Sitting of 8 April 1986

Preamble
The House met at half-past Two o'clock
PRAYERS
[MR. SPEAKER in the Chair]
PRIVATE BUSINESS
  ISLE OF WIGHT BILL
  Read the Third time, and passed.
Oral Answers to Questions
  EDUCATION AND SCIENCE

    General Certificate of Secondary Education
    Mr. Shersbyasked the Secretary of State for Education and Science if he will make a further statement about preparations for the introduction of the general certificate of secondary education examination.
    The Minister of State, Department of Education and Science (Mr. Chris Patten): The programme of preparation for the GCSE is thorough and of high quality. Never before has so much been done to prepare all teachers for examination reform. My right hon. Friend announced on 13 March a series of measures to ensure the successful completion of the training programme and the provision of adequate resources for schools.
    Mr. Shersby: Will my hon. Friend assure head teachers that, given the additional training and resources that we have made available, there is time available for
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    proper planning by teachers, including an agreed syllabus? Will my hon. Friend bear in mind that parents of third-year pupils in my constituency will soon have to choose subjects?
    Mr. Patten: I give my hon. Friend that assurance. I know of some of the concern expressed about syllabuses. There is no reason why proper choices should not be made on the basis of the information available, including the national criteria and the draft syllabuses that have been in schools for some months.
    Mr. Beith: Is the hon. Gentleman aware that few head teachers or other teachers would recognise his description of the state of preparedness for the GCSE? Does he realise that most parents are not at this stage primarily interested in apportioning blame but are interested in ensuring that their children are properly prepared for the examination? Does the hon. Gentleman agree that postponement has now become a matter for much more serious consideration than hitherto?
    Mr. Patten: Postponement of the examination would overwhelmingly lead to the very chaos which its supporters say they fear. Most fair-minded heads and teachers would accept that there has been more preparation for this change than there was for the introduction of the GCE O-levels or CSEs or for the raising of the school-leaving age.
    Mr. Pawsey: Will my hon. Friend confirm that the onus for ensuring that this new examination functions effectively is on the shoulders not only of my hon. Friend or his Department, but of teachers and the LEAs?
    Mr. Patten: I agree with my hon. Friend. We must make this important change work. I do not believe that we have an option. The Government have shown that they are prepared to play their part. I hope that we can all work to make this new examination the success that it deserves and needs to be.
    Mr. Fatchett: Does the hon. Gentleman still not recognise the widespread anxiety and concern among parents? Would it not be a sign of strength rather than of weakness by the Government if they postponed the

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    examination and allowed proper preparation and proper resources to be devoted to this examination so that those worries and anxieties could at last be eased?
    Mr. Patten: Of course I recognise those worries and anxieties. Last week I sat through a debate on this subject at the conference of the Assistant Masters and Mistresses Association. I recognise that many of the anxieties expressed are the result of professional judgments rather than of politics. I do not believe that another option exists. I think that we can and should now work together to make this examination a success.
    Mr. Greenway: Is my hon. Friend aware that this morning my right hon. Friend the Secretary of State told the Select Committee on Education, Science and Arts that teacher disruption made the introduction of GCSE less sure? Will my hon. Friend give an assurance that, despite that problem, this important educational reform will go ahead whatever happens, so that parents are certain that their children's education problem is solved?
    Mr. Patten: We shall press ahead. I hope that in all the teachers associations and unions wiser counsel will prevail than was shown by some last week. We cannot have a national syllabus determined by the annual conference of the NUT.
    Mr. Boyes: Is it not fact that parents, local authorities, teachers and students are concerned about the education system—in fact just about everybody except Education Ministers on the Front Bench. Is it that they simply do not care?
    Mr. Chris Patten: That is a ludicrous observation. If that were true, last month the Government would not have announced further phase two training and said that we were prepared to allow schools to close next term for a couple of days so that training could be completed. We would not have made available the £20 million in addition through the education support grant for the extra cost of books and equipment.
    Mr. Madel: If certain teacher trade unions continue to refuse to co-operate with the introduction of the new examination, will the Government have contingency plans ready to deal with possible disruption of the curriculum in September? Will it be necessary to ask the Associaton of Chief Education Officers whether it thinks it would be practicable to go ahead with the new curriculum in September?
    Mr. Patten: I am afraid that if some of the teacher unions do what they claimed last week they would do, it raises far greater questions than the introduction of the GCSE. In those circumstances we would have to look at contingencies, but I hope that that situation will not arise.
    Mr. Radice: We share the Government's support for the new 16-plus examination. Is the right hon. Gentleman aware that not only the teachers but the National Confederation of Parent Teacher Associatons, many local authorities and two out of the five examining groups have expressed strong reservations about the new courses going ahead as planned? Is the hon. Gentleman seriously telling the House that, without more resources and without more adequate preparation, it is fair to next year's fourth-year pupils to start work for the new examination in September?
    Mr. Patten: I repeat that we have added to the literally unprecendented preparations which have already been
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    made and which were agreed in 1984. I see no reason why every teacher should not have received perfectly adequate training by the end of next term. There are no GCE or CSE syllabuses for 1988, and in many cases the machinery which would be necessary to create them has already been dismantled.

    Departmental Reorganisation
    Mr. Sheermanasked the Secretary of State for Education and Science whether he has any plans to reorganise his Department.
    The Secretary of State for Education and Science (Sir Keith Joseph): Separate information technology and architects and building branches have been established this year on 1 January and 1 February respectively. I have no plans for any further changes in the organisation of my Department.
    Mr. Sheerman: Given the variety of educational policies that have been espoused by the Secretary of State, his junior Minister, Lord Young and the Prime Minister, what structure of Department would the Secretary of State advise the Prime Minister to adopt and thus bring a notion of vision, clarity and purpose to a Government who seem to have no educational policy and who are fighting about it after seven years in office?
    Sir Keith Joseph: I commend to the hon. Gentleman the policies set out and which are being implemented in "Better Schools". Such policies can be perfectly carried through by the Department of which presently I am the head. There is no need on account of those policies to make any changes.
    Dr. Hampson: Will my right hon. Friend initiate a move to end the binary division in higher education, where there is much overlap and duplication and a need for better use of resources? Many of us find it strange that the polytechnics, having increased the proportion of young people going into higher education, now contemplate a massive cut in places.
    Sir Keith Joseph: I have to say to my hon. Friend that the report in The Times this morning about a decided cut in polytechnic places is rubbish. There is no need to change the organisation of the Department, of which I am presently the head, in the light of any decisions about binary or non-binary division in higher education.
    Dr. Owen: Is the Secretary of State aware that there are many people who believe that the time has come to merge the MSC with the Department of Education and Science, but think that it would be anathema if he were to nationalise the locally provided educational service and would see that as going against the spirit and purpose of the Education Act 1944?
    Sir Keith Joseph: There is no intention to nationalise the education service. As the right hon. Gentleman knows, merging one Department with another would be a matter for my right hon. Friend the Prime Minister.
    Mr. Patrick McNair-Wilson: Will my right hon. Friend warmly congratulate my hon. Friend the Minister of State on his speech last week? Is my right hon. Friend aware that the belief that there is genuine local control of education is a complete fiction, and will he take urgent

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    steps to transfer the cost of teachers salaries from local government to the central Exchequer and so take the burden off a handful of ratepayers?
    Sir Keith Joseph: In answer to the first part of my hon. Friend's question—yes, enthusiastically. I agree with every word of my hon. Friend's speech. I understand that he has made the same speech in substance several times before, and I am glad that it has received the attention that it deserves. On the last part of my hon. Friend's question—no, Sir.

    School Books
    Mr. Fisherasked the Secretary of State for Education and Science if he will make a statement on the level of expenditure on text books in primary and secondary schools.
    Mr. Chris Patten: Since 1979 spending per pupil on books has fallen in real terms, as measured by the GDP deflator, while spending per pupil on books and equipment overall has increased substantially. It is for local education authorities and schools to decide on the balance of spending on these items, bearing in mind local priorities.
    Mr. Fisher: Is the Minister of State aware that the Prime Minister, in a letter to my hon. Friend the Member for Durham, North (Mr. Radice) yesterday, confirmed the judgment of Her Majesty's Inspectorate that one third of local education authorities have an inadequate supply of textbooks? Is it not an appalling condemnation of seven years of Tory mismanagement of education that children have to share textbooks and so cannot take them home and, in many subjects, are working from textbooks that are out of date? What will he do about it?
    Mr. Patten: Unlike the hon. Gentleman, I obviously have the advantage of reading the whole of the letter from my right hon. Friend the Prime Minister to the hon. Member for Durham, North (Mr. Radice), rather than just part of it. My right hon. Friend pointed out that Her Majesty's Inspectorate had found that the proportion of books and equipment was satisfactory in over two thirds of the local education authorities, and in only one tenth of schools was inadequate capitation judged to be the cause of shortage.
    Mr. Willie W. Hamilton: Does the Minister recognise that if there is a chronic shortage of textbooks throughout the education system we are in danger of creating the "yob society" about which he talked, which is already in evidence at the Federation of Conservative Students?
    Mr. Patten: That would have been a more impressive supplementary question if the hon. Gentleman had listened to my earlier answer. In its report the HMI noted that provision for books in schools has improved each year since 1981. It also noted that inadequate identification of needs and poor departmental management were a more common cause of shortage of books and equipment than low capitation.

    Burnham Committee
    Mr. Chopeasked the Secretary of State for Education and Science whether he remains satisfied that the representation of the teaching unions on the Burnham committee is pro rata to the size of membership of those unions.
    Mr. Haselhurstasked the Secretary of State for Education and Science whether he will institute a biennial review of the composition of the Burnham committee teachers' panel; and if he will make a statement.
    Sir Keith Joseph: I am satisfied that the representation of the teacher unions on the Burnham primary and secondary committee reflects the Burnham-relevant membership of the teacher unions as at 31 December 1984, which is the latest date for which figures are available for all the unions. I do not think that it would be appropriate to consider another review until the independent panel recently appointed by the Advisory, Conciliation and Arbitration Service to assist management and teachers in negotiations on various matters, including procedures for negotiation, has completed its work.
    Mr. Chope: Is my right hon. Friend aware that tens of thousands of moderate teachers who put pupils before politics are leaving the NUT, and have been since 1984, and are joining the Professional Association of Teachers and the AMMA? Should not those changes be reflected without further delay in the composition of the Burnham committee?
    Sir Keith Joseph: I am unwilling, at a time when there is widespread agreement that the Government should consider shifting from the present Burnham committee arrangements for negotiations—although without much agreement on what the shift should be towards—to confirm the durability of the Burnham committee by reviewing teacher numbers. After all, the only arrangements for the audited collection of numbers is at the end of the year, so the latest numbers available would be at the end of 1984, and, soon, 1985. It will be time enough to consider this when ACAS has reported.
    Mr. Haselhurst: Will my right hon. Friend not altogether exclude the possibility of a further review, and not confine that review simply to a pro rata arrangement, but consider the more revolutionary approach of according equal representation to all the teacher unions? That might reflect a better balance and better working within the Burnham system.
    Sir Keith Joseph: I certainly do not want to rule out the possibility of a review in a suitable form at a suitable time. I therefore heed what my hon. Friend says, but without necessarily espousing his last suggestion.
    Mr. Flannery: Is it not true that the problems of education will remain huge and will continue to move towards the centre of the political stage, no matter how much gerrymandering is done with the Burnham committee? As the right hon. Gentleman moves the goalposts on the Burnham committee, are not teachers going back to work embittered and angry because they realise that the Government are interested not in state education but only in private education? The Government care not for the education of the children, whom we believe should be educated to the best possible standard.
    Sir Keith Joseph: The hon. Gentleman is mischievious in his suggestions and entirely unjustified. Let him read "Better Schools" to see the practical interest of the Government in the improvement of standards in state education. The only power that I have used in reviewing the membership of the Burnham committee was given to the holder of my office by statute by a Labour Government.
    Mr Madden: When will the Secretary of State respond to the calls of those on the Burnham committee and elsewhere in education, and resign?
    Hon. Members: Answer.
    Sir Keith Joseph: I think, Mr. Speaker, that that was a rhetorical question.

    Privatisation
    Mr. David Atkinsonasked the Secretary of State for Education and Science what recent representations he has received in support of legislation to privatise educational services; and if he will make a statement.
    The Parliamentary Under-Secretary of State for Education and Science (Mr. Bob Dunn): There have been many responses to the Government's consultative paper on compulsory competitive tendering by local authorities issued in February 1985. The Government remain committed to the principle of requiring local authorities to submit certain of their in-house services to the discipline of competitive tendering against outside private contractors and are preparing the necessary complex measures for inclusion in the legislative programme as soon as is practicable.
    Mr. Atkinson: Does my hon. Friend agree that the demand for private and independent education in this country has never been higher? Will he now consider introducing new incentives to satisfy that demand? Does he agree that the alarming expressions of teacher power over the Easter weekend will serve only to encourage those who believe that the privatisation of state education services is now due?
    Mr. Dunn: As the House knows, the Government continue to consider all possibilities for improving school education. We also take the view that the greater the variety available to all parents, whether in the maintained or the private sector, the better for the future well-being of the country.
    Mr. Bell: May I commiserate with the Secretary of State for being described in today's Daily Telegraph as
    "the most misunderstood man in British politics"?
    We welcome the fact that there are no privatisation plans for the polytechnics. May we nevertheless have an assurance that the proposals announced yesterday by the National Advisory Board, as they affect Teesside, Newcastle and Sunderland polytechnics will be set aside after counter-proposals have been made to the Department, whether they are privatised or not?
    Mr. Dunn: I congratulate the hon. Gentleman on the ingenuity of his supplementary question, but it has no relation to my hon. Friend's original question.
    Mr. Stern: Does my hon. Friend agree that, in view of the Government's wholesale success in privatisation across Government Departments, the privatisation of existing schools should not be ruled out?
    Mr. Dunn: I am certainly prepared to consider any schemes along the lines suggested by my hon. Friend, but I must point out that we are concerned about privatising educational services and that many of the least efficient local authorities are the least interested in increasing efficiency. That is why the Government propose to take this step.
    Mr. Canavan: As education should be a right for all and not just a commodity to be bought and sold in the market place, may we have a categorical assurance that the Government will reject the crazy proposals of some of the Right-wing extremists in the Tory party and also, apparently, Mr. John Pardoe of the Liberal party, who want to take education out of the hands of elected local education authorities and contract it out to private agencies and private schools? That will be the surest way of creating the type of "yob society" to which the Minister of State referred during his speech last week.
    Mr. Dunn: I feel that the hon. Gentleman is in danger of not understanding the debate about the future of the education service. His rather crazy and convoluted question does not deserve an answer from me.

    Teachers' Dispute
    Mr. Chapmanasked the Secretary of State for Education and Science if he will make a statement about the situation in schools, following the declared end of the teachers' industrial action.
    Sir Keith Joseph: Following the 1985 pay settlement and the opening of talks led by the ACAS appointed panel, many teachers have returned to full normal working, but I am sad to say that disruption has continued in many schools in England and Wales. Such disruption is even more indefensible now that talks covering pay, structure, duties and responsibilities are taking place.
    Mr. Chapman: I welcome the belated agreement to the 1985 pay settlement at a level ahead of inflation. Does my right hon. Friend agree that any long-term solution must not only consider improved pay and promotion prospects for teachers, but must include an unequivocal definition of teachers' responsibilities and some sort of performance assessment? Does my right hon. Friend also agree that any disruption in the schools before these talks are concluded, or any attempt by any union to dismiss certain parts of what must be a total package; will be vigorously objected to not only by parents but by the public at large?
    Sir Keith Joseph: I think that what my hon. Friend has formulated lies within the agreement reached by ACAS with the local education authorities and with at least five of the teacher unions. The National Union of Teachers, to a certain extent ambiguously, is associating itself with the talks.
    Mr. Weetch: My question refers to the abiding situation in schools. Does the Secretary of State realise that one of the deplorable features in state schools is the increasing level of violence outside and inside the classroom against members of the teaching profession? Has the Secretary of State received a report from the NAS/ UWT on the appalling level of violence against teachers in some parts of the country? Has he considered it, and if not, will he consider it carefully and consult local education authorities as to ways in which this deteriorating situation can be dealt with?
    Sir Keith Joseph: Yes, I have received such a report. I share anxieties about it. I have to point out that although the subject has validity, the report represents a 3 per cent. response to an inquiry by the NAS/UWT of its members. Nevertheless, I do not doubt that violence takes place and

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    is enormously to be regretted. I take the view that a good head teacher makes a huge difference to a school. I shall certainly study the report and anything that might be done seriously.
    Mr. Lord: Is my right hon. Friend aware that in some schools in my constituency of central Suffolk no homework is being set, some pupils have had only one school report in three years, and many pupils are now having to decide on their state examination options without their parents having had any consultations with the teachers who will be teaching them throughout that period? Does my right hon. Friend agree that the teachers concerned in this action must be well aware of the permanent damage that they are doing to the children and that they ought to be made to carry out at least those basic duties?
    Sir Keith Joseph: I share entirely the reaction of my hon. Friend. I have time and again paid tribute to those teachers, including head teachers, who, despite every pressure, have not responded to the encouragement to disrupt from some teachers' unions. I deplore the disruption that some teachers' unions have encouraged their members to take. It is entirely wrong that pupils should be penalised, and I agree with my hon. Friend. The employers—the local education authorities—must consider their reaction to the behaviour of such teachers.
    Mr. Evans: Can the Secretary of State confirm that the sensible agreement reached between the Scottish Office and the Scottish teacher unions has made his task of trying to reach a sensible agreement with the English and Welsh teachers' unions almost impossible? Will he guarantee that no matter what ACAS recommends in its inquiry into the dispute, he will accept it?
    Sir Keith Joseph: I cannot give that assurance to the House. The Government have said that they will seriously consider any recommendations that emerge from ACAS. The hon. Member must realise that the position in Scotland was not paralleled in England, where the ACAS initiative has broken the deadlock.
    Mr. Key: One tragic side effect of the dispute is the loss of contact time out of school between the teaching profession and pupils. Is the Secretary of State satisfied that this is, therefore, a good time to deregulate Sunday trading, when that might lead to pupils having less time for school preparation? The teachers unions are extremely worried about that. Will he ensure that there is no unfortunate educational side-effect to this measure?
    Sir Keith Joseph: I congratulate my hon Friend on introducing his views on Sunday trading into this question. I cannot accept that, whatever happens to Sunday trading, it will have the result that he fears.
    Mr. Radice: Is the right hon. Gentleman aware, after four and a half years as Secretary of State, and after seven years of Conservative Government, that even Ministers acknowledge that our schools are in a crisis? As he is an honest man, will he accept that when the contenders for the succession so publicly and obviously submit their competing job applications, and when he has so clearly lost the confidence of parents, teachers and local authorities, the time has come for him to stand aside and allow someone else to clear up the mess?
    Sir Keith Joseph: I welcome the hon. Gentleman's acknowledgement earlier that the Opposition agree with
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    the Government that the new GCSE examination should be introduced. A by-product of the present tragic state of schools is the fact that all parties in the House acknowledge that higher standards in the state education service are greatly to be desired, for the benefit of children and the country as a whole. I hope that, out of that general recognition, much good can come from the present misery.
    Mr. Fallon: Is my right hon. Friend not constantly amazed at his tolerance and patience? If the NUT now demands a veto on what its members will teach and when they will teach it, has not the time come to scrap the Burnham machinery and introduce legally enforceable contracts between teachers and employers?
    Sir Keith Joseph: I need no persuasion that it may be sensible to abolish the Burnham machinery. I need to know what might suitably and appropriately take its place.

    Schools (Midday Supervision)
    Mr. James Lamondasked the Secretary of State for Education and Science whether he is satisfied with the arrangements of local education authorities in giving effect to section 2 of the Education (Amendment) Act 1986.
    Mr. Litherlandasked the Secretary of State for Education and Science if he is satisfied with the arrangements made by local education authorities for training supervisors for midday supervision as a result of section 2 of the Education (Amendment) Act 1986.
    Mr. Greenwayasked the Secretary of State for Education and Science if he will make a statement on lunchtime supervision in schools.
    Mr. Thurnhamasked the Secretary of State for Education and Science how many local authorities have not yet sought additional funding for lunchtime supervision for schoolchildren.
    Mr. Chris Patten: Sixty five local education authorities in England have submitted bids or draft schemes in application for education support grant for midday supervision. Thirty two LEAs have yet to submit a scheme, although 26 of these have made informal inquiries of the Department. Forty nine LEAs have had their proposals approved. This represents satisfactory progress in the short time since the Education (Amendment) Act 1986 came into force. It is for LEAs to make their own arrangements for training supervisors.
    Mr. Lamond: Does the Minister realise that the plain truth about the midday supervision scheme is that it is grossly underfunded, and was introduced without adequate consultation? It is causing great concern to parents throughout the country, including those in my constituency. Should he not grasp the nettle now and introduce a national plan, which would at least prevent an unmitigated disaster, even by the pathetic standards of his own lame duck Department?
    Mr. Patten: I am delighted that the Oldham local education authority has submitted a scheme, which we have been able to approve, subject to certain inquiries on our part. That represents good progress. But I fear that if we had suggested a national plan we would have been accused of centralisation, and that really would not do.
    Mr. Litherland: Does the Minister not agree that a national scheme would be more beneficial and would give

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    equal supervision to all children? If the scheme is left to local education authorities, what confidence can parents have that the supervisors will be adequately trained and will have the necessary experience?
    Mr. Patten: This is an issue for local education authorities, and I hope that the hon. Gentleman's constituents will have every confidence in the scheme submitted by the Manchester local education authority.
    Mr. Greenway: Is it not scandalous and dangerous that children should be locked up in schools during lunchtime? Is not the Act, and the way that it is working, to be welcomed? Is my hon. Friend aware that some head teachers are concerned that assistant teachers operating the scheme may earn more than they do, and that that is why they have some reservations? Will he look into that possibility and ensure that it does not arise?
    Mr. Patten: I understand what my hon. Friend has said. We want to see that head teachers are paid properly for the responsibility that they carry. That would, of course, have been one of the consequences if the teachers associations had accepted the 12 September package.
    Mr. Thurnham: What action can be taken in the case of those head teachers who are not co-operating in making the new arrangements work?
    Mr. Patten: It is more a question of encouraging the remaining local education authorities to put in bids for schemes. I very much hope that all head teachers will help to make the arrangements work. I know how hard head teachers have had to work during the past year, and we greatly admire the way in which they have carried their burden.
    Mr. Flannery: Why does the Minister not admit to something that no one knows about? Why does he not tell the House that the £40 million is not only not enough, but is taken out of the £1·25 billion being offered to the teachers, which is in itself inadequate? Ministers never tell people where the money is coming from.
    Mr. Patten: As a matter of interest, both the public and the teachers, in particular, were told that on 5 August 1985.
    Sir Kenneth Lewis: Is my hon. Friend aware that I and many teachers and parents are convinced that teachers make the best supervisors? They should be encouraged to pick up the extra money and to supervise school meals. The only thing stopping them is the NUT, in particular, and some of the other unions.
    Mr. Patten: I do not think that only teachers can supervise at lunchtime, but some local education authorities are introducing schemes involving teachers. We have made it clear that teachers should carry out such duties on a contractual basis.
    Mr. Andrew F. Bennett: Why did the Government not heed the Opposition's warning that there should he national standards for midday supervision and a basic training scheme? Does the Minister agree that he has now offended the National Association of Head Teachers as a result of his proposal? Have we not seen yet another example of the Government's determination to offend everyone involved in education, and to cause as much difficulty as possible?
    Mr. Patten: No.
    Mr. Couchman: Is my hon. Friend aware that both parents and governors are writing to us suggesting that some schemes put forward by local education authorities propose an inadequate level of supervision? Will he ensure that when he approves schemes he takes careful account of that so as to reassure parents and parent governors?
    Mr. Patten: I can certainly give my hon. Friend that assurance.
    Mr. Dixonasked the Secretary of State for Education and Science when he last met the National Association of Head Teachers to discuss the implementation of the Education (Amendment) Act 1986.
    Mr. Chris Patten: My right hon. Friend met the NAHT on 3 January. I met the NAHT myself on 28 January. My right hon. Friend and I are always willing to discuss matters of common concern with the teacher unions, although no date has been set for a further ministerial meeting with the NAHT.
    Mr. Dixon: Is the Minister aware that the National Association of Head Teachers, 16 counties and 24 metropolitan district counties, including my district council of South Tyneside, have suggested that there should be a national plan for midday supervision? Why does the hon. Gentleman not listen to them? How does he propose to ensure that children are properly and equally supervised?
    Mr. Patten: That is the general view of local authorities. I am delighted that South Tyneside local education authority was one of the first to apply for help under the education support grant. We acted in the Education (Amendment) Act 1986 to deal with a longstanding grievance. I am surprised that the hon. Gentleman and others are criticising us for doing so.

    Science Budget
    Mr. Soamesasked the Secretary of State for Education and Science what recent representations he has received on the size of the 1986–87 science budget.
    The Parliamentary Under-Secretary of State for Education and Science (Mr. George Walden): My right hon. Friend has received 193 representations about the resources available for science. These representations relate generally to the Government's plans for science funding over a period of years rather than to the budget for a specific year. The Government's plans for the science budget will be reviewed during the annual public expenditure survey.
    Mr. Soames: Is my hon. Friend aware of the very great concern felt in all parts of the House that if we are to compete with the Japanese and United States of America we must spend a great deal more money on civil research and not so much on military research? Does he agree that we should have a national policy, and will he take steps to move towards that?
    Mr. Walden: There is a standing case for spending more on science, as there is in many other areas, but it is a question of priorities. It is a question of getting the money first and of making sure that that money is well spent. In that connection, I should like to pay tribute to the considerable efforts made by the research councils to rationalise the way in which money is spent. But it is not

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    just a question of the Government spending money; industry, too, should spend more on research and development. Pointing to the fact that British business spends less on research and development than any other Western economic competitor, and to the fact that our wage increases are higher by far than those of any other economic competitor, my right hon. Friend recently described that as "a suicide pact".
    Mrs. Renée Short: Does the Minister accept that one of the major criticisms of his Department is that resources for teaching and research in science are not adequate? Is it not nonsense that in industrial areas we should be closing down science departments in polytechnics? What will he do about that? Does he not think that a Minister for Science should be appointed?
    Mr. Walden: My right hon. Friend earlier described the so-called cuts in polytechnics as rubbish. I do not think I can do better than that. I am sure the hon. Lady knows that it would be wrong to lend her name to a campaign of alarmism about so-called cuts in polytechnics. [Interruption.] I am chairman of the relevant committee of the NAB, which has made no such recommendation for cuts; has my right hon. Friend. He will be considering in the normal way at the end of the year, in the first round, the amount of money available for expenditure in the public sector of higher education.
    Sir Anthony Grant: Is my hon. Friend aware that in Cambridge at least there are definite signs of a brain drain, which could be resolved by the expenditure of a relatively small sum of money? Will he and his colleagues fight the Treasury on this much more vigorously in the future than in the past?
    Mr. Walden: My hon. Friend makes a point to which we are devoting considerable attention. We are awaiting a report from the Royal Society on the brain drain. We also listen carefully to the representations from the "Save British Science Campaign", which includes many distinguished men and women.

    General Certificate of Secondary Education
    Mr. Weetchasked the Secretary of State for Education and Science what are his latest estimates of the cost of introducing the general certificate of secondary education examinations.
    Mr. Chris Patten: The Department is contributing more than £9·5 million to the national programme of in-service training for the GCSE. We have also proposed devoting £20 million expenditure, supported by education support grant, to books and equipment for the GCSE. It is not possible to draw up precise estimates of local education authority expenditure, but the general criteria for the GCSE provide that syllabuses and methods of assessment should not make unreasonable demands on resources.
    Mr. Weetch: I am grateful to the Minister for that answer. Is he aware that one of the issues on which confidence has been lost in the teaching profession and among parents is the utterly inadequate level of funding of the examination? How has the £20 million figure been reached? Are there any detailed costings which will be subject to public scrutiny? When will any of the money be made available to the examination groups?
    Mr. Patten: The money will be made available during the next financial year— it should be available by the second half of the academic year. As for the assessment of how much money we should make available, we took account of what was already being provided through capitation and what we could afford on top of that.

