possibility.
We should think of the issues involved. Let us take one of the issues, maybe one of the most important, the question of the future of Jerusalem. The Palestinians, backed by the Arabs of course, are asking for the restitution of their rights over the sites of Islam and Christianity in Jerusalem, whereas the Israeli Government has repeatedly declared its insistence upon the annexation of the whole of Jerusalem to Israel. This is the sort of issue on which it is not possible to get agreement by exchanges between both sides. I use the illustration to emphasise what I am putting to your Lordships: that there is no possibility

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of advance in this most dangerous international situation except by international action.
If it is not possible to achieve results by bringing both sides together, as has recently been repeatedly suggested, then I would also say that it is not possible, in my opinion, to get any agreement in this desperately dangerous situation merely by the intervention of one great power even if that is a very powerful power. It is not, I think, to be accepted that the United States can provide the answer to the problem of the Middle East. It has already, by massive supplies of arms and money, backed one side; it has shown that in almost every aspect of the dispute it takes one side. If we are going to get a settlement, it must be obviously impartial and obviously international.
Therefore, I put this argument to your Lordships: that we should use our utmost influence in Europe with the initiative coming from Europe, maybe, but all the time moving towards an international intervention and an international solution. It is necessary, of course to deal with all aspects of the situation, which are complicated and difficult, as we know. But, when you put three purposes together—that is, the full independence of the Lebanese, the freedom of the Palestinians in their own homeland and the security of the Israelis in theirs—you realise that there is nothing contradictory in the three purposes. They run together; they are dependent upon each other. Therefore, I believe that the reference should be to the Security Council of the United Nations. There has been some talk of an international conference and, yes, I can see some arguments for it but I can see some arguments against it. The trouble with conferences is that people come but they also go away.
The great advantage of the Security Council of the United Nations is that it can embark, with the cooperation of everyone in the council and others, to where the Israelis, the Palestinians and the Arabs can be given full opportunity to participate in a continuing discussion and a search for peace. It is surely amazing that, for so many years with this danger growing, as we all, I think, realise, there has not been a reference of this issue to the Security Council.
There has been opposition to the actions of the Security Council—and I think this is a very serious situation indeed—on a wider aspect. We are now getting to the stage where we expect from the United States that they will oppose the Law of the Sea, where there is the question of the future of the United Nations agencies and where you get a constant opposition and a rufusal to use the instrument which was created and which can successfully deal with a situation as dangerous as this.
I should like to put it to your Lordships that it is a matter not of asking the United States to deal with the matter or expecting that it can come from a joint conference. No, it must come from a worldwide effort in the Security Council established for that purpose in order to find a way in consultation, certainly with the Israelis and with the Palestinians and with every one else concerned to find a plan which neither side could initiate but which both can eventually accept, and to find a way in which the decisions then taken are hacked by a great range of international opinion to put
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into effect the decisions of the Security Council This is the action which I believe should be called on now.
The freedom of Palestinians, the security of Israel, are not in conflict. One is dependent upon the other. So what chance have we now of seeing the leadership in the world in the Security Council, in which I would hope that our country would take a leading part" What chance have we now of seeing a new proposal after the discussions with all concerned and, indeed, with the consistent and continuing discussion among those concerned? What chance have we got that this, the finest achievement of the United Nations, could now be made effective? I should like to think that it is possible—and why not? I do not forget the occasion when, years ago, I looked to my right in the Security Council of the United Nations Assembly and rejoiced to see the vote of the Soviet representative for the British resolution, thus making it unanimous Why should it not happen again? Why should there not be leadership in the world to find an answer to a problem which, it is true, is affected by malice, hatred and obstruction? Why is it not possible that we should see this triumph now in international relations?
I like to think it is not necessary to assume that the two super powers will be more intent on their enmity than on their interests. I like to think that the Israelis—encouraged greatly, it is true, by massive support from the United States—will not wish to spend their time achieving the subordination of their neighbours. I like to think that the Palestinians will not be condemned indefinitely to obstruction and great suffering. I think all those things are possible; and I like to think, too, that Europe can take the initiative and can indicate a way in which good sense, mutual benefit and the yearning of the people mainly concerned for peace can at last prevail.
5.32 p.m.
The Lord Bishop of Ripon: My Lords, I have no personal experience which equips me to contribute to this debate. I do so because the debate is about a calamitous conflict with a religious dimension. It is not primarily a religious conflict but a political one, between the State of Isreal, whose overriding need arising from the history of the Jewish people is for security, and the Arab nations and communities, united by a desire for territory for the Palestinian Arabs.
Inevitably, the polarisation into two bodies, one with a Jewish history and ethos and the other with a common Moslem allegiance, gives the conflict a religious dimension in which passions—not political only but religious also—run deep. No outsider can hope to say anything about the situation without misunderstanding by one side or the other. Yet each body can be understood from within as being right in its basic conviction.
To read the history of the Jewish people and the Zionist movement leading to the establishment of the State of Israel is to enter into a passionate and powerful story. A major factor in that story is the element of anti-semitism within the European people, of which I have to confess that the element of anti-semitism within the history of the Christian Church is a part. The Jews from Europe went to America and

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established a secure position and a financial base. They went to Palestine to seek a national homeland. The British handling of the mandate in the 1940s and the United Nations intervention brought about the transformation of this homeland into a national state. To hear the story from Jewish lips is to listen to a record of suffering, agony, hope and fulfilment. But the cost to the Palestinian Arabs was terrible, with the loss of their lands and properties, and the hopeless regime of the refugee camps.
The Arabs felt, and feel, betrayed, dispossessed and bereft of their land and holy places. To hear the story from Arab lips is to understand that the Arabs now sit where the Jews have so frequently sat in the past—in the place of dispossession and ignominy. We listen in these stories to two proud peoples, trapped by their histories into an apparently irreconcilable hostility and conflict. In the face of this conflict, any comment sounds trite and superficial. Nevertheless, our British history is intertwined with their histories and we cannot avoid sharing the task of reconciliation, without which there will be further and deeper bitterness, and perhaps greater bloodshed.
The guidelines which I offer from the British Churches are intended as a modest contribution to that task of reconciliation. They are derived in part from a speech made by the most reverend Primate the Archbishop of York, who took part in the visit of an ecumenical team to the Middle East in 1981. They are derived in part from a statement of the British Council of Churches on the Middle East last year.
The first guideline is the need to enter understandingly into the fears and hopes of both sides. I have already spoken of listening attentively to both stories. The passions expressed in those stories must be recognised. We must not take sides without first grappling with the power of each story to grip its people with a sense of their own rightness. I believe that to affirm both sides in this way is not the same as to assert that there are no failures on each side. From the outside there are wrongs on both sides: the use of terrorism, violence and counter-violence. At the heart of this there is a failure to recognise—and I believe that this is recognition not only in the political sense but also in the human sense—people as people. It is when Jew meets Arab and Arab meet Jew and they look eye to eye and affirm one another as human beings that attitudes change. I believe that in the human sense as well as in the political sense recognition is necessary. That recognition is made possible by affirmation from without of the rightness of the stories that we hear.
The second guideline that is offered is the need to maintain relationships with the Christian communities in the Middle East, many of them ancient churches whose histories go back to the beginnings of Christianity. Members of these Christian churches have suffered and continue to suffer in the conflict. They are mostly Arab churches, but if they were to recognise their Jewish inheritance they could become builders of bridges over the religious gulf. The noble Lord, Lord Chelwood, has already referred to the necessity of a political catalyst. Maybe there is a need also for a religious catalyst—a person or a community who can be present to bring about new attitudes between those of different and hostile religious
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communities. Such changes of attitude must surely come before any agreement or consensus about the custody of holy places, however important that may be.
The third guideline from the British Churches is a theological one: to be wary of giving political support solely on the basis of theological understanding, particularly biblical prophecy. There is a kind of Christian fundamentalism which uses biblical exegesis unwisely and, I would argue, unsoundly. Instead of leading to reconciliation, which must involve compromise, such a fundamentalism evokes intolerance by making political objectives into religious absolutes. To quote the most reverend Primate the Archbishop of York:
"How can essentially religious people, whether Jews, Christian or Moslems, express their religious commitments politically without thereby transforming politics from the art of the possible into the pursuit of the absolute?"
Finally, I share a word of warning from others more experienced than myself in the Middle East. The failure to find a resolution of this conflict is producing an increasing religious extremism among all communities. This extremism makes life increasingly difficult for those who seek the common ground. The resurgence of fundamentalist Islam, in Iran and in Lebanon, the influence of some religious parties in Israel, even Christian groups seeking a Maronite enclave in Lebanon, all make for difficulties in reaching a negotiated settlement. I believe the British Churches have a part to play in bringing about a state of affairs in which the religious resources of the Middle East—Moslem, Christian and Jewish—are used not to further conflict, division and hatred, but to bring about mutual recognition and just settlement.
5.41 p.m.
Lord Kennet: My Lords, the right reverend Prelate the Bishop of Ripon has spoken with eloquence and with justice. Which of your Lordships, and which of our ancestors over the last thousand years, have not seen or read of the orthodox Jews standing with their hands or their foreheads against the Wall of the Temple lamenting their exclusion in "the place of dispossession and ignominy" to quote the Bishop of Ripon? All of us who have must realise that around the frontiers of the present State of Israel, annexed or real, there are Arabs who are internally in that place of dispossession and ignominy but there is no symbol for them to lean upon as the Jews lean upon their Temple, which is now a mosque.
When I read the Motion of the noble Lord, Lord Chelwood, I thought he was going to say that it is time we came back to the Venice Declaration and that the European Community should throw its weight about a little more in search of a Middle Eastern settlement. I was surprised to find that he did not say that at all but that the European Community ought to pool its diplomatic efforts in order to persuade President Reagan to have another go at producing a settlement.
I have to say I agree rather more with the noble Lord, Lord Caradon, when he says that if we can continue a unified European Community policy it will be wiser to press the United Nations to do what is best rather than to invite the Americans to try yet again. The reason for this has been stated already by the noble Lord, Lord Caradon. It seems to me that both

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the great world powers are in fact excluded from any hope of assisting progress. The Soviet Union is a very long way from the Middle East. Its total civil aid to Syria since 1955 has been about 806 million dollars. Nobody can tell what its military aid has been because they do not trade in a way which is visible in money terms; but it is very large. I have been there, as I am sure many of your Lordships have, and have seen the Syrian army and air force. It is large. Compared with the population of the country, it is very large. It is well disciplined; and the equipment is modern, but not super modern. The Soviet Union is out as a mediator because it is the patron of Syria, which is one, as I shall argue in a moment, of the two chief contestants.
To return to the United States, we find that since 1948 United States civil aid to Israel has been 7·2 billion dollars, which is nearly 10 times the Soviet civil aid to Syria to a country with a population of about one-eighth of that of Syria. We find that during that period United States military aid to Israel has been 16 billion dollars, which is no less than 17 per cent. of all the military aid it has given to anybody in the world since 1948—and that to a population of two and a bit million. We make the comparison of 806 million dollars of civil Soviet aid to Syria with 7·2 billion dollars of United States civil aid to Israel. I think The Times is right in saying that there is approaching a total economic dependence on the United States in Israel, and to formalise this they have recently declared what amounts to a customs union.
The United States is disqualified for the equal and opposite reason why the Soviet Union is disqualified. Its partisanship for one of the chief contestants is even more intense than the Soviet Union's for the other. It is even further away than the Soviet Union from the Middle East.
The United Kingdom has not taken any of the contestants under its wing or given noticeable military aid to anybody, but we have a great political aim in the world. That is to build up the ability of the European Community to come to common foreign policy positions. I think that this country, it is fair to say, has done better than some of its continental friends in achieving this. It was carried forward very sharply during the time when the noble Lord, Lord Carrington, was Foreign Secretary. Great steps were made then in political co-operation. The main fruit of that period was of course the Venice Declaration, which we are by implication debating today.
Is it time for this country to do something? No. We should do it through the European Community. Is it time for the European Community to do something? Yes, it is, through the political co-operation machinery. What should it do? I think that the condition of all progress is for anybody who seeks to lend a helping hand to get away from the 19th century picture of the sovereign independent nation state. Of course, there are nation states in the Middle East, but they are not nation states as we are in Europe, or the United States or even the Soviet Union.
There are the so-called Arab countries, which consist of large numbers of people of the same religion, language, appearance, "race" if you like, and the same history, who happen to be divided up in a way not at
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all of their choosing. They used to drift around the Middle East in the Bedouin ages declaring their allegiance to any sheikh the quality of whose justice appealed to them. They were free to do this wherever they were. The habit dies hard. We can see this once again in the case of the Palestinians who have had to leave Israel. They have nothing else to do. They give their allegiance to a sheikh who pleases them, whether he happens to be in Tunis, Amman or even Tripoli, or wherever he may be.
Let us see, then, whether the State of Israel has something of the same quality. It is an emanation or concentration of the world's Jewish people. It reflects Jewish characteristics which were formed all over the world, and the quality of its links with outside countries is quite different from the quality of out links with outside countries—and even more so, shall we say, from German links with outside countries. It is porous in feeling and in history. It is a mere concentration of Jewry, just as each Arab country is a mere division of "Arabry" (if there is such a word) into an arbitrary geographical unit.
These are the states which have to make peace in the end. Do what we will in this country, in the European Community, in the Soviet Union, in the United States, we can only help them do what they want to do. They want to make peace: we know that. At the moment it seems to me—I think it is hard to deny—that the matter lies between Israel and Syria. Lebanon no longer exists. It has been destroyed by many actions over many years, all of them the unhappy and unwished-for result of the establishment of the State of Israel.
Jordan has had only a shadowy existence at the best of times. Its frontiers are rather vague in the West. There is no Jordanian people. A Jordanian sort of Arab is not as different from any other sort of Arab as a Syrian sort of Arab is. Half the people who live under the rule of King Hussein at the moment are "Palestinians". Of course, they are all Palestinian really. Palestine used to include Jordan, if the name meant anything. But half of them are those who have had to leave what was their home before, either in undoubted Israel or on the West Bank, the status of which is disputed. There is nothing that King Hussein can really do when only half of his people owe allegiance just to him. He is the prisoner of the other half.
Egypt, by a sublime and blessed act of imagination, offered peace to Israel and found that offer met promptly with generosity, and successfully. It is an amazing achievement. The moral is there for all other Arab countries to see. Who knows whether they would be greeted with as much imagination and generosity as President Sadat was? We have no reason to think that they would not, but they are not as well placed to do it as he was. If there is a unified Arab country, it is Egypt. He had his own people with him, or controllable—rather a homogeneous people.
Lastly, there is Syria—and here is the point. Israel is withdrawing from Lebanon after three years. There is much press coverage of the effect of that on Lebanon and on Israel. We must not forget that Israel is also withdrawing from artillery range of the capital of Syria. For three years Israeli guns have been on the Lebanese heights within range of Damascus. It could

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have been bombarded. We all know that in the age of rockets it does not matter as much as it used to, but as a psychological factor it is very strong.
There is then the phenomenon of the Golan Heights. We say "Golan" because we are so familiar with the Israeli point of view, but the Arabic name is "Jolan". Syria contains a great many refugees from the Syrian province of Jolan, who are more of a political force in Damascus than the others because they are Syrians and the others are not; they are Palestinians, Lebanese or whatever they might be. This is the silent conflict which is not discussed enough. A solution lies in a settlement between Israel and Syria above all others, and that settlement depends above all other factors on a settlement of the Golan/Jolan question.
I should like to say one last word about the Camp David procedure. Some people say that it will solve all problems: some say that it can solve none. It has solved one problem, but I do not believe there is much chance of it solving any more. So, to sum up, I am for Britain's initiative towards the EEC to get an initiative towards the UN which will help the countries on the spot to get together, and principally Israel and Syria.
5.53 p.m.
Viscount Buckmaster: My Lords, it gives me the greatest pleasure to welcome this debate this afternoon, which was so ably moved by the noble Lord, Lord Chelwood, almost exactly three years after his earlier one, and it is delightful to see so many noble Lords who took part in that debate speaking again this afternoon.
The Motion directs us to consider what efforts can be made to get the European Community to bridge the terrible gap between the Arabs and the Israelis. I feel there is very little that European countries can do, either collectively or individually. Our own country, we know, is still held in high regard and yet, unfortunately we do not cut a great deal of ice, either in the Arab world or with Israel. France, no doubt, cuts rather more ice. Italy has won a round of applause recently for the splendid performance of its peacekeeping contingent in Lebanon.
But, of the other European countries in the Community, what do they achieve, what do they know and what are their concerns and their interests in the Arab world?—really very little. So can we really see these countries making any positive attempt to breach this terrible gap between the Arabs and Israel or to pick up the shattered pieces of the Lebanese Humpty-Dumpty? Like the Carpenter in Alice in Wonderland, I doubt it and I "shed a bitter tear". The only country with any real power and real pull, as the noble Lord, Lord Chelwood, said, is the United States. But then, as the noble Lord, Lord Caradon, has indicated, and as other noble Lords will probably indicate too, their massive involvement with Israel is a gravely inhibiting factor.
Let me give your Lordships just one example. Very recently, the Americans established a Voice of America transmitter in Israel, and the people running the programmes that it transmitted were told that in no circumstances whatever were there to be any broadcasts in any way critical of Israel. The Americans have tried, they have tried again and again to get the Israelis
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to exercise a more conciliatory policy. They have tried to restrain the Israeli settlement policy, about which I want to say more later, but they have failed. Indeed, one almost feels that the situation is rather like that of the Sorcerer's Apprentice. The Americans are unable, like that apprentice, to restrain the wonder child which they took such great pains in bringing into being.
But I must return to reality. As the noble Lord, Lord Chelwood, said, the last three years have seen a distressing hardening of attitudes. On the Israeli side, we find continuing obduracy and intransigence, which I suppose stems mainly from fear, while on the Arab side we have growing hatred leading to desperation. Nevertheless, I know that many moderate Arabs and many moderate Israelis deplore the present trends and would like to see more moderate policies pursued.
May I refer to an article in Time and Tide last year by Gerald Kaufman? (I refer to him thus, rather than in his ministerial capacity, because he was writing privately and not officially.) He deplored in very forthright terms the aggressive, expansionist policy that is now being pursued by the Government of Israel, which is so greatly at variance with the pacific aims of the founding fathers of the State of Israel.
One point that one has to bear in mind is that Arabs have elephantine memories. They ponder politics to a much greater extent then we do in the West. Just as they have not forgotten the Balfour Declaration, so they have not forgotten that Israeli attack on Lebanon in June 1982, that monstrous massacre which was master-minded by Sharon—and, indeed, it was a monstrous massacre; make no mistake about that—with 17,000 people killed in the first few days and 60,000 to 80,000 wounded, so we understand.
The memories of that will not die. Nor, indeed, will the memories of what the Israelis have been doing in Lebanon with their "iron fist" policy, and also the gradual encroachment of the Israeli octopus in the West Bank area. It is that area that I want to deal with particularly, because it is of crucial importance. There are several other aspects with which I want to deal, but I must concentrate on that.
One thing which stands out a mile is that the Government of Israel has no intention whatever of relinquishing its hold on the West Bank. Another very sad aspect of the situation is that Shimon Peres, the Prime Minister, who we had hoped would pursue a conciliatory role, has not realised that hope, and this expansionist policy continues. It is very difficult to get reliable figures about what is going on on the West Bank, but I can produce certain information and I am fairly sure that it is correct.
Let me deal first with land. Israel now controls 52 per cent. of the land on the West Bank, according to a recent report from the West Bank data base project. Furthermore, the study shows that, of this 52 per cent. 41 per cent. has been brought under direct Israeli control and the other 11 per cent. has been declared a forbidden zone for building and farming and is therefore under the effective control of the Government.
I come now to settlements. A great deal has been said about the Israeli settlement policy. No one quite knows exactly how many they have, but there are probably just about 200 now. The point here is not so

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much the number of the settlements but the policy behind their establishment. Whereas formerly these settlements were being established in agricultural land because they were predominantly agricultural settlements, they are now beng established in hilly land. They are being built on little hills, and they are being built, it seems, for strategic reasons. Indeed, some of them seem to resemble Kitchener's blockhouses or even miniature Crusader castles. They attract very few people. Some of these settlements have fewer than 30 settlers. But, despite the country's growing economic problems and quite apart from the reluctance of many Israelis to live in such a harsh environment, the Israeli Government is pursuing this policy of settlement expansion.
Another very important aspect with which I shall deal briefly is justice or lack of justice to Arabs. Last year, for example, 5,222 West Bank Gaza residents were convicted in military courts; 64 per cent. more than the 3,339 in 1983. It is quite clear that the Israeli attitude towards student troubles and towards offenders in universities and so on is hardening. It is an interesting and important point that a survey conducted two years ago revealed that Jews convicted of drug offences were receiving sentences seven times less severe than Arabs convicted of similar charges.
Then there has been Israel's policy of depriving Arabs of water, Yes, indeed, they have been doing just that. For example, there is a regulation which says that every Arab must have a permit before he digs a well and that no well may exceed 30 feet in depth; whereas the Israelis have unlimited access to water.
Finally, there is the road construction policy. The Israeli Government has embarked on a massive policy of building roads in the West Bank. These roads are designed to link the Israeli settlements, by-passing the Arab centres of population.
So I feel very strongly that, however we proceed in our attempts to solve this Arab-Israel problem, Her Majesty's Government must exert the greatest possible influence on the Israeli Government over its settlement policy. This was reflected in a speech which the Secretary of State made on his last visit to Israel. They must exert all possible pressure on the Israeli Government to get it to modify its repressive and oppressive policy in the West Bank before there remains in that area not a single square yard of territory to put on the negotiating table.
6.4 p.m.
Lord Kagan: My Lords, anybody who has visited Israel is fully aware that Israel not only wants peace but desperately needs it; but it does not know how to achieve it. A third of its national budget goes on military expenditure, at a tremendous cost to the standard of living, to employment and to all the aspiration of the Israeli people. This is not being done voluntarily and when the world exhorts Israel to rely on internationally binding guarantees every Israeli schoolchild will refer you to the fate of Czechoslovakia; it did.
The Israelis are reconciled to living under a constant threat. It has been the declared policy of Yassir Arafat, of the Syrians, of Khomeini and of Gaddafi in Libya to
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drive the Israelis into the sea. It is easy to give advice, but one must take into account that the Jews remember what happened to them in the concentration camps and how far they could rely on morality in international politics, on good will and on security provided by others. If it comes to the ultimate, the Jewish aim is, if they cannot live in peace, at least to die in dignity. That is the reason for the militaristic role which Israel is supposed to assume. That is important.
No Israeli mother sends her son into battle willingly; no mother has ever allowed her son to join the army more willingly; and no Israeli wants to lose his young life. But they think they have no choice. In fact there is a Hebrew expression "Ein Breira". It is the secret weapon of Israel. Do noble Lords know what it means?—"No choice". That is their view.
I should like to quote a speech by Gaddafi which was made as recently as the middle of May. He declared:
"It is legitimate for our entire people to liquidate its enemies abroad and quite openly".
The speech was made only a few weeks ago. The resources of the world, which has to buy Libyan oil, are going to help him in this.
I do not think that I need waste your Lordships' time in referring to Khomeini. Khomeini is quite willing to take children away from their mothers to send them to certain and horrible death in a fight between Moslem and Moslem. Could the Jews in Israel, if ever someone such as Khomeini got the upper hand, expect understanding, mercy or justice? Israel wants to negotiate. Israel wants to come to an accommodation. But with whom? Moderate voices by Israelis—noble Lords have referred to them—are heard and may be criticised, but moderate voices by Arabs are murdered—Sadat.
People talk about the freedom of the Arabs; but the Arabs have lost far less freedom to the Israeli Government than they have to the coercion of the PLO. No Arab can proclaim a point of view which conflicts with that of Yassir Arafat or the PLO and survive it.
The holy sites have been mentioned here. When Jordan was in occupation in Jerusalem the wailing wall and the Jewish holy sites were not accessible to the Jews. Nobody can say now that religious worship is inhibited by the Israeli Government. It is encouraged. Israel is a democracy. Of course it has its factions, but on one thing the nation is united: it cannot for a second time in its history leave its fate to the good will of other nations. As I said before, the memory of the concentration camps is still very strong in people's minds.
The right reverend Prelate the Bishop of Ripon came closest to understanding the position there when he referred to a land being taken away. When the Jews came to Israel it was an arid desert. Bedouins wandered across it. If one flies over Israel today, one does not need to look at a map to identify Israeli territory, because it is a flowering garden. But on the other side it is still desert. The native population of Israel before the Jews went into it were Bedouins who never stayed more than two or three months on the same spot.

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I must not exceed my time. I shall conclude by saying this. The Jews are supposed to be a logical people. When I was last in Israel I asked this question: where will it all lead to and where will it end? The reply I received was, "Once upon a time we believed in miracles; now we may have to rely on them". And so they will.
6.11 p.m.
Lord Sandys: My Lords, your Lordships greatly appreciate this opportunity which has been afforded us by my noble friend Lord Chelwood to discuss this whole subject. We rarely have such an opportunity and so it is with particular pleasure that I join in this debate. In considering the events of the past 48 hours it is perhaps of great significance that more than 1,150 prisoners—mainly Palestinians—have been exchanged for three Israelis. This is the second exchange of prisoners within about two and a half years, since in November 1983 some 4,500 PLO prisoners were exchanged for six Israelis. I understand that the latest exchange was arranged by direct negotiation between Yassir Arafat and the authorities in Israel. Surely this is of very great significance.
One must pay tribute first, naturally, to the mechanics of these negotiations—and particular tribute to the Committee of the International Red Cross which effected them. One must pay tribute also to the two governments concerned. One must most particularly pay tribute to the fact that the negotiations culminated in an exchange.
While many of your Lordships would agree with the deep doubt cast by the noble Lord, Lord Caradon, on the possibility of reaching an agreement of any sort, nevertheless a negotiation achieving an exchange of prisoners, while not considerable in terms of the overall negotiations, is in itself a very satisfactory step. After all, it is in accord with the step-by-step approach which my noble friend Lord Chelwood said he favoured when making his opening remarks. He spoke of a hardening and fomenting situation; one which calls upon the EC to make greater efforts. In the light of the agreement, and exchange of prisoners, it is timely that a further initiative should be taken. I hope that my noble friend Lady Young will feel able to respond in very positive terms when she comes to reply.
I was interested by what was said by the noble Lord, Lord Kennet, in regard to the possibility of an initiative in respect of the Syrian-Israel situation at the Golan Heights. Naturally I was very disappointed by what he said about Jordan, as I was by what the noble Lord, Lord Kagan, said, who gave the impression that Jordan consists of a desert. It is of course true that today Amman is one of the greatest capitals in the Middle East. It is a major centre of population. It is a joy for all those friends of Jordan to see the success of many irrigation and fertilisation schemes and other projects which have been attracted to that country over the past 25 years—and most especially in regard to the areas more beneficial to cultivation.
I should like to recall the words of my right honourable friend the Prime Minister when she said in another context that:
"Programmes and initiatives always produce better results if more sharply focused".
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We are focusing on particular areas in this dispute. It is often the case that when one initiative produces success it may lead to another. Before Mr. Henry Kissinger started his whole range of shuttle diplomacy, who would have believed, before that remarkable period began, that it could have achieved what it did? Negotiations can often build on their own successes. I hope very much that there is a possibility something may be achieved along the lines suggested.
In concluding my brief remarks, perhaps I may say that the work of the United Nations relief work agency now based in Vienna, so far distant from Beirut, should receive the further assistance of all the countries of the United Nations. It is very notable that throughout its existence the Russian contribution to this very major project of sustaining the unfortunate victims of this whole problem has been little, if anything.
6.16 p.m.
Lord Mayhew: My Lords, I believe that I agree with every word spoken by the noble Lord, Lord Chelwood, when he introduced this debate. I would particularly urge the noble Baroness the Minister, when she replies, to give specific answers to the very specific questions that the noble Lord put to her, suggesting a weakening of the British Government on a number of important issues.
I should like to speak about the security of Israel, which was spoken about very eloquently by the noble Lord, Lord Kagan. It seems to me that the European Community has shown quite plainly that self-determination for the Palestinians would serve the cause of peace, and would of course be in the interests of the Palestinians. Sometimes I wish that the European Community would also press on the Israelis and the Americans that self-determination is also in the vital security interests of the Israelis themselves. This is understood by a small but growing minority of courageous Israelis; namely, that self-determination for the Palestinians—whether it takes the form of a Palestinian state that is independent or a federation with Jordan—is in the security interests of Israel far more than the current conduct of Israel in international affairs, which actually detracts from her security.
The argument is that a Palestinian state, whether independent or federated, would undermine Israel's security. That belief is sincerely held by many Israelis—as those people, like myself, who have been to Israel and discussed this matter, know. However, that belief is wholly irrational from the military point of view. One look at the map shows that this small, open territory is surrounded on three sides by Israel; that the one air strip is within artillery range of Israel; and that the one port—Gaza—is at the mercy of the Israeli Navy. A glance at the map shows also that, from a military point of view, Palestinian self-determination would give a hostage to Israel rather than be a security threat.
So far as terrorism goes, the same is true. There is already, unfortunately, a terrorist threat inside Israel and against the settlers in the occupied territories. Self-determination is in a number of ways likely to lessen rather than increase that threat; first, and most obviously, by modifying the bitter sense of outrage felt

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by young Palestinians about the humiliation, oppression and deprivation of their people.
Then also of course the Palestinian leaders in these circumstances would have something that they do not have now and have lacked in the past—namely, police, prisons and a judiciary—with which to control the minority of extremist terrorist groups which have done all the harm in the past. I believe that Europe should convey some of those points very strongly to the Americans and the Israelis, and should also offer peace-keeping in the event of a settlement between the boundary of Israel and any new Palestinian entity.
But, above all, I believe that it is a fatal illusion to think that Israel's present policies in any way offer her long-term security. The idea that military dominance and the unconditional aid that she now gets from the United States can give her a long-term guarantee of security is a very dangerous illusion. In the short term that may be so, and in the short term, despite the military setback in Lebanon, the new hostility of the Shiah Moslems and the lower morale of the Israeli defence forces—in spite of all those things—in the short term of course Israel has the military dominance in the region.
But the gap is closing as far as the military balance of power is concerned. It is masked a bit by the Gulf war and a bit by the precarious neutrality of Egypt, but the balance is plainly closing; and in economic and financial power the balance is going firmly against Israel in the long term; and so are the facts of demography, which may be the decisive factors in the end. There is the differential birthrate between Jews and Arabs inside Israel and between Israel and the Arab and Islamic world, the increase in net immigration from Israel and the assimilation in the Jewish Diaspora. All those things are important if one takes not just the immediate view. In the immediate view the cause of the Palestinians seems hopeless; but if one projects existing trends 10 or 20 years, a totally different picture emerges.
It will be argued that the Americans will always bail the Israelis out. That may be true, and a number of speakers have said already that in fact Israel is extremely dependent on the United States. I would add only that Congress is also extremely dependent on the pro-Israeli lobby in Washington. My information is that 50 per cent. of the Democratic Party's funds and 25 per cent. of the Republican Party's funds come from pro-Israeli sources.
But all the time in the long term the gap is growing between Israel's requirements from the United States and the national interests of the United States. Her unconditional support for Israel isolates her at the United Nations. It alienates from her the Islamic world and a large part of the third world. It makes difficulties sometimes between her and her European NATO allies. It gives openings to the Soviet Union. One day quite certainly voices will be raised in the United States calling for an American rather than an American-Jewish policy in the Middle East.
Even supposing that Israel succeeds in what appears unfortunately to be her present policy and succeeds in incorporating the West Bank and Gaza into Israel, perhaps with the expulsion of many, many more refugees into Jordan, it will not solve the problem. It will only increase the stakes. The problem will be
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deepened because, having thrown aside the option of two Palestines co-existing, which is the European concept and the concept that surely offers the best hopes, the Israelis will simply have raised the question: who is to own and control the whole of Israel? Is it to be the Jews or is it to be the Arabs? They will have created a zero-sum situation.
I would say that Israel was more secure before her victories in 1967 than after. I believe that she was more secure before her victory in 1973 than after. I am sure that she was more secure before she invaded Lebanon than after. If therefore she continues in that way, relying solely on fire power and the Washington lobby, I do not believe in the long run that there is much hope for her survival—that is to say, hope that she will survive as an independent Jewish state into the next century.
Her own security demands that she must grant Palestinian nationalism some expression—that she must grant self-determination to the Palestinian people. I should like to see the Europeans laying a good deal more stress upon that, trying to reasure the Israelis that it does not mean undermining their security, but that what the European Community recommends—namely, self-determination for the Palestinians—is in the interests not only of the Palestinians but also in the long-term interests of the Israelis themselves.
6.25 p.m.
The Earl of Oxford and Asquith: My Lords. I join with other speakers in thanking the noble Lord, Lord Chelwood, for giving us the opportunity for this debate, and I do so the more readily because I agree with so much that he said and indeed with what many other speakers have said this evening, including in particular the noble Lord, Lord Mayhew, who has just sat down.
For 50 years and more the Arab-Isreali conflict has proved so intractable that there is now the danger that we may be learning to live with it. There have been so many attempts in the past to reach a settlement and so many failures to achieve one, that we are tempted to wash our hands of the problem and, if there is to be any solution at all, to regard that as the sole responsibility of the United States. Historically of course it is a European problem and more particularly a British one. That is one good reason for not washing our hands of it, though it is not the most important one.
The most important reason is that, while no solution can be achieved without the Americans, no solution seems likely if it is to be left to the Americans alone. The question, after all, is one of mediation, and for a sole mediator to be successful his impartiality must gain the acceptance of both parties. The Americans, to use an Americanism, lack credibility in that vital respect. The well-known Zionist pressures in their home politics, the massive military and economic aid given to one of the two parties out of all proportion to the other, the equivocal American attitude towards the West Bank occupation and the West Bank settlements—all these and many other factors cannot fail to arouse suspicion in Arab minds. Europe, with fewer pressures, is better placed to take a more balanced view, and if America neglects the advice

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which Europe could offer in this matter it is very hard to believe that she will have greater success in the future than she has had in the past.
The recent past has indeed shown a succession of failures—the sterile outcome of the Camp David accords; the intervention in Lebanon which had so ignominiously to be abandoned; the so-called Reagan plan, which seemed to offer some hope, which indeed might be revived but which was not at the time pursued with the necessary flexibility or determination. Arab disunity is sometimes blamed for such failures, and it is of course one of the difficulties in the whole situation. But I have the impression that America often uses it as an excuse for doing nothing.
Time, I am afraid, is not on the side of peace, and I do not believe that one of the options is a peaceful stalemate. Frustration breeds extremism and not peace, with all the instability that extremism in that context could bring. One of the obvious dangers here is the growth of Islamic radicalism, which in its political forms has already caused so much disruption in the Middle East. It has not so far succeeded in undermining the moderate Arab regimes, but it is all too possible that it may one day do so.
The alternative to stalemate, apart from war (which God forbid!) is compromise, which is a very different matter. In spite of all the dashed hopes of the past, I, like the noble Lord, Lord Chelwood, believe that it is still possible to see some hopeful signs. On the Arab side there are the increased contacts and growing rapprochement between moderate Arab leaders. On the Israeli side, there is evidence that currents of moderate opinion within Israel are now somewhat stronger than in the past. The ever-growing strains on Israel's economy caused by keeping the country on a war footing should also prove favourable to a climate of compromise.
Against this background, with elements on the one hand of increasing danger and on the other of increased hope, there is surely opportunity for Europe to renew its attempts at mediation while there is still time. As your Lordhips well know, and have been reminded, such an attempt was made five years ago and resulted in the Venice Declaration, to which our Government subscribed. Cold-shouldered at the time by the United States, the impetus petered out in what I can only describe as a pusillanimous failure of the European will.
Much has happened since then; none of it has been good, nor can any of it be of much encouragement to the Americans, who must surely appreciate the threat to their own position in the Middle East as indeed to ours, if extremism should prevail. If we add to this President Reagan's concern for the Atlantic Alliance and his fear of the threat of Communism, we may well expect him to be now more receptive to a European participation in the dialogue. It would certainly be best if all countries in the Community could be included in such an approach, at least eventually. However, in case the machinery for this proved too slow moving and a European consensus now more difficult to achieve, then I fully agree that a firm Franco-British move could well be the most useful start, France and Britain being the two permanent European members of the Security Council.
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As the noble Lord, Lord Chelwood, has said, it is to the Americans, especially, that our action should at present be directed, since their role is indispensable if progress is to be made—and at present no progress is being made. The Euro-Arab dialogue is also of importance and should be resumed. By encouraging a gradualist rather than an all-or-nothing approach; by seeking and encouraging the voice of moderation wherever it can be heard (for example, taking advantage of the new Jordanian-Palestinian accord and preventing it from falling apart); by consulting more actively with all the parties concerned (not excluding the Syrians, who, like it or not, will remain an essential factor in the equation but with whom the Americans are barely on speaking terms), we should in all such ways be making it possible for proposals to emerge to which Europe can lend its weight—proposals which America may find hard to reject or encourage Israel to reject and in which the PLO, or a substantial part of it, might acquiesce.
These are generalities. Your Lordships may think that one ought to be more specific in one's recommendations. I have one particular suggestion to offer. There are two major stumbling blocks which in recent years have stood in the way of any constructive dialogue between the main parties concerned. On the Arab side, there is the question of an explicit recognition of the right of Israel to exist within its 1967 boundaries, coupled with the Arab insistence that no dialogue would be meaningful unless the PLO took part in it or at least were in some way associated with it. On the Israeli and American side there is the refusal not merely to recognise the PLO but to allow them any direct participation in a dialogue unless they first explicitly admit Israel's right.
The result is an impasse because both sides are stuck in positions from which politically and psychologically they are unable to retreat. Both sides are in need of a third party to help them extricate themselves. This is just one instance where European mediation could play a valuable part.
In conclusion, I should like to ask the noble Baroness if she will give us information on two points. First, can she confirm that the principles embodied in the Venice Declaration are still recognised by the Government as the ultimate basis for an acceptable solution, despite America's reluctance to accept all of them at the present time? Your Lordships have been reminded already of these principles, so there is no need for me to repeat them now. Secondly, I ask the Minister if she can give an indication that our contacts with all parties concerned will be more actively pursued. The final articles of the Venice Declaration called for this as a prelude to determining the form which our contribution towards a settlement could most usefully take. Our contribution during the last four years has, in my view, been much less effective than it could and should have been. Is it the Government's intention that our efforts should be increased?
6.37 p.m.
Lord Molloy: My Lords, I should first like to put on record the thanks that we all owe the noble Lord, Lord Chelwood, for his endeavours, over so many years, to find a peaceful and just settlement to the horrendous