  PRIME MINISTER

    Engagements
    Mr. McKelveyasked the Prime Minister if she will list her official engagements for Tuesday 8 April.
    The Prime Minister (Mrs. Margaret Thatcher): This morning I had meetings with ministerial colleagues and others, including one with the President of Kiribati. In addition to my duties in this House I shall be having further meetings later today. This evening I shall be presiding at a dinner for the President of the Republic of Korea.
    Mr. McKelvey: Does the Prime Minister endorse the actions of "Rambo Ronny" who, at this very moment, is exploding a nuclear device in the Nevada desert? Does she agree that that is against the spirit of world peace? [HON. MEMBERS: "Reading".] If the Prime Minister is in favour of a comprehensive test ban treaty, will she say so? Will she—[HON. MEMBERS: "Reading".]—further assure the House that this test is not in any way connected with the present British Trident programme?
    The Prime Minister: I have seen press reports on the prospective test. As a nuclear power, we understand the reasons for nuclear testing. It is not possible to have a comprehensive test ban treaty until methods of verification have cleary been worked out.
    Mr. Robert Atkins: Has my right hon. Friend seen—[HON. MEMBERS: "Reading".]—a copy of this document, which I have in my hand, which purports to be guidelines for members of governing bodies in secondary schools and which seeks to destabilise, damage and destroy the relationship of head teachers with governors and children in schools? The document is circulating in the north-west of England. Will my right hon. Friend do what she can to publicise to head teachers, governing bodies and parents the nature of this insidious and seditious paper, which is put out by the extreme Left-wing of the Labour party?
    The Prime Minister: I have seen today the report of that document in The Times. I agree with my hon. Friend. The document should be compulsory reading for everybody. It shows how the extreme Left really works.
    Mr. Willie W. Hamiltonasked the Prime Minister of she will list her official engagements for Tuesday 8 April.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Hamilton: Has the Prime Minister ever known a time when the education system as a whole was in such a chaotic mess and when morale among all sections involved, whether parents, teachers, students or university lecturers, was so low? When will the Government understand that massively increased investment in this area would be the wisest possible decision that the nation could make now?
    The Prime Minister: I hear what the hon. Gentleman says and, of course, disagree with most of it.
    "I fear that those whose only answer to these problems is to call for more money will be disappointed … The challenge in education is to examine its priorities and to secure as high efficiency as possible by the skilful use of existing resources."
    That is what the last Labour Prime Minister, the right hon. Member for Cardiff, South and Penarth (Mr. Callaghan), said in a speech at Ruskin college. I agree with him.
    Mr. W. Benyon: In view of the recent appalling events in Protestant Loyalist Ulster, has not the time come when we should reconsider very carefully the expenditure of lives and money to keep Ulster within the United Kingdom?
    The Prime Minister: I share my hon. Friend's view about the recent appalling events in Ulster, when the police have been attacked in a terrible way, which all of us should utterly condemn. I think that we must carry on with the Anglo-Irish accord and do our best to try to restore some peace and stability in the Province. We really must call upon all decent Unionists utterly to condemn this kind of activity and to do their best to see that no more of it occurs.
    Mr. Kinnock: First, may I completely endorse the Prime Minister's last answer and express the hope that the message goes to all parts of the community of Northern Ireland so that they will comprehend the determination, jointly shared in this House, to see that the agreement is upheld in peace as a way to peace.
    When our country's future depends so obviously and so heavily on technology and trade, where is the sense, the efficiency or the justice in making further cuts in polytechnic degree courses in civil engineering, the sciences and modern languages? Would that not be a desertion of the national interest? Would it not be a further action by a yob Government?
    The Prime Minister: The number of places in polytechnics in 1986–87 will be 172,000, an increase of 43 per cent. over the number in 1979, which remained static under the Labour Government. As for trying to get more scientific courses in both universities and polytechnics, an extra £43 million has been made available by the Government to get the courses which industry requires. Industry has contributed another £24 million towards those courses. That augurs well for future co-operation between universities and polytechnics and industry.
    Mr. Kinnock: If the position is as the Prime Minister describes, why is it that her own National Advisory Body and the Committee of Directors of Polytechnics say that they cannot make any further cuts without destroying the quality of provision in all the subjects that she mentioned? Will she heed the words of her own Green Paper last year on higher education, which acknowledged that if present trends continue we shall fall even further behind our competitors in engineering and technology?
    The Prime Minister: I saw the right hon. Gentleman sitting in his place when I heard my hon. Friend the Member for Buckingham (Mr. Walden), the Parliamentary Under-Secretary of State for Education and Science, who is chairman of the National Advisory Body committee utterly repudiate that report. [HON. MEMBERS: "Not true."] He should know, because he is the chairman.
    Mr. Kinnock: In that case, was the dispatch of a letter from the National Advisory Body committee to the directors of the polytechnics a mistake, or did it not take place, or is it another fantasy?
    The Prime Minister: It was not a committee. It was a secretariat. The National Advisory Body will not submit formal recommendations about academic provision in particular polytechnics in 1987–88 until September. In the meantime, I repeat that this Government have an excellent record in the provision of science courses in polytechnics.
    Mr. Baldry: Does my right hon. Friend agree that this House will not countenance intimidation from the Loyalist community in Northern Ireland, any more than it would countenance it from the IRA? Does she agree that it does not lie in the mouth of any person who attacks anyone who wears the Queen's cap badge to call himself a Loyalist?
    The Prime Minister: I agree with my hon. Friend that terrorism and violence must be condemned equally, no matter from what quarter in Northern Ireland they come. I am sure that the police will uphold their duty totally impartially and will not be intimidated by terrorism.
    Mr. Steel: Will the Prime Minister explain to the House how it is that, when Sunday trading was not in the Conservative manifesto at the last election, the Government are intending to introduce the Bill to this House next week on a three-line Whip? Should there not be some issues left to a conscientious free vote of the majority of Members of this House?
    The Prime Minister: The right hon. Gentleman will remember that we have had the Auld committee report, that it made a full report on Sunday trading, that the Bill has been through the other place and that it will shortly be coming before the House. He knows that whipping is never decided until much nearer the time.
    Sir Eldon Griffiths: Referring to Northern Ireland, does my right hon. Friend recall that long before Portadown, when we were debating the Northern Ireland agreement, I asked in the House for an assurance that, in the event of the police needing protection for their families, that protection should be provided? As Ministers promised it and it did not materialise until the petrol bombers struck, does my right hon. Friend not understand that that is why there is among the rank and file of the Royal Ulster Constabulary a great measure of dispiritment at the present time?
    The Prime Minister: I understand what my hon. Friend is saying, and I know he will agree with me that we have great admiration for the RUC, for the totally impartial way in which it carries out its duties. My right hon. Friend will take every action he possibly can if any further action is required to see that the families of the RUC are protected.
    Mr. Sheermanasked the Prime Minister if she will list her official engagements for Tuesday 8 April.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Sheerman: Will the Prime Minister have time today to look at the chorus of criticism of her Government's educational policies? Her Government have been in power now for seven years, yet at this time her Ministers are publicly both confused and divided about the

    17
    educational policies of her party and her Government. When will she do something to put at rest the minds and hearts of parents and deal with the confusion and chaos that exist in our classrooms today?
    The Prime Minister: This Government have committed substantial resources to education. Indeed, expenditure per pupil is up by 16 per cent. in real terms and pupil-teacher ratios are at their best-ever levels. So resources and increasing numbers of teachers have been provided. I agree with the hon. Gentleman that many of us are shocked at the action that some of the teachers have taken recently. It is not befitting any profession, let alone a profession which expects, and should expect and enjoy, a good deal of prestige.
    Mr. Holt: Does my right hon. Friend agree with me that most of us woke up this morning to a marvellous fillip on hearing of the launching of HMS Coventry? Does she agree, further, that the management of Swan Hunter has shown that it is leading a marvellous shipyard in the northeast, and does this not augur well for the order for the new auxiliary oil replenishment vessel going to that region?
    The Prime Minister: Strenuous and successful efforts were made to ensure that the frigate HMS Coventry was launched on time, and I congratulate all concerned. I have nothing further to report on the order which two shipyards are hoping will come to them. Further inquiries are being made to ensure that the figures about competition are fair, because that is vital to both shipyards.
    Mr. Stottasked the Prime Minister if she will list her official engagements for Tuesday 8 April.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Stott: The Prime Minister is no doubt aware that in a letter replying to my hon. Friend the Member for Durham, North (Mr. Radice) she admitted that reports by Her Majesty's inspectors of schools indicated that at least one third of local education authorities in this country were vitally short of textbooks for the education of our children. Is that not an appalling record for someone who has been the Prime Minister of Britain for the last seven years?
    The Prime Minister: If the hon. Gentleman reads that report in full he will find that a good deal of the problem is due to bad management of the resources. He has heard about the tremendous extra resources that the Government have made available per pupil for education. Expenditure per pupil is up by 16 per cent. over and above inflation and pupil-teacher ratios are at their best-ever level. With increasing resources per pupil, and an increasing number of teachers compared with pupils, there is good reason to expect that, if those resources are properly managed, education will be at a high standard.
    Viscount Cranbourne: Will my right hon. Friend take time today to tell the House whether, in her opinion, there would have been an Anglo-Irish agreement if there had riot been an IRA terrorist campaign?
    The Prime Minister: There is an Anglo-Irish accord, and it must be implemented. It is intended to bring peace and stability to Northern Ireland. Obviously that requires the goodwill and active co-operation of decent men and women on both sides of the community. As Burke said, all that is required for evil to triumph is that good men do nothing. Now is the time for good men on both sides of the community to make their views known.
    Mr. Redmondasked the Prime Minister if she will list her official engagements for Tuesday 8 April.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Redmond: What monetary price does the Prime Minister put on the pain and suffering of people who are waiting to go into hospital? Will the Government cut the waffle and put their money where their mouth is?
    The Prime Minister: The number of nurses and doctors has increased considerably, the number of patients treated by the NHS has also considerably increased and the waiting lists have decreased. In 1979, when the Government were elected, expenditure on the NHS was £7·5 billion. This year it will be £17·5 billion.

Royal Ulster Constabulary
3.30 pm
Mr. Peter Archer(by private notice) asked the Secretary of State for Northern Ireland if he will make a statement on the safety of members of the RUC and their families.
The Secretary of State for Northern Ireland (Mr. Tom King): In the last month there have been 138 attacks on off-duty members of the RUC and the RUC Reserve, and their homes and families. The vast majority have taken place in predominantly Protestant areas. The whole House will wish to join me in condemning utterly these cowardly and disgraceful attacks on the men and women of the RUC who have given such loyal and courageous service to defend the Province against terrorism and to uphold law and order.
The Chief Constable, with the full support of the Police Authority for Northern Ireland and of the Superintendents Association and the Police Federation, has put arrangements in hand to provide quick and effective assistance to police officers and their families who are subject to attack or other forms of intimidation. Extra patrols are being mounted in vulnerable areas, and steps have been taken to provide suitable alternative accommodation for those unfortunate enough to have to move from their homes. In addition, the police are making strenuous efforts to bring the people responsible for this criminal behaviour to justice, and a considerable number have already been charged with serious offences associated with it.
I welcome the fact that the Churches and the more responsible political leaders have condemned without any qualification these outrages.
I look to the whole community to join together to defeat these acts of terrorism against its own police force, and to give every possible support to bring those responsible to justice.
Mr. Archer: Will the Secretary of State accept that we on these Benches join him in extending our sympathy to those officers and their families who have suffered attacks?
In recognising that violence of this kind against police officers and their families is deplorable from whatever political sector it comes, does the Secretary of State agree that it is condemned by the large majority of right-thinking people in the Unionist tradition? Will he invite those Unionist politicians who have not dissociated themselves from these attacks to make clear where they stand? Does he agree that the violence appears to stem from elements who once identified law and order with support for a particular political position, who expected the police to administer the law in a discriminatory way, and whose belief in law and order evaporated when they discovered that they too were subject to the law?
Does the Secretary of State share the view that at least some of those people have been and are involved in unlawful attacks on isolated Catholics? Will he join us in commending the stand taken by the Chief Constable in difficult circumstances in distinguishing between the freedom to march and demonstrate peaceably, and triumphalist marches calculated to provoke a disturbance?
I have two specific questions. First, does the Secretary of State agree that those who warned that plastic bullets
20
were an unpredictable and dangerous method of crowd control and that their use was counter-productive have been shown by the tragic injuries to Mr. Keith White to have given sensible advice?
Secondly, will the right hon. Gentleman consider, with the Home Secretary, the suggestion made from the Opposition Front Bench by my hon. Friend the Member for Hammersmith (Mr. Soley) during the debates earlier this year on the Public Order Bill that there should be a special scheme for quick and adequate compensation for policemen and others whose jobs involve a special risk of criminal injury and on whom we rely to form a front line in situations not of their own making?
Mr. King: I am grateful to the right hon. and learned Gentleman for his remarks. I immediately endorse one thing he said. I have no doubt that the overwhelming majority of people in the Province, regardless of their views about the Anglio-Irish agreement, are quite appalled by the attacks on the police. It is regrettable that some political leaders, some of whom sit in the House of Commons, have not yet felt able to condemn, without qualification, these attacks on the Royal Ulster Constabulary. One of the nastiest aspects of these attacks is that they are not just attacks on the police; there have also been nasty sectarian attacks that I know the House will deplore.
I have the greatest admiration for the Chief Constable, his senior officers and the RUC. Hon. Members may have heard that one such police officer who was attacked today, when asked in a radio interview this morning whether what had happened would undermine morale, said that it would only make the RUC stick together more closely as a family in their determination to stand against terrorism. They have stood together bravely for about 17 years and they will not stop now just because terrorism is coming from a different quarter. The whole House will respect them for that.
On the point made about plastic baton rounds, one understands the problems and difficulties involved, but at the same time the police face real problems when they are being stoned, as they were in Portadown. I am not prepared to see the police left quite defenceless against that sort of violence, although I very much regret injuries, even if they were caused to people who knew they were attending an illegal march, because that march had already been banned.
I would like to consider the point about compensation.
Sir John Biggs-Davison: Must not all politicians on both sides of the water accept their responsibilities? Was it not forecast from these Benches that the result of the Anglo-Irish agreement would be to place this splendid force, whose families are also suffering so grievously now, between two fires? In the light of experience, will the Prime Minister seek to talk to the Taoiseach and, in view of the threat to the security of the whole of Ireland, seek an appropriate change of policy?
Mr. King: I very much hope that, in his remarks, my hon. Friend was in no way condoning the violence against the police. I am sure he would wish to be associated with any statement of condemnation of the fact that the RUC should be placed in that situation. Obviously, I recognise that many people in the Province, who have the strongest feelings about the Anglo-Irish agreement and who wish to argue about it, discuss it, and see how we can provide

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alternative approaches, would not dream of indulging in violence of any kind. I trust that we will respect that approach and no approach that espouses violence.
Obviously, we are most anxious—and the Prime Minister has made this clear—to enter into talks with Unionist leaders. We have just received a letter from the right hon. Member for Lagan Valley (Mr. Molyneaux) and the hon. Member for Antrim, North (Rev. Ian Paisley) expressing concern, and we shall respond to it shortly. I hope that it will be possible to have sensible talks, because it is by talking and not by violence that these problems must be solved.
Mr. J. Enoch Powell: Does the right hon. Gentleman remember that he and the Prime Minister were told in advance of the disastrous consequences that would inevitably ensue if they went ahead and made this agreement? What shall be done to the evil counsellors to whom they listened instead?
Mr. King: I am well aware of the right hon. Gentleman's feelings about this agreement. I had hoped that he would feel able to include in his remarks his condemnation of the violence shown to the RUC. That violence is regrettable, and I hope that the right hon. Gentleman will feel able even now to say so, even if in another place, and to make that known.
Sir Eldon Griffiths (Bury St. Edmunds): Why did certain elected Unionist Members approve the use of plastic baton rounds when they were directed at Sinn Fein mobs but objected to them when they were used against Loyalist mobs? Will my right hon. Friend explain to the House and to the men and women of the RUC why protection, for which requests were specifically made and which was specifically promised, was not forthcoming until after the petrol bombers had struck? Will my right hon. Friend explain that the arrangements being made now could not have been made when they were promised?
Mr. King: The first point is not a matter for me. It is for the Unionist Members of Parliament, or whoever my hon. Friend has in mind, to respond to that point. I have noted the comments elsewhere on that matter.
On the second point, I think that my hon. Friend is referring to a reply in this debate by an Under-Secretary of State to the effect that, if resources and help were needed and requested, they would be given. That is precisely what we are doing at the request of the Chief Constable. I have set out clearly in my statement ways in which, as soon as the threat emerged, steps were taken to meet it. I hope that I shall have my hon. Friend's full support—he has a particular interest in this matter—in ensuring that these co-operative efforts work as effectively as possible.
Mr. Merlyn Rees: Is the right hon. Gentleman aware that, like all his predecessors, he has every reason to praise the RUC for the way in which it has changed itself over the years from a Protestant force for a Protestant people, and I gladly do so?
In my view, the position is getting worse every day. The politicians do not count. Whatever the reason, the politicians dare not put their heads above the political parapet.
Will the right hon. Gentleman ask the Prime Minister—I offer this as a serious suggestion—to appear on the television and to talk to the people of Northern Ireland as
22
Prime Minister and as leader of the Conservative and Unionist party? Will she explain to them that the people over there can take any view they like about the Anglo-Irish agreement—it is a political agreement—but that the RUC has become a British police force which is there for one reason—to uphold the laws on violence, which is what it is doing?
Mr. King: I have noted those comments, as has my right hon. Friend the Prime Minister, especially in view of the right hon. Gentleman's experience and his years of service in the Province. Obviously we take those points seriously.
During the terms of office of the right hon. Gentleman and of other right hon. Members who have shared the post which I now have the honour to hold, more than 200 members of the RUC have laid down their lives in defence of the Province and of Protestants and Catholics against terrorism. They are entitled to the support of everyone in the Province and in the United Kingdom. If, as the right hon. Gentleman said, the politicians do not count any more, it is perhaps because it has not yet been possible to get talks or discussions going. This is a political matter and it is essential that it is discussed by politicians and is not tackled by men of violence, as is happening at present. That is why it is so important that we have early discussions.
Mr. Ian Gow: Is my right hon. Friend aware that those Conservative Members who support him and those who opposed the Anglo-Irish agreement join him in condemning totally attacks on members of the RUC? Is he aware that, but for the Anglo-Irish agreement, this afternoon's statement would not have been made?
Mr. King: I am grateful to my hon. Friend for his clear and unequivocal support of the condemnation of acts of violence. I hope that, in his last sentence, he did not imply that violence against the RUC could be justified. The RUC is seeking impartially to uphold the law and it is in the vital interests of every person in the Province that it should be able to continue to discharge that function. The community owes it to the RUC to give it support at this difficult time.
Mr. Stephen Ross: We would like to add our congratulations to the RUC. We recognise the courage which it is showing at this time. We also recognise the courage shown by the Secretary of State. We on these Benches much admire his responses and we hope that he will see the Anglo-Irish agreement through to its fulfilment because it is the only sane way forward in Northern Ireland.
Is protected accommodation being made available to members of the RUC who have not yet suffered any attacks? Can they move into such accommodation with their families if they so wish?
Mr. Tom King: I am grateful to the hon. Gentleman for his opening remarks. I would rather not go into detail on the question of the arrangements that are being made for the RUC. There is close co-operation between the Chief Constable and the Superintendents Association and the Police Federation in this respect. They will certainly receive the fullest support from my office, and from the other security forces with anything that can be done to help.
Mr. Michael McNair-Wilson: Further to the events in Portadown, and in view of the fact that the marching season has now begun in the Province and this year is likely to be more contentious than usual, is my right hon. Friend satisfied that the RUC has sufficient forces to cope with the parades? Will my right hon. Friend give due consideration to the Chief Constable's suggestion for an independent public tribunal to look into the routes of the parades? I beg my right hon. Friend not to put the RUC in a position where it is alienated from the support of either the majority or the minority.
Mr. King: My hon. Friend will be aware that the march which took place in Portadown was a non-traditional march. He will recall that last year, even before the Anglo-Irish agreement, violence had unfortunately taken place at Portadown when there was an attempt to reroute the march. When my hon. Friend makes such comments, I hope he will recognise the responsibility on others who wish to carry out the traditional and respected rights of marching and that they should not seek to do it deliberately in the most provocative and aggressive way through nationalist areas.
That has been part of the problem which has obviously concerned people in the past. I am very anxious that the marching season should be conducted without the strains that my hon. Friend has mentioned. Obviously responsibility falls on others to seek to arrange their business in the most appropriate way.
Mr. Roy Mason: Is the Secretary of State aware that much of this violence must weigh heavily on the shoulders of the Unionist leaders, especially when hard-liners from their own ranks are turning against their own people? Is the Secretary of State further aware that firm leadership should now be given to stop this mass intimidation of the RUC and their families? It is about time that the Unionist leaders spoke out alongside the Secretary of State and his Ministers.
Mr. King: I am grateful to the right hon. Gentleman. He is held in respect for the firm leadership he has given on previous occasions. We shall give the RUC our fullest support. I certainly hope that the message which he has just delivered will be heard by others and that they recognise their clear responsibility.
Mr. Ivor Stanbrook: Every responsible person, including every Member of this House, condemns violence, so do not let us waste any more time on that. When the Government decided to sign the Anglo-Irish agreement, was any assessment made of the scale and violence of the likely reaction among the majority population of Northern Ireland? If so, is my right hon. Friend really surprised at what has happened? If not, why not?
Mr. King: I am sure that my hon. Friend does not seek in any way to imply that violence can be justified. I hope that I will get his support about the need for discussions to take place. I understand his views on these difficult issues and I have made my own position absolutely clear in the past and my concern about the strength of the reaction. I hope that we can have talks, because that is the way to find a sensible and law-abiding way of resolving these difficulties.
Mr. John Hume: Does the Secretary of State agree that the policemen in Northern Ireland who so
24
clearly and in such difficult circumstances impartially upheld the rule of law in Northern Ireland last week deserve not just the support but the appreciation of the entire Northern Ireland community, but that those Loyalist Members who consistently come here to lecture the rest of us on law and order now stand exposed as to what they mean by law and order—they mean their law and their order?
Does the Secretary of State further agree that some hon. Members—I use the adjective "honourable" only because I am supposed to use it—are engaged in organising and encouraging the violence against the police in Northern Ireland in an outright campaign against the democratic process in order to create an atmosphere of fear in Northern Ireland so that decent people will not speak against it?
Finally, does the Secretary of State agree that the right hon. Member for South Down (Mr. Powell) has presented himself for most of this century in the House as the upholder of the sovereignty of Parliament but that he abandoned that today, abjectly, and in so doing abandoned the rule of law?
Mr. King: Some hon. Members and some Unionist Members have stood up bravely and have unequivocally condemned the violence against the RUC, not without some risk to themselves, and I hope that the House respects them for that, but others have not felt able to do so. I note the hon. Gentleman's further comments about those who may be involved in organising or abetting. I shall not comment on that today, but the House will have noted the Chief Constable's remarks.
Mr. Henry Bellingham: Does my right hon. Friend agree that those who currently advocate an increase in the number of troops in Northern Ireland should listen carefully to the views of the Chief Constable who has made it clear that more troops should not be moved there at the moment?
Mr. King: The House will have noted the Chief Constable's comments, and I know that hon. Members will recognise, as did the right hon. Member for Barnsley, Central (Mr. Mason), the professionalism, competence and all-round ability of the RUC. It is an impressive police force. There is a real determination on the part of the Chief Constable and throughout the RUC to meet the challenge to prove that they can command and deal with this serious situation. Having said that, I make it clear that should additional resources be needed we would obviously seek to meet that, but, as my hon. Friend makes clear, that is not the Chief Constable's request at this time.
Mr. Tam Dalyell: What is the Secretary of State's reflection on the important question asked by the hon. Member for Dorset, South (Viscount Cranborne) of the Prime Minister, but unanswered by her, that, if it had not been for the activities of the IRA, would there have been an Anglo-Irish agreement at all?
Mr. King: I think that the hon. Gentleman took part in our debates on the Anglo-Irish agreement in which that point was discussed, along with the problems that have been posed in Northern Ireland over the years and the attempts to find a way to break the stalemate and to establish a form of local administration, or whatever word one uses for it, which could command widespread

25
acceptance. The way in which the particular characteristics of Northern Ireland could be recognised in an effective form has defied solution, and the agreement was an attempt to break that stalemate in the interests of all the people in the Province, not in response to the problems of terrorism.
Mr. Barry Porter: Will my right hon. Friend accept from me, as one of those who voted against the Anglo-Irish agreement, and, indeed, as somebody who has frequently spoken in the House in defence of loyalism, in the proper sense of that word, that I recognise, accept and applaud the views expressed by my right hon. Friend the Prime Minister and my right hon. Friend about the recent violence, but will he also accept that the patience of those of us who have supported and who will continue to support the Union is wearing thin and that, unless and until the leaders of the Unionist parties decide and express the view that the Union and the rule of law is utmost, the rule of the paramilitaries should be dismissed immediately by them?
Mr. King: I am grateful to my hon. Friend for his remarks. My own views on the value and merit of the Union are clearly on the record, and I am determined to see that the Union is not put at risk. The tragedy is that those who shout loudest against the agreement and in any way associate themselves with the current forms of behaviour are those who represent a real risk to the Union.
Mr. Robert Maclennan: Does the Secretary of State agree that those politicians in the Province who seek to present the RUC as supporting a political settlement with which they are in disagreement are uttering a calumny upon the RUC whose sole role is to uphold the rule of law?
Mr. King: That is exactly the position. It is overwhelmingly in the interests of all the people in the Province to realise the need to respect the impartiality of the RUC in enforcing the law, whatever it may be.
Mr. Hugh Dykes: At this testing time for the Government, will my right hon. Friend hear it in mind that he has the support of virtually the whole House? Is he not shocked that today one or two prominent politicians here have not unequivocally condemned the violence? Far from acceding to the ideas of the right hon. Member for Morley and Leeds, South (Mr. Rees)—in respect to the inference of his question, not of its substance—is it not the duty of Protestant politicians in Northern Ireland not to abdicate, as the right hon. Gentleman suggested, but to get out there, condemn the violence and support the Government's policy? In due course, after passing through this testing time, they will then have the courage of my right hon. Friend the Secretary of State—perhaps even including, dare we guess it, that Jacques Soustelle, the right hon. Member for South Down (Mr. Powell).
Mr. King: The community in Northern Ireland at this time desperately needs leadership from every person in any position of responsibility. Everyone has that duty to lead. This is a dangerous and uncertain time; I make no secret of that. I will do what I can, and I feel entitled to look to every responsible person in the Province to play his part, too.
Several Hon. Members rose—
Mr. Speaker: Order. We have a heavy day before us. We must move on.

Questions to Ministers
Mr. Giles Radice: On a point of order, Mr. Speaker. In view of the confusion arising out of the Prime Minister's answer to a question by my right hon. Friend the Member for Islwyn (Mr. Kinnock) about the status of the advice sent out last week by the National Advisory Body to directors of polytechnics and colleges, and in view of the anxiety of the 9,000 well qualified young people who may be deprived of places in polytechnics and colleges in 1987–88, would it now be possible for the Secretary of State to answer question No. 15 on the Order Paper, which requests a statement on the National Advisory Board's 1987–88 planning exercise?
Mr. Speaker: I am sorry, but that will not be possible. We have passed beyond that point. I am sorry that that particular question was not reached, but we had a fairly long run on the matter.
Mr. Radice: Further to that point of order, Mr. Speaker. Of course I accept your ruling, but my hon. Friends and I will press for the Government to make an early statement on the matter.
Mr. Stuart Bell: Further to that point of order, Mr. Speaker, and in response to the question that the Prime Minister answered, may I refer to the answer by the Parliamentary Under-Secretary of State for Education? I suggest that the Parliamentary Under-Secretary of State unwittingly misled the House by stating that the Government had no responsibility either for the National Advisory Board or for the proposals sent yesterday to every college of further and higher education. That letter stated that there was a 7 per cent. cutback in students—
Mr. Speaker: Order. That sounds like an extension of Question Time. It is not a matter for me. I cannot be responsible for answers from the Government Front Bench.
Mr Bell: I respect what you say, Mr. Speaker, and I shall bring my point of order to the point. There is a constitutional relationship between what was said by the Parliamentary Under-Secretary of State and the position of the Government. As I have indicated that the hon. Gentleman misled the House, would it not be appropriate for him to make an early statement rectifying that misleading statement?
Mr. Speaker: Order. I do not know whether the Parliamentary Under-Secretary of State did so, unwittingly or not, but I am sure that he will have heard those comments.

Entry Refusals (Rights of Members)
Mr. Max Madden: I wish to raise a point of order of which I have given you notice, Mr. Speaker. It concerns the rights of hon. Members in connection with immigration matters, and I think that it is a matter directly for you.
Last Friday morning at 10 minutes past nine o'clock a visitor to this country was refused entry. A message was left with a relative of the sponsor, who is a constituent of mine. I was asked for my help at 10 o'clock. I immediately phoned the Home Office which made inquiries and rang back a few minutes later to tell me that it was impossible to accede to my request to stop the visitor's removal or for me to make representations on his behalf as he was already on a flight taking him to Pakistan. You will remember, Mr. Speaker, that immediately before the Easter recess we received assurances from the Home Secretary that every effort would be made to ensure that the guidelines concerning the rights of Members of Parliament in immigration matters would be exercised reasonably and flexibly to allow us an opportunity to exercise those rights. If the immigration authorities act as they did last Friday—which an official at the Home Office has described as "undue haste"—the immigration authorities will not be limiting the rights of hon. Members but removing them altogether.
Therefore, Mr. Speaker, I ask you to inquire urgently into the circumstances of this case and ask the immigration authorities and the Home Office to ensure that the period of time between refusing a visitor entry into this country and the removal of the visitor from this country is sufficient for our constituents to ask for our help and sufficient to enable us to give the help they are entitled to receive, but on this occasion were denied.
Mr. Speaker: I have allowed the hon. Gentleman to make his point, but it is not a matter for me. The operation of the immigration regulations is not a matter for the Chair.
Several Hon. Members rose—
Mr. Speaker: Order. The regulations are not a matter for the Chair.
Mr. Dennis Skinner: On a point of order, Mr. Speaker. You will have noticed that during Question Time several matters were covered but, unfortunately, not the one to which I shall refer. During the recess there was mention of the alleged conspiracy of Gerry Gable, the editor of Searchlight, in which a Tory Member of Parliament was involved. Many of us had thought, quite properly, that during Question Time someone would have got round to raising that matter. In fact, my hon. Friend the Member for Battersea (Mr. Dubs) was only too anxious to catch your eye—
Mr. Speaker: Order. No hon. Member got round to that.
Mr. Skinner: I have an answer for it.
Mr. Speaker: The hon. Gentleman probably has, but I cannot see that in any conceivable way it is a matter for me.
Mr. Skinner: I raise the point of order with you, Mr. Speaker, because it borders on the question of privilege of Members of Parliament. If there is the faintest possibility

29
that the Prime Minister could be induced to answer questions on this matter later, we might get round to that question.
Mr. Speaker: Order. The hon. Gentleman should try his luck on Thursday.
Mr. Madden: Further to my point of order, Mr. Speaker.
Mr. Speaker: I have nothing to add to what I have already told the hon. Gentleman. I allowed the hon. Gentleman to make his point, but it clearly was not a matter for me.
Mr. Madden: May I ask you to reflect, Mr. Speaker, on the fact that it is pointless and futile for us to have guidelines, which were debated in the House before Easter, giving hon. Members clear rights in immigration matters if those rights are to be obliterated by the immigration authorities? I believe that it is directly your responsibility.
Mr. Speaker: Order. It is certainly not my responsibility. It is the responsibility of the Government Department concerned. The hon. Gentleman must raise the matter with that Department.

Tin Mining (Cornwall)
4.4 pm
Mr. David Harris: 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 tin crisis in Cornwall, particularly the suspension of mining at Geevor".
I hope that I and my colleagues from Cornwall, particularly the hon. Member for Truro (Mr. Penhaligon) and my hon. Friend the Member for Falmouth and Camborne (Mr. Mudd), have said sufficient over the past weeks and months to convince you, Mr. Speaker, and the House of the specific nature of the crisis facing Cornwall and of the importance of that crisis for the count) and for those who work in its tin mining industry.
I am afraid that during the recess the importance, seriousness and urgency of the matter has intensified dramatically, particularly a week ago when, unfortunately, Geevor mine in my constituency was forced to give notice to some 270 of its employees that they would be laid off at the end of last week.
It must have been one of the saddest days in the history of Cornwall when that took effect last Friday. It certainly had a tremendous impact on the whole of the county and, dare I suggest, even beyond the boundaries of the county, when the final shift came up from Geevor mine last Friday. The miners did not know whether they would ever return to the mine. Of course, whether they will return depends, in large measure, on the response to a submission today from the management of Geevor mine to the Government.
Here, I pay tribute to my hon. Friend the Minister of State, Department of Trade and Industry, who is in the House today, who was very good over the holiday weekend to take repeated telephone calls from me and listen to the urgent pleas I was making. However, the Government will now have to decide the fate of the mine and the fate of the tin industry in Cornwall.
In urging you, Mr. Speaker, to consider this matter as one of supreme urgency, I shall quote from the report of the Select Committee on Trade and Industry, which was published just as the House was going into recess before Easter. On the whole tin crisis the Committee said that if the Government
"waits for the tin price to settle before taking action, there will be no tin industry left in Cornwall".
The concluding paragraph of the report said:
"It is of supreme importance that the Government should begin negotiations with the industry on the possible types and amounts of aid and conclude them without delay. We believe that the Cornish tin industry is worth saving."
That is what the Select Committee said and that sentiment is echoed by everyone in the county of Cornwall and by many beyond it.
I urge you, Mr. Speaker, to consider giving leave to move for an emergency debate so that the House may discuss, without delay, the seriousness of the situation and particularly the plight of the miners.
Mr. Speaker: The hon. Member for St. Ives (Mr. Harris) asks leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that he thinks should have urgent consideration, namely,
"the crisis in the Cornish tin industry following the suspension of mining at Geevor and the lay-off of 270 miners."

31
I fully understand the concern that the hon. Gentleman has expressed, but I regret that I do not consider that the matter he has raised is appropriate for discussion under Standing Order No. 10. I cannot, therefore, submit his application to the House. I hope that the hon. Gentleman will find other ways of raising the matter.