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situation that exists in the Middle East, where murder, butchery and slaughter go cheek by jowl with religion. One used to think at one time that it was only the Europeans who behaved like that, who slaughtered and butchered, stopped for a few hours while the padres got together to say a few words to the Almighty, and then again set about butchering and slaying each other.
We had all hoped that that had finished. Then the 1966 war started. That was another war without a declaration. There were standards even in wartime. I have witnessed it twice in my life: in 1939 and then again in 1966. Since then the noble Lord, Lord Chelwood, has maintained a very balanced and courageous view. He has sometimes stated something that was terribly unpopular, which was that the Arabs, too, had a case. He has stuck to his guns. I think that should be put on the record. Slowly but surely people are taking the line that even the Arabs have a point of view. That is good because it might compel the Israelis to listen to their courageous minority who have always declared that the Arabs have a point of view.
The right reverend Prelate the Bishop of Ripon said that the terrible atrocities inflicted on Jewish people by European Christians were horrendous. They were horrendous. We all know about them. The point the Bishop should have made very strongly was this; and I shall make it for him. There was no particular Arab involved in that appalling holocaust, none whatsoever. We must take full cognisance of this because young people, half my age, in both America and Britain are taking cognisance of it.
For example, the noble Lord, Lord Kagan, mentioned Czechoslovakia. I can understand his point of view. We did not do very much about it. I hope that there are not many Israelis who condemned us because we did not act against Czechoslovakia, because when we acted, whether or not it was to save our own skins, we did a massive job in saving world Jewry. I shall stand and say that for as long as I have breath.
Another matter that hurts me is this. Some young men who I knew were called up almost in the last hours of that war in which we defeated fascism that was dedicated to wiping out world Jewry. They then left to go to the Middle East because of the problem there. They ended their lives at the bombs of the Jewish terrorists. That has always to be put on the record. If we can acknowledge these things with courage, we can move to understanding.
My noble friend Lord Kagan mentioned Gaddafi and Khomeini. I do not know how many Israelis are having a go at that pair of boys. They are very unpopular people. But they are not suffering a great deal. The people who have suffered, by and large, are the Lebanese and the Palestinians—not Gaddafi, not Khomeini. I do not hold any score for them. That should be clearly understood. They are just about as despicable as the Israeli Minister of Defence, who said that it was his aim to wipe out every Palestinian, man, women and child. He is a villain, too, along with the other pair.
We have also to consider what is happening in Israel. I get my information from Israelis, who are shocked. They went to that country, some of them from America, some from Europe, in some cases never having been there before in their lives—it was a
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brand new world for them—and some from my own tiny little nation, Wales. I hope that my noble friend Lord Kagan acknowledges what I wish to say next. I know that my noble friend Lord Caradon does. If the world had listened to the wonderful speech of my noble friend Lord Caradon when he was British Ambassador at the United Nations in introducing Resolution No. 242, we might have groped forward much more swiftly than we have done in trying to find peace in the Middle East. That is why I must now say to the noble Baroness, Lady Young, and to my noble friend Lord Cledwyn, on each Front Bench, that if they were not quite sure what my noble friend Lord Caradon said at the United Nations, I hope that they have listened to him today. If no action is taken on his suggestions, and the suggestions of some other noble Lords, by the noble Baroness and by my noble friend Lord Cledwyn, we should never have started the debate in the first place; it will have been a complete waste of time.
I am told by young Israelis coming here how appalled they are by the racialism that is occurring in Israel where Arabs are third-rate citizens, where they have no national insurance, no health insurance, nothing whatever. We also have to consider, as my noble friend Lord Kagan rightly said, the case of those who are imperilled by the activities of their extermists. It seems that the Middle East is almost a land of extremists. I should like to put to the House the most powerful argument that the Palestinians possess. It is this. If this country, this island of ours, had been successfully invaded by the Nazi forces, I know that under Winston Churchill, Ernie Bevin, Nye Bevan and a few others I would have gladly served as a terrorist. I would have been proud to do so. I am not going to say, however, that patriotism and love of one's country is to be found only in the breast of a Scotsman, a Welshman an Irishman and an Englishman but can in no way develop in the heart and bosom of a Palestinian. That is a form of intellectual treachery. We have to have the courage to acknowledge that. The Palestinians have lost 90 per cent. of their land. They are being used as cheap labour for Israeli industrialists.
It is acknowledged that the EC has tried in its Venice Declaration to find a solution to the massive paradox of the Middle East and the agonies that have occurred in Palestine and in the Lebanon. Do we not realise that our Chamber could be filled to its gorgeous roof with the corpses of men and women, Israelis and Arabs, who have been slaughtered in the appalling argument that is going on? If we were able to understand that someone dear to us, a child, a mother, a brother or a sister had been slaughtered in that chaos, we would arrive perhaps at the frontiers of understanding. We cannot wait for that. We must try to exert our great influence now. The noble Lord, Lord Chelwood, has said that we must appeal to Europe. That is a good thing. Like the Palestinians, the people of Europe know what it is to be invaded without a declaration of war. Like the Palestinians, Europeans know what it is to be hounded all over the place. It was worse if they were Jews, but even if they were not Jews, they were living under an occupying force that did not know the meaning of the word "compassion". It is right and proper, therefore, that they should do something to end this dreadful situation.
I am not at all happy that it can be done through the

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European Economic Community. It has never done anything much of any use since it was established. I shall tell your Lordships what I believe to be a much better and more worthwhile organisation. If any noble Lord wants the absolute proof, I will provide it. A better contribution to bringing Europe together and to dealing with the realities of grim world situations has been made by the Council of Europe than in the case of anything done by the EC. I had the privilege of serving on the Council of Europe and also had the privilege of introducing, as chairman of its social services committee, the principle of reciprocity in the Health Service. It is something magnificent that this island has done. Of course, the father of it all was the great Aneurin Bevan. He was not killing anyone. He was not slaughtering anyone. He was not blowing anyone up. Yet he was daily attacked by the capitalist press of this nation, week in and week out. But he triumphed. He triumphed through his goodness. I believe that we should try to triumph with our goodness. If the EC is to make a reality of the Venice Declaration, it can be done only by the noble Baroness, Lady Young, urging this upon Sir Geoffrey Howe and the Prime Minister, and by my noble friend Lord Cledwyn saying that he will give them every support. In this way we can go to the EC and at the same time ask for the help of our colleagues serving on the Council of Europe.
It was in the Council of Europe—I beg your Lordships to listen to this—that we brought Israelis from Israel and Arabs and Palestinians from Arab countries to Europe and to the Council of Europe. For the first few days it was touch and go. I thought that we would see some of the incidents that I used to see when a couple of miners bumped into a couple of dockers at ten o'clock on a Saturday night in Swansea. There was the danger at one time of fisticuffs. In the end, however, there were talks and discussions. Those talks were held not in the EC but in the Council of Europe. There were proposals that were examined, but unfortunately a new outlook emerged and sanity was once again done away with.
I should like to mention, before sitting down, the courage, the sense, the intelligence and the bravery of Mr. Gerald Kaufman. He has examined this situation in great depth. He has reason to be concerned. He is no one's fall guy. No matter how many millions the Americans pour into Israel, he knows that this, in the long run, is not for the benefit of Israel but is to its detriment. All of us know that this American money is not poured in there to help Israel. It is because each American President is afraid that he will lose the Jewish vote. That is why it is poured in. And they do not mind how many Arabs are slaughtered and killed. This is what our Front Bench must tell the likes of President Reagan and some other senior Americans. We should set as our target, as Mr. Kaufman has urged in Europe, through the Council of Europe and the EC, to help Arab and Jew to escape from the hatred of their own creation and to realise what would be perhaps the most mighty paradox for them. It was in the Middle East that the greatest of the desiderata of mankind was enunciated in the declaration of peace on earth and goodwill towards men.
I believe that we, in Europe, have enough experience to show this and to make our voice heard, to bring
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about peace, to stop the slaughter and not necessarily to take sides, but where one side is behaving in an appalling manner to have the guts and the courage to stand up and say "What you are doing is wrong". There have been times when the Arabs have been wrong. More often it has been the Israelis who have behaved abominably. However, on both sides there are courageous people. There are wonderful Israeli people and wonderful Arab people who know that the way in which they are behaving will not guide them down the road for peace.
Let us through our own endeavours and, as a nation, through our membership of the EEC and our membership of the Council of Europe add our voice and our pressure to bring peace to that very troubled and dreadful part of the world where, as I have said, peace on earth and goodwill to mankind was first enunciated. It would be to the honour of our nation and, indeed, to the honour of mankind if we could make a contribution to the success of that endeavour.
6.50 p.m.
Lord Gladwyn: My Lords, I am very glad that the noble Lord, Lord Chelwood, has once again drawn the attention of the House to what I can only describe as a running sore in the whole of international relations; namely, the terrible situation in the Middle East. Like the noble Earl, Lord Oxford, I should like to devote just one or two minutes to making a few general remarks before coming to any proposals.
The most depressing feature of the present situation in the Middle East is that we have now reached a total impasse. The Israelis, it seems, will not take part in any negotiations over Palestine in which the PLO, however disguised or indirectly represented, will take part; and the Arabs, of whatever persuasion, will only agree to negotiations if there is at least some semblance of PLO representation. Thus no progress can for the present be expected as regards any form of Palestinian settlement; and meanwhile Israeli occupation of the West Bank—for, as the noble Viscount, Lord Buckmaster, has said, that is what the construction of ever more Jewish settlements amounts to—proceeds apace.
For their part the Americans, even during the first part of President Reagan's second term of office, are not prepared to put any form of pressure on their friends, who remain their chief—perhaps their only—ally in the Middle East. Indeed, they are actually stepping up their aid to the Israelis, whether military or economic, and that in spite of the fact that the Israelis show no inclination whatever to pursue the policy which the United States Administration strongly supports. That is a fact. Outside the West Bank, moreover, there still remain some millions of Palestinian refugees who absolutely refuse to be incorporated in the states to which they fled after being evicted from their homeland and are, therefore, presumably biding their time in the hope—desperate though that may well be—that one day events will result in the removal from over Israel of the United States umbrella.
The end of the entirely disastrous Israeli advance to Beirut and their evacuation of most of Southern Lebanon has, unfortunately, only exacerbated an already depressing situation. The Lebanese Christians—in principle the best friends of Israel in the

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past—have as a result of this adventure suffered appalling losses, being largely driven from their homes and made to travel northwards. The Shia proletariat—hitherto a rather dormant element in Lebanon—has suddenly sprung to life in the shape of a passionate anti-Israeli "Jehad", or Holy War, thus seeming to constitute an enemy potentially even more formidable to the Israelis than the PLO, which anyway is now apparently split into at least two warring factions, some of which are now engaged in furious Beirut battles with the Shi'ite "Amal" supported by the Syrians.
Meanwhile, the position of the Israeli-Lebanese frontier remains most disturbing. The Israelis want, it seems, to institute some kind of buffer zone under their indirect control, but it is by no means clear what, in such circumstances, will be the continuing role of the United Nations forces—UNIFIL—in that area, some members of which, I believe, have already become casualties as a result of the total confusion surrounding them, from which only the revolutionary Shi'ites can possibly benefit. And all this time the general economic situation, notably in Israel, seems to be getting worse, which can only add to the general unease in the whole area.
On the positive side—and I suppose that one must always think that there is a positive side—I imagine that one can point, as I think my noble friend Lord Kennet pointed, to the at least tolerable relations between Israel and Egypt, without whose active support no concerted Arab action against Israel could possibly succeed; and, more generally, to the apparently rather cautious attitude of the Syrian Government—presumably the chief friend of the Soviet Union in the area—who do not seem to want to profit, at the moment at any rate, from the Israeli withdrawal by occupying even the southern part of the Bekaa Valley. It looks, too, as if the Syrians were doing their best to put an end to the fratricidal strife in Beirut itself, although, as the noble Viscount, Lord Buckmaster, said, whether the Lebanon can ever now be reconstituted as a single viable entity is open to considerable doubt.
I suppose that one might add to the positive side the fact that at least the Iranians do not seem to be winning their war with Iraq, which would clearly have been a total disaster from the point of view of any general Western interest, and that there may even now be substantial signs of reaction against the murderous and fanatical regime of the Ayatollah Khomeini. Might we not also, if we want to be optimistic, suppose that the Russians will not be inclined, given their present difficulties with the other super power, to do anything to inflame the situation in the Middle East, still less to give rise to justified suspicions that they may be trying to advance their centuries-old desire to advance their empire to the warm waters of the Persian Gulf, as indicated in the famous exchange of views in 1940 between Mr. Molotov and Herr von Ribbentrop?
What, then, in all this distressing confusion, can Her Majesty's Government—and more significantly, perhaps, the European Community—actually do? Here I am afraid that we must have some regard for certain facts. We do, indeed, have two "sovereign bases" in Cyprus, but they are really only the
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equivalent of look-out posts; and the French have a small force in Djibouti. I believe that, in addition, a frigate or two occasionally visits the Persian Gulf. However, apart from this pretty meagre military presence, the Europeans do not have much physical means of making their influence felt. I do not suppose, in any case, that the Israelis care very much what the Europeans do or say; and although we in the Community compete with each other in selling large quantities of arms to various Arab states, I doubt whether we are thus enabled to put any particular pressure on them, either. Whether we can put any pressure, as a Community, on the United States is another matter with which I shall deal in a moment.
Are we, then, depressingly enough, reduced to giving unheeded advice? We did that some five years ago, as so many noble Lords have said, in the Venice Declaration, to which nobody, I am afraid, paid very much attention. I do not think that it was our fault that they did not do so, but that was the result. I am afraid that they may not pay much more attention to any similar initiative now, although I entirely agree with the noble Lord, Lord Chelwood, that at least we ought to try to induce the Americans to have some regard now to the Venice Declaration and, indeed, perhaps to insist on the famous Reagan plan, which is something very much on the same lines as that put forward by ourselves.
Of course, if we were really willing and able to contribute substantially more to help the United States in what they consider to be their necessary effort to defend the Gulf against possible Soviet attack, we might have more success in advancing views on how best to handle not only the Israelis but the Saudis, the Iraqis, the Iranians, or even, conceivably, the Soviet Union itself. But at the moment, I fear, we are in no such position. Nor are we likely to be. Better, no doubt, to satisfy the Americans that we are doing more to strengthen the "conventional" defences of Western Europe, thus enabling them, in theory at least, to strengthen their own forces in the Middle East.
There is, however, one direction in which we might, as a Community, make our collective influence felt—and it would naturally have to be a collective initiative if it is to do any good. That lies in getting support in the Security Council of the United Nations for a real enlargement and reinforcement of the United Nations force, UNIFIL, in southern Lebanon, which is so urgently required. With due respect to what the noble Lord, Lord Caradon, said, in order for this to be accomplished there would have to be some kind of super-power agreement in the Security Council. In other words, both the Russians and the Americans, urged on no doubt by the European Community, would both have to agree on any such proposal. My impression is that the Russians, for their part, quite possibly might agree.
What is necessary, therefore, is for us to direct all our efforts as a Community to impressing on the United States the necessity to back up some initiative at an early date, and also to face the fact that if they are going to vote for any such proposal with the Russians they will have to meet, and overcome, the objections of the Israeli Government. If they are so disposed, I believe, with the noble Lords, Lord Caradon and Lord Kennet, that at least a beginning would be made to

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solving an international situation which is becoming increasingly desperate and on which some advance must be made to solve it at the present time. For if some kind of reinforced United Nations authority was put up in this area to the north of the Israeli frontier—between that and the Lebanon—it might lead eventually to the much-sought-for agreement with the Syrians and for general international agreement on some long-term solution of the awful problems of the Middle East.
7.2 p.m.
Lord Cledwyn of Penrhos: My Lords, I join with other noble Lords who have paid tribute to the noble Lord, Lord Chelwood, both for his Motion and for the excellent speech with which he set the scene for our debate this evening. We are indebted to him. The continuing turmoil and conflict in the Middle East is deeply distressing and dangerous to world peace, as most speakers have pointed out. It is for that reason that we have our debates upon the situation there. Anything which poses a threat to peace is of immediate concern to us, and we have every right and, indeed, duty to debate it in this House and in the House of Commons. We also have historic links with the Middle East and, with many other countries, we are customers in the purchase of their oil.
Despite these interests, there is not a great deal that this country can do alone to resolve the almost intractable problems which bedevil the area, or to eradicate the underlying bitterness between Christian and Arab, between Arab and Israeli, and between Muslim and Muslim, to which the right reverend Prelate the Bishop of Ripon referred in his speech. But, as many noble Lords have said, all this should never deter us from making every effort to help and, with our friends, to seek new avenues towards a solution to one of the most difficult problems facing the world at this time.
Of course we recognise that whatever the Community proposes must be seen side by side with any initiatives taken by the United States, and I shall return to that in a moment, but certainly the Reagan initiative, to which the noble Lord, Lord Chelwood, referred is important and significant in this context.
The Venice Declaration did not please everybody, but we should not forget the two principles on which it was based—namely:
"the right to existence and to security of all the states in the region [including Israel]"—
and it is important to stress "including Israel", because anyone who knows the history of the area and knows the suffering of the Jewish people must be sensitive to the feeling of the Jewish people on this matter. Secondly,
"justice for all people, which implies the recognition of the legitimate rights of the Palestinian people".
The second part of the declaration caused some apprehension at the time, as noble Lords will recall. There was in fact another significant sentence in the declaration which read as follows,
"The Nine"—
as they were at that time—
"noted the importance which they attach to the Euro-Arab dialogue at all levels and the need to develop the advisability of holding a meeting of the two sides at political level",
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as a contribution to,
"the development of co-operation and mutual understanding between Europe and the Arab world".
I do not think that that has been followed up during the last five years as was intended. Perhaps the noble Baroness will comment on it. This is a point on which the noble Lord, Lord Caradon, had some doubts, but I recognise that the Community has in fact discussed the Middle East fairly regularly since the Venice meetings, and in the context of the noble Lord's Motion I think we should bear in mind what in fact the Community has been doing, or at least been saying. There were two statements in 1981; a further two in 1982. The one in June 1982 referred to,
"the practical possibilities available to Europe to make an effective contribution towards a comprehensive peace settlement in the Middle East".
Again, in June 1983 they said:
"They remain convinced that a just, lasting and comprehensive peace in the Middle East can only be secured on the basis of the principles which they have stated many times in the past"—
that is, the principles of the Venice Declaration. The Community continued to express similar views in later meetings. These views are unexceptionable, there is nothing wrong with them, but unhappily they have not led to anywhere near a concrete solution to the problem thus far. This was the point made by the noble Lord, Lord Chelwood, and even more strongly by my noble friend Lord Caradon.
During this period there have of course been other initiatives, to which noble Lords have referred. The most serious in its consequences has been the phased withdrawal of Israeli forces from Lebanon, which has triggered off the most appalling violence in the southern part of the country. I agree with the remarks of my noble friend Lord Caradon about the importance of the Security Council in all this, and of the United Nations generally. I believe that the Security Council debate at the end of February up to the beginning of March was of considerable importance.
What is interesting is that the United Kingdom abstained in the vote on the resolution sponsored by Lebanon. I have read the speech made by Mr. Maxey, Britain's deputy representative at the United Nations, and also a speech made by Mr. Richard Luce in the House of Commons on 14th March, but it might be helpful if the noble Baroness, when she winds up the debate, summarises the reasons for Britain's abstention on that crucial vote, as it has been suggested that we should have been more sympathetic, especially to the principles of the Motion moved by the Lebanese representative.
There are two other points on which the Minister may like to comment. The noble Lord, Lord Chelwood, spoke about the future of UNIFIL, whose mandate was extended by the Security Council for a further six months from April onwards. As time will pass quickly, do the Government see the possibility of a further extension and of participation by British forces in UNIFIL? Can we be told the Government's view on the talks between Israel and Lebanon on the withdrawal of Israeli forces? Is it not here on this very question of withdrawal and the vacuum—the most dangerous vacuum—which obviously has been left behind that the presence of UNIFIL becomes of great

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significance in any resolution of the problem and in the search for stability in the area?
Other important developments include the alliance between the PLO and Jordan, the visits of Mr. Charles Murphy, the United States Under-Secretary, and especially the visit by Mr. Shultz, the Secretary of State, to the Middle East—the first visit he has made for a period of two years. And, of course, most important of all—a subject which has not been referred to a great deal in the debate—there are the projected United States-Soviet talks on the Middle East. These are not to be dismissed out of hand. The talks are of basic importance because we know that, if confidence and goodwill between the super-powers could be achieved, the conflicts in the region could be brought under control. But without their co-operation, without some understanding between the Soviet Union and the United States, the prospects become very bleak indeed.
The talks will give the first practical experience of Mr. Gorbachev's willingness and desire to achieve progress in dealing with the United States and with the West generally. Thus they are of the first importance. The Soviet influence in Syria, to which noble Lords have referred, and the United States influence in Israel are crucial in reaching a settlement. If the Soviet Union and the United States wanted to, they are capable of working for a solution to the Lebanese crisis and of bringing the Iran-Iraq war to an end. If they did, it would greatly increase their reputation with the rest of the world. The importance of this meeting between President Reagan and Mr. Gorbachev, if it is properly prepared and accompanied by goodwill and an intention to succeed, cannot be overestimated. The immediate and urgent objective must be to help in making these talks a success.
To return to the noble Lord's Motion, this is probably where the Community has a rôle to play. We must not underestimate Europe's rôle. I think the United States now believes that a more active European Community rôle in the Middle East peace process could be valuable. We recall that the United States did not care very much for the second part of the Venice Declaration. But all that is now in the past and we must hope that the United States and the Community can work with a common purpose. Perhaps the noble Baroness can confirm that that is the position today.
The last meeting of Heads of Government in Brussels did not in fact give a particularly strong lead. It may be that the Heads of Government at that time were preoccupied with other important matters such as the accession of Spain and Portugal, but it was slightly disappointing that the Middle East was not given more serious attention.
The question is asked in these debates, and very properly asked: what can be done? What can we do? But, having started on this road in 1980, I believe that the Community has a duty to pursue its initiative as hard and as effectively as possible. There are great diplomatic skills in Europe. We frequently forget that. There is great political experience and great experience of the area in question in Europe. The countries of the Community should bring all these diplomatic skills to bear upon the United States, upon the Soviet Union
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and in the Security Council as well to seek a solution to the problem. There is no gain, no advantage, either to the Soviet Union or to the United States in the continuation of war, suffering and destruction in the Middle East. The creation of stability there would be a boon to the Soviet Union, a boon to the United States and a boon to the rest of the world. I support the noble Lord's Motion and I hope that the noble Baroness can tell us that the Government are working hard with our Community partners to bring this about.
7.14 p.m.
Baroness Young: My Lords, I am sure that the whole House is grateful to my noble friend Lord Chelwood for introducing this debate this afternoon. The need for a solution to the Arab-Israel dispute is in our view increasingly urgent. We share with our European partners a firm belief in the importance of encouraging early practical steps towards a settlement. The conflict between Israel and its Arab neighbours has become one of the most lengthy and intractable disputes in the world today. I am sure that we all listened with great interest to what the right reverend Prelate the Bishop of Ripon said on this matter and the observations that he made in this dispute. We also noted with interest the remarks of the noble Lord, Lord Kagan.
The conflict has become one of the standard focuses of international diplomatic activity. It is a daily personal tragedy for the many thousands of people directly involved in its consequences: military occupation, rootless exile, deprivation of rights, physical conflict. It has repeatedly threatened, and continues to threaten, the right of all people in the region, Jews and Arabs, to the normal certainties of civilised existence, to live their lives in peace. For them it is no esoteric matter of the minutiae of peace plans but a question of their unsatisfied right to safety and security such as is enjoyed by every citizen in the United Kingdom. For our part, we must not allow familiarity to breed inertia.
The human suffering which this dispute has caused requires an urgent solution. There have been five wars between Israel and its neighbours in less than 40 years, each made more devasting than the last by the advances in the sophisticated technology of destruction. The dispute has had other equally serious consequences for the world at large. It has made the Middle East dangerously susceptible to tension and insecurity. Its poison has spread far beyond the few countries directly involved in the territorial dispute. It is a major threat to the stability of the whole region, a region with which we maintain close, traditional links of friendship and which is of vital economic and political importance for all Western countries. It has had important and well-known consequences for international economic stability but even more seriously it retains the potential to explode without warning into wider conflicts on a global scale. It is not a problem which we can responsibly regard as remote or inessential to our own national interests.
It is for this reason that the Government are fully committed to the continuing search for a just, peaceful, negotiated settlement; something to which I think every noble Lord who has taken part in this debate has referred to. I should like to make that statement very firmly.

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It is our belief that only through a process of negotiation can a lasting peace be achieved and the rights of all the parties be safeguarded. We and our partners in the Ten believe that a settlement must tackle the fundamental questions at issue in the dispute. For this reason we are convinced that it must be based on two central principles, as we and our partners have repeatedly stated in the Venice Declaration, and in later statements of our position.
The noble Earl, Lord Oxford and Asquith, asked a question on the Government's view on the Venice Declaration. I hope that I make the Government's position absolutely plain. The declaration says that the first is Israel's right to exist behind internationally recognised and secure borders. There is no doubt of our commitment to Israel's security which is unwavering. The second, and no less imperative, principle is the satisfaction of Palestinian aspirations to self-determination. In our view this means that the Palestinians should be able to choose what attainable constitutional arrangements they can willingly accept. How the Palestinians should achieve their aims is a matter for them to settle through negotiation; but if the eventual settlement is to be just and effective, their rights must in one way or another be achieved. It is not for outsiders to decide who should represent the Palestinians in the negotiating process. But whoever these representatives are, they must accept the need to achieve a peaceful settlement which safeguards the two basic principles that I have mentioned and must renounce unequivocally the use of violence. I hope that that reassures those noble Lords, including my noble friend Lord Chelwood, on our view on this Venice Declaration.
However, many noble Lords have asked what more we can do. There are many ways in which progress towards peace might be achieved. I would not wish to lay down hard and fast rules. The history of the dispute urges a healthy mistrust of blue-prints of solutions to be imposed by outsiders. But that said, we should not seek to opt out; the role which the United Kingdom can play in co-operation with our Community partners is an important one. We wish to help, not interfere; support, not cut across. We have a responsibility and an interest to be active as a force for moderation, assisting the various parties and encouraging flexibility and practical moves. We can assist at a later stage in providing guarantees as we already do in Sinai. But we must also be realistic and recognise the very real limitations of our own ability to determine the course of events. It is for this reason that I would emphasise that the prime need is for action by parties directly involved in the dispute. Nothing can substitute satisfactorily for this. We therefore attach particular significance to recent signs from within the region of growing realism and moderation, of a readiness for peace and a corresponding commitment to work towards an overall solution by negotiation. These are welcome developments.
I think in particular of the agreement on joint action concluded between the King of Jordan and the Chairman of the Palestine Liberation Organisation on 11th February, which was referred to by my noble friend Lord Chelwood. This is a highly significant step, which contains important and constructive new elements. It deserves the full support of the
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international community. Essentially, it represents a commitment by the Palestinians to go forward in collaboration with the Jordanians towards a process of peaceful negotiation. It envisages ultimately the exchange of territory for peace, with Palestinians and Jordanians living in a confederate state which would include territory at present under Israeli occupation. Much has been said in the Arab world about this agreement: it has not received as much explicit endorsement as King Hussein would like. But it has been welcomed by a wide cross-section of Palestinians both within the Occupied Territories and outside. Their opinion should be given particular importance. In our view the agreement is a basis for the start of a substantive dialogue. This requires the active support of all the parties. It is all too easy for outsiders to criticise, when what is needed is encouragement and backing for those willing to make a bold move.
We have welcomed the practical and procedural suggestions put forward by President Mubarak of Egypt as to how negotiations might be set in train. We have also noted the positive Israeli response to some of his ideas. We regard it as particularly encouraging and important that there should be this continuing discussion. Unless the search for peace is regarded as a dynamic process, there is a danger that the positions of the various parties become rigid and inflexible. This in turn induces despair which provides a fertile breeding ground for extremism and violence. A cycle of violence and retaliation is easily started, but difficult to break. Let us be in no doubt that unless the international community makes the most of the new opportunity presented by King Hussein's courageous move the consequences of failure will be prolonged suffering for those most directly affected, continuing instability and damage to our interests and those of our friends and allies.
In our own diplomatic activity we must take account of the key role which the United States has to play in assisting the parties. This, I think, was a point made by the noble Viscount, Lord Buckmaster, and the noble Lords, Lord Mayhew and Lord Kennet. The uniquely close contacts which the Americans have with the main parties to the dispute give them a particular responsibility. We maintain a close and high level dialogue with the United States Administration about these matters. President Reagan has made clear that he accepts the special nature of United States responsibilities. He has acknowledged that the time is ripe for fresh efforts and the Americans have been active in recent weeks. The United States Assistant Secretary of State, Richard Murphy, made in April a two-week tour of the countries most involved. This was an effort to explore various possibilities for progress arising from recent Arab initiatives. Mr. Shultz has taken this a stage further during his own visits to Israel, Jordan and Egypt. King Hussein is due in the United States later this week. We and our European partners continue to attach great importance to our contacts with our American friends. They are fully aware of our views on the need for United States participation to further favourable developments, and share our objective.
We maintain a constructive dialogue with the principal parties to the dispute. We have regular talks with King Hussein, a frequent visitor to London, who

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is here this week, and my right honourable and learned friend the Secretary of State for Foreign Affairs will be seeing him tomorrow. President Mubarak paid a successful visit here in February. My right honourable and learned friend visited Israel in October. We look forward to welcoming the Israeli Deputy Premier and Foreign Minister, Mr. Shamir, to London on an official visit on 3rd and 4th June. We value highly these full and friendly exchanges.
We also maintain close contacts in the Occupied Territories and are fully aware of the problems of those whose lives are directly affected by Israeli occupation. We value the links which we maintain with leading Palestinian representatives from the West Bank and Gaza. The Israelis are well aware of our profound concern at the difficulties under which they live. We have welcomed the commitment of Prime Minister Peres to improve conditions in the Occupied Territories. We look to the Israelis to translate this urgently into substantive changes which would create confidence among the Arab neighbours of Israel's intentions. Nothing would do so more effectively than a decision by Israel to freeze her policy of establishing settlements in the territories, which we regard as illegal. That would demonstrate that Israel does not intend to prejudge the outcome of negotiations.
On a practical level, we have substantially increased our own modest aid programme. This concentrates on improving the medical and educational facilities available to ordinary Palestinians. We make a major contribution to the work of the United Nations Relief and Works Agency for Palestinian Refugees, both nationally and as part of a contribution by the European Community.
Time presses very hard. May I say one word on Lebanon because several noble Lords have referred to the continuation of the appalling violence there. We have every sympathy with the long-suffering population and are pleased that the Israeli Government have announced the imminent completion of the withdrawal of their forces from Lebanese territory. We hope that this will make a major contribution to the cycle of violence and retaliation that we have witnessed. We continue to believe that UNIFIL still has a role to play in the restoration of stability in Southern Lebanon and therefore regret that Israel and Lebanon were unable to agree on the co-ordination of security arrangements for the border area which could have given UNIFIL a wider mandate. It is all the more important for stability that Israel should not maintain any residual presence on the Lebanese side of the frontier. That would be inconsistent with United Nations resolutions and an unacceptable infringement of Lebanese sovereignty and, by provoking retaliation, increase regional tension. What is needed is a period of calm in which all the Lebanese communities can concentrate their energies with renewed vigour on the vital task of learning to live and work together in peace to restore the shattered unity of their country.
I have been asked many questions. May I respond first to my noble friend Lord Chelwood who asked why Israel is given favours by the Community when still occupying Arab territory. I should say that the Community maintains with Israel, as with all
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Mediterranean states except Albania and Libya, agreements allowing for mutually beneficial exchanges of trade. The prime requirement for a solution to the Arab-Israel dispute is the political will to move towards a settlement. May I say to the noble Lord, Lord Caradon, that the right time for an international conference could make a major contribution to a negotiated solution to the Arab-Israel problem and the Security Council might also need to be involved as, for example, in the provision of guarantees for a settlement. The United Nations has a vital role in the provision of peace-keeping forces but at present the two sides remain deeply divided on fundamental points and it is difficult to see an international conference leading to a constructive negotiation.
May I conclude by saying that we and our Community partners are actively engaged in the search for ways forward. We maintain close contact with the leaders of the parties to the dispute, and in doing so we seek to support the favourable developments which have recently occurred in the region. We would not give the impression that action by outsiders can substitute for moves by the parties directly involved. There is an urgent need for the parties to engage fully in a process leading to direct negotiations.
Lord Mayhew: My Lords, before the noble Baroness sits down, can she explain the qualification she attached when giving the assurance that the Government still support self-determination for the Palestinians? I believe she said that that meant the Palestinians had the right to choose whatever constitutional arrangements were available, whereas I would have expected her to say that they could choose whatever constitutional arrangements they wished.
Baroness Young: My Lords, that is indeed what I said. I said they should be able to choose what attainable constitutional arrangements they could willingly accept.
Lord Chelwood: My Lords, we have had a good debate. It has certainly been a very well-informed one, and naturally I wish to thank all noble Lords and the right reverend Prelate for being good enough to take part in it. I do not think it is very often that in a short debate noble Lords from the Conservative, Labour, Social Democrat and Liberal Benches, the Cross-Benches and the Bishops' Benches all take part; but that is what has happened today and there has on the whole been a remarkable consensus of view which I have found very encouraging.
I am also very encouraged to have had it confirmed that Mr. Shultz has just completed, as we have read in the newspapers, his Middle East tour, his first tour of the Middle East for a couple of years. I hark back to the evidence of Mr. Shultz given under cross-examination in front of the Foreign Relations Committee of the Senate when he made it absolutely clear that he strongly favoured an initiative in the Middle East and that—here I use my own words—he wanted to get off the Kissinger hook. Noble Lords, I am sure, will know what I am talking about; in other words, talking to the Palestinians is an absolutely essential feature of finding a satisfactory answer.

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I also find it very encouraging, as I am sure we all do, that King Hussein is meeting the Foreign Secretary tomorrow and will be meeting President Reagan next week. So perhaps the timing of this debate, through a little bit of good luck, was just about right and we have quite good reasons for being fairly optimistic.
I should also like particularly to thank the noble Baroness, Lady Young, for her very encouraging speech. She did not in fact have time to answer two or three questions which I put to her. They were not very easy ones and of course I would not expect her to give answers to them off the cuff, but if she will be good enough to write to me about them, I shall very much appreciate it. I said just now—and I repeat it—that it is hard to be optimistic, but I think we must be. My Lords, I beg leave to withdraw my Motion for Papers.
Motion for Papers, by leave, withdrawn.

Tobacco Products (Advertising) Bill [H.L.]
7.33 p.m.
Lord Pitt of Hampstead: My Lords, I beg to move that this Bill be now read a second time.
It is accepted knowledge that there is a causal relationship between lung cancer and cigarette smoking and that that causal relationship extends also to bronchitis and emphysema, coronary heart disease and the narrowing of the blood vessels in the limbs. Mothers who smoke during pregnancy give birth to smaller babies than do mothers who do not smoke; they also have a greater chance of losing their children in the period around birth and of producing handicapped babies. Moreover, recent education has been focused on the possible hazards of passive smoking; that is, breathing in other people's tobacco smoke. Recent research has suggested that the non-smoker inhaling other people's smoke may be at some small risk from health hazards similar to those which affect smokers and that passive smoking can be harmful to those with heart and lung disease, in addition to those who are allergic to cigarette smoke and who get asthmatic attacks if they find themselves in smoke-filled rooms.
Therefore, we are dealing with a very serious health problem. It is estimated that tobacco accounts for 15 to 20 per cent. of all British deaths. In addition, there is the misery to the cigarette smokers who suffer prolonged ill health and to their families. There is the loss of working time and the cost to the nation, and there is also the direct cost to the National Health Service.
Since this mortality and morbidity is related to cigarette smoking it is preventable, and it is our duty to do everything possible to prevent it. The independent Scientific Committee on Smoking and Health, which was chaired for 10 years by our distinguished colleague, the noble Lord, Lord Hunter of Newington, advised the Government that the important step was to get a reduction of tar levels across the board. That has been successful in reducing the levels of tar, and since there is evidence that lower tar levels can help in reducing the incidence of cancer of the lung, this is a step in the right direction. But there is no evidence that low tar levels reduce the incidence of coronary heart disease, or any of the other cardio-vascular catastrophes.
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I was therefore appalled, when reading Hansard of the 7th May, to discover the complacency of the Government in this matter, as revealed by the Answer to the Question asked by the noble Baroness, Lady Ewart-Biggs. Nowhere in that Answer would one have got the impression that the Government realised that they were dealing with a very serious matter. Apart from the legislation to ban the sale of tobacco goods to children under 16 and the ban on cigarette advertising on television, the Government have so far refused to legislate on this matter and have relied on the voluntary agreements made with the tobacco companies.
The voluntary agreements were probably a useful first step in dealing with the question of tobacco promotion, and they have certainly helped in reducing the tar levels of cigarettes which are sold in this country, but they have disadvantages. For example, they have converted the DHSS from a health executive agency to little more than an arbiter between the conflicting interests of health and the sales of tobacco. That is not the proper role of the DHSS. Also, by offsetting the threat of legislative controls, they help to maintain an environment which supports smoking as a socially acceptable activity, whereas the opposite is what is required.
Today many adults are, with difficulty, giving up smoking. Unfortunately, their places are being taken by their children. A great deal of valuable work is being done by the Health Education Council in combating the habit and in trying to prevent children from starting to smoke. But, my Lords, it is the status of smoking rather than its dangers that decides whether or not a youngster begins to smoke. Therefore, what is required is a social atmosphere in which being a non-smoker is more respectable and worthy of emulation than is being a smoker.
Creating that atmosphere is difficult. It requires several things, but one of the most important, to my mind, is the non-advertising of tobacco products. To understand this it is necessary to study the present advertisements. Although they carry the health warning, the form of presentation in fact belittles the health warning while glamourising the cigarette. If the cameras were not here I would have brought some to show your Lordships but I did not want to give them the added publicity of television. That is a fact. All your Lordships have to do is to go and study them and you will see that that is so.
The truth is that there is no room for compromise between the health risk and the enticement to smoke risk. Of course, Government could insist on the health warning being given more prominence than the product. I am pretty sure that they will not get the tobacco companies to accept that, but the only sort of tobacco advertising that makes sense is an advertisement which says, "This product is dangeous to your health, but"—at a lower level—"if you must smoke you can smoke X, Y or Z". But I am sure that that would not be acceptable to the tobacco companies.
Tobacco advertising continually tells people that smoking is desirable. It undermines the credibility of Government statements which say that smoking is bad for health. It is therefore incompatible with the