Anglo-Hungarian Conductive Education Project
4.8 pm
Mr. Dave Nellist: I beg to ask leave to move the Adjournment of the House, under Standing Order No. 10, for the purpose of discussing a specific matter of public importance that should have urgent consideration, namely,
"Government financial assistance for the Anglo-Hungarian conductive education project."
—[Interruption.] I am sure that Tory Members will find it even more amusing when they find out what the project is.
The matter is urgent and could not have been raised in Parliament before today because the extraordinary and moving documentary entitled "Standing up for Joe" was transmitted by the BBC only last Tuesday, 1 April. The hour-long film showed children with some of the severest physical handicaps—we shall have some more Tory laughter now—which led to extreme problems in controlling their body movements. In this country such children would receive care and compassionate treatment, but would be unlikely to make the breakthroughs shown in that film. The film showed children in Hungary who were wheelchair-bound at the beginning of their treatment at the Budapest clinic, and then showed them ice skating after two or three years of conductive education.
The matter is important because thousands of families watched that programme and within a couple of days of transmission the 1,000 information leaflets prepared for distribution had been used up. Those families were amazed at the improvement that conductive education could bring, because they had always thought that such improvements were beyond the capability of their children.
The tragedy is that the few dozen places available at the Petö clinic in Budapest for children from overseas, including those from my constituency in Coventry, presently receiving or hoping to receive treatment will be vastly oversubscribed as a result of the revelations of that documentary. The position will be exacerbated by agreements and visits agreed between the Hungarian institute, Japan and America, which will stretch the facilities beyond the reach of families in this country.
That brings me to the urgency of my request for a debate. This morning I learnt from the British Council that on 21 March the Government signed a cultural agreement with the Hungarian Government. It states:
"Both sides will encourage the conclusion of an agreement on co-operation between Birmingham University and the Teacher Training and Education Institute for the Motor Disabled."
That paragraph refers to a project to start in Birmingham a teacher training centre to bring the full benefits of conductive education to children and families in Britain—benefits which the Paymaster General and Minister for Employment saw on his visit in late 1984 and which, despite his encouraging words, have received no concrete or specific financial support from the Government. That project can begin in September only if, in the next few days, the Government find £250,000 to assist its establishment.
That sum, which is minute compared with other expenditure which the Government consider worth while, could be added to the £200,000 already promised by

33
Birmingham city council, the £200,000 given by Dr. Barnardo's and the £75,000 given by the Parkinson's Disease Society. The Parliamentary Under-Secretary of State for Education and Science, who is in the Chamber, said on 29 October 1985 that no funds were available from the Government. It could be done on a pound-for-pound basis, as the Government offered in 1981 in a press release entitled
"£1 for £1 to help mentally handicapped children"
to assist the charities which have already raised pound;500,000.
The project could bring enormous and extraordinary benefits of conductive education to Britain and to the tens of thousands of families affected here. It is impossible in this short debate—
Mr. Speaker: Order. The hon. Gentleman has had four minutes. Will he bring his remarks to a close?
Mr. Nellist: It is impossible in such a short application to convey the full impact—[Interruption.]
Mr. Speaker: Order. The hon. Gentleman asks leave to move the Adjournment of the House for the purpose of discussing a specific and important matter that he believes should have urgent consideration, namely,
"the Government's financial assistance for the Anglo-Hungarian conductive educational project."
Mr. Nellist rose—
Mr. Speaker: Order. I am on my feet. The hon. Gentleman knows that the rule is that three minutes are allowed for applications under Standing Order No. 10. I told the hon. Gentleman that he had already had four minutes, and I must now deal with the matter.
I listened with great care to what the hon. Gentleman said, and I hope that he will have further opportunities to raise this matter, but I regret that I do not consider that it is appropriate for discussion under Standing Order No. 10 and I cannot, therefore, submit his application to the House.
Mr. Nellist: On a point of order, Mr. Speaker. Could you or the Clerks tell me how much time the hon. Member for St. Ives (Mr. Harris) had to make his application? I was about 40 seconds away from finishing my application. This is the first time that I have seen you stop an hon. Member during his concluding remarks in an important application under Standing Order No. 10.
Mr. Speaker: This is the first occasion on which the time allowed has been exceeded. The hon. Member for St. Ives (Mr. Harris) spoke for just more than three minutes. I indicated to him that his time was up and he sat clown. I warned the hon. Gentleman that he had spoken for four minutes. This is a rule of the House, not my rule.

Airports Bill
4.14 pm
Mr. Alfred Morris: On a point of order, Mr. Speaker. I shall be grateful for your guidance in relation to the Airports Bill. On the basis of advice from parliamentary counsel I submit that, in view of events during the Easter recess, there is a strong argument for holding that the Bill is hybrid and that, in accordance with the Standirg Orders, it should be referred to the Examiners.
Manchester Airport plc is a company which commenced trading on 1 April. It has been set up to control the operation, development and management of Manchester airport. In law, the company is now an entirely independent trading company. It functions independently of the district councils and of local authority financial controls. As a result, Manchester Airport plc, unlike other airports affected by the Bill, can now raise money on the market in the normal way.
Clause 20 of the Airports Bill would apply to public airport companies the expenditure controls in the Local Government, Planning and Land Act 1980. That clause applies to advances and share issues made in respect of public airport companies which, as defined in clause 15(1) of the Airports Bill, includes airport companies whether or not formed under the powers proposed in the Bill. It appears, therefore, that, for the purposes of the Bill, Manchester Airport plc will be a public airport company. As a result it will become subject to local authority expenditure controls.
It is on that basis that I suggest that the Bill is now hybrid. As I understand the position, the effect of earlier decisions as to hybridity has always been that persons or bodies who were on equal terms before the passing of the Bill maintain an equality thereafter.
I have drawn your attention in a letter, Mr. Speaker, to precedents which have some relevance to this case—in particular, the Local Dues on Shipping Bill in 1856 and the Union of Benefices Bill in 1873— and will not detain the House about them this afternoon.
The true effect of the Airports Bill is that, if it is passed, other local authorities will be required to form public airport companies which will be under the same financial control as today while, by contrast, the Manchester company which now trades subject only to the constraints of company law will for the first time be subject to controls. The Bill will accordingly alter the status quo as between the Greater Manchester districts and other local authorities.
Finally, I must refer to the definition of hybridity by Mr. Speaker Hylton-Foster in connection with the London Government Bill in 1963. He defined a hybrid Bill as:
"a public Bill which affects a particular private interest in a manner different from the private interest of other persons or bodies of the same category or class."
It is widely felt that, on that definition alone, the Airports Bill is now hybrid. I do, of course, appreciate that the present case appears to be unprecedented and by definition, therefore, no previous ruling on hybridity may directly apply. That being so, I know that it may thus be difficult for you, Mr. Speaker, to rule on my point of order today.
Mr. Speaker: I thank the right hon. Gentleman for raising the matter, for sending me a letter, and for what he said on the point of order. I shall, of course, look carefully into the matter and rule on it tomorrow.

SCOTTISH AFFAIRS
Ordered,
That the matter of the development of the proposals for Scotland in the Green Paper on "Paying for Local Government", being a matter relating exclusively to Scotland, be referred to the Scottish Grand Committee for its consideration.—[Mr. Archie Hamilton.]

STATUTORY INSTRUMENTS, &c.
Ordered,
That the Metropolitan Roads Trunking Order 1986 (S.I., 1986, No. 153) be referred to a Standing Committee on Statutory Instruments, &c.—[Mr. Archie Hamilton.]

Right to Interest
4.17 pm
Mr. Richard Ottaway: I beg to move,
That leave be given to bring in a Bill to establish a legally enforceable right to interest on late payment of debts.
I repeatedly hear cries from Nottingham business men who say, "We have never had a better year for turnover, but we are still in danger of going broke," or, "If all our bills were paid, we would be millionaires, but we cannot recover the sums due." How many times have we heard those cries in industry today, especially in the smaller companies where cash flow represents one of the biggest problems? In a recent survey carried out by the Nottinghamshire chamber of commerce, firms were asked to name four factors which most limited their business prospects. After interest rates, the second on their list was cash flow.
Getting paid has always been a problem, but as money has got tighter in recent years it has become harder still. Any company which has survived the recession is reporting increased orders and a new wave of confidence, but the problems of getting paid are becoming worse. Long delays in payment are being experienced and the worst offenders seem to be large companies, which are making large sums from their capital reserves and which, because of their industrial muscle, can delay payment to smaller companies, which rely upon them for their business.
A classic example is a photographer who complained about advertising agencies for which he worked and which use excuses such as, "There is no sign of the invoice", or, "We cannot get at that invoice until the end of the month because it is in the computer." When it was in the filing cabinet, they got it within minutes. Loth as I am to tell tales against my party's advertising agency, I must say that he complained that, in his view, the main offender was the advertising agency Saatchi and Saatchi which, at the very earliest, only paid him some four months after the job.
The proposal enshrined in the Bill is that, no matter how long it takes to get paid, the party who has been out of pocket will be entitled to sue for interest. Incredibly there is at present no right to sue for interest on the late payment of a debt. A person can sue for interest if he commences proceedings before he is paid, but that means that the only way to be sure of receiving interest is to issue a writ with every invoice. That is hardly likely to lubricate the wheels of industry.
The Bill would give anyone a legally enforceable right to interest. That means that the right would not be confined just to business men but would apply to anyone who is owed money by, say, a Government Department. However, I am pleased to report that Government Departments and local authorities are, by and large, quite prompt about paying their debts. Critics of the proposal may suggest that it would be hard to define when the right to interest arose—a certain amount of leeway must be given to make a payment. I quite agree, and the proposal is that the right to interest arises 30 days after notice has been given of the intention to enforce the right. Enforcing the right would be easy, utilising the facilities of the county court, which has a jurisdiction of up to £5,000.
It may be said against the Bill that it is impinging upon a relationship between two contracting parties who could make a contractual relationship for interest if they so

37
wished. As someone who is most concerned about individual rights, and about the rights of the individual rather than the collective, that is a criticism which I have considered carefully and rejected. The object of the Bill is to protect the small man against oppression from the large company. It is interesting to note that in a CBI survey only 19 per cent. said that they included a provision for interest in their contractual terms.
Why has there not been such a right to date? As long ago as 1978, the Law Commission, in its report on interest, concluded that the existing law did not provide adequate means of redress for the creditor who is kept out of his money by his debtor, and recommended that
"the introduction of statutory interest is appropriate and necessary".
We are very much the odd man out in Europe. Only Ireland and the United Kingdom, with the exception of Scotland, do not have laws entitling creditors to interest on the withholding of a debt. In certain instances even Scottish law provides a right. There is even a precedent in English law in that the little used Uniform Laws on International Sales Act 1967 gives an entitlement to interest where the buyer delays payment in breach of contract. But that is not a general right.
It has been argued that a voluntary code is sufficient, but, although I would welcome a voluntary code, I cannot accept that it alone would be sufficient. Payment of interest, on a voluntary basis, has not worked during the past few hundred years, and I see no reason why it should work now. It is vital to put some statutory teeth into combating this problem.
It is said that industry does not want the measure, but that simply is not true. Since starting my campaign to introduce a right of interest I have received substantial support. I have the support of the Nottinghamshire chamber of commerce, the Institute of Directors and the small firms council of the CBI. The full council of the CBI is actively considering the proposal and I hope that it will shortly be giving its support to it. The CBI recently carried out a survey on the late payment of trade debt among small firms. Among the questions asked was
"If there was a right to interest do you think you would ever use it?"
Of those asked, 44 per cent. said yes, which included a yes answer from 67 per cent. of the construction industry. But more interesting still is the fact that when asked
"If you were automatically entitled, by law, to interest on any debts paid late, do you think your customers would pay more promptly?"
a staggering 85 per cent. answered yes.
To me, that shows that the mere existence of a right to interest would result in the faster payment of bills without the need to refer to the courts. That must be an utterly desirable objective, and I commend the Bill to the House.
Question put and agreed to.
Bill ordered to be brought in by Mr. Richard Ottaway, Mr. Patrick Nicholls, Mr. Andrew Rowe, Mr. Michael Grylls, Mr. Michael Fallon, Mr. Michael Forsyth and Mr. Michael Knowles.

Right to Interest
  RIGHT TO INTEREST
  Mr. Richard Ottaway accordingly presented a Bill to establish a legally enforceable right to interest on late payment of debts: And the same was read the First time; and ordered to be read a Second time upon 9 May and to be printed. [Bill 127.]
Orders of the Day

  Dockyard Services Bill
  As amended (in the Standing Committee), considered.
  4.25 pm
  Mr. D. N. Campbell-Savours: On a point of order, Mr. Speaker. You may recall that before the Easter recess I raised a point of order about the Bill being read today, prior to the Public Accounts Committee being able to produce its report on the control of dockyards, their operation and manpower. On Monday 10 March 1986, the PAC took evidence in relation to such matters, and in both public and private sessions matters were raised—certainly in private session—that would affect the tabling of amendments and their potential selection.
  Is it not unreasonable of the Government to insist on the Report stage and Third Reading of the Bill today in the knowledge that the PAC report has not been published? Does that not represent an interference with our proceedings, and is there not an argument for suggesting that proceedings on the Bill should be suspended pending the report's publication, so as to ensure the widest and most informed debate possible?
  Mr. Speaker: The hon. Gentleman knows that I am not responsible for Bills that are brought forward by the Government. I had no difficulty in selecting amendments which were submitted and which appear on the Amendment Paper.
  Mr. Martin J. O'Neill: Further to that point of order, Mr. Speaker. On 11 February Standing Committee D discussed the Bill and the Minister of State said:
  "We have made it clear that a draft of the contract with the private contractor will be made available to the House. Many of the draft contract conditions, the 73 annexes for example, will be set out in the invitation to tender documents, of which we will make as much as possible available."—[Official Report, Standing Committee D, 11 February 1986; c. 489.]
  The documents were placed in the Library at 3 pm today. They are extensive, and it could be suggested that the three and a half hours that it took for them to be delivered from the Ministry of Defence was due to the fact that the clerk could not carry them more quickly. The information would have been extremely helpful to those participating in the debate. Although the Minister has been as good as his word, he has not carried out the spirit of his remarks. Will you consider that point, Mr. Speaker?
  Dr. David Owen: Further to that point of order, Mr. Speaker. I have just been to the Library and have examined the documents. As has been said, they are compendious. There are three volumes, which are seven or eight inches thick. There is also an extraordinarily interesting document which is relevant to this debate. I refer to the report of Fuller Peiser, on the scheduling and valuation of assets; the stage one report on Devonport dockyard, and volume two.
  We are dealing with this whole question today. Are you prepared, Mr. Speaker, to urge the Government to postpone the Report stage and Third Reading? It is intolerable that we should suddenly receive such

  39
  information at this late hour. Will you do your best to change the business of the House to allow these important documents to be studied and examined?
  Mr. Speaker: Those are matters for the Leader of the House. I think that we must now proceed.

New Clause 1

  REPORT ON COSTS AND SAVINGS ARISING FROM PROVISION OF DOCKYARD SERVICES
  'The Secretary of State shall set out and itemise in a report to be laid before each House of Parliament all the costs and savings in excess of £100 incurred by and owing to the Exchequer from any arrangements made in consequence thereof for the provision of designated dockyard services by any company or companies'.—[Mr. Denzil Davies.]
  Brought up, and read the First Time.
  Mr. Denzil Davies: I beg to move, That the clause be read a Second time.
  My hon. Friend the Member for Workington (Mr. Campbell-Savours) raised an important point of order and rightly said that the Bill's Third Reading should not be debated until we have received the report of the Public Accounts Committee, which inquired into costs. We quite understand why the Government are concerned not to have to say too much about the costs and possible savings that will result from the Bill.
  4.30 pm
  In the 24th sitting of Standing Committee D on 13 March the Under-Secretary made an extraordinary statement which is germane to the point of order raised by my hon. Friend the Member for Workington:
  "The Government's plans are about more than profit and loss. I shall not follow the right hon. Member for Llanelli (Mr. Davies) down the path that he took on costings. It is not relevant to the Bill."
  I should have thought that costings were germane and basic to the Bill. The cost to taxpayers should be part of the whole investigatory function of the House. The Under-Secretary also said:
  "the House will be able to debate on Third Reading the policy issues, including questions of costings on which the Public Accounts Committee may by then have reported."—[Official Report, Standing Committee D, 13 March 1986; c. 777.]
  Of course the Public Accounts Committee has not reported. As my hon. Friend said, we would have been in a much better position to debate the Bill if we had had the report of the Public Accounts Committee.
  I understand why the Minister of State and the Government Whips want the Bill to proceed. Costings are very embarrassing for the Government. The Minister of State may deny this, but it seems to be clear that there will be no savings to the Ministry of Defence. As we have said from Second Reading onwards, this ill-considered and highly speculative Bill will cost the Ministry of Defence and the defence budget money. Therefore, I can understand why the Government are happy that the Bill should be debated today before the publication of the Public Accounts Committee's detailed report.
  Mr. Campbell-Savours: Having seen all the documents, may I point out to my right hon. Friend that it is impossible for the House to consider the Bill unless hon. Members see the figures that were presented to the Public Accounts Committee?
  Mr. Davies: My hon. Friend has seen the figures and I have not. We shall have to do the best we can with the various statements from Ministers. Indeed, last week a civil servant in the Ministry of Defence held a fairly late press conference, no doubt hoping that the press would not pick up some of the things he said. That civil servant made it clear that there would not be any saving and that the budget of the Ministry of Defence would suffer because of the Bill.
  Mr. Dick Douglas: On a point of order, Mr. Deputy Speaker. I apologise for raising the matter in the House but I have just been to the Library and I have here the only documents that are available to the House. These are the articles of association of the companies which the Government propose to set up under the Bill. I have here the only copies that are available to the Library. I have also got copies of the document which was referred to by the right hon. Member for Plymouth, Devonport (Dr. Owen). These, too, are the only copies that are available to the Library.
  While I respect the difficulty you are in, Mr. Deputy Speaker, I do not think it was right that the documents should have been presented at the end of a recess. If they had been available at the beginning of the recess hon. Members would have had the opportunity to discuss them and to put down amendments. Opposition Members pressed time and time again in Committee for the articles of association and other documents to be made available. For the documents to be placed in the Library at this late hour is an abuse of the Government's position and shows arrogance on their part. They had plenty of time to make the documents available sooner.
  I am in training for the London marathon but not for lifting these documents. I can hardly carry them. As I have said, these are the only copies available. I urge you, Mr. Deputy Speaker, to consider the matter with the Clerks and perhaps to ask for a business statement from the Leader of the House on the suspension of the sitting so that hon. Members may have an opportunity to examine these documents.
  Mr. Deputy Speaker (Mr. Ernest Armstrong): I can only reiterate what Mr. Speaker has said. That is a matter of complaint against the Government; it is not a matter for me in the Chair.
  Mr. Davies: The points made by my hon. Friend are again indicative of how ill-thought out, how ill-considered and how ill-prepared the Bill is.
  Mr. Michael Foot: Further to the point of order, Mr. Deputy Speaker. A most serious point has been made by my hon. Friend the Member for Workington (Mr. Campbell-Savours) and others. Can we not have a statement from the Government? I fully understand that it is not in your power to change the proceedings that have been put down, but it is certainly within the power of the Minister who is supposedly in charge of the Bill to get up and make a statement. He could be asked to make a statement and to give some explanation. If he cannot give an explanation to the House, it is utterly intolerable that the Bill should proceed in these circumstances. I urge that an opportunity be given to a spokesman for the Government to make a statement about the complaints.
  Mr. Campbell-Savours: Further to that point of order, Mr. Deputy Speaker. I am sorry to press the matter but my

  41
  right hon. Friend the Member for Blaenau Gwent (Mr. Foot) has raised a point in addition to the points that were raised earlier by my hon. Friends. My hon. Friend the Member for Dunfermline, West (Mr. Douglas) brought documents to the Chamber after Mr. Speaker had given his former ruling. This was new evidence in support of the case for the suspension of the sitting. In the light of the new information, Mr. Deputy Speaker, I wonder whether you would suspend the sitting for 15 minutes to examine whether there has been an abuse of our proceedings in so far as it is unreasonable and unfair to place a responsibility on hon. Members to consume all the information that is available in those documents prior to being able to debate the Bill responsibly.
  Mr. Deputy Speaker: I have listened carefully and understand the concern of hon. Members, but this is not a matter for me. The complaint is against the Government. I have no doubt that the Minister has heard it and will reply in due course.
  Mr. Denzil Davies: Further to that point of order, Mr. Deputy Speaker. The Minister of State owes the House at least an explanation why these important tender documents—I understand that we have not got the articles of association—arrived in the Library only a short time ago. It is extremely difficult for hon. Members to consider them. As well, we have not got the report of the Public Accounts Committee. I appreciate that Ministers did not give an assurance on that, but it is difficult for us to debate the new clauses without the PAC report, without having had time to consider the documents that are now available and without the articles of association which are germane to new clause 2. In view of the time the Government had to prepare the Bill, the time it was in Committee and the fact that there was the Easter Adjournment, we should expect a statement from the Minister of State at least as to why it has taken so long to make the documents available in the Library.
  The Minister of State for Defence Procurement (Mr. Norman Lamont): If I may intervene, I must point out that documents were made available on 3 April only to the companies interested in tendering. This has been the first opportunity since then when the documents could be made available to the House. The choice of business for the first day was discussed through the usual channels. The documents could not have been made available to the House before today. Of course, I accept that the right hon. Gentleman is making a serious point, but we are discussing the principles of the Bill. I appreciate that he would have liked to have had the documents earlier but there is no way in which they could have been made available to the House sooner.
  Mr. Davies: That really will not do. It is all very well for the Minister of State to say that the companies had the documents only on 3 April and so this was the first opportunity on which they could be made available to the House. The Government could have postponed today's consideration of the Bill. It is no good saying that the Government's business managers brought the Bill on today. The Ministry of Defence is in charge of the Bill. The Minister of State could have said to the Government's business managers, "We cannot have this Bill on Tuesday because on Tuesday I shall be delivering in a pantechnicon or whatever these enormous documents to the Library of
  42
  the House and I want to make sure that hon. Members have time to read the documents before the debate takes place." The primary responsibility for putting the Bill through the House lies with the hon. Gentleman. It is no good the hon. Gentleman trying to hide behind the Government's business managers. He should have said, "Postpone the Bill for a week," and that would have happened.
  Dr. Owen: Further to the point of order, Mr. Deputy Speaker. There may be some misunderstanding because the documents which I have relate only to Devonport, and there is only one copy. The copies that the right hon. Member for Llanelli (Mr. Davies) referred to relate to Rosyth. We are discussing both dockyards, in which we have a considerable interest, and the only documents available are the contractual tenders. When the Minister of State and, more important, the Secretary of State reflect on this, they must realise that we are in an intolerable position because new clause 1 relates to financial assets and costs and the Government's judgments about the effects and consequences for the defence budget.
  We could help the Minister out. We are reasonable people. If we could have a suspension of an hour or two, the business of the House would be expedited. The danger in the Government not giving way is that we may have to resort to the traditional weapon available to all Oppositions. We have been most reluctant to use that weapon as none of us wishes to filibuster.
  Mr. Gordon Brown: Further to that point of order, Mr. Deputy Speaker. Are you aware that the Minister of State's statement does not fully accord with the facts available to me? He has given us the impression that these documents were put in the Library on the earliest possible occasion. When I telephoned the Ministry of Defence this morning to ask that these documents be made available immediately, I was told that it was under instructions not to place them in the Library until 2.30 this afternoon. When I went to the Library at 2.30 pm, the documents had not arrived and I had to remind the Ministry about them. The documents arrived at 3 pm, so the Minister of State's statement that he did everything possible to make them available at the earliest opportunity does not accord with the timetable of events that has led to this sorry state of affairs this afternoon.
  The Minister of State was asked specifically in a written question before Easter to delineate the costs involved in the Government's dockyards privatisation scheme. He replied that he would write to me as soon as possible. We are now debating new clause 1, but there has been no reply. The Leader of the House should come to the House to make a statement about why official business has been affected by the Ministry of Defence's reluctance to bring vital documents to the House.
  Mr. Douglas: Further to the point of order, Mr. Deputy Speaker. I must apologise to the House because, in my eagerness, I brought not the articles of association, but the tender documents. To the best of my knowledge, we do not have the articles of association of these companies. Nevertheless, it is very clear to all who have eyes to see and ears to hear that we are most disturbed at the method and approach adopted by the Government.
  4.45 pm
  I suggest, Mr. Deputy Speaker, that you consider whether it is in order to suspend the sitting until the Leader

  43
  of the House is available to make a statement on the business of the House and to decide whether we should proceed, in view of the difficulties in which we have been placed by the Government's mismanagement.
  Mr. Tam Dalyell: Further to that point of order, Mr. Deputy Speaker. You may recollect that this is not the first occasion in this Session when Ministers have engaged in such parliamentary hanky-panky. You will recall that, during the debates on the Westland affair, the text of the Solicitor-General's letter was promised by the Leader of the House. When we went to the Library, we found that it was there, but under embargo on the orders of a higher authority—which later turned out to be 10 Downing street—that it should not be released.
  Some of us believe that the heart of the Leader of the House is often in the right place. He said that the full text of the Solicitor-General's letter, and not the selective text leaked for political purposes, should be made available before the debate on Westland. Should we not wait, Mr. Deputy Speaker, until the arrival of the Leader of the House, who has previously proved himself to be relatively enlightened and has put the House of Commons before party political interests?
  Mr. Foot: Further to that point of order, Mr. Deputy Speaker. The Secretary of State for Defence has now arrived and he will have heard the strong sense of dismay that has been expressed in many parts of the House on this matter. He must recognise that he has a responsibility. It is open to him to move that the sitting be suspended for 10 minutes, or to get agreement to that. I am not suggesting that that would solve the problem, as the House has a right to study the documents.
  The Government's statement has only made matters worse. It would be intolerable if the House were asked to discuss the Bill when there is confusion about the availability of documents and the form in which they have been presented. I urge the Minister to communicate with the Leader of the House. The proceedings here are his responsibility. The Secretary of State for Defence also has a responsibility, and he should announce that he will send at once for the Leader of the House to come to the House's aid to get our business in proper order.
  Mr. Deputy Speaker: Perhaps I can help the House. I have listened carefully to the strong representations that have been made on the point of order, but the complaint is against the Government and not a matter for the Chair. I see no reason why we should not pursue our discussion of new clause 1. The Secretary of State and others have heard the point of order. It is for the House to decide how it will get the information that it requires. It is not a matter for me.
  Mr. O'Neill: Further to the point of order, Mr. Deputy Speaker. I think that, with respect, you are not in full possession of the facts. The volumes are the Ministry of Defence royal dockyards invitation to tender for the operation and management of Her Majesty's dockyards at Devonport and Rosyth. We have so far skated around the nature of the documents. If we are to be in any position to consider the Bill, we have to have an opportunity to reflect on those documents.
  The two substantial documents beside me relate only to Rosyth dockyard. I think that the right hon. Member for
  44
  Plymouth, Devonport (Dr. Owen) would not regard it as disrespectful of me to say that he filched the documents relating to Devonport from the Library without the permission of the Librarian. The dockyard is in his constituency, but we were not allowed to take the documents out of the Library. My hon. Friend the Member for Dunfermline, West (Mr. Douglas) requested and was subsequently granted the loan of the Rosyth documents.
  We are discussing three substantial volumes, one of which is complex, to say the least. Its contents are set out in indexes which run to some four pages. The information might seem somewhat arcane to the hon. Member for Wells (Mr. Heathcoat-Amory) who participated virtually not at all in Committee, but some of us became students of the publications of Touche Ross, albeit only those which were made freely available. Some were not made available in Committee as there was a cloak of secrecy masquerading as commercial confidentiality which prevented our seeing the documents.
  We could get through this pile of memorandums fairly quickly, as most of us know our way around the dockyards, having spent some 70 hours debating them in Committee. That is all the more reason to be given a reasonable amount of time to consider the documents.
  This is not an attempt at filibustering. We are anxious to make progress. However, the Government's managers should appreciate the difficulties under which not only Opposition Members but Conservative Back Benchers will labour today unless there is an adjournment during which we can look at these documents. I admit that that will be very difficult, because there is only one copy. However, if we could have a 30-minute adjournment it could be split up between those Opposition Members who served on the Standing Committee and looked at very carefully.
  Surely there is a mechanism whereby the Leader of the House, the Government's business manager, can be summoned to the Chamber to explain why the Government have allowed the Ministry to deal with hon. Members in such a disrespectful manner. There ought to be a mechanism whereby the rights and responsibilities of the Government can be questioned in this Chamber. You as our protector, Mr. Deputy Speaker, should be able to bring the Leader of the House to the Chamber and ask him to provide an explanation for an action that is leaving an extremely sour taste in the mouths of, I think, all hon. Members, certainly in those of Opposition Members.
  Mr. Deputy Speaker: Let me remind the House that all that is happening at the moment is that new clause 1, which was tabled by the Opposition, is being proposed. I see no reason at all why we should not continue to discuss new clause 1. If the usual channels, or any other hon. Members, want to make representations to each other, that is another matter, but it is not a matter for me. I see no reason why we should not continue to discuss new clause 1.
  Mr. Dalyell: Further to that point of order, Mr. Deputy Speaker. I am wondering whether this is symptomatic of the difficulties that the Leader of the House may have with the Ministry of Defence. It will be within your recollection that on 25 March, at column 865, I raised in detail and at some length the case of Mr. Jim Smith, a whistle blower at the Ministry of Defence—
  Mr. Deputy Speaker: Order—
  Mr. Dalyell: —on which my hon. Friend the Member for (Workington) (Mr. Campbell-Savours) has done so much work.
  Mr. Deputy Speaker: Order. I am on my feet. I do not see the relevance of that point of order.
  Mr. Dalyell: The relevance of that point of order is to be found in column 879 when the Leader of the House said:
  "I shall look at the points made by the hon. Member for Linlithgow about Jim Smith and shall get in touch with my right hon. Friend the Secretary of State for Defence. I understand the analogy the hon. Gentleman drew with the pit prop case in the 1960s and 1970s."
  I then asked him:
  "Will the right hon. Gentleman raise James Smith's case with the Treasury?"
  The Leader of the House said:
  "Yes, certainly."—[Official Report, 25 March 1986; Vol. 94, c. 879.]
  Since then I have heard nothing. I am wondering whether the Leader of the House stands in too much awe of the Ministry of Defence. These are matters on which he ought to be in a position to tell the Ministry, whatever the pecking order may be, what it ought to be doing.
  Mr. Deputy Speaker: Order. I am even more convinced now that the hon. Gentleman's contribution is not relevant to the discussion of new clause 1.
  Mr. John McWilliam: Further to that point of order, Mr. Deputy Speaker. As you rightly said, the fixing of the business of this House is a matter for the Leader of the House, but that is not what we are discussing. We are discussing documents that have been laid in the Library of this House. The assumption is that those documents are available to all hon. Members. Since the only copy is lying down there at the Dispatch Box, it is patently not the case that all hon. Members had an opportunity to see the documents before this debate began. Ministers have seen those documents and copies have been laid in the Library, but my hon. Friends and I have not yet had an opportunity to see them. The contents of those documents are germane to the debate.
  My hon. Friend the Member for Clackmannan (Mr. O'Neill) raised a point that is germane to new clause 1. We are asking that the House should be adjourned for 15 minutes so that the advice of the Leader of the House can be sought about how to proceed. I do not know how we can continue with this debate since we have been unable to consider properly the information that is contained in those documents. It will be impossible to consider the amendments without having had an opportunity to study them. The Minister chose to lay those documents in the Library. It was his choice. If he had chosen not to do so it might have been possible to continue with this debate. However, as he chose to lay those documents in the Library he will undoubtedly say that the information is there, although we have had no opportunity to study it. Therefore, both sides of the House are being put in an unfair position.
  I agree that it is the duty of the Leader of the House to fix the business of the House but it is for the Chair to determine whether a debate can properly and fairly take place. Information has been made available and placed in the Library of the House and all hon. Members must, in justice, be given an opportunity to study it, otherwise the matter cannot properly be debated.
  Mr. Deputy Speaker: I have listened carefully to that lengthy point of order. It merely reiterates what has already been said. The complaint is against the Government. I have said already on four or five occasions that it is not a matter for me.
  Mr. Douglas: Further to that point of order, Mr. Speaker. I have great respect for your views and constitutional knowledge and for the guidance that we receive but, with great respect, you keep reiterating that the complaint is against the Government and that it is not a matter for you. However, I ask you to reflect upon the need to defend the rights of hon. Members. We are discussing the Report stage, and we will presumably also debate the Third Reading of a four clause Bill. It is an enabling Bill. In order to put flesh upon it, the Government, in their wisdom, or otherwise, have provided information to the House regarding their intentions.
  During the Committee stage, the Government produced a large number of documents, to some of which hon. Members have access, including volume 1 of the Touche Ross report. There was also access, on a restricted basis, to volumes 2 and 3. The documents that were placed in the Library today are either important or unimportant. The Government thought that they were so important that they placed them in the Library. In order to protect the interests of the House, hon. Members are entitled to ask for your support, Mr. Deputy Speaker, in seeking an opportunity to examine the documents.
  The Bill was amended in Standing Committee D. It says:
  "Ordered, by the House of Commons, to be Printed, 18 March 1986."
  It also says:
  "Presented by Mr. Secretary Heseltine …Mr. Secretary Brittan."
  Neither of them now holds office. This point ought, perhaps, to have caught my eye earlier, but I ask you now to pronounce on the authenticity of the document and to say whether it is in order that the names of the right hon. Member for Henley (Mr. Heseltine) and the right hon. and learned Member for Richmond, Yorks (Mr. Brittan) should appear on the face of the Bill as presenting it for Report and Third Reading since they no longer hole the positions set out on the face of the Bill. Therefore, the Bill that is now before the House is not in my view accurate.
  5 pm
  Mr. Deputy Speaker: As far as the presentation is concerned, as the hon. Member knows, the names mentioned were those of the Ministers who presented the Bill in the first place. I understand the concern but, if we are talking about protecting Members, and so on, it is in their best interests to allow the right hon. Member for Llanelli (Mr. Davies) to propose the new clause. The exchanges have been heared and I have no doubt that, according to custom, all sorts of other exchanges will take place. I see no reason at all why we should not get on with new clause 1, which has been tabled by the Opposition and which the hon. Member wants to propose.
  Mr. Campbell-Savours: On a point of order, Mr. Deputy Speaker. You say that you "can see no reason at all". Perhaps I could give you the reason why, in my view, the Bill cannot possibly proceed.
  My hon. Friend the Member for Dunfermline, West (Mr. Douglas) made an important point. He said that he

  47
  had contacted the Ministry of Defence this morning about documents which were to be placed in the Library and had been informed that those documents would not be available, to use his words, until early this afternoon. The Minister states that he had them made available at the earliest possible opportunity. There is a contradiction there, unless the Minister can explain to the House that there was a reason why those documents, which were published and which we can see here, were not made available this morning when my hon. Friend sought them.
  Mr. Deputy Speaker: Order. I may join in deploring conduct, and so on, but what the Minister said or did not say is not for me. It is not a matter for me as far as the proceedings this afternoon are concerned.
  Mr. Campbell-Savours: Further to my point of order, I would say that indeed it is a matter for the Chair in so far as the Minister has indicated to the House what his intention was because his actions do not fit his intentions. Yet his actions have a direct bearing on the ability of Members to debate this matter.
  Further to that, Mr. Deputy Speaker, may I refer you to the undertaking given by the Minister in Standing Committee D on 13 March. He said:
  "The Government's plans are about more than profit and loss. I shall not follow the right hon. Member for Llanelli (Mr. Davies) down the path that he took on costings."
  The crucial word is "costings", because we have a whole series of amendments which deal, as I understand it, with that matter. The Minister went on:
  "It is not relevant to the Bill. But, as I said last Tuesday, the House will be able to debate on Third Reading the policy issues, including questions of costings".
  Then he said, as an addendum to his statement,
  "on which the Public Accounts Committee may by then have reported."—[Official Report, Standing Committee D, 13 March 1986; c. 777.]
  It was clear at that stage: during the course of the Committee's proceedings that the Minister's way of dealing with the amendments was to draw attention to the fact that when those matters were to be debated on the Floor of the House there would be information available to Members of the House. That information is not available. In other words, the Minister effectively misled the Committee into believing that information would be made available. He may shake his head, but the record is there in Hansard. It is very clear from what he said that he intended that information on the question of costings to be made available to the House. It is not available, and it is on that basis—
  Mr. Deputy Speaker: The hon. Member may feel that the Minister has not honoured certain undertakings, but that is a matter for debate; it is not a matter for me. I really think that we ought to get on and proceed with new clause 1.
  Mr. Denzil Davies: Further to that point of order, Mr. Deputy Speaker. My hon. Friend the Member for Dunfermline, West (Mr. Douglas) made a very important point when he said that he was told by an official at the Ministry of Defence that he could not see the documents until 2.30 this afternoon. In view of that statement, we need to be told by the Minister of State whether that was indeed the case.
  Mr. Deputy Speaker: That is a matter for the Minister of State; it is not a matter for me.
  Mr. Davies: But it does affect the conduct of this debate because we are raising points of order that relate to documents that really should have been made available to the House before now. This is a four-clause Bill. It is a piece of enabling legislation. Most of the legislation—if I can use that word—takes place outside the Bill. It takes place in contracts, articles of association, invitations to tender, reports made by management consultants such as Touche Ross. It takes place in reports that we were not allowed to see in the Committee, that even hon. Members for constituencies where the dockyards are located, Rosyth and Plymouth, Devonport, were not allowed to see. This is an unusual Bill in that it does not contain much of the information that is needed to debate the Bill.
  New clause 1 deals with costings, new clause 2 deals with foreign ownership, new clause 3 deals with redundancy payments. Many of these matters are dealt with in these very documents. The document about the scheduling and valuation of assets is crucial to new clause 1. It is not possible to determine whether there will eventually be profit or loss until we know what the value of the assets is. New clause 1 calls for a balance sheet, a report before the House of Commons. Without some kind of indication from the Government this is not possible.
  The business of the House was determined in respect of this Bill before the Easter vacation. The agreements were made then. There was plenty of time from the beginning of the vacation to last week for these documents to be placed in the Library of the House. So I think that the Minister should tell us whether there was a policy decision that these documents were commercially confidential and could not be allowed into the Library of the House before the last minute, that they must be treated like quasi-secret budget documents. That is the issue at stake.
  This Bill is open-ended. There is no guillotine on it. There was no guillotine in Committee. Therefore, it is quite possible for this debate to continue for most of today and, indeed, into tomorrow. There is no pressure of time.
  What we are asking is that consideration be given to allowing an adjournment to enable us to look at these documents—documents which appeared in the Library of the House only 30 minutes before this debate was scheduled to take place. This would give us an opportunity to study them and see how germane they are to the new clauses we are debating. Then perhaps we could come back and start debating those clauses. We are merely asking for time to enable us to debate these new clauses properly.
  Mr. Foot: Further to the points of order that have been put to you, Mr. Deputy Speaker. I certainly appreciate, as I think every Member of the House appreciates, the difficulty in which you are placed because you are asked to deal with a matter that is primarily a question for the Government.
  This is an extraordinary state of affairs. We have had one short intervention from the Government when these points of order were being raised on matters concerning the proper conduct of this debate. We now have an unprecedented state of affairs. The Secretary of State in charge of the Bill looked in for a few minutes, but then he skedaddled; he seems to have gone off. He is not taking

  49
  any responsibility although his name is certainly on the back of the Bill, whatever names have been removed. For the Secretary of State for Defence to look in for a few minutes, see that there is some trouble over a Bill for which he is primarily responsible and then run away is, I think, appalling.
  We also had for a minute or so the presence of the Patronage Secretary. He should know what the situation is.
  It is intolerable that the Government should think that they can continue with this Bill without the Leader of the House being brought here to say how we are to proceed upon it. For the very reason that you have underlined, Mr. Deputy Speaker, that you are put in such difficulties in the matter, I think it behoves the Minister himself to make a fresh statement. Surely he must understand that the Bill cannot properly be discussed in the circumstances in which he has presented it to the House of Commons. It is to him and to the Government that our main demands are made. We believe that the Government should take the procedural step of asking for an adjournment of the House. If that happened, matters could proceed in an orderly fashion.
  Dr. Owen: Further to that point of order, Mr. Deputy Speaker. In the time that has elapsed during this discussion, it has become clear that the draft memorandum and articles of association of the dockyard company have been submitted to the House through annexe 4.1 to this document. Therefore, the third crucial document is available, although only in draft form, in an annexe to the tendering documents. That is a further argument on which the Government should reflect.
  It is extraordinarily difficult to discuss the Bill and the corporate structure of the dockyards without having considered the articles of association which in Committee the Minister made clear he hoped to publish. The draft documents are now available, although I have not yet been able to get hold of the annexe in the time available to me. I assure the House that they were not filched, but given with the full authorisation of the lady librarian to me in my capacity as a constituency Member in order to carry out what we hope will he a serious examination of the legislation.
  As the right hon. Member for Blaenau Gwent (Mr. Foot) said, you are in an extremely difficult position, Mr. Deputy Speaker. Everyone is aware that this is not a decision for you, and that we are having to use this procedural device to draw attention to the Government's problem. It would help us greatly if the Minister or the Parliamentary Under-Secretary of State would come to the Dispatch Box and explain how we should proceed.
  The right hon. Member for Llanelli (Mr. Davies) made it clear that he conducted the business in Committee, ably assisted by my hon. Friend the Member for Portsmouth, South (Mr. Hancock), through consent. There were no problems and there was no timetabling. We are not in a mood to create difficulties for the Government. If they wish to reintroduce the matter on another day, the business of the House can be proceeded with on an arranged basis. I am a little sceptical about a short adjournment because the more we look at the documents, the longer we shall need to consider them. Business could be arranged through the usual channels. I understand that there is an order on general practice expenses to be debated after this matter,
  50
  and the House could well examine it. It is not as if all the Government's business would fall if this business were withdrawn.
  In that spirit, we should like the Minister to answer. You, Mr. Deputy Speaker, have valiantly sought to direct the attention to the Government, but, as yet, the Minister has not felt able to come to the Dispatch Box, apart from his rather short interjection. If the Minister will explain how he intends to proceed, I am sure that we would all be grateful. We should like to hear how he anticipates proceeding. Otherwise, this will take rather a long time.
  Mr. Deputy Speaker: I am sure that an adjournment of 15 or 20 minutes would satisfy nobody. I have listened carefully and we have had a long time for substantial representations to be made. They have been made strongly, and a period of reflection has undoubtedly been made available to Government Members. I do not wish to take any further points of order on this matter. I have heard all that I want to hear. I am sure that we should proceed with new clause 1, and then we shall hear the Minister's reply.
  Mr. Campbell-Savours: I beg to move, That strangers do withdraw.
  Notice being taken that strangers were present, MR. DEPUTY SPEAKER, pursuant to Standing Order No. 136 (Withdrawal of strangers from House), put forthwith the Question, That strangers do withdraw:—
  The House divided: Ayes 110, Noes 259.

  Division No. 118]

  [5.14 pm

  AYES

  Adams, Allen (Paisley N)

  Fields, T. (L'pool Broad Gn)

  Archer, Rt Hon Peter

  Fisher, Mark

  Ashley, Rt Hon Jack

  Foot, Rt Hon Michael

  Banks, Tony (Newham NW)

  Forrester, John

  Barnett, Guy

  Foster, Derek

  Barron, Kevin

  Foulkes, George

  Beckett, Mrs Margaret

  Fraser, J. (Norwood)

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

  Gilbert, Rt Hon Dr John

  Bidwell, Sydney

  Gourlay, Harry

  Blair, Anthony

  Hamilton, James (M'well N)

  Boothroyd, Miss Betty

  Hamilton, W. W. (Fife Central)

  Boyes, Roland

  Harman, Ms Harriet

  Brown, Gordon (D'f'mline E)

  Hattersley, Rt Hon Roy

  Brown, Hugh D. (Provan)

  Haynes, Frank

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

  Home Robertson, John

  Brown, Ron (E'burgh, Leith)

  Hughes, Dr Mark (Durham)

  Buchan, Norman

  Hughes, Robert (Aberdeen N)

  Caborn, Richard

  Hughes, Roy (Newport East)

  Callaghan, Jim (Heyw'd & M)

  Hughes, Sean (Knowsley S)

  Campbell-Savours, Dale

  John, Brynmor

  Clark, Dr David (S Shields)

  Kaufman, Rt Hon Gerald

  Clarke, Thomas

  Lambie, David

  Clay, Robert

  Leighton, Ronald

  Clelland, David Gordon

  Litherland, Robert

  Cocks, Rt Hon M. (Bristol S)

  McKay, Allen (Penistone)

  Cook, Frank (Stockton North)

  McTaggart, Robert

  Corbett, Robin

  McWilliam, John

  Craigen, J. M.

  Madden, Max

  Cunliffe, Lawrence

  Marek, Dr John

  Dalyell, Tam

  Martin, Michael

  Davies, Rt Hon Denzil (L'lli)

  Mason, Rt Hon Roy

  Davies, Ronald (Caerphilly)

  Maxton, John

  Deakins, Eric

  Maynard, Miss Joan

  Dixon, Donald

  Michie, William

  Eadie, Alex

  Mikardo, Ian

  Eastham, Ken

  Miller, Dr M. S. (E Kilbride)

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

  Morris, Rt Hon A. (W'shawe)

  Ewing, Harry

  O'Neill, Martin

  Fatchett, Derek

  Orme, Rt Hon Stanley

  Faulds, Andrew

  Park, George

  Field, Frank (Birkenhead)

  Patchett, Terry

  51

  Pavitt, Laurie

  Strang, Gavin

  Pendry, Tom

  Thomas, Dr R. (Carmarthen)

  Pike, Peter

  Thompson, J. (Wansbeck)

  Powell, Raymond (Ogmore)

  Thorne, Stan (Preston)

  Redmond, Martin

  Torney, Tom

  Rees, Rt Hon M. (Leeds S)

  Wardell, Gareth (Gower)

  Rogers, Allan

  Wareing, Robert

  Sheerman, Barry

  Weetch, Ken

  Sheldon, Rt Hon R.

  Wigley, Dafydd

  Shore, Rt Hon Peter

  Wilson, Gordon

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

  Winnick, David

  Skinner, Dennis

  Young, David (Bolton SE)

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

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

  Tellers for the Ayes:

  Soley, Clive

  Mr. Dick Douglas and

  Stott, Roger

  Mr. Bruce George.

  NOES

  Adley, Robert

  Gardiner, George (Reigate)

  Alison, Rt Hon Michael

  Gardner, Sir Edward (Fylde)

  Alton, David

  Garel-Jones, Tristan

  Ancram, Michael

  Gilmour, Rt Hon Sir Ian

  Ashby, David

  Goodlad, Alastair

  Ashdown, Paddy

  Gorst, John

  Aspinwall, Jack

  Gower, Sir Raymond

  Atkins, Rt Hon Sir H.

  Grant, Sir Anthony

  Atkins, Robert (South Ribble)

  Greenway, Harry

  Baker, Nicholas (Dorset N)

  Gregory, Conal

  Beaumont-Dark, Anthony

  Griffiths, Sir Eldon

  Beith, A. J.

  Griffiths, Peter (Portsm'th N)

  Best, Keith

  Grist, Ian

  Biffen, Rt Hon John

  Ground, Patrick

  Biggs-Davison, Sir John

  Hamilton, Hon A. (Epsom)

  Body, Sir Richard

  Hamilton, Neil (Tatton)

  Boscawen, Hon Robert

  Hampson, Dr Keith

  Bowden, Gerald (Dulwich)

  Hancock, Michael

  Brandon-Bravo, Martin

  Hanley, Jeremy

  Brinton, Tim

  Hannam, John

  Browne, John

  Hargreaves, Kenneth

  Bruce, Malcolm

  Harris, David

  Bryan, Sir Paul

  Harvey, Robert

  Buchanan-Smith, Rt Hon A.

  Haselhurst, Alan

  Buck, Sir Antony

  Hawksley, Warren

  Burt, Alistair

  Hayes, J.

  Carlile, Alexander (Montg'y)

  Heathcoat-Amory, David

  Carlisle, John (Luton N)

  Hill, James

  Carlisle, Kenneth (Lincoln)

  Hirst, Michael

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

  Holland, Sir Philip (Gedling)

  Cartwright, John

  Holt, Richard

  Chapman, Sydney

  Hordern, Sir Peter

  Clark, Sir W. (Croydon S)

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

  Cockeram, Eric

  Howarth, Gerald (Cannock)

  Colvin, Michael

  Howell, Rt Hon D. (G'Idford)

  Coombs, Simon

  Howell, Ralph (Norfolk, N)

  Cope, John

  Howells, Geraint

  Couchman, James

  Hubbard-Miles, Peter

  Cranborne, Viscount

  Hunter, Andrew

  Currie, Mrs Edwina

  Jackson, Robert

  Dickens, Geoffrey

  Jenkin, Rt Hon Patrick

  Dorrell, Stephen

  Jessel, Toby

  Douglas-Hamilton, Lord J.

  Jones, Robert (Herts W)

  Dover, Den

  Jopling, Rt Hon Michael

  Durant, Tony

  Joseph, Rt Hon Sir Keith

  Dykes, Hugh

  Kellett-Bowman, Mrs Elaine

  Emery, Sir Peter

  Key, Robert

  Eyre, Sir Reginald

  Kilroy-Silk, Robert

  Fairbairn, Nicholas

  King, Roger (B'ham N'field)

  Fallon, Michael

  Kirkwood, Archy

  Farr, Sir John

  Knight, Dame Jill (Edgbaston)

  Favell, Anthony

  Knowles, Michael

  Fenner, Mrs Peggy

  Lamont, Norman

  Finsberg, Sir Geoffrey

  Lang, Ian

  Fookes, Miss Janet

  Latham, Michael

  Forth, Eric

  Lee, John (Pendle)

  Fox, Marcus

  Leigh, Edward (Gainsbor'gh)

  Franks, Cecil

  Lennox-Boyd, Hon Mark

  Fraser, Peter (Angus East)

  Lewis, Sir Kenneth (Stamf'd)

  Freeman, Roger

  Lilley, Peter

  Fry, Peter

  Livsey, Richard

  Galley, Roy

  Lloyd, Peter (Fareham)

  52

  Lloyd, Tony (Stretford)

  Shaw, Sir Michael (Scarb')

  Lord, Michael

  Shelton, William (Streatham)

  Luce, Rt Hon Richard

  Shepherd, Colin (Hereford)

  Lyell, Nicholas

  Shepherd, Richard (Aldridge)

  McCrindle, Robert

  Shersby, Michael

  McCurley, Mrs Anna

  Short, Ms Clare (Ladywood)

  MacKay, Andrew (Berkshire)

  Silvester, Fred

  MacKay, John (Argyll & Bute)

  Sims, Roger

  McNair-Wilson, M. (N'bury)

  Skeet, Sir Trevor

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

  Smith, Tim (Beaconsfield)

  Major, John

  Soames, Hon Nicholas

  Malins, Humfrey

  Speed, Keith

  Malone, Gerald

  Spencer, Derek

  Maples, John

  Spicer, Jim (Dorset W)

  Marlow, Antony

  Spicer, Michael (S Worcs)

  Mates, Michael

  Squire, Robin

  Mather, Carol

  Stanbrook, Ivor

  Maxwell-Hyslop, Robin

  Stanley, Rt Hon John

  Mayhew, Sir Patrick

  Steel, Rt Hon David

  Meadowcroft, Michael

  Steen, Anthony

  Mellor, David

  Stern, Michael

  Merchant, Piers

  Stevens, Lewis (Nuneaton)

  Meyer, Sir Anthony

  Stewart, Allan (Eastwood)

  Miller, Hal (B'grove)

  Stewart, Andrew (Sherwood)

  Mills, Iain (Meriden)

  Stewart, Ian (Hertf'dshire N)

  Mills, Sir Peter (West Devon)

  Stokes, John

  Miscampbell, Norman

  Stradling Thomas, Sir John

  Mitchell, David (Hants NW)

  Sumberg, David

  Moate, Roger

  Tapsell, Sir Peter

  Monro, Sir Hector

  Taylor, John (Solihull)

  Montgomery, Sir Fergus

  Taylor, Teddy (S'end E)

  Moore, Rt Hon John

  Tebbit, Rt Hon Norman

  Morrison, Hon C. (Devizes)

  Temple-Morris, Peter

  Moynihan, Hon C.

  Terlezki, Stefan

  Mudd, David

  Thatcher, Rt Hon Mrs M.

  Neale, Gerrard

  Thompson, Patrick (N'ich N)

  Nelson, Anthony

  Thorne, Neil (Ilford S)

  Neubert, Michael

  Thurnham, Peter

  Newton, Tony

  Townsend, Cyril D. (B'heath)

  Nicholls, Patrick

  Tracey, Richard

  Norris, Steven

  Trippier, David

  Onslow, Cranley

  van Straubenzee, Sir W.

  Ottaway, Richard

  Viggers, Peter

  Owen, Rt Hon Dr David

  Waddington, David

  Page, Richard (Herts SW)

  Wainwright, R.

  Parris, Matthew

  Wakeham, Rt Hon John

  Patten, J. (Oxf W & Abgdn)

  Walden, George

  Pawsey, James

  Walker, Bill (T'side N)

  Penhaligon, David

  Wall, Sir Patrick

  Percival, Rt Hon Sir Ian

  Wallace, James

  Pollock, Alexander

  Waller, Gary

  Porter, Barry

  Ward, John

  Powell, William (Corby)

  Wardle, C. (Bexhill)

  Prentice, Rt Hon Reg

  Warren, Kenneth

  Proctor, K. Harvey

  Watts, John

  Rathbone, Tim

  Wells, Bowen (Hertford)

  Rees, Rt Hon Peter (Dover)

  Wheeler, John

  Rhodes James, Robert

  Whitney, Raymond

  Rhys Williams, Sir Brandon

  Wiggin, Jerry

  Richardson, Ms Jo

  Wilkinson, John

  Ridley, Rt Hon Nicholas

  Winterton, Nicholas

  Robinson, Mark (N'port W)

  Wolfson, Mark

  Roe, Mrs Marion

  Wood, Timothy

  Rooker, J. W.

  Woodcock, Michael

  Rowe, Andrew

  Yeo, Tim

  Rumbold, Mrs Angela

  Ryder, Richard

  Tellers for the Noes:

  Sackville, Hon Thomas

  Mr. Donald Thompson and

  St. John-Stevas, Rt Hon N.

  Mr. Francis Maude.

  Shaw, Giles (Pudsey)

  Question accordingly negatived.
  Mr. Denzil Davies: On a point of order, Mr. Deputy Speaker. The House has voted, and I understand that the Leader of the House is fairly close to the Division Lobbies. I now seek a statement from him about why the Government placed these important documents in the Library of the House less than one hour before the debate

  53
  was due to take place. I remind the House that we are discussing a four-clause Bill; indeed, three of those clauses are little longer than two or three lines. We are debating enabling legislation, and this House has traditionally been suspicious and most concerned about such legislation.
  The background to this is that, until numerous documents are studied, it is extremely difficult for the House to debate fully the difficult questions involved. As one example, I refer to the cost of privatising the royal dockyards. One document placed in the Library but half an hour before the debate was due to start sets out a schedule of the assets which will still be held by the Ministry of Defence but the use of which will be given to the private contractor to enable that contractor to operate the dockyards. The valuation placed on those assets and the cost of their use is absolutely crucial in determining questions of profit and loss.
  The first new clause is concerned with striking a balance sheet and determining for the benefit of this House and the taxpayer whether the whole operation will result in a loss or gain of money to the taxpayer. Without studying that document, without being able to see what assets will be allowed to be used, leased or granted by licence to the private contractor, and without seeing what price will be put on these obligations, it is impossible for this House to consider new clause 1.
  New clause 2 is concerned with foreign ownership of the dockyards and with the share structure of the different companies. I am told that two, three or four consortia of companies are involved. Again, the share structure of these companies is involved, and the key issue is whether the Government have been able to obtain for themselves the "golden share" control, as used in previous privatisation Bills, because this Bill contains nothing about it. It is also crucial to be able to study the articles of association, because it is impossible to debate new clause 2 fully until we have seen the articles to discover how the Government intend to ensure—if they want to ensure—that these dockyards do not finally fall under foreign control.
  5.30 pm
  There is a pile of documents called "Invitations to Tender". They will go out to the various companies which will then be allowed to tender for the contract to run the royal dockyards. The documents contain provisions which will be set in those contracts and those provisions must bear upon the three new clauses we shall debate. They must bear upon profit and loss, upon costs to the taxpayer and upon the share structure of the different companies.
  New clause 3 is concerned with redundancy payments and pensions. I should have thought that the contracts must refer to the provisions regarding redundancies and pensions. We were told in Committee that, apparently, the Ministry of Defence would pay the pensions of the employees who had been transferred from the public to the private sector. We were told that, apparently, the contracts would contain provisions whereby the private contractor would have to add to the sum he would charge the Ministry of Defence to provide a proper pension comparable to the pensions provided in the public sector.
  We are not asking for the contracts—we are asking to be allowed to see the invitations to tender. Many of the details are contained in these documents. A large number of the documents to which reference was made in
  54
  Committee were considered to be secret or in confidence commercially and Committee members were not allowed to see them. The House will not be allowed to see them until the Bill becomes law.
  It is not just a matter of documents not being available until within the last few hours. We are concerned with enabling legislation, which depends for its understanding and debate on a vast number of documents which have not been available to the House. When we debated the matters in Committee, we accepted Ministers' assurances in good faith. They told us, "These documents will be available for debate on the Floor of the House." We did not think that they would be made available only half an hour before the House was due to debate them. That is the burden of our complaint.
  The documents could have been made available long before today. We have had the Easter recess. The documents could have been made available two or three weeks ago. It is no good the Under-Secretary of State for Defence Procurement shaking his head. He should tell the House why it was not possible to make the documents available. The Minister of State said that he could not do so because he gave them to the companies on 3 April. Time and time again, in the interests of the companies, their directors and outside parties, that is what happened with documents of paramount importance to Committee members. That is why we accepted the assurances that the documents would be provided. All the documents have still not been provided, but I think that most of those we were promised are here by now. They were available only half an hour ago and we have not, therefore, had an opportunity to study them before debating this important legislation.
  This is not just another privatisation Bill. It transfers the operations of the royal dockyards from the public domain into the private sector. The Bill affects the livelihoods, pensions, redundancy payments and working practices of thousands of employees in Rosyth and Plymouth, Devonport. Because of the importance of these documents to this enabling legislation, which comprises four clauses—a skeletal piece of legislation—the Leader of the House should come to the Dispatch Box and tell us that the Bill will be withdrawn today, and will be brought back in a few days time. The Bill comprises only four clauses. It could certainly be dealt with next week without too much difficulty. If we had the documents, we could deal more rapidly with the Bill. If we do not have them, it will be much more difficult for us to deal with the clauses.
  The Leader of the House should explain why we did not get the documents until half an hour before the debate was due to start. He should tell us that there is no urgency and that it will be possible to bring the Bill back next week. When we have had a chance to study the documents and to table amendments, the matter can be properly debated.
  Mr. Deputy Speaker: Ministers have heard that request and submission. This is a matter not for me but for the Ministers concerned.
  Mr. Douglas: On a point of order, Mr. Deputy Speaker.
  Mr. Campbell-Savours: On a point of order, Mr. Deputy Speaker.
  Mr. Deputy Speaker: Order. I shall not take any more points of order on the lack of documents. We must continue with the business.
  Mr. Douglas: On a point of order, Mr. Deputy Speaker.
  Mr. Deputy Speaker: Is it a different point of order?
  Mr. Douglas: I ask you to reflect on your own words, Mr. Deputy Speaker. You said that you were not willing to take further points of order on the lack of documents. My point of order concerns not the lack but the superfluity of documents. With respect—
  Mr. Deputy Speaker: Order. The hon. Member knows very well that we are talking about the lack of documents, whether they are the right documents, and so on. I am not prepared to take any more points of order on that matter. We must get on to the debate.
  Mr. Campbell-Savours: On a point of order, Mr. Deputy Speaker.
  Mr. Deputy Speaker: Order. Is it a different point of order?
  Mr. Campbell-Savours: Yes, I want to raise a point of order about the position in which you find yourself when the Government take a particular approach to our procedures. In the past hour and a half, you have had to sit through a series of points of order. You have suggested repeatedly that those matters can be dealt with only by Ministers, especially the Leader of the House. It is clear that you believe that in your role as the protector of Members' rights you must, to some extent, rely upon Ministers fulfilling their responsibilities in the exercise of our procedures. Not once in the past one and a half hours—
  Mr. Deputy Speaker: Order. The hon. Member is pursuing the issue which has been before the House for an hour and a half. I am not prepared to take any further points of order on that subject.
  Mr. Campbell-Savours: It is a completely different matter.
  Mr. Deputy Speaker: Order. The business will proceed better if hon. Members take note of the Chair.
  Mr. McWilliam: I beg to move, That further consideration of the Bill, as amended, be now adjourned.
  Mr. Deputy Speaker: I am prepared to accept the motion. Because the arguments have been raised over a considerable period, I shall use my powers to put the Question forthwith.
  Question put:
  The House divided: Ayes 169, Noes 239.

  Division No. 119]

  [5.39 pm

  AYES

  Adams, Allen (Paisley N)

  Blair, Anthony

  Alton, David

  Boothroyd, Miss Betty

  Archer, Rt Hon Peter

  Boyes, Roland

  Ashdown, Paddy

  Brown, Gordon (D'f'mline E)

  Ashley, Rt Hon Jack

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

  Atkinson, N. (Tottenham)

  Brown, Ron (E'burgh, Leith)

  Bagier, Gordon A. T.

  Bruce, Malcolm

  Banks, Tony (Newham NW)

  Buchan, Norman

  Barnett, Guy

  Caborn, Richard

  Barron, Kevin

  Callaghan, Rt Hon J.

  Beckett, Mrs Margaret

  Callaghan, Jim (Heyw'd & M)

  Beith, A. J.

  Campbell, Ian

  Bell, Stuart

  Campbell-Savours, Dale

  Benn, Rt Hon Tony

  Canavan, Dennis

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

  Carlile, Alexander (Montg'y)

  Bidwell, Sydney

  Cartwright, John

  56

  Clark, Dr David (S Shields)

  McKelvey, William

  Clarke, Thomas

  McTaggart, Robert

  Clay, Robert

  McWilliam, John

  Clelland, David Gordon

  Madden, Max

  Clwyd, Mrs Ann

  Marek, Dr John

  Cocks, Rt Hon M. (Bristol S)

  Martin, Michael

  Cook, Frank (Stockton North)

  Mason, Rt Hon Roy

  Corbett, Robin

  Maxton, John

  Corbyn, Jeremy

  Maynard, Miss Joan

  Craigen, J. M.

  Meacher, Michael

  Crowther, Stan

  Meadowcroft, Michael

  Dalyell, Tam

  Michie, William

  Davies, Rt Hon Denzil (L'lli)

  Mikardo, Ian

  Davies, Ronald (Caerphilly)

  Millan, Rt Hon Bruce

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

  Miller, Dr M. S. (E Kilbride)

  Deakins, Eric

  Morris, Rt Hon A. (W'shawe)

  Dewar, Donald

  Morris, Rt Hon J. (Aberavon)

  Dixon, Donald

  Nellist, David

  Douglas, Dick

  O'Neill, Martin

  Dubs, Alfred

  Orme, Rt Hon Stanley

  Duffy, A. E. P.

  Owen, Rt Hon Dr David

  Eadie, Alex

  Park, George

  Eastham, Ken

  Parry, Robert

  Evans, John (St. Helens N)

  Patchett, Terry

  Ewing, Harry

  Pavitt, Laurie

  Fatchett, Derek

  Pendry, Tom

  Faulds, Andrew

  Penhaligon, David

  Field, Frank (Birkenhead)

  Pike, Peter

  Fields, T. (L'pool Broad Gn)

  Powell, Raymond (Ogmore)

  Flannery, Martin

  Radice, Giles

  Foot, Rt Hon Michael

  Randall, Stuart

  Forrester, John

  Redmond, Martin

  Foster, Derek

  Rees, Rt Hon M. (Leeds S)

  Foulkes, George

  Richardson, Ms Jo

  Fraser, J. (Norwood)

  Roberts, Allan (Bootle)

  George, Bruce

  Robertson, George

  Gilbert, Rt Hon Dr John

  Rogers, Allan

  Godman, Dr Norman

  Rooker, J. W.

  Gould, Bryan

  Ross, Stephen (Isle of Wight)

  Gourlay, Harry

  Sedgemore, Brian

  Hamilton, James (M'well N)

  Sheerman, Barry

  Hamilton, W. W. (Fife Central)

  Sheldon, Rt Hon R.

  Hancock, Michael

  Shore, Rt Hon Peter

  Harman, Ms Harriet

  Short, Ms Clare (Ladywood)

  Hart, Rt Hon Dame Judith

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

  Hattersley, Rt Hon Roy

  Silkin, Rt Hon J.

  Haynes, Frank

  Skinner, Dennis

  Healey, Rt Hon Denis

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

  Home Robertson, John

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

  Howell, Rt Hon D. (S'heath)

  Soley, Clive

  Howells, Geraint

  Steel, Rt Hon David

  Hoyle, Douglas

  Stott, Roger

  Hughes, Dr Mark (Durham)

  Strang, Gavin

  Hughes, Robert (Aberdeen N)

  Thomas, Dr R. (Carmarthen)

  Hughes, Roy (Newport East)

  Thompson, J. (Wansbeck)

  Hughes, Sean (Knowsley S)

  Tinn, James

  Jenkins, Rt Hon Roy (Hillh'd)

  Torney, Tom

  John, Brynmor

  Wainwright, R.