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Government's wider smoking control policy, and it leads to widespread cynicism about health education messages.
In 1983, 44 per cent. of smokers questioned in a Government national survey agreed that smoking cannot be really dangerous or the Government would ban cigarette advertising. Tobacco advertising is not the only factor which promotes smoking but it is of special concern because it affects other influences to smoke such as peer groups and social pressures. It does that by suggesting that this dangerous, costly and addictive behaviour is widely held to be grown-up, relaxing, sociable or attractive. Tobacco advertising perpetuates such ideas and should be banned.
We must grasp this nettle, and I am inviting your Lordships to do so tonight. The Bill itself is very modest. In fact one of my friends asked me, "What is this puny Bill all about?" This Bill only requires the Secretary of State to make provision for the banning of all forms of advertisement for tobacco products by a date to be specified, not later then three years from the passing of the Act. First, the actual banning will be done by statutory instrument subject to the negative procedure. The three-year period will give the Secretary of State time to consult widely before making the order; and it will also give the tobacco industry time to adjust to the new situation. There are penalties for failure to comply; and a definition of "advertisement". I hope your Lordships will feel able to support it.
I first spoke about the subject of smoking and health when I made my maiden speech in your Lordships' House in 1975. In the 10 years that have elapsed, approximately 1 million people have died prematurely in the United Kingdom from the effects of smoking. There have been two reports from the Royal College of Physicians, and the tobacco companies, in collusion with Government departments, have developed new ways of promoting their products which evade successive voluntary agreements. At about the same time as I first spoke in this House, a Tobacco Act came into force. That Act followed a decision by the Norwegian Parliament to introduce a smoking control programme that included health education in schools, warnings on cigarette packets, and a ban on all tobacco advertising and promotion. Figures from the Norwegian Customs and Excise Department show that cigarette sales declined markedly at the time of the 1970 announcement, and also after the Norwegian Tobacco Act came into force in 1975.
The Norwegian programme and legislation is considered the outstanding model by international smoking control agencies and its correspondence with the decline in smoking in Norway has been cited often as evidence that advertising bans affect tobacco consumption. I am sure that we can do as well as Norway. Let us try to do so. I beg to move.
Moved, That the Bill be now read a second time.—(Lord Pitt of Hampstead.)
7.48 p.m.
Lord Mottistone: My Lords, I am sure we must be grateful to the noble Lord, Lord Pitt, for introducing this debate. My own misgiving is that he has introduced it in the form of the Second Reading of a
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Bill. This subject certainly needs discussing, but I do not think there needs to be legislation.
Perhaps I should begin by telling your Lordships what I do about smoking, so that it will be seen where my position lies. I endeavour to stop every winter; and I smoke in the summer because I like it. On the whole, in the last ten years I have been successful for about six winters out of ten. The reason why I adopt this practice is because I do not want to be a slave to tobacco, but neither do I want to bow to those who tell me not to indulge in this habit, which in health terms (although the noble Lord said that it was not until recently it was certainly thought to be) is of no harm to any others, and the difficulties of which, if they arose, would apply to myself. But I shall come back to that.
On that point I would add that at no time has advertising had any effect whatsoever on this plan. Indeed, advertising has never had any effect on my smoking. It is not a factor. I have to admit to your Lordships that last winter, when I should have given up, was not a good one because of pressure of work in your Lordships' House. I am now planning to switch to a new time of stopping, during recesses. I stopped during the Easter Recess. I shall certainly stop in the Summer Recess and, maybe, continue until Christmas. But what this shows is that I smoke because I like it, and I do not see why a lot of do-gooders should tell me to do otherwise.
Why should the anti-smoking lobby move on to banning advertisements? That is rather strange. The anti-smoking lobby's campaign over the last 20 years has been markedly effective—and, from their point of view, more power to their elbow, and well done! As an example, smoking declined by 28 per cent. between 1974 and 1984, and it is still going down.
One of the results of this campaign has been a series of voluntary agreements between the advertising association and the Government, which is reducing, step by step, the average tar yield of cigarettes offered to the public. I know that the noble Lord sought to decry the difference in tar values, but over the last 20 years it was thought to be an important factor and, by agreement with the advertising association, this change has come about. If this is shown not to be an important factor, and if there are other factors which are more important, it is surely quite possible that the (again voluntary) agreement with the advertising association will enable the Government to get the new factors presented to the public and the smoking habit will change in a different way—
Lord Pitt of Hampstead: My Lords, will the noble Lord give way?
Lord Mottistone: My Lords, the noble Lord will be winding up, and he can answer this point then. Otherwise, with the greatest respect to the noble Lord, Lord Pitt, he will be intervening in every speech which objects to what he is trying to say. The noble Lord can tell me at the end, because he has the last word.
The evidence that smoking is not so much of a habit now is all around us. When I first entered your Lordships' House some 18 years ago, I think it is fair to say that, in the Peers' Guest Room, about 75 per cent. of the Peers there were smoking. Now I should be surprised to find more than 25 per cent. Smoking, and

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that has all come about during the time that I have been in your Lordships' House. Cigarettes are banned at lunchtime in the Dining Room. There are no smoking compartments on the Tubes.
The campaign that is being operated is a very successful one, and if that is what the campaigners want to achieve, well and good. Let them go on campaigning and, if people care to listen, let them listen. I suggest that the trend will continue and that it does not require the added impetus of banning advertising—the effects of which are highly doubtful, as I shall try to explain later—to continue the great bandwagon of reducing smoking, which is already under way.
Not having smoking compartments on the underground railways has come about only during the past year, and smoking on the ordinary railways has reduced steadily. I shall not be surprised if we find all sorts of other examples. It is inconvenient to the smoker, but tolerable, and that is something which needs to be watched. But this total pattern of success by the anti-smokers does not need to have an Act of Parliament of the nature that is put before your Lordships tonight.
Until very recently, when the anti-smokers picked this new scientific fact out of a hat, we were told that smoking was potentially harmful only to the smoker. It may be unpleasant to others, but people need only to be reasonably polite. When I was a teenager before the war—and everybody smoked a great deal more during the war—one always used to ask whether one could smoke in the presence of ladies. Now, because of the Equal Opportunities Act, one cannot say that any more—but let that pass. One now finds oneself asking ladies, and possibly even gentlemen, "Do you mind if I smoke?" in certain circumstances. That is a very good thing, because it is all very polite. It is bringing back a courtesy which we had perhaps allowed to drop.
But that is in a different category from this Bill. Even if it is true that smoking is harmful to people who are breathing in your smoke, you would have to puff at them very heavily to make a difference because the air diffuses very quickly. If you sit in a pub for the whole of its opening time, that is something special, but in an ordinary place it is not an important point.
I suggest (though not for another purpose that I need to achieve) that, for example, drink can lead to harm for others through child-battering and road accidents. While not suggesting for one moment that we should do so (because I do not think it is right to ban advertising on specific objects, anyhow) banning the advertising of drink, of motor cars or of adventure training, which can all damage other people, would surely be more logical because others can be harmed. Whether you harm yourself is your own business.
To turn to the advertising aspect, there is no proof that banning advertising would achieve the aims of its protagonists. There is no evidence that advertising causes anyone, including children, to start smoking. I did not smoke until I was 21, and I started because my wife did. That has nothing to do with advertising, unless you say that she is an advertising person, which she is not. So there is no proof of that and there is no proof that advertising increases smoking. People who
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smoke, smoke; people who do not smoke, do not smoke; and people who want to try to stop, which lots of people do, try to stop, and advertising is just on the edge of this.
In fact, voluntarily controlled advertising helps to reduce smoking, as I said earlier, and the banning of it would deny free choice. Voluntarily controlled advertising has helped the Government to create a change in smoking habits. For example, countries with advertising have switched more quickly to filter cigarettes and low tar cigarettes than those without, and this in a period when low tar was thought to be a good thing. Whether or not it is now is quite irrelevant, because I am talking about figures in 1982, when that was the great cry.
Averaging it out among nine nations, 72 per cent. of those without advertising were smoking filter cigarettes, whereas 94 per cent. with advertising were smoking filter cigarettes. The noble Lord, Lord Pitt, made a great point about Norway. Norway, without advertising, has a figure of 85 per cent., which is much less than the average for those with advertising. So I do not think that there is enough of a case. It may be a very good thing to encourage people not to smoke and to have debates such as this; maybe there is some kind of spin-off. But I do not think there is a case for a Bill of this nature, which is very abrupt, whatever the noble Lord may say.
The noble Lord says that this is a mini-Bill with only one effective clause, and that there will be three years before it can be put into effect. If by some ghastly mistake the Bill was enacted, the Government of the day in three years' time would have to produce the order which would ban such advertising. So it really does not make much difference that it specifies three years. What would happen, for example, if during those three years the Government of the day found that there was not a case? They would have to repeal the Act because otherwise the noble Lord, Lord Pitt, would have told them that they had to have an order.
I have covered most of the ground. I think it is very important that people should take into account that as a result of this campaign—this, I think, is wholly right, and I have no objection to it—smokers have become much better behaved and do ask whether people mind if they smoke and do restrict their smoking under certain circumstances. I think that that is all to the good. The noble Lord said that 15 per cent. to 20 per cent. of deaths were due to tobacco, and he also mentioned that there was a great loss of working time and a heavy direct loss to the National Health Service. Those factors may be right; but, on the other hand, I suppose that if the deaths did not happen the National Health Service would have to pay more to keep those people alive in other ways. If one starts to bring in this sort of argument about whether an individual who is responsible for his own life should be ordered not to die, one is really on a very slippery slope of masterly control from the centre; and one does not necessarily achieve the saving, if that is what it is, to the National Health Service, which is there to deal with whatever ailments we have. One might just as well say that it is a bad thing when people break their legs, because that is a loss to the National Health Service, but they do that anyhow.
The noble Lord said that we have a duty to prevent smoking. I wonder whether we do. Certainly I should

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not have thought that Parliament does. I think that we have a duty possibly to discourage people from smoking and to present them with all the arguments as to why it is wrong, which is what the great campaign has been doing. I am all for that: but the duty to prevent people from doing something which is wholly personal, or very nearly wholly personal, seems to me to be going a little too far.
In conclusion, I would suggest that there is no proof that banning advertising will accelerate the reduction in smoking. There is proof that voluntarily controlled advertising will change people's habits and lead them to adopt less harmful cigarettes. There is proof that the main campaign by doctors and others substantially reduces overall consumption, with voluntarily controlled advertising to help them in achieving this. Hence, my Lords, the Bill would not achieve what it intends. It would be in the nature of a "Big Brother knows best" piece of legislation, and would do harm in depriving the Government of a means of persuading an alteration in the smoking habits of those who will smoke anyhow. I trust that if we are asked to vote on this Bill we will reject it from the bottom.
8.4 p.m.
Viscount Hanworth: My Lords, may I say first of all that I think the noble Lord, Lord Pitt, has introduced his Bill in a very moderate way, although I disagree with it root and branch.
I of course accept that cigarettes, and to a lesser extent pipe-smoking, can be damaging to the health of many people but it clearly is not always so, to judge from the example of the noble Lord, Lord Shinwell. I do however think that there is a tendency for some people to espouse a cause and run it too far when emotion rather than common sense prevails.
Having said that, I nevertheless believe that young people should not start smoking if they can avoid it. Inevitably, in all societies, some people for one reason or another will use some drug or other; and smoking in moderation may be less harmful than other alternatives. We can now see what alcohol can do to affect those at football grounds. There is glue sniffing and of course there are harder drugs.
This debate, however, is not about banning smoking but about banning advertising. If we were to do so we should first convince ourselves that it would achieve worthwhile results and should take into account the inevitable undesirable side-effects of such a measure. I believe that advertising with the voluntary controls, which have been very well observed, has no noticeable effect on smoking. In fact I would go further and say that advertisements with a fairly prominent health warning may be a positive disincentive.
Not all young people realise that smoking can be harmful: or if they ever did they have forgotten about it. The advertisement is therefore a timely warning and an incentive to consider the matter seriously. In the few countries which have banned advertising, with the possible exception of Norway, there has been no reduction in smoking, and in certain cases there has been an increase. This compares with what has happened in Britain, where there has been a reduction in the past decade of something like 28 to 30 per cent.
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But advertising has promoted low-tar cigarettes and filter tips, both of which are generally considered to lessen the undesirable effects of smoking. Furthermore, brand promotion has effectively prevented the import of cheaper and stronger cigarettes; and we cannot legally impose an import tax. The sponsorship by the tobacco companies of games and sports such as snooker and motor racing has been beneficial. I simply refuse to believe that seeing a tobacco logo on a racing car has any effect in encouraging people to start smoking. Its sole effect is on the brand image.
To summarise, I am making one point only, which is that an advertising ban is not the way forward for people who would like to see smoking reduced or even brought down to zero. I am afraid that some of the arguments that are put forward are extremely spurious. One which I think is particularly so and which was mentioned this evening is the cost to the National Health Service. We all have to die from some cause, and doing so or becoming old cabbages because our life is prolonged will always involve some medical and nursing expenditure. I doubt whether the cigarette-induced cancer makes any difference. And, very cynically, I might remark that it may save some old age social benefits if lives are somewhat shortened.
In any case one has to offset against that what is obtained by the Treasury from the tax on cigarettes. That does not mean that I think that this is any justification whatsoever for encouraging smoking; and I personally should like to see it continue to be reduced in England, but I do not believe that the banning of advertising is the way to do it. I deeply resent it if people worry me needlessly about my habit of smoking. I shall continue to smoke until I die.
8.10 p.m.
The Countess of Mar: My Lords, I would ask those noble Lords who know me well not to fall about laughing when I say that I rise to my feet to support the noble Lord, Lord Pitt. To those noble Lords who do not know me—unlike the noble Lord, Lord Mottistone, and the noble Viscount, Lord Hanworth—I must say that I am a nicotine addict. I am totally ashamed of the fact that I smoke 20 to 30 cigarettes a day. I am even more ashamed of the fact that I lack the will-power to overcome the powerful withdrawal symptoms of trying to give them up.
I had not intended to speak in this debate, but when talking to the noble Lord, Lord Pitt, yesterday afternoon about his Bill I mentioned that I had spent the morning in situations where it would have been unwise for me to smoke. That did not worry me too much. But while I was being driven from one place to another I passed by a row of shops which were plastered with advertisements for cigarettes. Normally, the effect of such advertisements would not have penetrated my conscious state, but for some reason—perhaps because I was aware of the imminence of this Bill—I became acutely aware of the correlation between my seeing those advertisements and the sudden craving I felt to smoke a cigarette.
Advertising is not the only factor which affects my addiction, but it is certainly a strong one. It had been my intention to make just this point and then sit down. If the noble Lord, Lord Somers, were here, perhaps he would command me to sit—as he did another noble

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Lord last week—but I hope your Lordships will hear me out.
Last night I was thinking about what I would say in my speech. It is easy to be flippant and amusing, especially when one knows others will make serious speeches for and against the Bill. The more I thought about this subject, the more I realised that if what I said today will deter just one person from smoking, I shall have achieved something.
Allow me to tell your Lordships what smoking has done to me. Apart from taking the odd cigarette as a teenager, I did not start to smoke until I was 30. I was just getting over a heavy cold and was miserable with nasal congestion. A colleague of mine offered me a mentholated cigarette—one of those advertised being smoked by people in a sylvan glen through which runs a cool mountain stream. When my symptoms returned I smoked another, and another. Before I knew it, I was hooked.
That was in 1970. In 1976 I was going through a period of severe stress and I developed a peptic ulcer. Those noble Lords who have suffered from one of these beasts will know that one has to lie low for long periods and that peptic ulcers have a nasty habit of raising their ugly heads at the most inappropriate moments. Just when one needs all one's reserves to overcome tiredness or anxiety, one is struck with acute pain. It was not until fairly recently that I was told of the relationship between smoking and ulcers, although I should have worked that out for myself. Smoking may not be the direct cause, but it certainly retards healing.
The trouble is that I use cigarettes to reduce stress. Without them I am impossible to live with and I feel physically ill. I have tried frequently to give up cigarettes. The last time was about two years ago, but after a fortnight of nicotine deprivation I was in such a state of physical and emotional tension that life itself became pointless. I had reached "the pits", as McEnroe might say.
I have never advocated the use of medicinal products as emotional props and I do not believe in substituting one addiction for another. Rather than do that, I returned to cigarettes. I am now smoking again and have, if I am honest with myself, given up giving up. I am well aware of all the hazards associated with cigarette smoking. I hate the taste of the weed, and an ashtray full of butts or the smell of a smoky room disgusts me; but the addiction is stronger than the aversion.
The realisation that my husband's and my own expenditure on cigarettes in a week combined is more than the unemployed benefit paid to a young person for a week horrifies me. It may be too late for me, but if we can stop others from taking their first cigarette—particularly children, and here again I have failed—I know that we will have done them a tremendous service. How can we morally justify the continuing promotion of a product which we know causes so much physical and emotional damage? I ask the House to support the noble Lord, Lord Pitt.
8.14 p.m.
Lord Kaberry of Adel: My Lords, confession seems
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to be the order of the evening. I propose to make a very brief and, I am sure, extraordinarily dull speech. I have never smoked cigarettes, I have never smoked pipe tobacco, I have never chewed tobacco, and I have never taken snuff. It has been a very dull life.
I share the concern of the noble Lord, Lord Pitt, about the illnesses and ensuing death from respiratory diseases, from lung cancer and other lung diseases, and from heart diseases. For many years I was chairman of the board of governors of a large teaching hospital in Yorkshire. I was left in no doubt about the problems associated with all those diseases. What I do know is that not all those who suffered in that bad way were users of tobacco substances in any form. It does not necessarily follow that all deaths from those diseases are attributable in any measure to the use of tobacco.
I accept the necessity to wage a campaign constantly against those diseases. To that end certainly I will do all that I can. But this Bill—as the noble Lord, Lord Mottistone, reminded us quite rightly—is not to ban tobacco products and the use and smoking of those products, but is to ban the advertising of them. The Department of Health published a White Paper in December 1977, I believe it was; the noble Lord, Lord Ennals, will put me right if I am wrong about the year. That White Paper dealt with the question of preventive health care and it stated, in relation to cigarette advertising and smoking:
"There is little direct evidence about the effects of cigarette advertising on total consumption. A ban would detract from Government strategy, which encourages smokers to smoke cigarettes in the relatively less harmful lower tar groups and would remove an important vehicle for the health warning which appears on all advertisements".
Since 1977 I believe that all the evidence associated with these problems supports what was then said. It leads me to say that I am wholly against any form of prohibition and certainly the prohibition of advertisements—advertisements which are used by the manufacturers and by the Government to bring home a warning as to the possible risks to the consumer from tobacco products.
I believe that practice has brought about quite a change—as the noble Lord, Lord Mottistone, so well illustrated—in the smoking and social habits of many of our fellow citizens. I believe I am correct in saying that about 40 per cent. of the adult population smoke cigarettes of one kind or another; cigarettes manufactured by themselves or by a tobacco company. Those people are not unaware of the problems associated with cigarette and tobacco smoking. I believe them to be sufficiently adult to take notice of all the propaganda which is, quite rightly, put out by the medical profession in respect of the difficulties associated with too much smoking or any smoking at all.
Over the past 10 years such propaganda has led the tobacco companies to spend considerable sums of money on better research and development on improved manufacturing of leaf tobacco, on the better use of the filter tip, and on other matters of that kind.
This Bill prohibits the use of all forms of advertisement for tobacco products. As Clause 3 says:
" 'advertisement', in relation to a tobacco product, includes every form of recommendation of the product to the public".
It then defines two particular matters which are of