  Kaufman, Rt Hon Gerald

  Wallace, James

  Kennedy, Charles

  Wardell, Gareth (Gower)

  Kilroy-Silk, Robert

  Wareing, Robert

  Kirkwood, Archy

  Weetch, Ken

  Lambie, David

  White, James

  Lamond, James

  Wigley, Dafydd

  Leighton, Ronald

  Wilson, Gordon

  Lewis, Terence (Worsley)

  Winnick, David

  Litherland, Robert

  Young, David (Bolton SE)

  Livsey, Richard

  Lloyd, Tony (Stretford)

  Tellers for the Ayes:

  McCartney, Hugh

  Mr. Lawrence Cunliffe and

  McKay, Allen (Penistone)

  Mr. Mark Fisher.

  NOES

  Alison, Rt Hon Michael

  Beaumont-Dark, Anthony

  Ancram, Michael

  Best, Keith

  Ashby, David

  Biffen, Rt Hon John

  Aspinwall, Jack

  Biggs-Davison, Sir John

  Atkins, Rt Hon Sir H.

  Body, Sir Richard

  Atkins, Robert (South Ribble)

  Boscawen, Hon Robert

  Baker, Nicholas (Dorset N)

  Bowden, Gerald (Dulwich)

  57

  Brandon-Bravo, Martin

  Hubbard-Miles, Peter

  Brinton, Tim

  Hunter, Andrew

  Browne, John

  Jackson, Robert

  Bryan, Sir Paul

  Jenkin, Rt Hon Patrick

  Buchanan-Smith, Rt Hon A.

  Jessel, Toby

  Buck, Sir Antony

  Jones, Robert (Herts W)

  Burt, Alistair

  Jopling, Rt Hon Michael

  Carlisle, John (Luton N)

  Joseph, Rt Hon Sir Keith

  Carlisle, Kenneth (Lincoln)

  Kellett-Bowman, Mrs Elaine

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

  Key, Robert

  Chapman, Sydney

  King, Roger (B'ham N'field)

  Chope, Christopher

  Knight, Dame Jill (Edgbaston)

  Clark, Sir W. (Croydon S)

  Knowles, Michael

  Cockeram, Eric

  Lamont, Norman

  Colvin, Michael

  Lang, Ian

  Coombs, Simon

  Latham, Michael

  Cope, John

  Lee, John (Pendle)

  Couchman, James

  Leigh, Edward (Gainsbor'gh)

  Cranborne, Viscount

  Lennox-Boyd, Hon Mark

  Currie, Mrs Edwina

  Lester, Jim

  Dickens, Geoffrey

  Lewis, Sir Kenneth (Stamf'd)

  Dorrell, Stephen

  Lilley, Peter

  Douglas-Hamilton, Lord J.

  Lloyd, Peter (Fareham)

  Durant, Tony

  Lord, Michael

  Dykes, Hugh

  Luce, Rt Hon Richard

  Emery, Sir Peter

  Lyell, Nicholas

  Eyre, Sir Reginald

  McCrindle, Robert

  Fairbairn, Nicholas

  McCurley, Mrs Anna

  Fallon, Michael

  MacKay, Andrew (Berkshire)

  Farr, Sir John

  MacKay, John (Argyll & Bute)

  Favell, Anthony

  McNair-Wilson, M. (N'bury)

  Fenner, Mrs Peggy

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

  Finsberg, Sir Geoffrey

  Major, John

  Fletcher, Alexander

  Malins, Humfrey

  Fookes, Miss Janet

  Malone, Gerald

  Forth, Eric

  Maples, John

  Fox, Marcus

  Marlow, Antony

  Franks, Cecil

  Mates, Michael

  Fraser, Peter (Angus East)

  Mather, Carol

  Freeman, Roger

  Maxwell-Hyslop, Robin

  Fry, Peter

  Mayhew, Sir Patrick

  Galley, Roy

  Mellor, David

  Gardiner, George (Reigate)

  Merchant, Piers

  Gardner, Sir Edward (Fylde)

  Meyer, Sir Anthony

  Garel-Jones, Tristan

  Miller, Hal (B'grove)

  Goodlad, Alastair

  Mills, Iain (Meriden)

  Gorst, John

  Mills, Sir Peter (West Devon)

  Gow, Ian

  Miscampbell, Norman

  Gower, Sir Raymond

  Moate, Roger

  Grant, Sir Anthony

  Monro, Sir Hector

  Greenway, Harry

  Montgomery, Sir Fergus

  Gregory, Conal

  Moore, Rt Hon John

  Griffiths, Sir Eldon

  Morrison, Hon C. (Devizes)

  Griffiths, Peter (Portsm'th N)

  Moynihan, Hon C.

  Grist, Ian

  Mudd, David

  Ground, Patrick

  Neale, Gerrard

  Hamilton, Hon A. (Epsom)

  Nelson, Anthony

  Hamilton, Neil (Tatton)

  Neubert, Michael

  Hampson, Dr Keith

  Newton, Tony

  Hanley, Jeremy

  Nicholls, Patrick

  Hannam, John

  Norris, Steven

  Hargreaves, Kenneth

  Onslow, Cranley

  Harris, David

  Oppenheim, Phillip

  Harvey, Robert

  Ottaway, Richard

  Haselhurst, Alan

  Page, Richard (Herts SW)

  Hawkins, C. (High Peak)

  Parkinson, Rt Hon Cecil

  Hawksley, Warren

  Parris, Matthew

  Hayes, J.

  Patten, J. (Oxf W & Abgdn)

  Heathcoat-Amory, David

  Pawsey, James

  Henderson, Barry

  Percival, Rt Hon Sir Ian

  Hill, James

  Pollock, Alexander

  Hind, Kenneth

  Porter, Barry

  Hirst, Michael

  Powell, William (Corby)

  Holland, Sir Philip (Gedling)

  Prentice, Rt Hon Reg

  Holt, Richard

  Proctor, K. Harvey

  Hordern, Sir Peter

  Rathbone, Tim

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

  Rees, Rt Hon Peter (Dover)

  Howarth, Gerald (Cannock)

  Rhodes James, Robert

  Howell, Rt Hon D. (G'Idford)

  Rhys Williams, Sir Brandon

  Howell, Ralph (Norfolk, N)

  Ridley, Rt Hon Nicholas

  58

  Robinson, Mark (N'port W)

  Temple-Morris, Peter

  Roe, Mrs Marion

  Terlezki, Stefan

  Rowe, Andrew

  Thompson, Patrick (N'ich N)

  Rumbold, Mrs Angela

  Thorne, Neil (Ilford S)

  Ryder, Richard

  Thurnham, Peter

  Sackville, Hon Thomas

  Townend, John (Bridlington)

  Shaw, Giles (Pudsey)

  Townsend, Cyril D. (B'heath)

  Shaw, Sir Michael (Scarb')

  Tracey, Richard

  Shelton, William (Streatham)

  Trippier, David

  Shepherd, Colin (Hereford)

  van Straubenzee, Sir W.

  Shepherd, Richard (Aldridge)

  Viggers, Peter

  Shersby, Michael

  Waddington, David

  Silvester, Fred

  Wakeham, Rt Hon John

  Sims, Roger

  Walden, George

  Skeet, Sir Trevor

  Walker, Bill (T'side N)

  Smith, Tim (Beaconsfield)

  Wall, Sir Patrick

  Soames, Hon Nicholas

  Waller, Gary

  Spencer, Derek

  Ward, John

  Spicer, Jim (Dorset W)

  Wardle, C. (Bexhill)

  Spicer, Michael (S Worcs)

  Warren, Kenneth

  Squire, Robin

  Watts, John

  Stanbrook, Ivor

  Wells, Bowen (Hertford)

  Stanley, Rt Hon John

  Wheeler, John

  Steen, Anthony

  Whitney, Raymond

  Stern, Michael

  Wiggin, Jerry

  Stevens, Lewis (Nuneaton)

  Wilkinson, John

  Stewart, Allan (Eastwood)

  Winterton, Nicholas

  Stewart, Andrew (Sherwood)

  Wolfson, Mark

  Stokes, John

  Wood, Timothy

  Stradling Thomas, Sir John

  Woodcock, Michael

  Sumberg, David

  Yeo, Tim

  Tapsell, Sir Peter

  Taylor, John (Solihull)

  Tellers for the Noes:

  Taylor, Teddy (S'end E)

  Mr. Francis Maude and

  Tebbit, Rt Hon Norman

  Mr. Donald Thompson.

  Question accordingly negatived.
  Mr. Denzil Davies: Despite the lateness of the documents coming to the Library, I shall endeavour again to argue for the new clause which I moved some time ago. In effect, the new clause proposes that a report be placed before the House of Commons itemising all the costs and savings, if any, which we doubt, which will arise as a result of what has been an ill-conceived and speculative exercise in attempting to turn the royal dockyards into a private venture.
  Ministers have been reluctant to talk much about costs. Information was dragged out of them towards the end of the Committee stage of the Bill. The Under-Secretary became a bit tetchy and did not want to talk about that, although he said that there might be a report from the Property Services Agency on these matters which could be debated. But we have not yet had that report, although there have been surmises in the press on its contents.
  First, what savings or costs will fall on the budget of the Ministry of Defence as a result of this operation and, secondly, what costs or savings will fall upon the Exchequer in general? First, let me deal with the Ministry of Defence's budget. On the Government's figures we have calculated that over a 10-year period from the start of privatisation — I accept that 10 years is a highly speculative period, during which time anything could happen, but that is the period that the Government have used for amortising costs—there will be a loss to the Ministry of Defence's budget of about £20 million a year. If we are wrong, no doubt the Minister will tell us when he replies. That comes to £200 million. That is a conservative estimate and I shall return to the way in which it has been arrived at. I need not remind the Minister that £200 million would almost buy two type 23 frigates or

  59
  eight, nine or perhaps even 10 Tornadoes. That is the nature of the loss that will fall upon the Ministry of Defence over that period.
  We know that right at the beginning large payments will have to be made. We have been told that at the beginning there will be a cost of £70 million. Part of that cost will be the cost of redundancy and of setting up the scheme —the accountancy and financial measures that have to be taken. I understand that part of that cost is to some extent the refurbishment of fixed assets. The initial cost of setting up this privatisation is an extraordinary figure. The turnover of the dockyards ranges between £400 million and £500 million. The £70 million that will have to be found almost immediately is almost 20 per cent. of the dockyards' turnover. That is an extraordinary position for the Government to be in. I have not checked, but I should be surprised if any of the other privatisation measures involving far more money attracted an initial cost of £70 million. That money has to be found. I do not think that it will all come from the Ministry of Defence's budget. I understand that some will come from the Civil Service pension and redundancy fund. But £70 million will have to be found almost immediately.
  On top of that, £200 million will have to be found for the transfer of the pension scheme to the private employer. I accept that that money relates to liabilities that would in any case have accrued and would have to be paid for in future. In that £200 million figure we have not,included the cost of any future redundancies. It is a conservative figure. We shall debate a redundancy fund when we come to new clause 3.
  It was not clear in Committee what Ministers intended, but they said that the private employer, the management company, was hoping that the redundancy payment would be more or less similar to what would be paid by the Civil Service. If that is the case, where wiil the money come from? Will money for redundancies come from the Ministry of Defence in the same way as the money for pensions? In other words, will the contractor charge a bit more? The contractor does not have the money; he has only the contract with the Ministry of Defence and his only income is from progress payments from the Ministry of Defence. If the contractor wants to declare another 2,500 employees redundant in the two or three weeks or month after privatisation, where will he find the money for the redundancy payments to replicate—that was the word used in Committee—the kind of payments that would be paid by the Civil Service?
  6 pm
  We have not included redundancy payments in the cost of £200 million over 10 years. Nor have we considered the question of emergency work. We did not debate that question very fully in Committee, but we debated it on Second Reading. No calculation seems to have been made of the cost to the Ministry of Defence of emergency work carried out by the private contractor. There was an example last week. HMS Illustrious had sailed little further than the Isle of Wight before it needed emergency work. I understand that that work will be done at the fleet maintenance base at Portsmouth. The costings for work at the maintenance base will be no different from what they are now, and they will not change in future. However, if the work on Illustrious could not have been done at
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  Portsmouth, presumably the ship would have had to go back to Plymouth. The work must be done in a rush because Illustrious has to proceed to wherever it is going.
  If the work was to he done at Plymouth, there would presumably be negotiations between the Ministry of Defence—the new outfit that is to be set up in Bath or somewhere — and private industry. What kind of negotiations would there be? Would the Ministry of Defence be in any position to tell the private contractor that it was charging too much, and in consequence to keep Illustrious anchored for a year off the Isle of Wight instead of sending it to join all the other fine ships of the American fleet in the south Pacific? Of course not. The Ministry of Defence would have to pay for the repairs, and pay through the nose. In our very conservative figure of the loss of £200 million to the Ministry of Defence budget over 10 years, we do not take into account the cost of doing such work.
  Thirdly, we have not taken into account the recommendations of the 19 working parties. Where are those recommendations? Perhaps we will see them before these matters are debated in the House of Lords. Working parties are bound to make recommendations, and I am sure that the recommendations will cost money. Those costs, too, will have to be found from the budget of the Ministry of Defence. I doubt whether the Minister of State can give us an undertaking that the Treasury will foot the bill. There will be the cost, for instance, of carrying out the recommendations of the working party on nuclear safety. Costs may well result from the splitting of responsibility between the Ministry of Defence and the private contractor. That and other recommendations of the 19 working parties may result in a cost of £X million and that money will have to be found from the budget of the Ministry of Defence.
  Our figure of £200 million is a conservative estimate which takes no account of emergency work, redundancy payments—which may at the end of the day fall upon the Ministry of Defence—or of the extra cost arising from the recommendations of the working parties.
  The Government have made some assertions about the effect on the Exchequer as a whole. The Minister of State gave us some figures on Second Reading, although he himself admitted that they were more like guesses. We know that nothing will be saved for the budget of the Ministry of Defence and that, in fact, there will be costs to that budget. I hope that the Minister will confirm that. However, there is apparently a magic wand to be waved. Apparently, at the end of the day, when the profits and losses have been calculated and the Parliamentary Under-Secretary of State has worked on the balance sheet as he used to in that back street accountancy practice in Manchester, there will be a profit figure of some kind. It will be a profit to the Exchequer for the greater good. The Defence Ministers will have subjugated their departmental duties to the greater good of the fisc. They were not operating in the Committee as departmental Ministers. They were operating for the Exchequer. No doubt the Treasury Ministers are very grateful to them.
  How much will be saved for the Exchequer? The difficulty is that the figure keeps changing. The original figure was £26 million. That was the speculative figure suggested last June. That figure rapidly fell to £23 million in November. As we have not had the report of the Public Accounts Committee, we have to rely on what we can glean from statements. The figure for the amount by which

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  the taxpayer will benefit fell again in February by the wondrously precise figure of £2 million, leaving a figure of £21 million. What is the figure now? We should be told. We have moved on since February and no doubt there are other costings to be taken into account. Has there been any further change in the figure?
  Apparently, there is to be a saving of £21 million over the period of 10 years over which initial costs are to be amortised, although the initial costs are only part of the total exercise. Apparently, over that period about £21 million is to be saved every year. Let us consider how that figure was arrived at. No doubt the Minister of State will correct me—he has all the papers—but I understand that the figure was worked out as follows. First, there are the actual savings. There will be a reduction in personnel, or the sacking of people.
  There will be a further saving because the Treasury will not pay the pensions any more. Curiously, although the Exchequer will not pay the pensions, the Ministry of Defence will do so. Pension payments will amount to £8 million or £9 million a year. Under the present arrangement they are paid out of the Civil Service pension fund. After privatisation they can no longer be paid out of that fund. They cannot be paid out of the pension fund of the consortium company or main company that is to run the dockyards because the employees are employed not by that company but by the management company, and the management company has only one contract—the contract with the Ministry of Defence. The effect will be the same as in the case of the redundancy payments. How will the company pay the pensions except by adding to the price which it charges to the Ministry of Defence?
  That is what is envisaged. That is why the Under-Secretary has been able to give an assurance that the pensions will not be that different from the pensions paid out of the Civil Service pension scheme. The Exchequer will save about £9 million a year because it will not have to meet the pension payments. However, the Ministry of Defence will have to meet those payments so that the £9 million, or perhaps a little less, will come out of the defence budget. It will not come out of the Exchequer. Therefore, that will be a saving in terms of the grand balance sheet the Government are constructing.
  Costs have to be deducted out of savings. As I have said previously, the figure for savings was £26 million, it then came down to £23 million and it is now £21 million. We have seen what the savings will be. Let us consider the costs of the operation to see how we arrive at the figure of £21 million. As I understand it, one figure of costs is for something called a customer organisation. Apparently, new jobs are being created; the Government are actually creating new jobs. The original costs for that customer organisation were envisaged to be £2 million. The Minister of State will correct me if I am wrong. The costs went up and up and are now estimated at £11 million a year.
  What is the customer organisation? It will create new jobs, new bureaucrats and more paper to shuffle around. What will the people who will cost the Ministry of Defence £11 million be doing? They are there to negotiate and work out the arrangement between the supplier and the buyer, the private company and the Ministry of Defence, between the monopoly seller and buyer. We need some organisation within the Ministry of Defence to do that work. We do not need it at the moment. There is no need to spend £11 million for people to do that work because it is done within the same organisation. However, once a
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  commercial organisation has been set up it will be necessary to negotiate with Trafalgar House about the costs of repairing warships, refitting or emergency work on HMS Illustrious or any other ship that has to come into Portsmouth or Rosyth.
  Can the Minister of State tell us why, within a year, there has been a 500 per cent. increase in the cost of the so-called customer organisation? I do not know exactly where the organisation will be, but I think that the Under-Secretary will agree that it will probably be in Bath.
  It is obscene that the Government have put 2,500 dockyard workers out of work in Rosyth and Devonport in the interests of so-called efficiency. Many of them, if not all of them, work on ships, do things with their hands and have technical skills. They will be put out of work and £11 million a year will be spent on some kind of customer organisation in somewhere like Bath where they will just shuffle paper around because of the operation the Government are setting up. It is obscene that the Government are taking money away from people who work at the dockyards and putting it into the hands of a bureaucratic body, which would not be necessary if the Government did not go ahead with their hare-brained scheme. Therefore, £11 million will be in respect of a new bureaucracy set up as a result of the Government's plans.
  6.15 pm
  The Ministry of Defence has to make some assessment of the profit that the contractors will make because the profit to the contractor must be a cost to the Ministry of Defence. No doubt those figures are commercially in confidence and, even if I knew them, I would not wish to breach that confidence on the Floor of the House because the Government have to negotiate with the companies. However, my understanding is that the original profit figure was much higher than it is now. The Ministry of Defence or the Government accountancy service, or whoever, have tried, I would not say to fiddle the figures, but to make them look a little better. They have done that by reducing by 35 per cent. the Government's assessment of the profits of contractors for Rosyth and Devonport. That is not a small reduction. We started with one figure in June 1985 and over a period the Government have become more optimistic in terms of the Ministry of Defence because they have scaled down the profit figure by 35 per cent. I do not know what that figure is, but my impression is that it is a fairly low profit figure on a turnover of £400 million or £500 million.
  The Minister of State would obviously not wish to tell us what the figures are, but perhaps he could tell us how on earth the Government can scale down the profit figure by 35 per cent. It is very convenient to do so because it reduces the costs. By reducing the costs, it increases the savings and, as I have said, the savings are now £21 million a year. If the figure of profit had not been scaled down, there would have been a substantial cut in those savings. That is why the figure for savings is not worth the paper it is written on. It is a purely speculative statement. The Minister of State knows that, as does the Under-Secretary.
  I am sorry to mention Manchester again, but the Manchester accountants had a high reputation within the Labour party at one time. I am sure that the Under-Secretary also had a high reputation. If somebody had brought in the balance sheet which is being presented, he would have thrown it in the waste paper basket in his office

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  in Manchester. The figures of £21 million, £23 million or £26 million are not worth the calculation. The Government have thought of a figure, put it in a table and found some justification for it. Perhaps the Minister could tell us how he justifies the figure of £21 million.
  Frankly, we do not believe that there will be any savings to the Exchequer, or anybody else, as a result of this exercise. There will be costs. Most of them, not all, will fall directly on the Ministry of Defence. Those costs will come out of the defence budget. Money will come out of equipment and items needed for defence and will be spent on bureaucracy and private contractors. Nothing that has been shown to us has dispelled that belief.
  We believe that at the end of the day the Navy will get an inferior service and at a higher cost. It is no good the Minister of State shaking his head. He has not produced one figure to dispel that belief. There was a long statement on Second Reading about improved efficiency and improved working methods. Can the Minister of State put one figure on what will be saved from improved efficiency? All he can put a figure on is how much will be saved by sacking 2,500 people. He cannot put a figure on improved efficiency or so-called better working practices. The figures that are being produced have nothing to do with that. They are concerned solely with actual savings and actual costs. No money will be saved. There is no case for privatisation on the ground of saving money. Indeed, money will be lost to the Ministry of Defence. Perhaps the Minister of State will tell us that our figures are wrong and that there will be savings. From what we have seen and heard, there will be no savings. This is purely an ideological kick by the Government. It has nothing to do with saving money. It will cost the country and the armed forces money.
  Dr. Owen: This is a probing new clause, but it goes to the root of this miserable Bill. There is no question, and the Government do not deny this now, but that in the first three and a half years of implementation there will be extra costs to the Royal Navy. The only question is whether, during the next six and a half years, there will be sufficient savings to compensate fully for the extra costs incurred in the first three and a half years. Nothing that has been presented to the House, to the Select Committee on Defence or to the Public Accounts Committee gives any confidence that this will do anything other than cost the Navy dear. It will certainly cost the Navy in money terms, but it will be an even greater cost in terms of the inability to turn round the capital ships of the Navy at the speed which the Navy requires.
  We constantly forget that the task of the dockyards is to act effectively as a garage for the Royal Navy, to be available for instant use in cases of emergency and to have the capacity to ensure the full value of these capital ships.
  I shall not refer to the lamentable delay in producing the information, but one advantage of the period that we managed to extract from the Government for analysis of the Bill is that we now have some figures for the costs and assets that we are discussing. The replacement value of the assets of Devonport dockyard has been estimated, taking 1985 as the base year, at £772,740,970. That is a vast sum of money. The existing use value of Devonport dockyard has been estimated at £227,727,830. The annual value is £23,911,090. We are dealing with a massive industrial
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  enterprise. The Government have not been prepared to privatise those assets because they know that no one could possibly find the money to buy them. So there is an agency arrangement.
  We had great difficulty in pinning down the extra costs. I gather that there is an estimated £30 million in consultancy fees and so far unquantified costs in Ministry of Defence staff time. That money has been spent before the exercise has started. There is the £46 million to ensure the continuation of the supply service to the Ministry of Defence, and between £150 million and £200 million to set up pension funds for transferred service. In addition, VAT must be paid on dockyard contracts.
  A licence fee will be payable quarterly in advance when assets are described in the schedules. It is proposed that the licence fee will be equal to the annual value to which I have already referred. It will need to be adjusted periodically during the term of the contract to take account of changes in the composition of the assets as a result of new investment or the removal of assets to take account of inflation, depreciation and other factors. There is a continuing cost in dealing with the estimation of the assets.
  Under these arrangements, we are told that the contractor will be fully responsible for the maintenance and repair of the assets at his expense. In some circumstances, the Ministry will bear the cost of replacing the assets and the contractor will normally be invited to tender for the supply and/or the installation of replacement assets. In other circumstances, the cost of replacement will be borne by the contractor. All of these carry heavy estimating costs, continuing consultancy arrangements and, indeed, bureaucracy.
  On bureaucracy, it appears that the Ministry's organisation to monitor and oversee the contracts will employ as many as 900 people. I should be grateful if the Minister of State would let us know the exact size of the monitoring organisation, which will be set up in Bath or perhaps spread through the dockyards. How much will it cost? It may cost tens of millions of pounds.
  I am told by the Shipbuilding Trades Joint Council that an internal Ministry of Defence report has identified future requirements for 11 officers in nuclear and radiological safety, five officers in nuclear qualified secondment, an unquantified extra requirement for naval base commanders for personnel work at Devonport and Rosyth, 18 naval personnel for local emergency monitoring organisations and 25 officers on ships acceptance trials. The biggest extra investment is expected in the proposed enhancement of the Navy's fleet maintenance bases as a direct consequence of agency management. We do not have real estimates of those, although the first estimate for the Ministry of Defence is £3·5 million in capital expenditure and 80 extra naval personnel. This is at a time when there is some difficulty in manning the Navy fully.
  The dockyards will be supplied by the Ministry of Defence with the management financial ledger, an accounting package for the use of the contractors; the cost of that is estimated at £95 million. The story will be unravelled month by month. There will be probing and investigation and we shall calculate the costs of this enterprise. My view is that the Minister of State's heart is not in it. Certainly we cannot blame him as he was not in at the start of the exercise. This hare-brained scheme was initiated by the right hon. Member for Henley (Mr.

  65
  Heseltine). There is no reason why the Minister of State or the Secretary of State should continue with this beyond the satisfaction of getting the legislation passed.
  There will be increased costs in the commercial world. We are told that before entering into contracts for non-defence work that required deployment of significant resources or prolonged use of facilities, especially docks, or which are likely to result in consequential time or cost penalties to Ministry of Defence work, prior consultation with the DGSR — this new bureaucracy — will be required. So far from setting them free, they will have to look back over their shoulders to get permission from Bath.
  We are told that on refits and repairs it should be clearly understood that this core programme is based on the current fleet requirements and that changes will be unavoidable as tasks and operational needs alter. The DGSR will review the core programme with the contractor on a quarterly basis and will also discuss changes as they arise at the earliest possible date. There is a constant Ministry of Defence involvement with this agency management at every stage, and at every stage there is duplication and cost.
  We are also told in relation to operational defects and other unprogrammed works on Royal Navy vessels and auxiliaries that the contractor may, however, be required from time to time to carry out such work on a noncompetitive basis. The contractor will be required to comply with requests to undertake this work, which may be crucial to fleet availability. There will be contractual obligations over and above the core work imposed on the contractor, and the Ministry of Defence will demand that this work be done. What control will there be on the price? No one else is involved and there will be a monopoly.
  HMS Illustrious is a perfect example. We are told that the work on that ship could be handled by the fleet maintenance base in the constituency of my hon. Friend the Member for Portsmouth, South (Mr. Hancock). But what happens if it cannot be done by that base? It comes into work unprogrammed to the fleet contractor. Big vessels, such as HMS Illustrious, can go only to Devonport. But the dockyard work programme is full, so the private agency management turns round to the dockyard and demands almost what it wants. There is no one else to go to.
  We are also told about the company structure. We are told that this two-tier company structure is preferred by the Ministry for several reasons. The next bit is worth quoting. It says that one reason is that
  "it will enable the Ministry more easily to detach the dockyard workforce from the contractor when the term contract ends for whatever reason."
  We are talking about people who have given a lifetime of service to the dockyards.
  6.30 pm
  We then try to find out what all this means. The document says:
  "In the event that the term contract is terminated for whatever reason the original contractor will be required on termination to transfer all his shares in the dockyard company either to the new contractor or to the Ministry. This will in effect transfer the employment of the dockyard workforce to the new contractor or the Ministry."
  I assume that that means that when the contract is terminated the whole dockyard labour force is automatically transferred. But what would happen if the core programme for the new contract was substantially less than
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  was given for the first 10-year contract? Will the whole work force be taken on? As the Ministry knows, there is a real difficulty. Someone must be responsible for those men before the redundancy payments are made. Effectively, the Government are saying that the new contractor will take on the work force even though, as a result of the new core programme for a further seven-year contract, the first task may be to make the men redundant.
  We then find that there are no safeguards covering the second contract period. I believe that the only contractual arrangement is that guarantees have been given as to how to deal with this situation in the case of the initial redundancy. But there is no safeguard for the redundancies that we fear will follow the second seven-year contractual period. Thus, there would be no safeguards for a second agency management, which would never even be expected to employ the men. I believe that I am right in saying that.
  Mr. Gordon Brown: Does the right hon. Gentleman accept that the Ministry's provision for redundancy payments is just on the first letting of the contract and that there is no provision for redundancy payments made during the first seven years?
  Dr. Owen: Yes, but it is even more worrying that for the second term, when the contract starts again—since it requires a new core programme to be negotiated—those responsible for redundancies would not even be the people who employed those men for the first seven years. Those responsible would come in suddenly and would have no relationship with the work force. In those circumstances, it does not require much imagination to realise what poor redundancy terms would be offered. The more one looks at the programme, the more one sees that a lot of feeling will be aroused, that the parallel organisation built up in Bath will expand and that the cost will also increase.
  The 10-year programme will obviously envelop one period when the term contract is likely to be changed and so the costs will be far higher than has been outlined by the Minister. We shall discuss later how something can be rescued from this mess, but I shall not anticipate that now. In the meantime, will the Minister give us all the information at the very least that has already been given to the PAC, and will he try to answer some of the questions put to him about the growth in costs? Indeed, senior naval officers are now anxious, and are saying that if it had been made clear to them that this extraordinary miasma of interlocking committees overseeing parallel organisations had been envisaged, they would not have dreamt of embarking upon such a course.
  The Minister owes it to himself completely to rethink the situation. The Bill will no doubt be forced through tonight with the votes of Conservative Members, but before the final moment when no changes can be made, perhaps he will reconsider this whole issue. The point is that the cost to the Royal Navy, the taxpayer and the country is unquantified but is already quite imaginable, and is far greater than the Government have acknowledged.
  Mr. Douglas: I shall be brief. We know that certain evidence was given to the Defence Committee and to the PAC last year. To coin a phrase, we shall deal not with a snippet from Tippet but with the information given by Sir Clive Whitmore to the PAC. In response to question No. 257, Sir Clive said:

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  "We have got to say that we have to make a lot of assumptions in doing these costings about a situation we have not faced before. We have had to make assumptions about the rate of profit that the contractor would want to see. We have had to make assumptions about redundancies which in the end might not actually be fulfilled if the contractor came in and decided after he had some experience of running the dockyard that he wanted to adopt an expansionist approach by seeking non-defence work to add to the defence work. The redundancies might turn out to be fewer than we assume. We have tried to approach the costings on a worst case or near worst case basis, but we do not think that in the event the savings could turn out to be larger than those that Vice-Admiral Tippet had been mentioning."
  We know that the PAC has examined those so-called savings. However, in the interim, a Standing Committee has consistently probed the Government's estimates. The Government have not been very forthcoming about the nature of those savings. We have seen a change in attitude from the original proposals about a managing company and an employing company to the Government wishing to have a managing company and a dockyard company as the repository of the labour force.
  There is no sign of any savings from the costing exercise. Indeed, there are no savings, but only costs and heartache. I could take up the time of the House by reading all of the Fuller Peiser report, but I shall not do so. Incidentally, I do not cast any aspersions on the chartered surveyors, as I recognise the difficulties. However, the Government propose to hand over plant and buildings. The report says:
  "Most buildings have been visited and some have been inspected in detail with reliance being placed upon the drawings of the PSA plan library for dimensions. This has enabled us to estimate valuations which we consider to be reliable on the whole but it will be necessary to check the details of the scheduling and allocation of values during the course of stage 2.
  Plant & Machinery
  Whilst buildings have been briefly visited no plant has been inspected in any detail, reliance being placed on existing records obtained from the Finance Department and Yard Services Department and a list provided by the Cost Centre."
  There is no way any responsible Government Minister can say to the House, "This scheme to change the ownership of the dockyards to a contractual relationship will produce savings." We assert that it will be costly. Why? First, because of disruptions. The Government have undermined the morale of the labour force at Rosyth and at Devonport. When the morale of a highly skilled labour force is undermined, productivity may tail off. That will be a cost. Currently management has to spend time holding the hands of contractors who are going through the yards, indicating what functions they might have to perform. That is a cost—not one which we will see immediately in the accounts but a cost in terms of satisfying the Navy.
  Additional costs were mentioned by the right hon. Member for Plymouth, Devonport (Dr. Owen) such as the cost of redundancy, the cost of pensions and the cost of indicating to contractors what security functions they might have to perform. I have scanned the documents quickly and some of the details are frightening. At the beginning the Ministry of Defence police will have certain functions but in later years the so-called contractors may bring in security personnel. This is a tangential remark; in Committee I recall that the Under-Secretary could not
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  assure us that such security personnel would not be employed where there were nuclear facilities. I hope that he can assure the House and the country that his further reflections will lead him to insist that no private security personnel will be employed on nuclear functions in Devonport or Rosyth.
  This is an exercise in dogma. It is significant, as I mentioned earlier, that neither of two right hon. Members whose names appear on the back of the Bill is present in the House. Where is the right hon. Member for Henley (Mr. Heseltine), who was the arch-promoter of the Bill? Neither of the two hon. Gentlemen who are on the Front Bench has his heart in the Bill. It is the product of the right hon. Member for Henley and of the person whom he brought into the Ministry of Defence, Mr. Peter Levene. There is no evidence that any savings will accrue to the Exchequer or to the Ministry of Defence from the promotion of the scheme.
  Although I may be out of order on the new clause, I suggest that the Government should reconsider their objectives. If they have the interest of the Navy at heart, they will cease this costly exercise and stop asking people to examine the dockyard facilities. That will not increase the value of anything. They should stop the nonsense of bringing in contractors and holding them by the hand. They should retain a wholly owned public corporation. All the other things that they want to do can be done just as easily by retaining all the assets, including the labour force, within the public sector. To continue producing huge documents and inviting Touche Ross and other consultants to go through the dockyards is a costly waste of time and will be of no benefit to anyone in the Navy or in the dockyard. It is costly to the country as a whole.
  Mr. Gordon Brown: The purpose of the new clause is to ensure that information not available to us before the implementation of the scheme will be available to the House after its implementation. I emphasise what my hon. Friend the Member for Dunfermline, West (Mr. Douglas) has just said. We are worried about the absence not only of the right hon. Member for Henley (Mr. Heseltine), who was not just the author of the scheme, but who made such extravagant claims for it, but of the Secretary of State for Defence, who is a newcomer to the privatisation of dockyards. We are concerned, too, about the absence of almost all Conservative Members with constituencies in the south-west, who have said to local trade unionists at Devonport that, while they could not be present in Committee, they were examining the scheme with interest.
  6.45 pm
  I should have thought that the Government would be anxious to accept the new clause, because it will allow them to prove to the House that there will be savings and to test the philosophy of value for money and open competition. The new clause is very much in line with the recommendation of the all-party Public Accounts Committee, which asked that there should be proper monitoring of the scheme. The new clause would get over the problem which the Public Accounts Committee foresaw early on, when it said that the evidence presented to it by the Ministry of Defence about savings was about the worst evidence that it had ever received.
  I can understand the embarrassment of Ministers if they were to accept the amendment, because they would have to show to the House and to another place, year in, year

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  out, that an exercise whose sole purpose was to save money would end up costing money, not just in one year or two years, but for the rest of the decade, and almost certainly for the rest of the century. The evidence would show that the Ministry of Defence, the Admiralty Board, and the managing directors of Devonport and Rosyth dockyards had been duped by Mr. Peter Levene and by the right hon. Member for Henley into believing that it was possible, by this shabby scheme, to make savings. We tabled the new clause because effectively the Bill offers a blank cheque to two private contractors who will be in a monopoly position to dictate the terms of refits for vessels and submarines for the Royal Navy.
  What we know already is alarming enough. The Ministry of Defence will have to ask the Treasury to set up a private pension fund, which will cost £150 million, or perhaps £200 million. The initial bill for redundancy payments will be about £40 million, and private consultants are to be paid £30 million, making a total of £70 million for transitional costs. Other costs associated with starting up the scheme will be involved in the creation of a new stores and supply organisation if the contractor decides that he wants to contract out, and we are reliably told that that could cost as much as £46 million. It has been conceded by the Minister's working party that the expansion of the fleet maintenance base will cost several million pounds.
  The Minister of State has a duty to tell the House today what he will cancel to pay all the start-up costs, which I estimate to be about £300 million even in the first year of the scheme. Will he cancel the type 23s? Will he not proceed with the auxiliary oil replenishment vessels, for which there is such fierce competition between two shipyards? Are savings to come only from the Navy, or from the Navy, the Army and the Air Force? He should tell us how his Department proposes to pay an initial bill which could run beyond £300 million in the first year after the implementation of the scheme.
  Those are only the known costs associated with the start-up of the privatisation project. The Minister ought to tell us his estimate for the profits of a private operator. My assumption is that on a turnover of £415 million for the dockyards they would not be less than 10 per cent., making an additional cost of £40 million, which must be recouped.
  The Minister ought to tell us what exactly the cost of the new monitoring organisation which he is proposing to set up will be. Our estimate is that it will take about £11 million a year to pay for the additional hundreds of staff who will be involved only in supervisory operations. The Minister ought to tell us what the additional costs associated with value added tax will be, and the costs of setting up an additional and new form of accountancy organisation to which his Ministry is committed. We ought to be told what the known costs that the Ministry of Defence has to recoup by savings in other areas will be for each year that the scheme is in operation. Again, these are only the known costs associated with the year-to-year operation of the dockyards under private control.
  There are also the unknown costs and the uncalculable costs because, no matter what it says in the tender documents, the Ministry of Defence, in its advice to contractors, is effectively enabling two companies to dictate the price at which they will do work.
  The problem of emergency work during the period of refits has not been properly addressed by the Ministry of
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  Defence in its proposals for this scheme. The problem of unprogrammed work, when the contractor will have to change his basic timetable to accommodate the Ministry of Defence, has not been dealt with either. The problem of emergency work is dealt with in only one paragraph of one of the working party reports, where the Ministry readily concedes that it will have to reimburse the contractor for taking on emergency work demanded by the fleet which would interfere with the private contractor's programme. This is unique. The Ministry of Defence will pay extra money to use a facility that it owns.
  I do not understand why the Ministry of Defence has not been prepared to accept the advice of the Treasury, which in its privatisation guidelines make it clear that
  "When work is transferred to the private sector it is important to consider the problems that might arise if a department becomes tied to a monopoly supplier"
  We know that the record of the private sector in naval refits is inferior to that of the public sector. The Minister cannot produce any evidence, either from the experience of the 1960s and 1970s or from recent refits such as HMS Redpole, that the private sector is better for quality, efficiency, delivery time or cost. All previous reports on dockyard work, whether the Speed report, the Hudson report or the Mallabar report, have concluded that the public sector is more dependable, more efficient and cheaper.
  The Ministry of Defence admits that transitional costs will be very high, that the year-to-year costs to the defence budget will be greater than if the dockyards were run under the present public sector arrangements, and that there is a price to be paid for demanding emergency unprogrammed work under private control. Having heard all the evidence that the public sector is better for time, efficiency, delivery and cost, the Ministry is prepared to hand the dockyards over to private contractors.
  The purpose of the Levene document, which initiated this sorry tale of events about the dockyards, was to save money. When the Gracious Speech announced that the dockyards were to be moved to commercial management, the stated objective was to secure value for money. When the right hon. Member for Henley defended his programme before the House, he said that he would secure that value for money. The evidence is now overwhelming and clear that there is not a hope of the Ministry of Defence saving money. Indeed, it will have to spend money. Far from diminishing the costs of naval support, the scheme will increase them.
  The Minister should accept the new clause, tell us that there will be further consultation on the scheme, and withdraw the Bill.
  Mr. Michael Hancock: The hon. Member for Dunfermline, East (Mr. Brown) has got to the crux of the matter. The absence of Conservative Members is a clear sign of widespread support for new clause 1 No doubt the Minister is hoping that their absence will mean that he has an easier task convincing his one hon. Friend who is present that the Bill should be accepted.
  New clause 1 asks the questions that the Minister promised to answer time and again in Committee to justify the Bill and what gains there will be for the national purse, the Royal Navy and for the people who work in the dockyards. There has been no attempt to answer those questions. As my right hen. Friend the Member for Plymouth, Devonport (Dr. Owen) said, £750 million is

  71
  invested in the Devonport dockyard alone. These are huge sums of money, so we should know what benefits will accrue from the transfer of responsibilities.
  The Ministry's notes on clauses beg more questions. Many of us have been denied access to documents that might have provided the answers. The notes state the Ministry's objectives. The first is full value for money from the defence budget. How will such value be achieved? Where will savings be made? The second objective is maximum competition. The third is freedom for local management from public sector constraints, enabling them to operate effectively in a competitive environment. The fourth is improved efficiency. If efficiency is improved, there must be savings. Why are Ministers reluctant to elaborate on what efficiency and savings will mean? The fifth objective is a clear separation between the dockyard as the supplier and the Royal Navy as the customer.
  HMS Illustrious returned to Portsmouth recently because of gearbox trouble. Both of the other Invincible class carriers were tied alongside the fleet maintenance depot in Portsmouth. What would have happened, as might happen in two years' time, if the fleet maintenance operation had been dealing with one of the other carriers? There would have been protracted negotiations between the Navy, the organisation in Bath and the contractor about shifting the ship from Portsmouth to Devonport and about the cost of the job. It is unfortunate and dangerous that we are putting the future role of the Navy at risk because we are allowing a contractor to name his price. The Government should ensure that there is no doubt about the financial justification for this Bill. The Minister surely cannot fail to answer the question that this new clause asks. Failure to do so must convince everybody, including the Minister's colleagues, that the Bill has no future, and must go into the wastepaper bin.
  7 pm
  Mr. Bruce George: When I look at the Government Benches, I am reminded of an Adjournment debate. It is a profoundly disillusioning experience for many hon. Members. I suppose that there are people who still naively assume that the Conservative party is the party of defence. That cannot be justified by the attendance of Conservative Members in the Chamber or by the Government's decisions. We know that Conservative Members are in the building because they all poured into the Chamber an hour and a half ago. However, it is clear that they have no stomach for what is being decided in their name. Apart from it being profoundly disillusioning, it is also unusual to find, perhaps for the first time, that those on the Opposition Benches this evening greatly outnumber those on the Government Benches; and those who are sitting in the Civil Service box outnumber both Opposition and Government supporters. It has been worth coming into the Chamber for just that experience.
  My right hon. Friend the Member for Llanelli (Mr. Davies) said that the Government team is acting at the behest of the Treasury. That is wrong. It is acting at the behest of Tory Central Office and of those who drafted the last Conservative manifesto which eulogised privatisation. That was to be the solution and the cure for many of the ills in our economy. When that principle was applied to
  72
  the Ministry of Defence, it was obliged to implement lunacies that had been decided upon years ago in the smoke filled rooms of Tory Central Office, or wherever the manifesto was drafted.
  The result of the Government's policies provides an inane solution. It will exacerbate this country's already considerable defence problems. The Government are hopelessly over-committed. The resources available to them to meet their growing commitments are inadequate. As the Government are unable, for one reason or another—public opinion is one factor—to increase defence expenditure in order to meet their growing commitments, they have thrown the principles of the market place at these complex problems. However, when one looks rationally at how efficiency is to be gained and at how our fighting forces are adequately to be equipped and led, one winces at what one sees. By their dogmatic solutions the Government are trying to save money. However, the contracting out that has taken place has been something of an illusion. Those who have suffered most have been cleaners or those who are engaged in security. The Government have not gained, therefore, from contracting out.
  The Government have also tried to reorganise the Ministry of Defence because they believe that that is a means by which efficiency can be achieved. However, the amount that has been saved by greater efficiency in the Ministry of Defence is marginal. The Government have tried the privatisation solution. I served on the Standing Committee that dealt with the privatisation of the royal ordnance factories. I do not think that the public has gained very much from that process. Political dogma and the desire for efficiency have resulted in the Bill that we have been considering for the past few months.
  If the Government believe that the public will gain from the privatisation of the dockyards, they are making a great mistake. It has already been pointed out that when the ledger is finally drawn the public will be the net losers—and very heavy losers. The gainers will be those who are lucky enough to pick up the contracts. Further losers will be our armed forces. The Ministry of Defence will have to bear the additional cost of consultancy fees. This is a growth industry. Hundreds of consultancies and so-called public relations experts will be involved. There will also be the cost of setting up pension funds for the staff who have to be transferred. I agree that that has to be done, but it will be costly.
  In accordance with Mr. Speaker's wisdom, I am sure that the Ministers are disappointed that they will be unable to listen to and comment upon points relating to security. Instead of just the Ministry of Defence police, there are to be two security systems in the dockyards. There will be the Ministry of Defence police—although Ministers might have liked to get rid of them, they were unable to do so, for all sorts of reasons—and alongside them there will be the gradual extension of private security. That, too, will have to be paid for. When one looks at the additional staff who will have to be employed by the Ministry of Defence, the cost of redundancies and the value added tax that will have to be paid, one begins to construct a ledger and to realise that the public will be the losers.
  The clause is important because it points out to the House and to the public, if it needs to be pointed out, that

  73
  this privatisation lark will be yet another disaster. The clause therefore seeks to establish a modicum of parliamentary accountability and scrutiny.
  Before the debate began, I was in the Library. I was not looking through the documents to which reference has been made. They were being bandied about in the Chamber, probably to greater effect. I was looking at the legislative role of Congress. Congress is very much involved in the legislative process. Hon. Members discuss each year one or two defence Bills. This Bill was introduced in such a way as to make constructive criticism and constructive comment exceedingly difficult.
  If one believes in efficiency, the Government ought to consider that they have been provided with a great opportunity to justify how clever they have been by being obliged to place before the House the savings that they intend to make. The new clause ought to be regarded by the Government and their supporters as providing an opportunity to justify those savings. However, none of the Government Back Benchers who served on the Standing Committee is in the Chamber. It has brought a new dimension to the term "Trappist". At least they were physically present in Committee, but they are not physically present, or even possibly spiritually or intellectually present, for these proceedings. Government Back Benchers fulfilled their obligations to the Whips and then cleared off. It is a pity that they are not here at least to justify to their constituents why they wasted space being on that Committee. At least two members of our Committee had the excuse of being simultaneously engaged in the inquiry into Westland.
  This clause is an attempt to establish some form of accountability. In view of the proceedings in Committee and the charade that we are going through at the moment, being denied the information essential to us as legislators in achieving our objective of scrutinising Government policy and legislation, it is clear that the Government are seeking to bypass Parliament, or to use merely the shell of Parliament, in order to go through the process with as little inconvenience as possible to themselves.
  If the vast numbers of Conservatives who are at present in their offices rush out when the call comes and, with superb efficiency, vote down new clause 1, the Government will lose an opportunity, even within their own warped ideological perspective, to show the House and the world how effective they have been in making savings for the public Exchequer.
  I believe that this clause deserves, but will not get, proper attention from the Government and Government Back Benchers. It seeks to achieve a small degree of parliamentary accountability, which I believe that this Government will seek to deny. I believe that the reason that it will not be approved is that the Government realise, if they look very carefully at what they have decided and what they have put into this legislation, that the savings will prove an illusion. The people who gain from this process will be, not the services or the British taxpayer, but the dogmatists and those who may be able to pick up the contract and profit financially.
  My name is appended to the list of those who tabled new clause 1, and I very much hope that those people who are not listening to this debate will have some pangs of conscience and will support it. If the clause is approved, the many hours that we spent in Committee and the hours that we are spending here may not prove to be such a waste of time.
  Mr. Norman Lamont: A large number of points have been raised in this debate and I shall do my best to reply to them and to give the House some of the information that it has been seeking. First, however, I wish to direct my remarks to what new clause 1 does, because I do not believe that it is sensible.
  The new clause would have my right hon. Friend the Secretary of State set out all the costs and savings of £100 or more resulting from the decision that the dockyards services should be provided by a company under commercial management. The new clause does not say when such a report is to be made. Clearly, since it talks of savings resulting from arrangements made, it does not mean that such a report is to be made before the Government's policy is implemented. It does not say whether the report should be made after the scheme has been in operation for a month, a year, five years or the full term of the original contract, which is seven years. The House should also consider what, even were the clause worded properly, it would achieve in terms of legislation. It does not say what should happen if the savings are large, small or non-existent. For those reasons, I do not think that the clause would achieve anything.
  I appreciate that one of the reasons for tabling the new clause was to raise questions about the costs and the savings, and I should like now to try to reply to some of the points that have been raised.
  It is open knowledge that our latest costings, which were made in February of this year, showed an annual surplus to the Exchequer of £21 million over each of the first 10 years of commercial management, during which time the setting-up costs would be amortised, and thereafter savings were estimated at some £28 million a year. On our latest estimates, therefore, there should be savings of £210 million in the first 10 years, and greater savings thereafter.
  Hon. Gentlemen have referred to the amortisation of costs over the 10-year period and have criticised what they see as the heavy setting-up costs involved. One point that is ignored by hon. Gentlemen when they make these criticisms is that whatever system is evolved to try to improve the performance of the dockyards—hon. Gentlemen have been urging upon us another solution, that of having a trading fund, some other middle way, as they see it—many of these initial setting-up costs will have to be incurred.
  It seemed to be common ground in Committee that we need to tackle the problem of inefficiency in the dockyards. Report after report has said that performance is not all that it might be, and that such things as the setting up of accountancy systems, which involve software programmes and the purchase of hardware, are necessary for the modernisation of the dockyards and the setting up of a proper commercial framework. That would have to happen whichever solution we adopted for the dockyards.
  7.15 pm
  Mr. O'Neill: Given that the Government undertook a wide-ranging survey of the various options beforehand, perhaps the Minister of State could tell us how much the start-up costs of a PLC would have been, so that we have some realistic basis of comparison. As far as we can see, none of the alternatives would have cost the £70 million or so which has been mentioned by various hon. Members.
  Mr. Lamont: I shall go further into the question of the £70 million, and I hope that when I do that it will become

  75
  apparent that many of the measures to improve efficiency would be necessary whichever vehicle was chosen, and many of them are the manifestations of increased efficiency.
  Mr. Denzil Davies rose—
  Mr. Lamont: I shall give way to the right hon. Gentleman, but then I want to take my argument further, because it meets exactly the point raised by the hon. Member for Clackmannan (Mr. O'Neill).
  Mr. Davies: The Minister said that the annual surplus to the Exchequer over the 10-year period would be £21 million. Can he tell us what the annual deficit to the Ministry of Defence would be in each of those 10 years?
  Mr. Lamont: I am coming on to the impact on defence as well.
  Mr. Gordon Brown rose—
  Mr. Lamont: No, I shall proceed just a hit further.
  As the new clause refers to a report to Parliament, the House might like to know that it is our intention that the customer organisation—or, to give it its proper title, the Directorate General of Ship Refitting—will produce an annual report of the previous year's dealings with the dockyard company at each yard and with others involved in the refitting and repair of naval vessels. As, unlike now, there will have been a separation of the Navy as customers from dockyard to supplier, and there will be in existence commercially accepted accounting procedures, the annual report which the DGSR presents will have to be full and informative. Additionally, the books of the two dockyard companies will be open to my Department to the same extent as are any other defence contractors' books when we have negotiated a non-competitive contract with them.
  The right hon. Member for Llanelli (Mr. Davies) outlined the structure of the savings and costs. While in no way retreating from the figures that have been given earlier to the House and to the Public Accounts Committee, I should like to say that the figures are based on worst case assumptions and are not a prediction of what will happen. There are many variables; for example, the savings that can be achieved and the efficiency gains that may be exceeded. The figures are not a prediction, but we have had to answer questions and make certain assumptions.
  The right hon. Gentleman asked what changes had been made since the previous estimates. They include alterations to the amount of profit that has been assumed. The profit that is now being assumed is calculated according to the Ministry of Defence profit formula, but there is not one profit formula. Different profit formulae are applicable to different industries; for example, according to their capital intensity. Another example is the setting-up costs and the implementation of commercial accounting systems, which include software and hardware. All those fall within the £70 million initial costs that we have been assuming.
  The right hon. Member for Llanelli outlined the structure of costs and savings as he saw it, and basically got the equation right. However, I cannot fill in all the figures under those headings, because it would not be right to do so. We would certainly not wish potential contractors to know certain of them, but I shall reply to some. The
  76
  right hon. Gentleman is right in saying that the initial costs include the changes in working practices, the preparatory work that is being done, and worst case assumptions about redundancies, which may not happen. Annual costs cover the customer organisation, contractors' profits and amortisation. We estimate the initial costs at £70 million. The figures that we have been analysing are nowhere near the figures mentioned by the hon. Member for Dunfermline, East (Mr. Brown), who talked about £350 million. I noticed that he was at least modest in that he did not go as far as some trade unions have done in mentioning a figure in excess of £400 million.
  Mr. Gordon Brown: If the Minister accepts the structure set out by my right hon. Friend the Member for Llanelli (Mr. Davies), obviously he is conceding that the scheme will cost the Ministry more. Will he answer the specific point about the initial start-up cost? If we include the cost, readily admitted in the Bill, of £200 million to set up the private pension scheme, the transitional costs of £70 million, the extension to the fleet maintenance base, the setting up of a new supply organisation, and the possibility of having to establish a new accountancy organisation, we see that the costs in the first year will be more than £300 million.
  Mr. Lamont: The costs will be nothing like that.
  Mr. Brown: Tell us why not.
  Mr. Lamont: If the hon. Gentleman will allow me to answer the questions, he will possibly see the substance of my position, even if he does not agree with it. He is wrong about pensions. The cost is merely the shifting of a liability which the Government would have incurred in any case. It is not additional public expenditure, because those liabilities already exist. Future pension contributions will be an addition to the public purse, and I shall come to that.
  The right hon. Member for Plymouth, Devonport (Dr. Owen) asked about the new DGSR organisation. We are now assuming on a worst case basis that as many as 800 people could be involved. Hon. Members asked why that may be necessary. I hope that it will not be necessary. However, new tasks are being done which were not undertaken under the old organisation. There were no contracts before for ship refitting. There is the production of specifications in support of project contracts, the negotiation, placing and monitoring of contracts, and overseeing in the dockyards. Part will be placed in Bath, and part in the dockyards.
  Mr. Douglas: Will the Minister confirm this mind-boggling statement, which appeared in the letter from C. M. Edwards, the director of contracts ship refitting:
  "The Ministry of Defence has established DGSR as a new organisation to act for the customer and exercise day to day project management responsibility for the Term Contract and for individual project contracts."
  Is it realistic to assume that the DGSR based in Bath or elsewhere will exercise day-to-day project management? The Minister shakes his head, but that is what the letter says. Do we already have a misleading document?
  Mr. Lamont: The hon. Gentleman knows perfectly well that the customer organisation will not be managing projects as projects are at present managed in the dockyards. I hope that the customer organisation will not involve the sorts of numbers or costs that Opposition

  77
  Members have been talking about. We have been open about that, and have been making our arguments about savings on the worst case possibilities.
  The hon. Member for Portsmouth, South (Mr. Hancock) and the right hon. Member for Llanelli said that we do not know what the efficiency savings will be, and challenged me to disclose them to the House. The right hon. Gentleman is far too clever for that. He knows perfectly well that I cannot tell the House what efficiency savings we are assuming because we do not want to inform contractors of that at this stage when we are just going out to tender. We do not want to tell them our assumptions for productivity increases and cost reductions. It would make no sense for us to display that to the world at the precise moment when we are asking companies to place competitive tenders and when we want to choose the best one in terms of productivity and efficiency. We have an assumption which is built into the figures and is behind the £21 million and £28 million savings after the overheads have been recovered.
  The right hon. Gentlemen the Members for Llanelli and for Devonport made great play of the impact on the Defence Vote. The Ministry of Defence will incur certain costs which are not at present incurred. Obviously, the contributions to pensions will in future be paid for by the Ministry of Defence as an overhead, as is the case with all customers of companies. Customers often pay a company's overheads in the prices charged. No other part of the Government can pay. The Treasury cannot pay the pensions of a private sector company through the prices. Obviously, the Ministry of Defence must do that, and that has an effect on the Defence Vote. The real point is not the effect it will have on the Defence Vote, but rather the effect it will have on the defence programme, and this extra cost will be taken into account in the public expenditure survey and when we decide what the programme will be for the defence budget.
  7.30 pm
  The hon. Member for Dunfermline, East (Mr. Brown), in another instance of his wild ideas about extra costs, spoke about the extra costs on a supply organisation, and he trotted out a figure of £46 million, saying that he had that sum on very good authority. I think that the hon. Gentleman was thinking of working group one, which was considering a possible need for proportionately higher stockholdings if the contractors decided to supply their own spares, and the possible value of the spares was assessed in the contract as being £46 million. However, that does not mean that an additional purchase must be involved, but simply that there would be a smaller reduction in the overall spare holdings so that operational support remained at an acceptable level. There again, just as elsewhere, the hon. Gentleman has been content to make wild allegations and exaggerations not based on fact. That was made clear to the hon. Gentleman in, I think, the Committee stage.
  Mr. Gordon Brown: What is the point of duplicating these supply organisations?
  Mr. Lamont: I explained to the hon. Gentleman on many occasions during the Committee stage that sometimes a contractor might wish and think it more efficient to have his own spares organisation and to provide them. However, the extra cost involved would be very small. At some time it could be that there would not
  78
  be the access to that spares supply that there is at the moment from the naval base to the dockyard. That is the simple administrative point, but it does not involve a huge extra cost.
  Hon. Members also asked various questions about consultants. I think that again a sum of £40 million was alleged by one hon. Member. Most of the money that has been spent on consultants has been spent on the setting up of commercial accounting systems. As I have said, that involves the purchase of hardware and software. The setting up of such systems has amounted to about £15 million, and the other support for consultants has amounted to £5 million, but that is all included within the £70 million initial costs. That cost, when it has been amortised, will result in savings to the Exchequer of £28 million, and of £21 million a year even before that.
  Mr. Denzil Davies: The hon. Gentleman has said again that there will be an annual surplus to the Exchequer of £21 million a year over a period of 10 years. What will be the annual deficit to the Ministry of Defence budget over that 10 years? Will it not be about £20 million or £21 million every year over 10 years?
  Mr. Lamont: I dealt with the point about the de fence Vote. I said that there might be adjustments and that obviously certain factors had an impact on the defence Vote. I explained what those factors were, but I said that this matter would be taken into account by my right hon. Friend the Chief Secretary when we determine what the Vote on the defence budget will be. The relevant point is that there will be savings to the Exchequer.
  It is also relevant that everyone has agreed that there is a problem in the naval dockyards because of inefficiencies. Report after report has said that. Right hon. and hon. Gentlemen are not facing up to that fact, however much they complain about the costs of the changes that we are implementing. They have said that there are other ways of making the dockyards more efficient, but they should recognise that the costs to which I am now referring in answering questions would be incurred in any alternative solution as well. The only difference is that an alternative system would not work. We are the first Government who have faced the problem. To implement these efficiency measures is not a matter of dogma: it is simply common sense. It is of interest not just to taxpayers but to the armed forces and the Navy in getting a good service out of the naval dockyards. For that reason, I urge my right hon. and hon. Friends to reject the new clause.
  Mr. O'Neill: Anyone who had not been on the Committee on the Bill and who was in doubt about why earlier we sought time to examine the information made available to us at such a late stage this afternoon will now understand our reasons, having heard the inadequacy of the Minister's reply. He commenced by talking about the amendment in the time-honoured way, saying that there could be shortcomings, that technical matters were involved, that the timing was not right, that the phraseology was incorrect, and so on. The Minister agrees to one of the later amendments. In that case he seeks to improve it himself by changing it. Therefore, if the Minister has difficulty with amendments, the remedy lies in his own hands.
  The inadequacy of the Government's response this evening makes clear, first, that they do not really know how much the savings will be. As a last flourish, in what

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  one imagined was the peroration of the Minister's speech, he referred to the inadequacy of any alternative solution to the problem, but he could not even tell us how much the commencement costs of a plc would be as against the option selected by the Government.
  It has been broadly accepted by the Opposition (and the Minister has not chosen to refute this) that, starting last year, with a saving of £26 million, the figure had been whittled down by this February to £21 million, a figure which, on a turnover of about £400 million, barely makes the whole exercise worth the candle. As my hon. Friend the Member for Dunfermline, East (Mr. Brown) said, it is barely worth the candle when we consider the bitterness caused, the deterioration in industrial relations, and the problems created for management in these yards.
  So far, no attempt has been made to calculate how long it has taken for management and staff of the yards to explain to consultants what the changes will involve, nor has the time been calculated that it has taken for the contractors to have introduced to them the workings of the yards. What will be the likely costs in the months and years ahead when the members of middle management who are still there will be working out the essential work to be carried out in the yards? Those people will have to hold the hands of the contractors while they begin to find their way around this complex industrial organisation.
  This evening we have heard that there is a possibility that the customer and supplier organisations will be based at perhaps Bath, Devonport or Rosyth. According to my hon. Friend the Member for Dunfermline, East, who has had an opportunity to read some of the material on this matter, some of the customer organisations will in fact be responsible for day to day operations. The Minister says that that is not so because such operations are far too detailed. One can imagine that that is why such an operation would be in Rosyth, Plymouth or Devonport in the first place. People could be in Bath and jump on the train to get quickly to other places if they had to go there as consultants. Frankly, we know that this is merely evidence of the lack of thought by the Minister and his colleagues.
  We know that there has been no lack of effort on behalf of the 19 working groups, which have produced report after report. The problem is that these reports have not yet been properly quantified. The suggestion has been made that once a year, following contractorisation, this customer organisation will produce an annual report of such detail that we shall be able to see clearly the extent of the savings. In this connection, the quality of the responses from the Government would suggest that there is no likelihood that the annual report from the director general of ship refitting will allay our fears or clearly indicate to us what will be the costs and savings of the new organisation.
  The Opposition have cited different costings. We need not just a report by the DGSR but a report on which the Comptroller and Auditor General can comment. The Public Accounts Committee said that it was not satisfied that there had been a close enough examination of the massive assets to which the right hon. Member for Plymouth, Devonport (Dr. Owen) referred during his brief sojourn in the Chamber, which represent decades of investment by the Exchequer and the Ministry of Defence. A tuppence ha'penny report by the DGSR, perhaps from
  80
  its headquarters in Bath with a couple of paragraphs produced in Rosyth and another couple in Plymouth, is not sufficient. These figures are not adequate.
  The new clause specifically says that any savings of more than £100 must be brought to the attention of the House in an annual report. The Government's assurances are inadequate. I therefore ask hon. Members to join with us in support of the new clause. If the measure does nothing else for industrial relations in the dockyards and for the quality of the workmanship provided by the contractorised yard, it certainly will provide a modicum of protection for the taxpayers' massive investments. I hope that, in the long run, it will give the Navy the service enjoyed for centuries through our dockyards. That service has been jeopardised by the Government's cavalier approach.
  Question put, That the clause be read a Second time:—
  The House divided: Ayes 170, Noes 224.

  Division No. 120]

  [7.42pm

  AYES

  Alton, David

  Evans, John (St. Helens N)

  Archer, Rt Hon Peter

  Ewing, Harry

  Ashdown, Paddy

  Fatchett, Derek

  Ashley, Rt Hon Jack

  Faulds, Andrew

  Atkinson, N. (Tottenham)

  Field, Frank (Birkenhead)

  Bagier, Gordon A. T.

  Fields, T. (L'pool Broad Gn)

  Banks, Tony (Newham NW)

  Flannery, Martin

  Barnett, Guy

  Foot, Rt Hon Michael

  Beckett, Mrs Margaret

  Forrester, John

  Beith, A. J.

  Foulkes, George

  Bell, Stuart

  Fraser, J. (Norwood)

  Benn, Rt Hon Tony

  Freeson, Rt Hon Reginald

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

  George, Bruce

  Bermingham, Gerald

  Gilbert, Rt Hon Dr John

  Blair, Anthony

  Godman, Dr Norman

  Boothroyd, Miss Betty

  Golding, John

  Boyes, Roland

  Gould, Bryan

  Bray, Dr Jeremy

  Gourlay, Harry

  Brown, Gordon (D'f'mline E)

  Hamilton, James (M'well N)

  Brown, Hugh D. (Provan)

  Hamilton, W. W. (Fife Central)

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

  Hancock, Michael

  Brown, Ron (E'burgh, Leith)

  Harman, Ms Harriet

  Bruce, Malcolm

  Hart, Rt Hon Dame Judith

  Buchan, Norman

  Haynes, Frank

  Caborn, Richard

  Healey, Rt Hon Denis

  Callaghan, Jim (Heyw'd & M)

  Hogg, N. (C'nauld & Kilsyth)

  Campbell, Ian

  Home Robertson, John

  Campbell-Savours, Dale

  Howell, Rt Hon D. (S'heath)

  Carlile, Alexander (Montg'y)

  Hoyle, Douglas

  Cartwright, John

  Hughes, Robert (Aberdeen N)

  Clark, Dr David (S Shields)

  Hughes, Roy (Newport East)

  Clarke, Thomas

  Hughes, Sean (Knowsley S)

  Clay, Robert

  John, Brynmor

  Clelland, David Gordon

  Kaufman, Rt Hon Gerald

  Clwyd, Mrs Ann

  Kennedy, Charles

  Cocks, Rt Hon M. (Bristol S)

  Kilroy-Silk, Robert

  Cohen, Harry

  Kirkwood, Archy

  Cook, Frank (Stockton North)

  Lambie, David

  Corbett, Robin

  Lamond, James

  Corbyn, Jeremy

  Leighton, Ronald

  Craigen, J. M.