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specific importance. If all advertisements were banned, it would mean, first of all, the denial and removal of the Government warning on all cigarette and tobacco advertisements. That would go. It is a warning on all advertisements which says very clearly:
"Cigarettes can seriously damage your health".
That will go. We shall have a world where cigarettes are sold over a counter or surreptitiously somehow without any proper recommendation by the manufacturers on the content of the cigarettes and without any warning by the Government.
Viscount St. Davids: My Lords, may I suggest that in that case the warning could be put on the tobacco shops themselves?
Lord Stoddart of Swindon: And, my Lords, on pubs and off-licences.
Lord Kaberry of Adel: My Lords, I am not quite sure what would happen if everything was banned, but certainly it would prevent competition among the tobacco companies. It would also deny a great deal of information being given to the public.
I do not know what "recommendation of the product" would mean. The noble Lord must have worked out what his Bill is proposing to do. At the other end of the corridor where there is another place I have heard one Member recommending to another to have a pinch of snuff as he goes into that Chamber. Is that to be banned? Are we to interfere with the privileges of that House? The phrase must at any rate be defined. Where are we going? Does it mean that all imported magazines, including those from the United States which have masses of advertisements for cigarettes and tobacco, are to be banned? Would a ban be effective? I think that we have had one or two illustrations as to what has happened in countries where there has been a ban.
So far—and that is why I introduce it—Italy has not been referred to specifically, but Italy banned tobacco advertisements in 1962. If we take comparable figures, say, from 1969 to the last completed year of 1983, we see that in 1969 some 68,000 million cigarettes were consumed in Italy; in 1983, after the ban on advertising, that consumption had risen to 120,000 million. It was almost double the quantity. In the United Kingdom taking 1969 again, there were 124,900 million cigarettes consumed. I think that as a result of the warnings and the change of habit consumption dropped in 1983 to some 100,600 million. I think that that shows that the voluntary scheme being used in the United Kingdom is effective.
What concerns me is that, if we remove the effective warning which presently is used, cigarette sales, and indeed all kinds of smoking, could well go underground without any expression publicly about the evils of the use thereof, which was so well illustrated by His late Majesty, James I of England, and into whose remarks I need not go.
There are other matters associated with the banning of advertisements. The term in the Bill is:
"every form of recommendation of the product to the public".
Almost daily on our television screens we see American or British—indeed, international—films of
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all kinds in which people are apparently enjoying smoking cigarettes, pipes or tobacco of some kind. On old films we even see seamen chewing tobacco. Are they to be banned? It is a form of recommendation of the product. They seem to enjoy it very much.
One actor, Mr. Clint Eastwood, portrays a great wild west character who appears regularly and who is first seen in a film chewing a half smoked cigarette, hand-rolled obviously as one sees it. The film always fades out after the great hero has performed wonderful deeds as he lights up yet another hand-rolled, half smoked cigarette, with a great smile of satisfaction on his face. Is that to go? Is that to be banned? It is in fact a recommendation of the product. He seems to be enjoying it very much. So why should we not all say, "I shall enjoy one, too. No one in the newspapers is telling me that it will injure my health, except some old fuddy-duddies called the BMA who have all sorts of cockeyed ideas. But I will take no notice of them. I shall have a cigarette because Clint Eastwood has one"?
If this Bill goes through, does it mean that every film to be shown on BBC and IBA programmes has to be censored: Big Brother will be watching! He will have a pen or something else and whenever a cigarette comes up it will be struck out somehow. I do not know what will happen. It is nonsense and the Bill is nonsense. I agree with my noble friend Lord Mottistone: let us throw it out.
8.27 p.m.
Lord Rea: My Lords, I should like to thank my noble friend Lord Pitt and support him for bringing in what I consider to be a long overdue Bill. I think that all noble Lords who have spoken accept that the scientific argument about smoking and health is over. I think that perhaps the noble Lord, Lord Ka berry, might need a refresher course on that. Although his speech was a great deal more amusing than mine will be, I am not sure whether it has helped the case against the Bill. I shall refer to a number of his arguments at a later stage of my speech.
The damaging effects of smoking were already established as much as 30 years ago, following the pioneer statistical work of Sir Richard Doll and Sir Austin Bradford Hill in 1950. About 18 years ago I was working with Professor Walter Holland's team at St. Thomas' Hospital in research which at that stage was dotting the i's and crossing the t's of the established evidence linking smoking with aspects of ill health. We discovered that the lung function of schoolchildren was already impaired if they smoked, and so was the lung function of young children whose parents smoked at home. Referring to the remarks of the noble Lord, Lord Mottistone, I point out that it is not just recently that the effect on others of people smoking has been established. It has been known for some time.
In that research group we also showed that men with chronic bronchitis survive much longer, with fewer episodes of acute bronchitis and pneumonia, if they stop smoking. It might be argued that that is obvious, but it was very important to establish that fact then and it has helped doctors to convince many people to give up smoking. We also found that carbon monoxide, which is a well-known poison, was present

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in people's blood in direct proportion to the number of cigarettes they smoked and the depth to which they inhaled the smoke. Carbon monoxide is only one of the noxious substances present in cigarette smoke. The research unit at St. Thomas' was, incidentally, funded by the Department of Health and Social Security; it still is, and is doing excellent work.
Even then, the evidence was so clear that we could not understand why the Government did not take immediate action to prohibit the promotion of tobacco products. I should have been quite incredulous if I had known then that today, 18 years later, I should be speaking in this debate to support a Bill that should have become law 20 years ago. I am not making a party point here. All governments have failed to stop the advertising of what is, without exaggeration, when it is smoked, an insidious and addictive combination of poisons.
The message has reached most people. As noble Lords have mentioned, tobacco consumption is slowly coming down. But, as his Royal Highness the Duke of Gloucester said in a remarkable maiden speech last June:
"Smoking is the single most important cause of preventable ill-health, disability and premature death in Britain today. This will continue to be so for many decades unless there is a much greater change in the rate of consumption."—[Official Report, 13/6/84; col. 1124.]
I will grant that the Government have taken some steps. They have financed the Health Education Council to the tune of some £3·5 million to undertake anti-smoking activities. They give a very small grant to ASH, Action on Smoking and Health, which does an amazingly effective job considering its really tiny budget. Tax is added year by year to the cost of tobacco. Cigarettes, and luckily cigars and pipe tobacco somewhat less, were hit this year. However, in relation to income, it is still cheaper to buy cigarettes now than it was pre-war. The price of a packet of 20 cigarettes should be £1·60, not 1·20, to represent the same proportion of average income as it did 50 years ago.
There is the voluntary agreement, about which noble Lords have spoken, with the industry on advertising, and the inclusion of health warnings regarding tar and nicotine, and the listing of tar, nicotine and carbon monoxide content. However, incidentally, information about carbon monoxide content is never printed on the packet, and never available in tobacconists. I wonder why, my Lords. Nevertheless, the industry spends at least £100 million, and probably considerably more (the figures are quite difficult to obtain) on advertising. That is 30 times as much as the Health Education Council's antismoking budget of £3·5 million. The Government receive £5 million a year in tobacco taxation revenue.
As the noble Countess, Lady Mar, has really very movingly pointed out, nicotine is a highly addictive substance. Some people say that it is even more addictive than heroin. Everybody knows how difficult it is for addicted smokers to give up, even when they know very clearly that their lives are at stake. Perhaps I may quote the noble Duke, the Duke of Gloucester, again (I am sorry he is not here tonight):
"even after undergoing major lung cancer surgery 48 per cent. of patients (if they survive) start smoking again".—[Official Report, 13/6/84; col. 1124.]
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The addiction can start quite early in life. The Royal College of Physicians has said,
"The matter is largely settled by the age of 20. If a person is still a non-smoker at this age, he is unlikely to take it up."
In my experence, it is easier to give up if you start well into adult life—as the noble Lord, Lord Mottistone, discovered, for he seems able to give up and start again at will. I think the situation is rather different for women who may start later and get stuck. It is vital for the tobacco industry to get young smokers started.
Simon Chapman, who wrote the BMA booklet which produced some of the evidence about which we have been talking, says:
"The failure of a generation of young people to start smoking would devastate the industry within 10 years".
Perhaps he exaggerates. However, I submit that despite their protestations to the contrary, the main aim of cigarette advertising is to get young people started and addicted to the habit. If they get them young, like the Catholic Church, they have got them for life.
Recently, I received a letter from the Advertising Association enclosing an aubergine-coloured booklet entitled Advertising and Cigarette Consumption by M. J. Waterson. They said in the letter that it was in case I wished to speak against the Bill. I do not think they have done their research very well! Neverthless, it is very handy because it has helped me to look at some of the arguments of those who oppose the Bill.
First, let us look at the situation in Norway. Tobacco consumption has fallen more slowly there than in the United Kingdom, despite a tobacco Act banning advertising which was brought in in 1975. However, no one pretends that advertising, or the lack of it, is the only factor affecting tobacco sales. The fact remains that a vigorous Government compaign against smoking in Norway in 1970 arrested a steady increase and that the ban was followed by a decline in male smokers after a year or so. More significantly, the ban on advertising was followed immediately by a fall in smoking by children of both sexes aged 13, 14 and 15. That is something not yet achieved in Britain.
The second point made in the booklet is that cigarette consumption has risen steadily in Eastern Europe, the USSR and also in some other countries, such as Italy which the noble Lord, Lord Kaberry, mentioned. All these countries have a ban on advertising. I submit that this is quite a false analogy. In all these countires there is a very low public health awareness regarding smoking. They are 20 years behind us in this. Cigarettes are cheap there and other consumer goods, particularly in Eastern Europe, are often scarce. They also started from a lower level of smoking. As the table in the book shows, those countries which reached our level of smoking in the 1960s are now recording a fall. There was a fall in 1981, compared to 1980. I think it is too easy to use statistics to mislead people.
A point that is often made and has been made already by other noble Lords is that advertising helps to give information so that people can choose safer brands; for instance, those with filters or with less tar. The booklet gives two tables comparing the percentage of filter cigarettes and low tar cigarettes sold in countries with and without advertising bans. There is

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no time to give a detailed analysis of the tables, but the countries are selected to prove the points that the author wishes to make. All the countries that he selects without advertising bans had over 90 per cent. filter cigarette sales, whereas those with bans mostly had lower rates, a median 70 per cent. of filter cigarettes. However, the authors failed to mention Mexico, India and Pakistan among the countries without advertising bans. Maybe the reason was because their filter rates are extremely low with figures of 20 per cent.; 39 per cent.; and 43 per cent.
There are other ways of encouraging people to smoke lower tar cigarettes: for instance, differential taxation and directives to the industry. In the United Kingdom tax on the high tar cigarettes, that is those with over 20 milligrammes per 100 grams, was increased over that level a few years ago. Consumption of these cigarettes after that plummeted from 15 per cent. to 3 per cent. of sales within three months. That was a much quicker effect than one might have expected from advertising.
In Finland, the criteria for the lowest tar grade has been progressively reduced, and high tar grades banned altogether. The consumption of the lowest tar cigarettes, that is those with less than 11 milligrammes per cent., has increased from 5 per cent. in 1978 to 31 per cent. in 1984. In the United Kingdom, the consumption of this lowest tar grade has remained steady at around 15 per cent. over the same period despite all the efforts of advertising.
In conclusion, I would submit that tobacco advertising cannot do anyone any good, except the tobacco industry. For the Government to continue to allow advertising is in effect condoning the habit and legitimising its continuation. As the noble Lord, Lord Pitt, said, anyone might say that if advertising is allowed, smoking cannot be all that bad. But the damage done by smoking is too great to allow this complacency. The tobacco industry, I suggest, should be prepared to put its house in order and wind up its affairs, with its early demise in prospect. I suggest that this might prevent hundreds of thousands of individuals who are our fathers, brothers, mothers and sisters and maybe our sons and daughters from having to do the same thing, as they face imminent death from lung cancer, heart disease or one of the many other smoking-related diseases.
Money saved by the industry by not advertising, if this Bill were to pass, could be used for retraining schemes for those who might be made redundant. But the industry is wealthy and has plenty of time to diversify, as it has already done. Many noble Lords will have received an extremely glossy brochure from BAT Industries which illustrates precisely this. I suggest that the tobacco fields of the world should be growing food or other useful crops. The change-over is going to take time. One has only to think of the millions of nicotine addicts. So no economic disaster will occur. I fully support the Bill. I feel that it is long overdue.
8.41 p.m.
Lord Harris of High Cross: My Lords, I thought that from the speech of the noble Lord, Lord Rea, we
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got a whiff of the real spirit behind many of the speeches, which is that the Bill is a kind of precursor of a total ban that he would clearly like to see on the use of these products.
Lord Rea: My Lords, when the noble Lord looks at Hansard tomorrow, I should like him to find the passage in my speech which says that, and send it to me.
Lord Harris of High Cross: My Lords, I apologise if I have misrepresented the noble Lord. But the spirit of his remarks was one of great impatience and even contempt for those who use cigarettes or tobacco and some anger with those who continue production. I wish to say that despite the most amiable and moderate manner of the noble Lord, Lord Pitt, I regard this Bill to ban advertising of all tobacco products as at once trivial and yet heinous. It seems to me yet another example of the profoundly anti-democratic temper of so many socialists, if I may say so, in all parties and their contempt both for individual liberty and for the common sense of ordinary people. It illustrates for me the casual, almost frivolous, resort to the full majesty of law to gratify what I hope, for the noble Lord, Lord Pitt's, sake, is no more than a passing professional whim. I am sure that he would not generally set himself up as the almighty censor of other people's everyday conduct. Yet here he is attempting to deploy the ultimate sanction of state coercion to influence or control the tastes and preferences of which he disapproves in his fellow men and women.
To me, the Bill is highly objectionable as breaching the sacred liberal principle that keeps compulsion in reserve for use against major threats to the peace and security of a free society. By the same token, it is essentially a trivial measure. At a time when this nation is faced with some fairly daunting economic and social challenges the noble Lord and his friends think it right that the attention and resources of this entire Parliament should be diverted to indulge their paternalistic itch to interfere in other people's affairs. Even from the narrow prohibitionist point of view, why deploy this legislative steam hammer to crack the little nut of tobacco advertising when, as we have heard, voluntary codes have already gone a long way to advance the cause both of less smoking and of what is regarded as less dangerous smoking?
The noble Lord, Lord Pitt, did not deny that advertising has been directly instrumental in switching smokers to filter-tipped cigarettes and to lower-tar brands which have increased during the last decade from 5 per cent. to 57 per cent. of the market. I should like to ask the noble Lord, when he winds up, whether he acknowledges that in those model socialist states of Eastern Europe about which we have heard, where government monopoly countenances no tobacco advertising, smoking has increased without advertising and there has been no comparable shift to filter tips or lower tar.
I should also like to hear whether the noble lord disputes the view that we have heard (and I have certainly been instructed in) that since Norway banned advertising in 1975, consumption has not obligingly fallen as fast as it has in the United Kingdom. Indeed, the director of the Norwegian Council on Smoking has

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himself explicitly poured cold water on the naïve expectation that this kind of censorship and suppression of advertising helps the noble Lord's cherished aims. The best commonsense view on the effects of advertising, in a well developed market such as cigarettes, is that of the Metra Consulting Group, which concluded that promotion influences brand shares but not the size of the total market.
Anyway, why should the noble Lord adopt such a superior and condescending contempt for the ability of smokers to make up their own minds? Does he honestly believe that a single citizen in this country has not heard that smoking is alleged to be dangerous? We have heard that by voluntary agreement 15 per cent. of every advertisement for cigarettes is devoted to a free display of the latest health warning which seems to be, "The more you smoke, the more you risk your health". I only wish that 15 per cent. of some of the speeches of Socialists to which I listen were required to include a warning against higher taxes and inflation that are their inevitable consequence.
I also recall from the dim recesses of a stubborn but selective memory a report in the BMJ in 1979 that doctors who heeded their own propaganda and stopped smoking risked worsening mortality from stress-related diseases including suicides, accidents and cirrhosis of the liver. It is a common observation that many people who stop smoking turn for consolation to over eating or over drinking and other damaging pursuits. This debate so far has also confirmed an impression that I have formed for some time—that non-smokers tend to make longer speeches in your Lordships' House. I believe that this is because they are not in such a hurry to leave the Chamber to have what I believe is called in the vernacular "a quick drag". If I may say so, without any disrespect to the noble Lord, Lord Ennals, I guarantee that my comparison of the average length of speeches in favour of smokers will be much confirmed by the time that he sits down.
The decisive practical case against this Bill was well put by the noble Viscount, Lord Hanworth, from the Alliance Benches. It is that it will not achieve the purpose sought by its authors. Even if all advertising could effectively be prevented—we have had some doubts expressed about that by the noble Lord, Lord Kaberry—it would not ensure the reduction in smoking and may end the current switch to lower-tar cigarettes. Thus, newspapers would be crippled by a decisive loss of advertising revenue, all to no avail. The big question is "Could all advertising be so easily prevented?" How about tobacconists' shop windows? Are they to be blacked out? What about point of sale display and other marketing devices? Are companies to be stopped offering free gifts, such as the cigarette cards I remember from my youth? How about lucky numbers or bingo prize games on the packet? Will Lord Pitt's Bill run me in for wearing a lapel badge or a T-shirt displaying the name of my favourite brand?
When this petty, persecutory Bill has been shown to fail in its feeble purposes, what further prohibitions would the noble Lord and his earnest friends dream up to impose their will on those of us who dared to choose to continue to smoke? It is on the grounds of practical expediency, no less than on the highest principle, that
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I urge the House to reject what I consider to be an ineffective, objectionable, piffling Bill.
8.50 p.m.
Earl Attlee: My Lords, smoking is a filthy, disgusting habit. My wife tells me that, my son tells me that and my daughter tells me that. How is it that I have been smoking for all these years and have brought up two children—and I was going to say one wife—and none of them smokes?
The noble Lord who has just spoken to the Bill has called it a petty Bill. My Lords, it is petty. I had hoped that the people who promoted the Bill would produce some good, cogent arguments. The noble Lord, Lord Pitt, referred to Norway. He said that when they banned advertising in Norway smoking decreased. However, why did he not tell your Lordships that at the same time they imposed a swingeing increase in the price? That was why smoking decreased in Norway.
The noble Lord, Lord Rea, said that the tobacco companies say, "Get them young and you've got them for life". If your Lordships have been into a tobacconist or a sweet shop during this past year you will have seen a large sign saying that it is illegal to sell cigarettes to children under age. That was not a Government action; the tobacco industry did it themselves. It has spent a vast sum of money trying to stop children from smoking; it does not want children to smoke.
The Bill looks quite innocuous until you actually think about it. If your Lordships pass this Bill, there will be no more motor racing. The tobacco companies spend millions and millions of pounds every year supporting motor racing, and as a result of motor racing we get better tyres, better brakes and we save lives. If we stop all forms of advertising we are bound to stop promotion.
Your Lordships sit down at home—that is, when we get home—and watch television, and it is great. Your Lordships may watch the Embassy World Snooker Championship, which is great. Perhaps little Johnny will be sitting with you and he will see "Embassy". Are you honestly telling me that he will say, "Embassy. That is a cigarette." He will be watching snooker, he will not connect the two. You may be watching the John Player Special and see someone driving down the motor racing track at 180 miles an hour. Will little Johnny at home say, "Oh; I must have a cigarette"?. Do you see the driver who is driving at 180 miles an hour lighting a cigarette? I am sorry, but it just does not work in that way.
If advertising does anything it gets you to change from one brand to another. I smoke Rothmans cigarettes. I do not actually like John Player Special cigarettes. I am sorry about that, but I shall try another brand. I have smoked all my life and I started when I was too young to smoke legally. When I was a sailor they cost tuppence for 50. If my wife does not smoke, if my son does not smoke, and if my daughter does not smoke, what will this Bill do? I am sorry, but this is a petty Bill and even the arguments which have been put forward in support of the Bill are petty. Your Lordships must throw this Bill out.
8.55 p.m.
Lord Orr-Ewing: My Lords, I ought first to declare an interest. I am a non-executive director of a public relations firm and one of our 45 clients is a tobacco firm. If I have to say that every time I speak on any subject, it is still better to be honest about it, and I should like to declare it before I begin.
The noble Lord, Lord Pitt, is a friend of many of us in all parts of the House. He is such a nice chap that we always feel sympathetic to anything that he promotes. He has certainly done us a service because until I began to study the problem I had no idea of the facts and figures and what was happening in other parts of the world which are all encountering this type of problem. He has brought the matter to our attention, and that is a very worthy cause. However, I do not think that so far anyone who is in favour of the Bill—even the noble Lord—has really put forward a good cause as to why we should abandon a voluntary agreement which has been extremely successful over the past 15 years, and substitute for it a law which will be very difficult to draw up—it is very imperfect in its present state—and which will forbid all advertising. And from advertising there will be a knock-on as regards sponsorship, which is a form of advertising, at least in the BMA's opinion. So I do not think that the case has been proved.
We have been asked to set aside two voluntary agreements: one on the health side and one covering advertising and sponsorship and the conditions under which that is done, and how much of it is done. That is to be abandoned and substituted for a complicated Bill making it essential that we abandon all advertising of every type of tobacco product. We are always groaning and saying, as we are kept up night after night, "There is too much legislation in this bloody place"—and, by the way, they are saying just the same down the corridor—"and so for God's sake stop legislation". Therefore, in that mood—and we are very much in that mood because so far as I can see we shall be permanently locked in here for June and July—I ask why we should have a further amount of legislation when a voluntary agreement is really working extremely well?
I had hoped that the noble Lord, Lord Ennals, would have spoken earlier so that I could have dealt with what he said. However, I hope that when he comes to speak he will explain what has happened since 1977 when he, as the Minister, signed the voluntary agreement. Has it not matched up to the hopes that he had for it? Perhaps he will tell us about that.
Perhaps the noble Lord, Lord Pitt, will tell us from where he produced the astonishing figure that he quoted. I have looked at an innumerable number of charts, medical reports and the like. No one has suggested that 20 per cent. of the people in this country die from tobacco smoking. Perhaps in his wind-up speech the noble Lord will tell me where I may find that, and we shall study it. However, certainly everything that I have studied suggests that his figure is way over the figure which could possibly be justified.
What has happened as a result of the voluntary agreement? First, we have had the low tar content which in 1972 accounted for fewer than 5 per cent. of
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the cigarettes that were bought; low tar cigarettes now make up 68 per cent, of the cigarettes that are bought. So that is a tremendous achievement. As regards filter tips, which were almost negligible in 1950, now 95·7 per cent, of cigarettes are filter tips. Therefore, in making the cigarettes less injurious, there has been a very real change in the habit in this country As a result, 30 per cent. fewer people smoke today than smoked a decade ago.
Meanwhile the industry—and the noble Lord, Lord Kaberry, touched on this—has understandably, because it is threatened, spent even more on improving its products. It has spent £300 million on research and development in the last decade. It will go on spending.
The BMA is an organisation that we all respect. It is a powerful advocate and it is a pretty resolute opponent. I noticed in its weekly journal of 28th April 1983 an article on how the BMA had beaten the Government over the police request for access to medical records. It was crowing over this success The article, by one Susan Edwards, concluded with these comments:
"They were not unhappy, however, that the profession got a chance to see the BMA at its most effective, and face the prospect of challenging the Data Protection Bill and later the tobacco industry with relish".
That is the relish we are enjoying this evening. 1 hope that we shall not let it get any further in the legislative programme.
As I have said, the noble Lord, Lord Pitt, is a nice chap, and he is also a doctor, and therefore he speaks with some authority. He is the future chairman of the BMA, so we must take anything he says seriously. The BMA is behind this Bill, and let us not brook that issue. It is behind the proposal that we reject the successful voluntary system.
Of course the BMA considers that sponsorship is another form of advertising. In a moment I shall draw attention to sponsorship and just what good it has achieved in both sport and the arts. But one thing has not been mentioned: let no one pretend that if this Bill is given a Second Reading tonight there will not be a follow-on, a knock-on, a domino effect. Once they have this banned, it will move on perhaps to certain forms of alcohol, and then broaden to other forms of alcohol. This is just a start.
Please, if a voluntary agreement is working, let it work. It is so much more flexible. Under a voluntary agreement you do not have to bring a case and have a criminal charge, and prove your case with all the courts taking it up and wasting their time, and with all the moneys expended. You get together with the industry and you adjust the conditions and make sure that what is being done is in the interests of better health.
We have had two doctors speaking tonight. I rather regret that the noble Lord, Lord Hunter of Newington, who is so renowned in medical circles, was not able to be present. He was chairman of the Independent Scientific Committee on Smoking and Health, and he said this about the 10 years of service he gave there:
"By the time I completed my period as chairman the levels"—
referring to tar levels—
"had been reduced from somewhere in the region of 28 milligrams to about 15 milligrams".