  Lewis, Terence (Worsley)

  Crowther, Stan

  Litherland, Robert

  Cunliffe, Lawrence

  Livsey, Richard

  Dalyell, Tam

  Lloyd, Tony (Stretford)

  Davies, Rt Hon Denzil (L'lli)

  McCartney, Hugh

  Davies, Ronald (Caerphilly)

  McKay, Allen (Penistone)

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

  McKelvey, William

  Deakins, Eric

  McNamara, Kevin

  Dewar, Donald

  McTaggart, Robert

  Dixon, Donald

  Madden, Max

  Douglas, Dick

  Marek, Dr John

  Duffy, A. E. P.

  Marshall, David (Shettleston)

  Eadie, Alex

  Martin, Michael

  Eastham, Ken

  Mason, Rt Hon Roy

  Edwards, Bob (Wh'mpt'n SE)

  Maxton, John

  81

  Maynard, Miss Joan

  Sedgemore, Brian

  Meacher, Michael

  Sheerman, Barry

  Meadowcroft, Michael

  Sheldon, Rt Hon R.

  Michie, William

  Shore, Rt Hon Peter

  Mikardo, Ian

  Short, Ms Clare (Ladywood)

  Millan, Rt Hon Bruce

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

  Miller, Dr M. S. (E Kilbride)

  Silkin, Rt Hon J.

  Mitchell, Austin (G't Grimsby)

  Skinner, Dennis

  Morris, Rt Hon A. (W'shawe)

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

  Morris, Rt Hon J. (Aberavon)

  Snape, Peter

  Nellist, David

  Soley, Clive

  O'Neill, Martin

  Stott, Roger

  Orme, Rt Hon Stanley

  Strang, Gavin

  Park, George

  Thomas, Dafydd (Merioneth)

  Parry, Robert

  Thomas, Dr R. (Carmarthen)

  Patchett, Terry

  Thompson, J. (Wansbeck)

  Pavitt, Laurie

  Thorne, Stan (Preston)

  Pike, Peter

  Tinn, James

  Powell, Raymond (Ogmore)

  Torney, Tom

  Prescott, John

  Wallace, James

  Radice, Giles

  Wardell, Gareth (Gower)

  Randall, Stuart

  Wareing, Robert

  Redmond, Martin

  Weetch, Ken

  Rees, Rt Hon M. (Leeds S)

  White, James

  Richardson, Ms Jo

  Wigley, Dafydd

  Roberts, Allan (Bootle)

  Wilson, Gordon

  Robertson, George

  Winnick, David

  Robinson, G. (Coventry NW)

  Young, David (Bolton SE)

  Rogers, Allan

  Rooker, J. W.

  Tellers for the Ayes:

  Ross, Ernest (Dundee W)

  Mr. Allen Adams and

  Ross, Stephen (Isle of Wight)

  Mr. John McWilliam.

  NOES

  Alison, Rt Hon Michael

  Goodlad, Alastair

  Ancram, Michael

  Gorst, John

  Ashby, David

  Gow, Ian

  Atkins, Robert (South Ribble)

  Gower, Sir Raymond

  Baker, Nicholas (Dorset N)

  Grant, Sir Anthony

  Beaumont-Dark, Anthony

  Greenway, Harry

  Biggs-Davison, Sir John

  Gregory, Conal

  Body, Sir Richard

  Griffiths, Sir Eldon

  Boscawen, Hon Robert

  Griffiths, Peter (Portsm'th N)

  Bowden, Gerald (Dulwich)

  Grist, Ian

  Brandon-Bravo, Martin

  Ground, Patrick

  Brinton, Tim

  Hamilton, Neil (Tatton)

  Brooke, Hon Peter

  Hanley, Jeremy

  Buchanan-Smith, Rt Hon A.

  Hannam, John

  Buck, Sir Antony

  Hargreaves, Kenneth

  Burt, Alistair

  Harris, David

  Carlisle, John (Luton N)

  Harvey, Robert

  Chapman, Sydney

  Haselhurst, Alan

  Chope, Christopher

  Hawkins, C. (High Peak)

  Clark, Sir W. (Croydon S)

  Hawksley, Warren

  Cockeram, Eric

  Hayes, J.

  Colvin, Michael

  Hayhoe, Rt Hon Barney

  Coombs, Simon

  Heathcoat-Amory, David

  Cope, John

  Heddle, John

  Couchman, James

  Henderson, Barry

  Cranborne, Viscount

  Hickmet, Richard

  Currie, Mrs Edwina

  Hill, James

  Dorrell, Stephen

  Hind, Kenneth

  Douglas-Hamilton, Lord J.

  Hirst, Michael

  Durant, Tony

  Hogg, Hon Douglas (Gr'th'm)

  Eyre, Sir Reginald

  Holland, Sir Philip (Gedling)

  Fairbairn, Nicholas

  Holt, Richard

  Favell, Anthony

  Hordern, Sir Peter

  Fenner, Mrs Peggy

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

  Fletcher, Alexander

  Howell, Ralph (Norfolk, N)

  Fookes, Miss Janet

  Hubbard-Miles, Peter

  Forth, Eric

  Jackson, Robert

  Fox, Marcus

  Jessel, Toby

  Franks, Cecil

  Jones, Gwilym (Cardiff N)

  Fraser, Peter (Angus East)

  Jones, Robert (Herts W)

  Freeman, Roger

  Jopling, Rt Hon Michael

  Fry, Peter

  Joseph, Rt Hon Sir Keith

  Galley, Roy

  Kellett-Bowman, Mrs Elaine

  Gardiner, George (Reigate)

  Key, Robert

  Gardner, Sir Edward (Fylde)

  King, Roger (B'ham N'field)

  Garel-Jones, Tristan

  Knight, Greg (Derby N)

  82

  Knight, Dame Jill (Edgbaston)

  Roberts, Wyn (Conwy)

  Knowles, Michael

  Roe, Mrs Marion

  Lamont, Norman

  Rossi, Sir Hugh

  Lang, Ian

  Rowe, Andrew

  Latham, Michael

  Rumbold, Mrs Angela

  Lee, John (Pendle)

  Ryder, Richard

  Leigh, Edward (Gainsbor'gh)

  Sackville, Hon Thomas

  Lennox-Boyd, Hon Mark

  St. John-Stevas, Rt Hon N.

  Lester, Jim

  Shaw, Giles (Pudsey)

  Lewis, Sir Kenneth (Stamf'd)

  Shaw, Sir Michael (Scarb')

  Lilley, Peter

  Shelton, William (Streatham)

  Lloyd, Peter (Fareham)

  Shepherd, Colin (Hereford)

  Lord, Michael

  Shepherd, Richard (Aldridge)

  Luce, Rt Hon Richard

  Shersby, Michael

  McCrindle, Robert

  Silvester, Fred

  McCurley, Mrs Anna

  Sims, Roger

  MacKay, Andrew (Berkshire)

  Skeet, Sir Trevor

  MacKay, John (Argyll & Bute)

  Soames, Hon Nicholas

  McNair-Wilson, M. (N'bury)

  Spencer, Derek

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

  Spicer, Jim (Dorset W)

  Madel, David

  Spicer, Michael (S Worcs)

  Major, John

  Stanbrook, Ivor

  Malins, Humfrey

  Stanley, Rt Hon John

  Malone, Gerald

  Steen, Anthony

  Maples, John

  Stern, Michael

  Marlow, Antony

  Stevens, Lewis (Nuneaton)

  Mather, Carol

  Stewart, Allan (Eastwood)

  Maude, Hon Francis

  Stewart, Andrew (Sherwood)

  Mawhinney, Dr Brian

  Stewart, Ian (Hertf'dshire N)

  Mayhew, Sir Patrick

  Stokes, John

  Merchant, Piers

  Sumberg, David

  Meyer, Sir Anthony

  Taylor, John (Solihull)

  Miller, Hal (B'grove)

  Taylor, Teddy (S'end E)

  Mills, Iain (Meriden)

  Terlezki, Stefan

  Mills, Sir Peter (West Devon)

  Thompson, Donald (Calder V)

  Moate, Roger

  Thompson, Patrick (N'ich N)

  Monro, Sir Hector

  Thornton, Malcolm

  Montgomery, Sir Fergus

  Thurnham, Peter

  Moore, Rt Hon John

  Townend, John (Bridlington)

  Morrison, Hon C. (Devizes)

  Townsend, Cyril D. (B'heath)

  Morrison, Hon P. (Chester)

  Trippier, David

  Moynihan, Hon C.

  Twinn, Dr Ian

  Mudd, David

  van Straubenzee, Sir W.

  Neale, Gerrard

  Viggers, Peter

  Nelson, Anthony

  Waddington, David

  Newton, Tony

  Walden, George

  Nicholls, Patrick

  Walker, Bill (T'side N)

  Norris, Steven

  Wall, Sir Patrick

  Onslow, Cranley

  Waller, Gary

  Oppenheim, Phillip

  Ward, John

  Oppenheim, Rt Hon Mrs S.

  Wardle, C. (Bexhill)

  Ottaway, Richard

  Warren, Kenneth

  Page, Richard (Herts SW)

  Watts, John

  Parris, Matthew

  Wells, Bowen (Hertford)

  Patten, Christopher (Bath)

  Wells, Sir John (Maidstone)

  Pawsey, James

  Wheeler, John

  Pollock, Alexander

  Whitfield, John

  Porter, Barry

  Whitney, Raymond

  Powell, William (Corby)

  Wilkinson, John

  Powley, John

  Winterton, Nicholas

  Prentice, Rt Hon Reg

  Wolfson, Mark

  Price, Sir David

  Wood, Timothy

  Proctor, K. Harvey

  Woodcock, Michael

  Rathbone, Tim

  Yeo, Tim

  Renton, Tim

  Rhodes James, Robert

  Tellers for the Noes:

  Rhys Williams, Sir Brandon

  Mr. Michael Neubert and

  Ridley, Rt Hon Nicholas

  Mr. Archie Hamilton.

  Question accordingly negatived.

New Clause 2

  TRANSFERS OF SHARES IN COMPANIES PROVIDING DOCKYARD SERVICES
  'Any contract made between the Secretary of State and any dockyard contractor shall contain a proviso requiring the transfer to a person or persons not resident in the United Kingdom of any

  83
  shares in any company connected directly or indirectly with the provision of dockyard services by the dockyard contractor to be notified to the Secretary of State and where shares subject to such transfer exceed 5 per cent. in number or value of the total share capital of such company or companies, then the Secretary of State shall forthwith terminate the contract'.— [Mr. Denzil Davies.]
  Brought up, and read the First time.
  Mr. Denzil Davies: I beg to move, That the clause be read a Second time.
  New clause 2 is concerned with foreign ownership. I accept entirely that it is not easy to draft foolproof clauses, regulations or articles to cover such an area, and the Government will accept that that is not a defensive statement.
  Our first criticism of the Government with regard to foreign ownership is that they have put nothing in the Bill to prevent the foreign ownership and control of assets of national strategic importance. That is not surprising because the Government do not care. They are prepared to sell off almost anything to cobble up a bit of money. The dockyards are an important national asset and I believe that there will be widespread support both in the House and in the country for ensuring that the dockyards do not fall into the hands of foreign countries.
  In Committee, the Government said that it was not necessary to deal in the Bill with the question of foreign ownership. They said that their lawyers had come up with a complicated scheme to deal with the problem. No doubt the Minister or the Under-Secretary will tell the House —they have already told the Committee—what that scheme is.
  As I understand the scheme, if 30 per cent. of the shares in any one of the consortium companies—I suspect at the end of the day there will be a consortium of some kind —become owned by foreigners, however they are to be defined, there will be some mechanism, at the discretion of the Secretary of State, for the contract to be terminated.
  That would not happen automatically. The company apparently has a duty to notify the Ministry of Defence when the shareholding by foreigners has risen to 30 per cent. That is all that happens. Presumably the company will, out of the goodness of its heart, send a note to the Ministry to tell it that the company is now 30 per cent. owned by the Moscow Narodny bank nominees, or whoever it might be. At that point the Secretary of State may study the contract and consider whether he should terminate the contract.
  Frankly, for all the high drafting and precision that appears on the surface, these provisions are worth little. They are purely cosmetic. They pretend that the Government are concerned about foreign ownership. The Government have not made a real effort. I shall try to show that. The new clause seeks to put that right.
  Thirty per cent. is too high. Of course 30 per cent. is more than 25 per cent., but 25 per cent. is a magical figure when it comes to company law. A shareholding of 25 per cent. in effect represents, as the Government well know, control of a company. Such a holding can block a liquidation or it can block special resolutions. It is no coincidence that, some months ago, Sikorsky-Fiat was aiming for a 29 per cent. share of Westland but there were also stock exchange reasons. With a 29 per cent. shareholding, one is in the driving seat, especially if the other shares are spread widely. We are not talking about
  84
  a company where 75 per cent. or 65 per cent. of the shares are held by one person. In consortiums such as Appledore International, Trafalgar House, the Weir Group and various other public quoted companies, there will be a wide spread of shares. It may well turn out that the foreign national or company owning 30 per cent. of shares would be the largest single shareholder, so 30 per cent. is far too high. It does not give the protection that is necessary. The new clause makes it clear that the figure that we would accept is 5 per cent. We accept that there will be changes, in the shareholdings of companies from time to time and 5 per cent.. as the lawyers say, is a kind of de minimis. That would be acceptable, but anything above that would not.
  8 pm
  Secondly, the duty to notify the Ministry of Defence is far too weak. A legal duty to notify may be written into the contract, but I do not know how that can be enforced. Will the Ministry of Defence sue its contractor? What damage will the Ministry of Defence suffer? The duty to notify is not worth the paper it is written on. We have seen nothing in writing—I do not know whether the details are contained in the documents that we were presented with today—but the duty is to notify when the figure becomes 30 per cent. and it will be too late by then because the holding will have been built up. That really is bolting the stable door after the horse has gone.
  The new clause reasonably points out that where there is a transfer of shares to a foreign resident or national—it is possible to find that out — there should be immediate notification, and where that transfer and others come to more than 5 per cent. the axe falls on foreign ownership. The 30 per cent. is too high a figure. The duty to notify is ridiculous, and it is too late at that point because the shareholding has been built up.
  The third weakness in the Government's scheme is that the Secretary of State merely has a discretion to terminate the contract. A complex legal arrangement has been built up. The contract contains all the provisions. Lawyers have been richly paid to do all the drafting, yet at the end of the day the Secretary of State has a discretion to terminate a contract with his contractor. That is the only contractor that there is to repair the ships and that contractor's shareholding already stands at 30 per cent. If the contract were then terminated, somebody else would have to he found to do the work, with all the hassle that that would entail.
  Does anybody believe that a Secretary of State for Defence would terminate such a contract because of the foreign holding? Certainly this Secretary of State would not. No, Mr. Deputy Speaker, that is nonsense. Ministers have worked hard. The Minister of State looked pained when I criticised his scheme and no doubt the Under-Secretary also feels that he has put long hours into this splendid piece of legal complexity. However, they should not take too much pride in it. It may be good in theory, but it makes no sense in practice.
  The new clause provides for a termination of the contract at an earlier stage—when the shareholding stands at 5 per cent., not when it has been built up to 30 per cent. Clearly the Government must think about this again. They must take seriously the view that we must not allow any substantial shareholding from abroad in the royal dockyards. If they are not prepared to put a new

  85
  clause into the Bill at this stage, such matters can be dealt with in the other place. The clause would be better in the Bill. That is where it should he. We do not accept that a shareholding of 30 per cent. provides the kind of safeguards that we require.
  Mr. Hancock: The points on the new clause were well made in Committee and the right hon. Member for Llanelli (Mr. Davies) spelt out the difficulties that could arise. We must consider the sort of situation in which we might find ourselves. What will happen if control of the royal dockyards falls into the hands of a foreign company holding at least 30 per cent. of the shareholdings? If the company refuses to drop a foreign-held shareholding the provisions in the Bill to terminate will then have to be put into practice. As the right hon. Gentleman said, what will happen to the work in progress? The one thing that we do know is that if the Bill is enacted there will be no turning back the clock. There will be no ready-made labour force and management to step in to fill the gap that will be created once one sets about trying to terminate a contract. What chance does that give of looking sensibly at the way in which the dockyards work? It will be an impossible situation. A seven-year contract may have run for three years when it has to be terminated and then other interested parties will have to be found. We know from Committee of the reluctance of many companies to look seriously at such a situation. More than one hon. Member suggested that strong arm tactics were being used to get people to show some interest. That would be par for the course should a contract be terminated.
  It would be a grave dereliction of the Government's responsibility if they were not to act sensibly in the protection of the national interest and the defence of the realm and, more importantly, the conscious giving of control of something as important as our dockyards to foreign companies or people with hostile intent, whether politically or militarily, towards the United Kingdom.
  I hope that hon. Members will see the sense of supporting new clause 2. It makes sense now and it did so in Committee. I have yet to hear a sustainable argument from the Government against it. I beg the House to support new clause 2.
  Mr. Gordon Brown: The question is whether, in their enthusiasm to transfer the dockyards from public to private control, the Government are inadvertently creating conditions which may transfer the dockyards from British control to foreign control. In recent weeks Conservative Members have filled the House to discuss the importance of British control over the British car industry, and the Conservative party has been divided over who controls the British helicopter industry. Yet it is remarkable that not one Conservative Back-Bencher is present this evening, and only three Conservative Members are present on the Front Bench, when we are discussing legislation that contains not one safeguard against the possibility of foreign control of the royal dockyards. There is not one safeguard in the Bill to prevent or avert the possibility that a foreign company may be entrusted with the responsibility of refitting not only our sophisticated nuclear submarines but our nuclear deterrent. Despite hours of Committee debate on some of these matters and the presentation of various formulae and amended formulae by Ministers, none of my hon. Friends can be
  86
  happy with any assurances that have been given about preventing foreign control when the Government are not prepared to include stipulations in the legislation.
  Because there are to be no legal guarantees against foreign control, the Government have been retreating daily from their determination to prevent foreign control of the consortiums running either of the dockyards. The original position was set out by the Minister of State in the Second Reading debate on 2 December in response to a question from my right hon. Friend. He said:
  "tenders would be sought from British companies."—[Official Report, 2 December 1985; Vol. 88, c. 98.]
  The assumption that underlay our initial discussion of the Dockyard Services Bill was that no company other than a British-owned and British-registered one would be in a position to bid for the dockyard franchise.
  During Committee stage a revised position was presented by the Parliamentary Under-Secretary. He said that to avoid the possibility of foreign control the Government would introduce a stipulation that no more than 30 per cent. of the shares of the consortium could be in the hands of a foreign firm. When we asked how he would eliminate foreign firms that might be interested in the dockyard franchise, and deal with other problems, he said:
  "The answer … is that the problem will be picked up at the pre-qualification stage, which we are now moving towards."
  That stage has come and gone. On the list of companies being invited to tender for the royal dockyards, exclusively as a single company and not as part of a consortium, is a wholly owned American company. The assurance that the problem would be picked up at pre-qualification stage was a bland one. It was one on which the Minister has not yet been able to deliver, at least in the parliamentary answers that he has given.
  The Parliamentary Under-Secretary of State then redefined the position again. In reply to a question in Committee he said:
  "It would be theoretically possible for Foster Wheeler,"—
  a wholly owned American company—
  "or another foreign company, to satisfy the shareholding requirements but come in with financial rather than commercial trading partners."—[Official Report, Standing Committee D; 30 January 1986, c. 376.]
  In other words, for all operational purposes the controlling interest could be a wholly owned American company, for technical purposes holding only 29 per cent. or 29·5 per cent. of the shares, but being the only company with the technical expertise that would allow it to succeed in winning the contract.
  At first, no foreign companies whatsoever were to tender. Now, the Minister is apparently prepared to contemplate a foreign-owned company bidding for the franchise, going beyond the pre-qualification stage, choosing a few banks and financial institutions to back up its application and to satisfy the shareholding requirement, and being effectively in control of the dockyards at Devonport or Rosyth.
  8.15 pm
  It is a situation unique in the Western world where an American-owned company that is not in a position to hid for the contracts to run the American shipyards and dockyards is somehow placed in an advantaged position to bid for the contract for the British dockyards. Neither America nor any European country would contemplate the

  87
  refitting of its most sophisticated nuclear weapons already in commission by a consortium with a substantial foreign shareholding.
  Some of us have had a chance to look, if only briefly, at the documents issued to companies over the past few days. Annexe 4.2 is of special interest. It is headed:
  "Proposed conditions governing foreign shareholdings in the dockyard company."
  It contains the Government's definition of a foreign corporation that would be able to hold up to 30 per cent. of the shares in a consortium running the royal dockyards. In the list of possible foreign corporations to hold shares in the dockyard, we find:
  "A Government or Governmental Department or Government agency or body other than of the United Kingdom or any part thereof'.
  In other words, as well as the fact that, under this legislation and the Minister's own regulations, a foreign, private company may be able to hold up to 30 per cent. of the shares in the consortium, it is also possible that a foreign Government could hold up to 30 per cent. of the shares in the royal dockyards. As far as Britain is concerned we are transferring control from public to private hands, but apparently the Government can contemplate the possibility that another state—perhaps Libya, Argentina or South Africa or another of the countries that might be interested in having refit work done at the dockyards—could become part of the consortium running the royal dockyards. That is the effect of the Minister's statement.
  Conservative Members seemed to be concerned about the future of Westland. They seemed determined to keep British Leyland under British control for strategic—they said—as well as financial and employment reasons. I cannot understand how they are prepared to contemplate the possibility of a foreign Government being the major party with a controlling operational interest in the running of the dockyards. Yet in one of the last sittings of the Committee the Minister of State told us that the only sensible criticism that might be made of these arrangements was that they were too restrictive. In other words, he seems to think that it would be better to open the floodgates, to allow foreign companies to hold a higher proportion of the shares, to let foreign Governments do what they want with the royal dockyards and to allow a strategic asset to fall into other people's hands. That is the effect of the statement that he made when we were discussing the stipulations governing foreign control of the franchise.
  It is small wonder that the hon. Member for Plymouth, Sutton (Mr. Clark), the Minister for Trade, is not here today. I gather that he has stated to the local newspaper that he is not here because he would be too embarrassed at having to vote against the Third Reading of the Bill. As the Minister may already know, the Minister for Trade has written to the trade unions at Plymouth dockyard saying that his real apprehension is that the fate of the dockyards might be decided by people with no interest in or experience of conditions in the city of Plymouth, and that a great asset may be sold into the hands of strangers.
  Perhaps the hon. Member for Sutton, who has had to be silent in debates on this matter in the House, will carry some weight with the Prime Minister when the final decision is made on whether to go ahead with the Bill.
  88
  I note that the hon. Gentleman also told the trade unions that
  "there remains the possibility of a number of detailed changes to the Bill in its passage both in the Commons and in the Lords".
  It is precisely such changes that we are proposing today.
  Mr. Denzil Davies: The hon. Member for Plymouth, Sutton (Mr. Clark) may not be the only one who has deserted the Government on this issue. There are no Conservative Members on the Back Benches.
  Mr. Brown: I do not think that the Government can call on any physical support today outside the Division Lobbies. It is noticeable that some hon. Members from the south-west, whom one might have expected to be here, have absented themselves from the Chamber and also from the Division Lobby. It may be that more hon. Members than the 10 who abstained on Second Reading will abstain on Report and Third Reading. It is a sign of the declining support for the Bill that the Minister who who should be going through the Lobby as a loyal Government supporter has made a public statement to the effect that he could not support the Bill in the Lobby this evening. I mean the Minister for Trade. It is clear that the Minister of State for Defence Procurement is a loyal supporter of the Government and will support them no matter what they say and no matter what wrongs they are doing to our defence forces.
  My right hon. Friend the Member for Llanelli (Mr. Davies) mentioned another problem associated with the dangers of foreign control. He mentioned the possibility that during the period of a seven-year contract a greater amount of foreign shares may be put into the consortium. We have to remember that the Ministry of Defence is not committed to re-tendering every seven years. All it wants to retain is the right to re-tender every seven years. The Minister of State was quite clear on 2 December on Second Reading. Where the consortium became subject to foreign influence he said:
  "In such conditions it would be written into the contract that the company would lose the contract to manage the yards".—[Official Report, 2 December 1985; Vol. 88, c. 98.]
  That seemed a clear statement that the contract would contain a clause not that the company might lose the contract to manage the yard but would lose the contract. That statement has been evacuated by the Minister. On 30 January the Under-Secretary told the Committee something totally different. Looking at a number of options open to him in circumstances where a consortium became subject to foreign control, he said:
  "The third option would perhaps be to allow the new situation to continue as it was in the overall interests of national security…Here, we would obviously take account of the time left for the contract to run, the adequacy of the contractor's performance to date and the nature of the foreign influence involved."—[Official Report, Standing Committee D, 30 January 1986; c. 375.]
  In other words, what the Minister said on 2 December is meaningless. It is not something that the Government are prepared to hold to. He misled the House on 2 December and I hope that he will apologise to the House for a statement that has not been justified by events in Committee or by the proposed conditions governing foreign shareholding in the dockyard company. That is a five-page statement which has been sent to the contractors. It goes into great detail about what constitutes a foreign consortium and a foreign shareholding and what 30 per cent. means. It defines foreign corporations, foreign

  89
  shareholdings and project contracts. It defines what an "interest" is, and what a Government nominee is. It goes into all that detail and then says that if the contractor or the consortium raises its share above the 30 per cent. limit and does not reduce its shares, if there are transfers of shares between parent companies, if directorships change and we have foreign directors in control the answer is that the authority, meaning the Government, may in their entire discretion terminate the agreement. It does not say would or will but may. In other words, what was said to the House on 2 December by the Minister of State is proved not to be what the Government are now saying to the company. Therefore, no matter what the level of foreign control, what sort of consortium emerges during the period of a contract, how many foreign directors there are or how many foreign Governments buy 5 per cent. or 10 per cent. of shares in the consortium, the Government are leaving it open to decide whether they will or will not leave the dockyard consortium in foreign hands.
  That emphasises the point that if the conditions governing foreign control are not enshrined in the legislation we will have evasion and retreat even from the bland assurances that Ministers have given during our debate.
  This not an academic argument. One foreign company is already expressing interest. There is the possibility that consortia may be made up by other foreign partners. The Government should realise that there is no more important strategic asset for the maintenance, repair and refit of our defence forces than the royal dockyards. If it is inconceivable that any other country would pass the control of its dockyards from its own native control to foreign control, it should be unacceptable to the Government to allow a foreign consortium to be in a position to be the major partner, no matter what shares it holds, in running British dockyards.
  As usual, Ministers wear the clothes of patriots but leave those clothes oddly empty. Having got into a situation where our helicopter industry has passed, in the main, into foreign control, along with many of our other assets, it is the last straw for the Opposition to see the dockyards being put in a position where, inadvertently, through Government neglect and negligence they too may pass into foreign control. If the Government are serious about retaining the dockyards as a British asset for the use of the British defence forces, they would include in the legislation a clause preventing foreign control of the consortia or even a substantial share in the consortia.
  The dockyard planning team reports still mention the possibility of refits for foreign navies. Argentina and South Africa are still part of the list that the Ministry of Defence seems prepared to contemplate. If the dockyards are to do work for foreign navies, the least we can expect is that they are not under foreign control. I believe that the Minister should take to heart the warnings that have been given by the Minister for Trade and should accept amendments to the Bill here before the other place includes them as part of its deliberations. If the Government were serious about retaining British control, they would accept the amendment moved by my right hon. Friend the Member for Llanelli.
  The Parliamentary Under-Secretary of State for Defence Procurement (Mr. John Lee): In essence new clause 2 seeks to provide that the contract between my Department and the successful bidders for the management
  90
  of the dockyards will provide that if shares in any company directly or indirectly connected with the provision of dockyard services by the dockyard contractor are transferred to someone not resident in the United Kingdom my right hon. Friend the Secretary of State should be notified. Where the transfer exceeds 5 per cent. in number or value, my right hon. Friend should terminate the contract.
  I say with the greatest respect to the right hon. Member for Llanelli (Mr. Davies) and his hon. Friends that this is a narrow, unrealistic and unnecessary reaction. On the assumption that the amendment has been drafted to mean what it says, I doubt very much whether it would even achieve what the right hon. Gentleman and his hon. Friends hope. It is by no means certain that the new clause would prevent any number of transfers, providing each was below the magical 5 per cent. figure, which could result in a transfer to foreign ownership in small stages.
  Nor is the new clause very specific about which company or companies it is seeking to constrain. The wording refers to
  "Any company connected directly or indirectly with the provision of dockyard services by the dockyard contractor"
  Again, I say with respect that that is pretty loose wording. I shall explain why I believe it is not only loose but misguided. It certainly has very little to do with preventing foreign control of the dockyards which it is clear from what Opposition Members have said is their concern, and the purpose of the new clause.
  The clause is also wholly inflexible and as soon as the very low level limit which it sets of the transfer of more than 5 per cent. of the shareholding of any company to non-UK residents is reached, the contract with the dockyard company must be terminated "forthwith". There is no question here of any discretion. There is no question of determining whether such a shareholding amounted to foreign influence — much less foreign control—in the dockyards. There is no question of considering whether any harm would be done to national security or other interests as a result of such a foreign shareholding. The wording of new clause 2 is simply a knee-jerking reaction, typical of the sort of opinions increasingly emerging from the Opposition that if it is foreign it must be bad. Or worse, it is an example of even more anti-Americanism on the part of the Opposition.
  Let me make it quite clear that safeguarding national security interests has always been, and will remain, a vital concern in our policy of introducing commercial management into the dockyards. I can say without any hesitation that the idea that what we are proposing somehow puts national security at risk is absolute nonsense. In a moment I shall outline, for the benefit of those who were not on the Standing Committee, what we propose. I am sure that all those who, unlike some Opposition Members, are prepared to listen will accept that we are taking the sort of steps on foreign shareholding that any prudent Government should take.
  8.30 pm
  The new clause moved by the right hon. Member for Llanelli is at best unclear which company and to what extent it is seeking to constrain. Taken literally, any purchases of even a minute shareholding by an overseas resident in the parent company of the managing company —for example, just two shares in Trafalgar House plc or Babcock International plc—would have to be notified to my right hon. Friend the Secretary of State.