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Now of course the plan in the next few years is to cut it down to 13. It has been more than halved in that period. He went on:
"The effect of the introduction of filters and the reduction of tar levels … has been a substantial reduction in the incidence of carcinoma".
There it is from one of the great authorities who was chairman of a very important body.
Sir Richard Doll in his Harvean Lecture of 1983—and I have all those papers here—produced some encouraging graphs. Nothing that he produced has suggested that 20 per cent. die from tobacco. What is significant is not only the reduction in the last 10 years but the way in which this voluntary agreement has restricted the amount of advertising, has restricted the amount of sponsorship, and has succeeded in bringing about a very successful industry.
I would also mention that if we banned it here, if the demand for the product fell markedly here, if there had to be a cutback in research and development, there would be the question how we are to keep out the overseas product. There would be a massive increase. Most of those overseas products would have much hgher tar content and be much less well filtered than the products we produce here.
People have suggested that the advertisements are aimed at the young. That is not true. The tobacco industry goes on reminding shops that they must not sell to the young, and that it is against the law to sell to the young. It has been suggested that when the young see these sponsored events that they will be encouraged to smoke. I went to watch my county, Middlesex, play rather unsuccessfully in the Benson and Hedges Cup at Lord's last week. I saw a small number of schoolchildren there. Unfortunately, Middlesex were out cheaply and so the game did not last as long as was expected.
I asked them in the interval what they knew about Benson and Hedges. They said, "Well, this is the Benson and Hedges Cup". I got that. But very few of them knew that Benson and Hedges made cigarettes. I am sorry, but, at least from my personal survey, it does not seem that the idea that young people seeing cricketers playing, or other people who are energetic, will immediately take to smoking is borne out at all.
In this country, unlike in the controlled economies of the Soviet bloc, our sports are controlled by governing bodies (all volunteers, by the way), and some governing bodies do not want to be associated with tobacco sales and therefore they do not want tobacco sponsorship. The Amateur Swimming Association is one of those, and I read in the Daily Telegraph today that soccer and swimming are not to be associated with smoking.
There is a voluntary agreement cutting back on where sponsorship acts. But let us bear in mind that sponsorship of sport is now worth between £8 million and £10 million a year to sport. If sponsorship was banned, let no one think that there will be an immediate inrush of other sponsors. I looked at the figures recently, and as many as 60 sports are now looking for sponsors and cannot find them.
May I put in a word also for the arts? The sponsoring of the arts by the tobacco industry is now worth £4
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million a year. Owing to the generous announcement we heard recently from the noble Earl, Lord Gowrie, every £1 given in sponsorship is to be matched by another £1 from the Government. Therefore, that sponsorship is worth much more than £4 million to those concerned.
If one had to pick out one example, it would come from Ulster. The Ulster Orchestra is sponsored. They received a £260,000 grant from a tobacco company for four years of sponsorship. In fact it kept the orchestra going. It would have lapsed but for that. It now has another £260,000 for the next four years. It is a wonderful example of how the arts can be helped just as sport has been helped.
I submit to this House that so far we have heard nothing which proves that the voluntary system is at fault, and that a legalistic system would be a better and worthier replacement. I hope, therefore, that the House will, if it comes to a vote, turn down the Second Reading of this Bill.
9.8 p.m.
Lord Airedale: My Lords, I did not put my name down to speak in this debate and to contribute the two sentences that I have in mind because I did not expect to hear the noble Lord, Lord Mottistone, say that smoking is only personal or very nearly only personal. I know that that is what people like the noble Lord think, but the unhappy truth is that a person who lays himself open to getting hooked on cigarettes lays himself open also to being cut off, not when he already has one foot in the grave but probably when he is the head of a family at his maximum earning capacity, making his maximum contribution to society and very deeply affecting the lives of other people who hold him in the greatest affection and are probably financially dependent upon him. It behoves people who smoke to think a great deal more about other people. Smoking is not only personal or even very nearly only personal or anything like it.
Lord Mottistone: My Lords, before the noble Lord sits down, I should point out to him that I am still thriving (having smoked since I was 21) and I have passed the stage at which my children are a great care to me. None of my children smokes and I can think of not one friend in quite a long life who in his prime died from smoking. I cannot think of anyone, and I have a large number of friends. I think that is just a myth.
9.10 p.m.
Lord Newall: My Lords, I hope noble Lords will forgive me for not having put my name down, but I did not expect to be here today and I had given notice that I intended to speak. As usual, I shall be extremely brief.
I am a non-smoker and am therefore thoroughly impartial. There is one point that I feel ought to be aired which has not yet been raised. We all know that advertising agencies are very commercial. They have to work for their clients and tell their clients' story. Generally they are expert at it. It would be a great tragedy if this Bill proposed by the noble Lord, Lord Pitt, were to go through because I should be denied, as would other people, some of the marvellous pictures that we see. The subtle way they have of reminding us of the warning also gives us wonderful pictures. I like

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those which show pieces of material with little slits in. I like to see the shaving cream with all those funny letters on it. This afternoon on the Underground I saw a picture of something that looked like a banana skin which was just slightly the wrong shape. These pictures are very attractive and I should hate to be deprived of them. Every time we look at them—and they have nothing to do with cigarettes of course—they remind us that if were were smoking we would be in some danger.
Many people who smoke heavily definitely regard it as their only relief from stress. I do not believe that is true, but that is their decision and they have a right to take it. To ban all the advertising in its main form is ridiculous because it is, as I have said and others have said, only a warning and its ban would stop the arguments and conversations that go on because we are continuously faced with these messages. Everybody knows it is unhealthy, so why not let them sponsor sports. Let them help sport which helps a lot of people to enjoy life and keeps many people in employment. It also keeps many sports going, as the noble Lord, Lord On-Ewing, said. No trainer ever allows a sportsman to smoke. We all know that, but it helps to keep the sport going. This is a thoroughly bad Bill and I hope that it is killed here.
9.13 p.m.
Viscount St. Davids: My Lord, I apologise for speaking at this late hour. As a non-smoker I shall be very brief. I must plead guilty to a considerable bias—I am a youth leader. I am therefore strongly biased against damaging children and young people. I am not so worried about all you intelligent adults. Indeed I believe that in your case the tobacco companies are right, that their advertisements do not increase smoking among intelligent adults. But with children it is different.
Children are both enormously conformist and highly logical. I was about to say that they are more logical than your Lordships, but I believe that is true to some extent because they have not gone through the very long training in illogic which so many of us have had. They have not had time for that. When they see their youth leaders and school masters smoking, and when they see smoking advertisemens, it has an effect on them which is far greater than it would have on your Lordships. This is what worries me greatly. I have seen it happening and I have wept over it. It is for that reason that I strongly support the Bill.
9.14 p.m.
Lord Fitt: My Lords, I should have felt very much more at ease tonight if it had been a Tory Peer who had sponsored this Bill, because I have been used to voting in the other place in an adversarial way. I rise to my feet not in any way to oppose the Bill but to tell my noble friend that I do not believe that it is possible to ban cigarette advertising. Let me give a little experience. I started smoking when I was eight or nine years of age. As many of your Lordships will know, the main street in Belfast is Royal Avenue. I was a very active member of the "Royal Avenue Butt Collectors' Association" when I was nine years of age. The RABCA was one of the few non-sectarian organisations that existed. The only thing that we
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worried about in those days was the weather, because if there was a big shower of rain, which frequently happened in Royal Avenue, it did not make things very good for our smoking.
From then, I smoked for 37 years. I had two daughters who were nurses and they were petrified with the fear that I might get lung cancer. I remember them persuading me to watch television programmes where people's lungs were taken out surgically. I used to look at them and say, "If that's going to happen to me, it's going to happen!". No amount of advertisement or reading was going to stop me from smoking. By this time I was smoking 80 cigarettes a day and again, I was being partisan because these were cigarettes made in my own home city of Belfast—one of my reasons for standing here tonight.
I stopped smoking because of a rather fortuitous set of circumstances. I see my old friend the noble Viscount, Lord Tonypandy, here. In 1976, I comprised the Labour Government majority at the other end of this building. There was a very contentious Bill going through, the Shipbuilding Industry Bill, which was eventually carried by one or two votes. On the particular night in question there was an all-night Sitting and, needless to say, I was a very popular Member among the Government supporters and much of that night was spent on the Terrace smoking my Gallaghers' Blues and drinking other things.
I awoke the next morning with such a hangover and such a taste in my mouth that I decided to give up cigarettes. It had absolutely nothing to do with people persuading or my reading advertising. I gave up cigarettes after 37 years and after a week or two I thought about starting them again but I did not. Then I began to count how many cigarettes I must have smoked throughout the 37 years. I told lies because as I say, for a number of years I had been smoking 40, 60 and 80 a day. I said to myself, "Tell a big lie to yourself. Say that I smoked only 20 cigarettes a day for 37 years". If you look at the arithmetic here, I smoked about 230,000 cigarettes. Just imagine the smoke that would emanate from such a pile of tobacco. But, thank God, it has not done me any great harm; and I would hope that it would do other people just as little harm.
The reason I take part in this debate tonight is that, first of all, I do not believe that the Bill can be made law. I do not believe it can be made effective. I do not think that my noble friend Lord Pitt is in any way trying to be piffling or persecuting. He has medical experience and I suppose that he is convinced that smoking can do tremendous harm. I do not believe that you can force people not to do something if they are intent on doing it. Most of all, the reason why I rise to take part in this debate tonight is that I represented a constituency in the Stormont House of Parliament. It contained within its boundaries Gallagher's tobacco factory and I know just how important it was for employment to be given to the people who worked in that factory. Later, when I represented West Belfast, there was, and still is, a tobacco factory in that constituency. I know how important it was that those two tobacco factories were there.
In Northern Ireland at the moment we have a 21 per cent. unemployment figure; we have a 121,000 people drawing social security benefit. I would not want to say

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anything in this debate or to vote in this House tonight in any way which would mean one job less in either of those constituencies. I believe that the exports from the tobacco industry in Northern Ireland are somewhere in the region of 30 per cent. or 35 per cent., and that is keeping people in employment. I know the argument can be used in support of this Bill that I may be speaking on behalf of the interests of 4,000 or 5,000 people whereas lots of other people are getting cancer and they are costing the health service a similar amount.
I maintain that you could argue all night on this Bill. I am opposing it, though I do it somewhat reluctantly because I believe that the noble Lord who sponsored it is very sincere in his belief. However, I do not believe it is enforceable; I do not believe that you can stop people from doing something that they want to do. I believe it would set up a whole underground movement in the cigarette industry if we were to try to compel people to stop smoking in this way. But, most of all, I stand here tonight and hope that this Bill will not get a Second Reading because it would undoubtedly lead to an awful lot more people being thrown out of work in Northern Ireland.
9.20 p.m.
Lord Ennals: My Lords, first may I say that I am under a challenge from the noble Lord, Lord Harris of High Cross, that I must not make a long speech. What I will say is that I shall not make the longest speech of the evening. It is most interesting that the most powerful speeches in this debate have come from two medical practitioners, who know very much more about the subject than the rest of us here—certainly judging by some of the speeches that have been made. There has been a speech from one brave woman, who wishes that she could stop smoking and has desperately tried to do so. There has also been a speech by one noble Lord who is a youth leader and does not wish to see any young people caught up in smoking.
It is perfectly clear that this is not a party issue; but I have forgotten to do two things which I must do straight away. The first, as the noble Lord, Lord Orr-Ewing, did, is to declare my interest. I am the patron of the National Society of Non-Smokers, and so dedicated am I to that cause that I have missed the annual general meeting of that society which is taking place this evening. I can assure those of your Lordships who have been talking about the extremely expensive campaigns and the vast resources that are being used in this campaign that not a penny comes, I regret to say, from the Government in terms of the national society, though of course one must thank them for contributing significantly to the funds of ASH and the Health Education Council.
I want to say straight away that I do not speak for my party. I have two people on my Front Bench who are here purely for the purpose of ensuring that I do not make any suggestion that I am speaking for either of them. There are three Davids sitting here: one of them is in advertising and another is one of those long, solid men who smoke pipes. I do not think he is likely to suffer from it because he does not inhale the tobacco smoke, but he does not want me to make any suggestion that I am speaking for the party. My other
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friend is involved in advertising, and naturally I understand his point of view. So I can say that I speak only for myself.
I want to support the Bill and to congratulate my noble friend Lord Pitt on the way that he has introduced it. I want to see a Second Reading for this Bill, because it is very clear that if we assume that doctors know something about this subject, and if we assume that the British Medical Association has no partisan interest or monetary gain in this but is concerned only with the health of the nation, we need a Second Reading in order to gain clarification of points to which noble Lords who have raised them have admitted that they did not know the answers. The noble Lord, Lord Mottistone, clearly needs to know the new evidence which is available concerning the effects of what has been called "secondary smoking".
It has been suggested that the passing of this Bill—and I cannot imagine that it will pass in its present state—is only going to lead on to more legislation from these vicious socialists who want to stop people doing everything, and that the next thing after stopping people smoking, is then to stop them drinking and then to stop them having sex, or whatever else you can think of. I am certain that that is not the intention of my noble friend Lord Pitt, and I think there should be a Second Reading in order to make all those points quite clear and to gain clarification on a number of other points.
Let me be serious just for a moment—and, as I say, I am not speaking on behalf of those in my party who enjoy smoking and think that smoking is a good thing. As regards advertising—and I can see the argument—it is said that because it is a warning it has more effect than if we were to stop advertising altogether. I have been looking at some of the things that British advertisers have been saying. David Abbott, who is a leading British advertiser, said:
"I think it is incontrovertible … that advertising things encourages people to use them".
I cannot imagine that people are going to advertise just in order to say, "Please, if you are going to smoke, use mine". It is that they want to campaign against we campaigners and to ensure that there is an increase in smoking in this country. David Abbott went on to say:
"The advertising industry believes that in every other product. I don't see why the rules are different for cigarettes".
Emerson Foote, who is a former chairman of one of the world's leading advertising agencies, said on the same issue:
"I am not even convinced that competition among brands is the most important purpose of such advertising. I suspect that creating a positive climate of social acceptability for smoking, which encourages new smokers to join the market, is of greater importance to industry".
I absolutely agree with the point that was made—some of the most interesting speeches came in the gap—that the people who are most likely to be influenced are in fact young people. I note that the noble Lord, Lord Orr-Ewing, shakes his head, but that is certainly the view of the Royal College of Physicians, and it is their reports which have been more authoritative than any others. They said:
"Learning to smoke usually occurs in childhood or in adolescence".

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That is sometimes because the parents smoke, and if they are born in an atmosphere where everyone smokes they are much more likely to smoke. The Royal College went on:
"The matter is largely settled by the age of 20; if a person is still a non-smoker at this age he is unlikely to take it up".
I think that a youngster with any intelligence is likely to say that if the Government think this is thoroughly dangerous, and if he knows that the Government are taking advertising space and spending money, quite rightly, to speak of the dangers of other addictive drugs, then clearly, because they permit advertising in this field, they must feel it this is okay.
The Royal College continued:
"In Britain in 1982, children aged between 11–16 spent £60 million on smoking. Many young smokers maintain the habit throughout their lives and so, from a marketing perspective, constitute the highest priority market segment".
If there is going to be a whole generation of youngsters who will not start smoking, then I am afraid that it is too bad for the tobacco industry. The tobacco industry is concerned at the moment and is putting as much money as it can into advertising to capture the market of young people, who, once they have started smoking, are likely to get into the smoking habit. I cannot understand why the noble Lord, Lord Orr-Ewing, shakes his head. I shall not ask him to explain because he does not have the privilege of speaking after me that he originally hoped he would have.
There are so many questions that people would want to put to the BMA, who are running a campaign, and that they would want to put to the Royal College of Surgeons, but I cannot imagine anyone would say that they would stand up as authorities in the health field against those who are involved in the campaign for reasons of health. I can think of no reason to discourage people from smoking other than health. If it was purely that people enjoyed it, that they got fun out of it, that it was one of the pleasures of life but was not dangerous, there would be no campaign to discourage people from smoking. It is precisely only because it is known to be a great danger. This is not something that the noble Earl will stand up and disagree with. He knows, as any Minister and any spokesman for the DHSS knows, that it is tremendously costly for the National Health Service. That is why he DHSS itself is against smoking in this country and is pleased with the results and the success so far.
It is perfectly reasonable for the noble Lord, Lord Orr-Ewing, to say, "If Lord Ennals thinks this ought to be done, why did he not do it when he was in office?" I give the answer straight away. During the three years when I was Secretary of State for Social Services the voluntary agreement was negotiated and I was not going to go barging in and say: "Right—scrub it all!" I do not believe in acting in that way, particularly since—and this is an even more important point—at that stage the majority of the public were smokers. Now, thank heavens, as a result of campaigns that have gone on under successive Governments in the last 10 years, the majority of the public are non-smokers, and a very high proportion of those who are still smokers want to stop smoking.
It is most interesting that when there was a major programme on the dangers of smoking and an
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indication that there was help available for people to stop smoking, that particular programme, which expected to get a response of 15,000 because the address was given actually had 650,000 people who wrote in and asked for some advice about how to stop smoking. I do not believe there is any single thing that would do more at the present stage to indicate the Government's attitude towards smoking than a decision to pass a Bill like this, saying, "This is now so serious that not only are we going, on the one hand, to advertise against addictive drugs, hut, as cigarettes are so clearly addictive, we believe that there should not be advertising in their favour." So I believe that the case has been made.
My only criticism, which does not perhaps fit very squarely with what some other noble Lords have said, is that the Bill does not go far enough. I think that it should have dealt specifically with sponsorship. I do not at all agree with those who intervened to say that if you see cricket, football and rugby sponsored by cigarette companies it does not give the impression that sport and smoking are compatible, when it is clear that the majority of those who play cricket, football and rugby and take part in athletics are not smokers. They have more sense than to be smokers.
The amount of coverage that is gained, not only by those people but by those who take part in snooker, darts, motor-cycling and car racing, is enormous, but actually it is less than 10 per cent. of the total sponsorship fund. So as regards sponsorship of sport or of the arts, about which my noble friend Lord Strabolgi is deeply concerned, this is a very small percentage of the total sponsorship, although it manages to get an enormous coverage on television.
In conclusion, while there are changes that I know many people want to make in the Bill, the issue is so important—and we have seen in this debate how important the issue is—the doubts are so vital and the need for knowledge is so important that I hope that noble Lords on the other side who do not agree with the principle will, nevertheless, say that if this is a Bill from the president-elect of the British Medical Association (and I congratulate my noble friend on the post that he is about to take over) and if this is what the BMA thinks, then this is an issue which we in this House ought to debate further. But we can debate it further only if we give a Second Reading to this Bill.
9.32 p.m.
The Earl of Caithness: My Lords, I, too, must congratulate the noble Lord, Lord Pitt, on his very good introduction of this Bill. The Government are gravely concerned at the appalling toll of disease and early death caused by smoking. Your Lordships debated these matters on 12th June last year and noble Lords who spoke then were virtually unanimous in their condemnation of smoking for causing an enormous amount of unnecessary suffering and death from diseases such as lung cancer, coronary heart disease and chronic bronchitis.
That view is based on the most authoritative medical opinion. It is well known that the Royal College of Physicians, whose latest report was the subject of our earlier debate, attributes no fewer than 100,000 premature deaths in the United Kingdom each year to smoking. To my noble friend Lord Orr-

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Ewing I would say that that is about the 15 to 20 per cent. to which the noble Lord, Lord Pitt, referred in his opening speech, and we accept that assessment.
The noble Lord, Lord Pitt, accused me of complacency in my Answer on 7th May. I have reread the report of that Answer and this Government certainly are not complacent about the problems caused by smoking. He was also cynical about our health education programme. I would tell him that among its other expenditure last year the Health Education Council gave a substantial amount to an anti-smoking programme and, in addition, we gave it an extra £½ million for a special campaign aimed at children and young people, while also encouraging the council to maintain its efforts at warning children of the dangers of smoking. The Health Education Council is carrying out works in a variety of ways, including in schools, the media and through special campaigns. There has, in addition, been a television campaign aimed at educating and informing families about the whole of the grave risks to health that could arise from smoking and other factors. We have also doubled the maximum penalties for illegal sales to children under 16.
To say that this Government are not concerned is quite wrong. To the noble Lords, Lord Pitt and Lord Ennals, and to the noble Viscount, Lord St. Davids, I would say that we do concern ourselves very greatly with the future of young people, and with great respect they do not have a monopoly of concern.
Lord Ennals: My Lords, perhaps I may say that I entirely agree. I did not suggest in any words that I used that the Government were any less concerned than I was about the gravity of the situation.
The Earl of Caithness: My Lords, I am most grateful to the noble Lord.
Differences of opinion arise only over the question of the most effective way of tackling the problem. We are, of course, well aware of the view of the British Medical Association and others in support of a statutory ban on the promotional activities of the tobacco industry. This Government, like their predecessors, are wholeheartedly in favour of regulating tobacco advertising in the interests of health. What they do not accept—as their predecessors also rejected—is the view that a statutory prohibition of all such activity is desirable or that it would be more effective in reducing smoking than the means currently employed. This conclusion is supported by such evidence as exists, though I must tell your Lordships that there are formidable problems in attempting to disentangle the effects of advertising from the many other factors that may influence smoking behaviour.
A key objective of the Government's policies on health promotion and disease prevention is to alert the public to the dangers of smoking and, by a wide range of means, to work towards reducing the prevalence of the smoking habit. We have been striving very hard in this direction, and not without success. The Government's strategic aims are, first and foremost, to try to discourage non-smokers, and especially young people, from taking up the habit; secondly, to try to
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encourage smokers to give up smoking; and, thirdly, failing all else, to help smokers to smoke less harmfully.
This strategy requires action on a number of fronts—health education, which I have just mentioned, product modification, encouragement of greater provision for non-smokers, and also control of the advertising and promotion of cigarettes, which is the subject of the Bill before your Lordships' House today. In taking action in this last area we continue to believe that the most effective method of control is by way of voluntary agreement with the tobacco industry governing the advertising and promotion of cigarettes. Successive Governments have adhered to that view. So far as advertising on television and radio is concerned, cigarettes are already banned by law, but otherwise the tradition in this country is to proceed by voluntary agreement.
The terms of the current agreement regulate tobacco advertising in a number of ways. First, there is the Cigarette Code which forms part of the British Code of Advertising Practice and is interpreted and monitored by the Advertising Standards Authority. This code is largely concerned with the content of cigarette advertisements. Its essence is that advertisements should not seek to encourage people, particularly the young, to start smoking or, if they are already smokers, to increase their level of smoking or to smoke to excess. Detailed rules are laid down in furtherance of these basic principles.
To give just two examples, advertisements must not imply any link between smoking and success with the opposite sex, nor that smoking is associated with success in sport. I should like to pay tribute to the Advertising Standards Authority for the way in which they carry out their very responsible task. One has only to look at cigarette advertisements in countries where arrangements for their control do not exist to see how successful the code has been in controlling the content of advertisements.
There is also the Government's voluntary agreement with the tobacco industry which relates to the advertising and promotion of tobacco products generally, including the matter of health warnings. The present agreement was reached in 1982 and will last at least until March 1986. The scope of the voluntary restrictions has widened progressively since the first such agreement was concluded in 1971. As part of the current agreement the industry is in the process of reducing in real terms its advertising expenditure on posters to 50 per cent. of the level in the year ended March 1980 and its cinema advertising to 60 per cent. of the 1980 level. Both these reductions are to be achieved by 1986 and progress is being carefully monitored by my department. The agreement provides for strong and conspicuous Government health warnings on packs of cigarettes and hand-rolling tobacco, in all main media advertising and on all major items of advertising and promotional material used at point of sale. Advertising on videos or by other aerial means is prohibited.
The sponsorship of sport by tobacco companies is also subject to a voluntary agreement. That agreement restricts expenditure on sponsored sports in real terms to the 1976 level. It stipulates that the Government

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health warning should appear on advertisements for sponsored events and on promotional signs at these events, and it places a number of other restrictions on the industry. That agreement lasts until the end of this year.
In drawing up the voluntary agreements the Government have been particularly concerned about the vulnerability of young people and the influence cigarette advertising may have on them. We have, therefore, ensured that promotional offers are not addressed to people under 18, that cigarette posters are not sited near school playgrounds, that cinema advertisements are shown only at films seen by people aged 18 and over, and that sports activities in which the majority of participants are under 18 are not sponsored by tobacco companies. The Cigarette and Advertising Code also includes important provisions designed to protect young people. Taken together, I believe that the present arrangements provide an effective measure of control over tobacco advertising; which is not to say that they cannot be improved, and the Government will be giving attention to that matter in due course.
There are those who believe that a product which has been shown to be seriously harmful to health should not be allowed to be promoted at all. To them I would point to the substantial progress we have been able to achieve in recent years without such a ban. The series of voluntary agreements has undoubtedly contributed towards reducing the prevalence of cigarette smoking from 47 per cent. of adults in 1972 to 35 per cent. in 1982 and to the significant fall in cigarette consumption which has also taken place recently. I would just say to the noble Lord, Lord Ennals, that by the time he was Secretary of State the figure had fallen to under 50 per cent. of the population.
Thus, cigarette sales which stood at 137 billion in 1973 are reported as 98 billion in 1984. the United Kingdom's record in these respects stands comparison with those of countries such as Norway, which have legislation. Norway is not the shining example which the noble Lord, Lord Pitt, made it out to be. We may take, for instance, the incidence of smoking among females in Norway. In 1972–73 it was 32 per cent. In 1982 it was 34 per cent. The percentage actually increased despite the ban. Admittedly, the percentage had fallen in the case of men, but not at the rate it has decreased in this country. Our record, therefore, is much superior to that of Norway.
The voluntary system has brought other important benefits. Under separate agreements, for example, the tobacco industry has over the years achieved a reduction in the average tar yield of cigarettes from over 20 mg in 1972 to 15 mg in 1984. As part of the current agreement it has undertaken to achieve a further reduction in tar yields to 13 mg by the end of 1987. As part of this effort, which has almost certainly contributed to the recent reduction in lung cancer rates among men, the tobacco industry has agreed to devote a disproportionate amount of its advertising effort to promoting cigarettes in the two lower tar bands. If smokers are unable or unwilling to give up the habit, there are sound reasons for urging them to change to a lower tar brand. As the noble Lord, Lord Harris of
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High Cross, said, this Bill would militate against spreading this particular form of guidance.
Other benefits of these agreements include the tobacco industry's funding of a programme of independent research into the effects of modified tobacco products and making available a sum of £11 million over four years for research into health promotion. The industry has also co-operated in efforts to discourage illegal sale of cigarettes by shopkeepers. These advantages have also to be considered in assessing the case for legislation.
This, then, is the background against which the House must debate this Bill, and which the Government have borne in mind in coming to their view. I would draw your Lordships' attention also to the fact that the measure before you draws no distinction between cigarettes and hand-rolling tobacco on the one hand, and pipe tobacco and cigars on the other, about which medical opinion is clear that there is a much lower risk to health. This point was mentioned by the noble Lord, Lord Ennals, on 7th May.
Another factor of more than just a little significance is that this Bill would create something of a precedent in introducing wide-ranging statutory controls on the promotion of products which are themselves freely and legally available for sale. With all due respect to the noble Lord, Lord Ennals, it is important that we know the Labour Party's official position on this subject. The Government have made their position clear, though it is of course up to individuals to vote as they wish tonight. The Government have clearly come out in favour of the voluntary agreement. I should very much appreciate it if the noble Lord would give the Labour Party's policy. Does it not have one?
Lord Ennals: My Lords, the noble Earl paused expecting me to get up. I did not think that he wanted an interruption, but I rise to my feet to make it perfectly clear that there are differences of view in the party. I thought that I had made it clear right at the beginning that I was speaking for myself and that I was not attempting to speak for the official Opposition.
The Earl of Caithness: Indeed, my Lords, but all I was asking for was the official Opposition view, which we still do not have.
The noble Lord, Lord Pitt, mentioned smoking among women. The Government have given the Health Education Council an extra grant this year of£½ million specifically to fund a campaign aimed at women smokers.
The noble Lord also raised the question of passive smoking, as did my noble friend Lord Mottistone. While breathing in other people's smoke is undoubtedly unpleasant and annoying at times to many non-smokers like myself, the extent to which it can damage otherwise healthy adults is as yet unclear.
My noble friend Lord Kaberry took a remark out of a publication in 1977 which was one of my department's documents of that year—Prevention and Health: Everybody's Business. The noble Lord, Lord Ennals, knows it well. The point that my noble friend made was that there was little direct evidence linking

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advertising to an increase in smoking, and that remains the case. That is why I find it difficult to accept some of the arguments of the noble Lord, Lord Rea. The noble Lord chided us for not producing figures on carbon monoxide yields. I have to tell him that they are published twice yearly and they are available to him at any time, as they are to other members of the public.
Noble Lords will wish to consider carefully not only the facts about smoking and health, about which there is little dispute, but also the considerable progress that we in this country have achieved by way of our system of voluntary agreements. As I have indicated, the Government will be reviewing the current agreements before too long and will be discussing with the tobacco industry what should succeed them. Without prejudicing those discussions, I should make it quite clear that we wish to continue to control such matters as advertising, promotion, the Government health warning and the sponsorship of sporting events. As long as progress by agreement is possible and the tobacco companies continue to adhere to the rules laid down, the Government believe that there is no case for introducing legislation of the kind that is before your Lordships' House tonight.
9.47 p.m.
Lord Pitt of Hampstead: My Lords, how should I say it? I am bloody but unbowed. I must begin by apologising to the noble Earl, Lord Caithness. When I read his reply to the Question of the noble Baroness I gained the impression that the Government were being complacent, but there is no evidence of complacency tonight and so I certainly withdraw that accusation.
Incidentally, when I talked of cynicism I was not meaning cynicism by the Government or even by the Health Education Council, nor was I being cynical about it. I was saying that the fact of cigarette or tobacco advertising generally creates cynicism in people's minds. The view is held that, although the Government say that cigarettes are damaging to one's health, the fact that they permit advertising in the way that they do suggests that they are not serious about it. That was the point I was making when I talked about cynicism.
I paid tribute to the work of the Health Education Council, and I repeat that. It is doing a great deal of work in this field. However, the truth of the matter is that if we are concerned about stopping young people from starting to smoke—and I am most concerned about it—all the evidence suggests that what influences children to smoke or not to smoke is the status of smoking. They start smoking, just as most of the noble Lords who now smoke did, and as I did, because they think it is the manly thing to do. Until the atmosphere is altered there will not be the change that I certainly want to see. My concern about advertising is the fact that it perpetuates the present atmosphere. Even though a majority of people at the moment do not smoke, the atmosphere of acceptability and desirability of smoking continues and will continue as long as tobacco advertising is allowed.
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It is not right to say, as the Minister says, that the product is legal and therefore can be advertised. It is legal only if it is sold to people over 16. There is no way of preventing people under 16 from seeing the advertisements. Therefore, the suggestion that because it is legal one should not restrict the advertising is quite wrong. The product is not entirely legal. It is legal only if sold to people over 16, and there is no way people under 16 can be prevented from seeing the advertisements.
I am sorry that the noble Lord, Lord Mottistone, did not allow me to intervene in his speech, because he has obviously misunderstood my statement about low tar. I in fact said that there is plenty of evidence that low tar reduces the incidence of cancer of the lung but there is no evidence that low tar reduces the incidence of coronary disease or any other arterial vascular catastrophe. That is the difference. Therefore, I was not suggesting that we should not have the campaign for low tar. Yes; it is the right campaign to reduce the incidence of cancer of the lung in people who want to smoke. Although the evidence is not yet forthcoming about bronchitis and the other respiratory diseases, it may well emerge that that is so too. Therefore, the low tar campaign is right in that respect. However, none of the research into its effects on cardio-vascular diseases suggests that the low tar makes any difference. That was the point I was making. It is not enough merely to say that we will go for low tar. We have to do more than that.
I find quite surprising the suggestion that if there is no longer tobacco advertising, people will not know the level of tar in various brands. When all is said and done there will be nothing to prevent shopkeepers from making these presentations, having a table in the shop indicating the level of tar in all the brands of cigarettes they sell. If that is not done, there will be nothing to prevent regulations being brought in to make the shops do it. Thus, it is not true that merely banning advertising will prevent the level of tar being advertised; of course it will not.
Again, it is not true that banning advertising will prevent the health warnings from being given, because the health warning will be on the packets anyway. People who buy the cigarettes will receive the health warning. It is not true that by banning advertising, one will prevent that being done; no, those things can still be done.
Lord Brougham and Vaux: My Lords, the noble Lord wants to ban advertising. He is now recommending advertising in shops.
Lord Pitt of Hampstead: My Lords, if a person is selling tobacco in a shop, he has to tell the people what he is selling. I do not see the point of the noble Lord's remark. If one sells anything in a shop, one has to tell the people what one is selling. Therefore, the noble Lord's remark is nonsense. If one sells anything in a shop, one has to tell the people what one is selling, Therefore, that remark is quite ridiculous. But it has thrown me off my stride and made me forget the next point that I was going to make.

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I think, however, that I have put my arguments. I wish to come back to the real question regarding the atmosphere. It is that more than anything that concerns me—the need to create the atmosphere in which non-smoking is regarded as the acceptable and preferable thing and smoking as not the desirable, respectable or preferable thing. It is on that aspect that the Minister and I differ. The noble Earl accepts that because progress is being made through the voluntary agreement we do not need to do more. I am saying, because I feel strongly about this, that voluntary agreements will never really change the atmosphere. If you ban tobacco advertising, you will change the atmosphere. I beg to move that the Bill be read a second time.
9.56 p.m.
On Question, Whether the Bill shall be now read a second time?
Their Lordships divided: Contents, 11; Not-Contents, 26.

DIVISION NO. 1

CONTENTS

Airedale, L.

Pitt of Hampstead, L. [Teller.]

Davies of Leek, L.

Ennals, L.

Ponsonby of Shulbrede, L.

Kilbracken, L.

Rea, L.

Mar, C.

St. Davids, V.

Molloy, L.

Tonypandy, V. [Teller.]

NOT-CONTENTS

Attlee, E.

Kaberry of Adel, L.

Brabazon of Tara, L.

Lindsey and Abingdon, E.

Brougham and Vaux, L.

Long, V.

Caithness, E.

Lucas of Chilworth, L.

Colwyn, L.

Monson, L.

Craigavon, V.

Mottistone, L.

Cullen of Ashbourne, L.

Newall, L.

Faithfull, B.

Orr-Ewing, L. [Teller.]

Fitt, L.

Rankeillour, L.

Glenarthur, L.

Sandys, L.

Hanworth, V. [Teller.]

Shannon, E.

Harris of High Cross, L.

Stoddart of Swindon, L.

Hylton-Foster, B.

Strabolgi, L.

Resolved in the negative, and Motion for Second Reading disagreed to accordingly.
House adjourned at four minutes past ten o'clock.

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