  91
  Our proposals require my right hon. Friend the Secretary of State to form a Companies Act company at each dockyard. Each company will have an authorised share capital of £50,001, divided into 50,000 ordinary shares of £1 each and one special share of £1 which my right hon. Friend will retain. The 50,000 shares will be transferred on vesting day to a managing company which will either be whichever company has been successful in tendering to manage that dockyard for the initial period of seven years or, where a consortium has been successful, it will be a company formed and owned by the consortium. All 50,000 shares will be owned for that entire period by the managing company. It is not our intention that anyone other than the managing company should hold those 50,000 shares and that will be in the contract. In the articles of association of the company which my right hon. Friend forms at each dockyard, he will make provision for a special share to be held by or on behalf of himself. The rights attached to that share will ensure that no change is made to the articles of the company or to its memorandum without my right hon. Friend's approval. No change in the ownership of the shares in the dockyard company may be registered without my right hon. Friend's approval. However, I have already said that ownership of the shares in the dockyard company must, under the contract, remain with the managing company for the period of the contract.
  On foreign control, therefore, one must consider also the managing companies. I must stress here that we do not propose the privatisation of the dockyards and the transfer to a private company of Government assets. Anyone would think, from the speeches of Opposition Members, that we intend to give away or sell the assets. They will be retained in public hands. To that extent, constraints on foreign shareholdings which were relevant to, for example, British Aerospace are not relevant to the dockyards. In this case, the Ministry of Defence will retain the ownership of the land, buildings, plant and equipment and we shall retain the right to change contractors at the end of the seven-year contract.
  As to the protection of information about our naval refitting programme, including—Opposition Members referred especially to this in Committee—information related to nuclear aspects, I can assure the House that the controls which apply to other defence industries—many of which are no less vital to our security than are the dockyards—will apply in full to all companies involved. These controls are those which apply to list X companies, and they have ensured that there has been no threat to national security from, for example, the involvement of companies in our nuclear and other weapons programmes or in the construction of nuclear submarines.
  Following the pre-qualification exercise which my Department carried out earlier this year, we published the names of those companies which we would be inviting to tender for the contracts. Last week, the invitation-to-tender documents were issued for Devonport, to a consortium of Trafalgar House, Plessey, A & P Appledore, and to the management-led Devonport Dockyard Limited; and for Rosyth to the Babcock International/Thorn EMI consortium, the Balfour Beatty Weir group consortium, Press Offshore and Northern Engineering Industries.
  Of course, the dockyards are of unique strategic importance, and for that reason cannot be regarded in the
  92
  same way as any other defence contractor. We have made it clear that we could not accept that the dockyards should be run by foreign companies because of the obvious necessity to protect security interests. The relevant concern, with which the contract will deal, is the shareholding and management structure of the managing company which will, for the period of the contract, own and therefore control the dockyard company employing the work force. Annexed to the invitation to tender, a copy of which has been placed in the Library of the House as hon. Members will gather from earlier deliberations—perhaps better late than never—are draft contractual clauses relating to foreign control. Although they are no more than draft clauses, the principles upon which they operate will not significantly change. Those clauses define, for the purposes of the contract, key terms such as "foreign corporation" and "corporation under foreign control".
  I accept that one can debate the shareholding which represents "control" of a company. We are really considering influence and the meaningful control which that may give. It is not, however, as simple as Opposition Members suggest. A shareholder who has 20 per cent. of the issued shares in a company may have considerable influence where no one else has more than 5 per cent.; however, a 20 per cent. interest in the shares of the company having four other shareholders each of whom also has 20 per cent. could hardly be described as a controlling influence. In terms of voting powers at a general meeting, the ability to exercise 51 per cent. of the shares voting is regarded as control. As I have said, for British Aerospace, foreign participation in share capital has been limited to 15 per cent. In yet other contexts, 30 per cent. has been considered to be the shareholding giving rise to control—that is the shareholding in a publicly quoted company at which a mandatory bid must be made under City rules.
  Our view is that, given the other safeguards to which I referred—the articles of the companies set up by my right hon. Friend, the fact that without his consent significant articles cannot be changed and shares cannot be transferred, the tried and tested protection which list X procedures afford—the shareholding in the managing company at which we consider, in normal circumstances, a risk to security may begin to arise is 30 per cent.
  This is the foregn shareholding in the managing company to which we expect we will, in the interests of security, expect tenderers to conform at the initial bid stage. But whatever the tenderer's proposals are, we shall examine them to satisfy ourselves that security interests will not be prejudiced. If we think that is their effect, we shall not agree to them.
  Opposition Members may ask how we shall determine whether shareholding in the managing company is foreign. The answer is that we will look at the parent company which holds it. Under the contract, my right hon. Friend will be entitled to assume, unless the parent company establishes otherwise, that any share in it is foreign held. If foreign held shares in the parent company exceed 30 per cent. it will be considered under the contract to be a corporation under foreign control, and the shares which it will hold in the managing company will also be considered foreign owned. If the parent company is foreign registered, or if its principal place of business is abroad, it will be considered to be a foreign corporation, resulting in its shares in the managing company also being

  93
  considered foreign held. We are, therefore, not excluding foreign owned or registered companies or their United Kingdom subsidiaries from joining a consortium to bid to manage the dockyards, though their shares in the managing company will be considered foreign for the purposes of the 30 per cent. level.
  The final question to consider is what would happen if the proportion of the foreign shareholding were to rise above the 30 per cent. level. My hon. Friend said on Second Reading that if a company which had been awarded the contract came under foreign control, it would be written into the contract that the company would lose the contract to manage the yards. My hon. Friend went on to say that the precise proportion of shareholding had not then been defined. We have, as I have just said, decided to place the "trigger point" in the managing company at 30 per cent. The contract would not automatically be terminated, but the important point is that the parent company or companies could not assume that it would continue.
  Mr. Denzil Davies: The Minister referred to the duty on the company to inform the Secretary of State when shares reach the 30 per cent. level. What sanction does the Secretary of State have on a company if it fails to carry out that duty?
  Mr. Lee: If the company fails to carry out that duty of notifying the Secretary of State, and if my right hon. Friend believes that there is a real concern about national security, he can, at his discretion, terminate the contract.
  Mr. Gordon Brown rose—
  Mr. Lee: If my right hon. Friend considered that the degree of foreign shareholding was contrary to the interests of security and that action should be taken, he could terminate the contract—and the company would know that. Alternatively, the parent company might be required to reduce the level of foreign shareholding. If, however, my right hon. Friend did not consider that the circumstances were contrary to the interests of security, the management contract would be allowed to continue.
  Mr. Brown: Will the Minister explain why, on 2 December, the Minister of State told the House that in conditions of foreign influence and control
  "it would he written into the contract that the company would lose the contract to manage the yards."—[Official Report, 2 December 1985; Vol. 88, c. 38.]
  Mr. Lee: With great respect, I have already covered that point. I explained that the precise percentage for the trigger mechanism had not be defined at that stage.
  May I make it clear that in my comments I have dealt with what has been of principal concern in the debate on this new clause, namely, foreign control or influence by virtue of shareholding. The draft foreign control clauses, which are both complex and comprehensive, also address the issue of foreign influence at board level of the managing company. So far as that is concerned, it is our intention that if 30 per cent. or more of the directors of the managing company or the votes they exercise are, to put it very generally, subject to the influence of foreigners or foreign corporations or parent companies under foreign control, my right hon. Friend may act in the same way under the contract as he can if the specified foreign shareholding level has been reached. But, that said, we are not banning foreign directors per se.
  94
  I should add that a further contractual safeguard will exist. Whether or not the 30 per cent. limit affecting the shareholding or board of the managing companies has been passed, my right hon. Friend will retain the power to terminate the contract where security interests, justify it if, in his opinion,
  "any other circumstances whatsoever have arisen which constitute any foreign ownership, control or influence over the managing company".
  The potential danger associated with foreign control can and will be avoided by the combined effect of the articles of association of the dockyard companies in which my right hon. Friend will retain a special share, by the standard security procedures covering all defence contracts, and by clauses in the contract giving my Department powers of termination if the degree of foreign control is such as to cause my right hon. Friend to consider that the interests of security are in any way threatened.
  I therefore invite the House, with confidence, to reject the new clause.
  Mr. O'Neill: Perhaps the Minister can answer one question before he gets too comfortable. He read out a list of companies that had passed the prequalifying stages, but he omitted any reference to Foster Wheeler. Am I right to assume that that wholly owned American company is no longer interested in bidding for the contract for either of the yards?
  Mr. Lee: Although I had finished my speech, I am charitable, and am glad to respond as the point has already been raised once. Foster Wheeler is a list X company. It therefore satisfied the prequalification exercise. But it was not sent an invitation to tender because it is a foreign company and it has not formed itself into a consortium that we would find acceptable. Therefore, it is at present a non-runner.
  Mr. O'Neill: Although I wish to avoid the charge of being anti-American, the Opposition can at least take some satisfaction from the fact that we exposed a foreign-owned company that was not prepared to change its terms and articles of association, and that as a result it has backed off or been discouraged from applying for the contract.
  Due to lack of time, we have been unable to study the provision with the care that the Under-Secretary of State has been able to give it. However, I understand that it contains a catch-all clause to the effect that if the Secretary of State does not, for any reason, like the look of a company, he can terminate the contract in the middle of the seven-year period. It seems unfair and unjust that a company can virtually be subject to the Secretary of State's whim. If it does something that he does not like, there does not seem to be any form of appeal. There is no clear indication of what procedures would be established for examining—
  Mr. Norman Lamont: Would the hon. Gentleman care to sort himself out with the hon. Member for Dunfermline, East (Mr. Brown)? The hon. Member for Dunfermline, East has complained that the Government's proposal is far too flexible, and says that we need a catch-all automatic mechanism, but the hon. Member for Clackmannan (Mr. O'Neill) wants the exact opposite.
  Mr. O'Neill: I am grateful to the Minister for showing such interest in a debate in which he has not been

  95
  participating. However, my hon. Friend the Member for Dunfermline, East (Mr. Brown) did not have the opportunity to hear what the Minister said earlier.
  The initial burden of our attack—and it remains the same—was that the figure of 30 per cent. is too high. But, at the end of his speech, the Under-Secretary of State seemed to say that 30 per cent. did not matter, and that the figure could be 1 per cent. If the directors had some sort of brainstorm and started acting in a manner characteristic of foreign nationals, he seemed to say that such a company would be debarred from retaining the contract. But our view is not narrow or unrealistic. We say that a figure of 5 per cent. should be set and that if it is exceeded the Secretary of State should allow termination. We believe that the 5 per cent. figure would provide such a low threshold that the Ministry of Defence would have no difficulty in establishing when it had been breached.
  I understand that at present the 30 per cent. level is dependent upon the company letting the Secretary of State know that its shareholding has fallen into foreign hands. The Under-Secretary of State has not disputed the fact that 25 per cent. could give control of a company. As has been pointed out, in such circumstances the figure of 30 per cent. is too high. The recent tangles experienced by the Ministry of Defence and the Department of Trade and Industry with British company law and the ownership of companies suggests that in some circumstances 25 per cent. could easily be recognised as giving control over the company.
  We therefore chose what lawyers would call the de minimis figure of 5 per cent. It has a precedent; it affords adequate policing and would enable us to be sure about the companies that we wanted to deal with. There could be no possibility of dawn raids and take-overs of companies unbeknownst even to the directors. The failure of the Department of Trade and Industry adequately to police take-overs and mergers gives us little confidence in the Minister's vague assurances. Given present Government policy, there is no likelihood of the Government exercising any powers that they reserve to themselves under that catch-all provision. This is no more than a bit of sophistry on their part.
  We believe that if our defence interests are to be adequately protected, there must be an upper limit of 5 per cent. It would be easily understood by the contracting companies and by the work force. Indeed, workers would be very distressed at the prospect of being employed by those who did not necessarily have the best interests of Britain's defence at heart. Therefore, I ask Conservative Members to join my right hon. and hon. Friends, whom I know will vote in great numbers, in supporting the new clause.
  Question put, That the clause be read a Second time:-
  The House divided: Ayes 169, Noes 213.

  Division No. 121]

  [8.48 pm

  AYES

  Archer, Rt Hon Peter

  Benn, Rt Hon Tony

  Ashdown, Paddy

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

  Ashley, Rt Hon Jack

  Bermingham, Gerald

  Atkinson, N. (Tottenham)

  Bidwell, Sydney

  Bagier, Gordon A. T.

  Blair, Anthony

  Barnett, Guy

  Boothroyd, Miss Betty

  Beckett, Mrs Margaret

  Boyes, Roland

  Beith, A. J.

  Bray, Dr Jeremy

  Bell, Stuart

  Brown, Gordon (D'f'mline E)

  96

  Brown, Hugh D. (Provan)

  Litherland, Robert

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

  Livsey, Richard

  Brown, Ron (E'burgh, Leith)

  Lloyd, Tony (Stretford)

  Bruce, Malcolm

  McCartney, Hugh

  Buchan, Norman

  McKay, Allen (Penistone)

  Caborn, Richard

  McKelvey, William

  Callaghan, Jim (Heyw'd & M)

  McNamara, Kevin

  Campbell, Ian

  McTaggart, Robert

  Campbell-Savours, Dale

  McWilliam, John

  Cartwright, John

  Madden, Max

  Clark, Dr David (S Shields)

  Marek, Dr John

  Clarke, Thomas

  Marshall, David (Shettleston)

  Clay, Robert

  Martin, Michael

  Clelland, David Gordon

  Mason, Rt Hon Roy

  Clwyd, Mrs Ann

  Maxton, John

  Cocks, Rt Hon M. (Bristol S)

  Maynard, Miss Joan

  Cohen, Harry

  Meacher, Michael

  Cook, Frank (Stockton North)

  Meadowcroft, Michael

  Corbett, Robin

  Michie, William

  Corbyn, Jeremy

  Mikardo, Ian

  Craigen, J. M.

  Millan, Rt Hon Bruce

  Crowther, Stan

  Miller, Dr M. S. (E Kilbride)

  Cunliffe, Lawrence

  Mitchell, Austin (G't Grimsby)

  Dalyell, Tam

  Morris, Rt Hon A. (W'shawe)

  Davies, Rt Hon Denzil (L'lli)

  Morris, Rt Hon J. (Aberavon)

  Davies, Ronald (Caerphilly)

  Nellist, David

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

  O'Neill, Martin

  Deakins, Eric

  Park, George

  Dewar, Donald

  Parry, Robert

  Dixon, Donald

  Patchett, Terry

  Dormand, Jack

  Pavitt, Laurie

  Douglas, Dick

  Pike, Peter

  Duffy, A. E. P.

  Powell, Raymond (Ogmore)

  Eadie, Alex

  Prescott, John

  Eastham, Ken

  Radice, Giles

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

  Randall, Stuart

  Evans, John (St. Helens N)

  Redmond, Martin

  Ewing, Harry

  Rees, Rt Hon M. (Leeds S)

  Fatchett, Derek

  Richardson, Ms Jo

  Faulds, Andrew

  Roberts, Allan (Bootle)

  Field, Frank (Birkenhead)

  Robertson, George

  Fields, T. (L'pool Broad Gn)

  Robinson, G. (Coventry NW)

  Fisher, Mark

  Rogers, Allan

  Flannery, Martin

  Rooker, J. W.

  Foot, Rt Hon Michael

  Ross, Ernest (Dundee W)

  Forrester, John

  Sedgemore, Brian

  Foster, Derek

  Sheerman, Barry

  Foulkes, George

  Sheldon, Rt Hon R.

  Fraser, J. (Norwood)

  Shore, Rt Hon Peter

  Freeson, Rt Hon Reginald

  Short, Ms Clare (Ladywood)

  George, Bruce

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

  Gilbert, Rt Hon Dr John

  Silkin, Rt Hon J.

  Godman, Dr Norman

  Skinner, Dennis

  Golding, John

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

  Gould, Bryan

  Snape, Peter

  Gourlay, Harry

  Soley, Clive

  Hamilton, W. W. (Fife Central)

  Stott, Roger

  Hancock, Michael

  Strang, Gavin

  Harman, Ms Harriet

  Thomas, Dafydd (Merioneth)

  Hart, Rt Hon Dame Judith

  Thomas, Dr R. (Carmarthen)

  Haynes, Frank

  Thompson, J. (Wansbeck)

  Hogg, N. (C'nauld & Kilsyth)

  Thorne, Stan (Preston)

  Home Robertson, John

  Tinn, James

  Howell, Rt Hon D. (S'heath)

  Torney, Tom

  Howells, Geraint

  Wallace, James

  Hoyle, Douglas

  Wardell, Gareth (Gower)

  Hughes, Robert (Aberdeen N)

  Wareing, Robert

  Hughes, Roy (Newport East)

  Weetch, Ken

  Hughes, Sean (Knowsley S)

  White, James

  John, Brynmor

  Wigley, Dafydd

  Kaufman, Rt Hon Gerald

  Wilson, Gordon

  Kennedy, Charles

  Winnick, David

  Kilroy-Silk, Robert

  Young, David (Bolton SE)

  Kirkwood, Archy

  Lambie, David

  Tellers for the Ayes:

  Lamond, James

  Mr. Allen Adams and

  Leighton, Ronald

  Mr. James Hamilton.

  Lewis, Terence (Worsley)

  97

  NOES

  Ancram, Michael

  Jones, Gwilym (Cardiff N)

  Ashby, David

  Jones, Robert (Herts W)

  Atkins, Robert (South Ribble)

  Jopling, Rt Hon Michael

  Beaumont-Dark, Anthony

  Joseph, Rt Hon Sir Keith

  Best, Keith

  Kellett-Bowman, Mrs Elaine

  Biggs-Davison, Sir John

  Key, Robert

  Body, Sir Richard

  King, Roger (B'ham N'field)

  Boscawen, Hon Robert

  Knight, Greg (Derby N)

  Bowden, Gerald (Dulwich)

  Knight, Dame Jill (Edgbaston)

  Brinton, Tim

  Knowles, Michael

  Buchanan-Smith, Rt Hon A.

  Lamont, Norman

  Burt, Alistair

  Lang, Ian

  Carlisle, John (Luton N)

  Latham, Michael

  Chapman, Sydney

  Lee, John (Pendle)

  Chope, Christopher

  Leigh, Edward (Gainsbor'gh)

  Clark, Sir W. (Croydon S)

  Lennox-Boyd, Hon Mark

  Cockeram, Eric

  Lester, Jim

  Coombs, Simon

  Lewis, Sir Kenneth (Stamf'd)

  Cope, John

  Lilley, Peter

  Couchman, James

  Lloyd, Peter (Fareham)

  Cranborne, Viscount

  Lord, Michael

  Currie, Mrs Edwina

  Luce, Rt Hon Richard

  Dorrell, Stephen

  McCrindle, Robert

  Douglas-Hamilton, Lord J.

  McCurley, Mrs Anna

  Durant, Tony

  MacKay, Andrew (Berkshire)

  Eyre, Sir Reginald

  MacKay, John (Argyll & Bute)

  Fairbairn, Nicholas

  McNair-Wilson, M. (N'bury)

  Favell, Anthony

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

  Fenner, Mrs Peggy

  Madel, David

  Fletcher, Alexander

  Major, John

  Fookes, Miss Janet

  Malins, Humfrey

  Forth, Eric

  Malone, Gerald

  Fox, Marcus

  Marlow, Antony

  Franks, Cecil

  Maude, Hon Francis

  Fraser, Peter (Angus East)

  Mawhinney, Dr Brian

  Freeman, Roger

  Mayhew, Sir Patrick

  Fry, Peter

  Merchant, Piers

  Galley, Roy

  Meyer, Sir Anthony

  Gardiner, George (Reigate)

  Miller, Hal (B'grove)

  Gardner, Sir Edward (Fylde)

  Mills, Iain (Meriden)

  Garel-Jones, Tristan

  Moate, Roger

  Goodlad, Alastair

  Monro, Sir Hector

  Gorst, John

  Montgomery, Sir Fergus

  Gow, Ian

  Moore, Rt Hon John

  Gower, Sir Raymond

  Morrison, Hon C. (Devizes)

  Grant, Sir Anthony

  Morrison, Hon P. (Chester)

  Gregory, Conal

  Mudd, David

  Griffiths, Sir Eldon

  Neale, Gerrard

  Griffiths, Peter (Portsm'th N)

  Nelson, Anthony

  Grist, Ian

  Newton, Tony

  Ground, Patrick

  Nicholls, Patrick

  Hamilton, Hon A. (Epsom)

  Onslow, Cranley

  Hamilton, Neil (Tatton)

  Oppenheim, Phillip

  Hampson, Dr Keith

  Oppenheim, Rt Hon Mrs S.

  Hanley, Jeremy

  Ottaway, Richard

  Hannam, John

  Page, Richard (Herts SW)

  Hargreaves, Kenneth

  Parkinson, Rt Hon Cecil

  Harris, David

  Parris, Matthew

  Harvey, Robert

  Patten, Christopher (Bath)

  Haselhurst, Alan

  Pawsey, James

  Hawkins, C. (High Peak)

  Pollock, Alexander

  Hawksley, Warren

  Porter, Barry

  Hayes, J.

  Powell, William (Corby)

  Hayhoe, Rt Hon Barney

  Rowley, John

  Heathcoat-Amory, David

  Prentice, Rt Hon Reg

  Heddle, John

  Price, Sir David

  Henderson, Barry

  Proctor, K. Harvey

  Hickmet, Richard

  Rathbone, Tim

  Hill, James

  Renton, Tim

  Hind, Kenneth

  Rhodes James, Robert

  Hogg, Hon Douglas (Gr'th'm)

  Rhys Williams, Sir Brandon

  Holland, Sir Philip (Gedling)

  Ridley, Rt Hon Nicholas

  Holt, Richard

  Roberts, Wyn (Conwy)

  Hordern, Sir Peter

  Robinson, Mark (N'port W)

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

  Roe, Mrs Marion

  Howell, Rt Hon D. (G'Idford)

  Rossi, Sir Hugh

  Howell, Ralph (Norfolk, N)

  Rowe, Andrew

  Hubbard-Miles, Peter

  Rumbold, Mrs Angela

  Jessel, Toby

  Ryder, Richard

  98

  Sackville, Hon Thomas

  Townend, John (Bridlington)

  Shaw, Giles (Pudsey)

  Townsend, Cyril D. (B'heath)

  Shaw, Sir Michael (Scarb')

  Trippier, David

  Shelton, William (Streatham)

  Twinn, Dr Ian

  Shepherd, Colin (Hereford)

  van Straubenzee, SirW.

  Shepherd, Richard (Aldridge)

  Waddington, David

  Shersby, Michael

  Walden, George

  Silvester, Fred

  Walker, Bill (T'side N)

  Sims, Roger

  Wall, Sir Patrick

  Skeet, Sir Trevor

  Waller, Gary

  Soames, Hon Nicholas

  Ward, John

  Spencer, Derek

  Wardle, C. (Bexhill)

  Spicer, Jim (Dorset W)

  Warren, Kenneth

  Spicer, Michael (S Worcs)

  Watts, John

  Stanbrook, Ivor

  Wells, Bowen (Hertford)

  Stanley, Rt Hon John

  Wells, Sir John (Maidstone)

  Steen, Anthony

  Wheeler, John

  Stern, Michael

  Whitfield, John

  Stevens, Lewis (Nuneaton)

  Whitney, Raymond

  Stewart, Allan (Eastwood)

  Wilkinson, John

  Stewart, Andrew (Sherwood)

  Winterton, Nicholas

  Stewart, Ian (Hertf'dshire N)

  Wolfson, Mark

  Stokes, John

  Wood, Timothy

  Sumberg, David

  Woodcock, Michael

  Taylor, John (Solihull)

  Yeo, Tim

  Taylor, Teddy (S'end E)

  Terlezki, Stefan

  Tellers for the Noes:

  Thompson, Patrick (N'ich N)

  Mr. Michael Neubert and

  Thornton, Malcolm

  Mr. Donald Thompson.

  Thurnham, Peter

  Question accordingly negatived.

New Clause 3

  EQUALITY OF PENSION RIGHTS
  'Where in pursuance of the arrangements referred to in section 1(2) hereof a qualified dockyard service employee ceases to be employed in the Civil Service of the Crown and becomes employed by a company all pension arrangements made by such company shall be equivalent in all respects to such pension arrangements as applied in the Civil Service of the Crown.'—[Mr. O'Neill.]
  Brought up, and read the First time.
  Mr. O'Neill: I beg to move, That the clause be read a Second time.
  Mr. Deputy Speaker (Mr. Harold Walker): With this we may discuss new clause 4—Redundancy Fund: payments for dockyard workers—
  'In pursuance of the arrangements made hereunder the Secretary of State shall out of money provided by Parliament set up a redundancy fund for the benefit of all qualified dockyard employees declared redundant after the transfer of the dockyard undertaking and payments made out of such fund shall be no less in amount and value than payments that otherwise would have been made under the Superannuation Act 1972.'.
  Mr. O'Neill: New clauses 3 and 4 relate to the pension rights and redundancy arrangements which employees of the new contracting companies are likely to experience. We want to afford such employees the same conditions of employment as prevail in the Civil Service. We would like to think that there would be no diminution in pension rights.
  For most working people, pensions are merely deferred wages. They are in many respects the only savings that many working people make. The savings are held in trust by management. It is sometimes suggested that they are provided by the grace and favour of management, but they are sometimes a substitute for pay and better conditions. People are often encouraged to accept the possibility of a pension on retirement in preference to a 1 or 2 per cent. increase in wages.

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  Pensions are often a barrier to mobility. That argument might be stronger in days of full employment, but pensions are nevertheless a consideration when a worker contemplates moving to other employment. Management are often prepared to pay in future for the advantage of lower wage bills today and a stable work force such as is established when people regard a good pension as a barrier to mobility.
  The pension arrangements that have been granted to public service employees have become a right. The result of contractorisation is a denial of a right. The pension arrangements presently enjoyed by the work force in the dockyards are not privileges but rights and they should not be removed at the whim of legislators. It could be said that the removal of such basic employment rights is nothing more or less than expropriation without adequate consultation. Those who are in employment bitterly resent the fact that the terms and conditions of anybody who is recruited after contractorisation will be inferior to the rights enjoyed by those who are already employed.
  New clause 4 provides for a redundancy fund for dockyard workers. If there are redundancies after contractorisation, the new clause will provide adequate financial provision for them. Anybody who is made redundant after contractorisation will be provided for at a level which is not inferior to that provided for those dockyard workers who will be made redundant in the next few weeks or months. We know that 3,000 voluntary redundancies are being sought.
  When privatisation takes place, there is usually a considerable reduction in the labour force. We have discussed the savings and the costs which could be incurred after contractorisation. There is disagreement about how the savings could be achieved, but it is not disputed that if any savings are to be achieved they will probably be achieved by a reduction in the dockyard work force.
  There has been privatisation in other areas of defence, most notably in the case of the royal ordnance factories. The amount of money that has been provided for redundancy payments has been almost exhausted. Additional funds will probably have to be provided from one source or another. Because of the nature of the contracting companies and their relationship with the employing organisations, if there have to be further redundancies, apart from those which have already been announced prior to contractorisation, they will probably be achieved only at the expense of the redundancy payments which are now being offered to the work force. The new clause is being moved to ensure that redundancy payments will continue to be made at the present level.
  The Minister did not suggest that more money will be made available for those individuals. A fair number of the redundancies that have been called for will probably be achieved. When large numbers of redundancies are called for, many of the older employees seek what is really early retirement. However, the contracting companies could run out of older men who are prepared to take early retirement. The amount of redundancy money that is provided then becomes a critical factor in the negotiations on labour reductions. Certainly we have not yet been satisfied by the Government's remarks this afternoon. I use the word "remarks" because the Government have been extremely coy about being specific on any figures. They have said
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  that, for reasons of commercial confidentiality and for other reasons, they are not prepared to be specific as to the sums involved.
  For the people who are at present employed in the firm, this must be extremely distressing, and new clause 4, in respect of a redundancy fund, is an attempt to allay the fears and anxieties of some members of the work force who believe that they could be told that their jobs no longer existed and that the rates of compensation for the service that they have given to the dockyards would not be on all fours with what is being paid at the moment.
  These two new clauses deal with the problems that have occurred with previous privatisation. So far the Government have said that, by and large, they hope that there will be no deterioration in the working conditions enjoyed by workers after the protection of, in this case, the Civil Service is removed. Frankly, we are not reassured by the Government's remarks on these matters. We feel that, if they mean what they say, they ought to be giving effect to their words by having far stiffer provisons in this piece of enabling legislation.
  The absence of these provisions and commitments required us to place new clauses 3 and 4 on the Amendment Paper, and we hope that hon. Members on all sides of the House will support them. They have been welcomed by the representatives of the work people, who see them as filling a gap in the present proposals. I believe that they will go some way towards alleviating the difficulties which any contracting company will have to face. As we have said, many costs can be calculated, but one of the major difficulties which a contracting company will face is resentment, and the suspicion that it will be trying to make savings and profits not just out of more effective and efficient work practices but out of the work people themselves.
  It is for these reasons that we believe that it would make a substantial contribution to improving industrial relations if there were adequate provision for pensions and redundancy arrangements in any future contractorisation scheme. We are not confident that the existing financial framework within these companies will provide anything like the opportunities for profit which the Government are suggesting. We fear that these opportunities for profit, if they are to be created, will be created at the expense of the wages, conditions, redundancy arrangements and pensions of the work force.
  I therefore commend these new clauses to the House in the hope that, in the interest of better industrial relations, they will be accepted.
  Mr. Hancock: In Committee, when this part of the Bill was discussed, the Parliamentary Under-Secretary of State said that the Government intended to set up arrangements which mirrored the existing pension and redundancy arrangements. That sounded very good at the time, but we have yet to get clarification of exactly what he intended to do. The new clause gives an opportunity for the House to give the reassurance which is undoubtedly needed by the work force both in Rosyth and in Devonport.
  The Minister should accept the new clauses because he has already committed the Government, if we are to believe what he told us in Committee, to maintaining a pension scheme that is the same as the Civil Service scheme that operates at present and that dockyard

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  employees are now in, so that there should be no detrimental effects upon them. I think that we have to insist that we get clarification of exactly what will happen.
  New clause 3 simply guarantees that the pension rights of dockyard employees transferred to a new company will remain the same as they have been in the Civil Service. That is not too much to ask for anybody who has given dedicated service to the Government in the dockyards. I hope that we can consider that, not with sympathy but with realism, and agree that that sort of assurance about protected pension rights is essential. As the hon. Member for Clackmannan (Mr. O'Neill) said, for many people the pension at the end of a working career is critical when considering employment. Many people would like the norm in Government service to continue, and have a right to it.
  9.15 pm
  As they stand, the conditions of service for dockyard workers transferred to a new company will not be adequately protected. That applies particularly to pension arrangements, and we seek to clarify that today. Time and again the dockyard unions have spouted out to Opposition Members, and, indeed, to every member of the Committee, information about their anxieties over the future pension rights of their members.
  New clause 4 follows the same line, and guarantees redundancy payments equivalent to the present arrangements funded by the Government under the Superannuation Act 1972. The Government intend to negotiate with the contracting companies arrangements which are as good as those applicable under the personal Civil Service pension scheme. Again, we seek assurance that that is exactly what will happen, and that the contracting companies will accept that, not as a negotiating right, but as a built-in part of contractual arrangements, and will guarantee the rights and future redundancy payments of the work force.
  Earlier, we heard of the problems that could occur if a sizeable percentage of the company was taken over by foreign interests. When we asked the Minister what action the Government would take if that happened, he said clearly that it would mean termination. If termination means redundancy, as I fear it undoubtedly will in some cases, the House has an obligation today to ensure that the redundancy payments due to those people are no different from what they are today.
  I hope that the House sees the logic and sense behind that, and the need for fair play in guaranteeing the work force their pension rights and redundancy payments. There can be no alternative. The House must accept the two new clauses and vote for their inclusion in the Bill.
  Mr. Douglas: It is difficult for the House to realise what is involved in the passage of the Bill. This is the first time in any form of privatisation that, not the physical assets of the dockyards, but the labour force is being transferred from the Ministry of Defence. The concept involves a managing company with the dockyard companies' only assets, to use the word loosely, the employees. The managing companies will take over the dockyard companies as wholly owned subsidiaries.
  When we probed the Minister in Committee about pensions, and particularly redundancies, he gave us the impression that the financial background of any consortium taking over the dockyard companies and its ability to fund any subsequent redundancies would be
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  carefully examined. There is no evidence in the tendering documents or from inquiries that that sort of searching investigation has taken or will take place.
  In relation to what the companies are asked to do in terms of redundancies, I quote from the invitation to tender and main annexes:
  "Details of redundancy provisions which were transferred under TUPE '81 and which should be taken into account by tenderers … are in annex 6/4."
  Annexe 6/4 uses a startling phrase in relation to new entrants:
  "The level of redundancy scheme benefits shall be consistent as far as possible with that applicable to other employees of the contractor and with good practice within related sectors of industry."
  What exactly does that mean in terms of the redundancy scheme? The first blow, as it were, can be taken by the public purse. We understand that. We understand in relation to Rosyth and Devonport that the redundancy payments are those expected by Civil Service employees.
  The next tranche theoretically would be taken by the public purse because the sums passed on in terms of the Bill would be passed on in one way or another to the dockyard employing companies, although the dockyard employing companies would have a shareholding of only 50,000 plus one golden share. However, assuming that some of these companies employ individuals, there is no obligation to have these redundancy provisions for the new entrants on all fours with the existing employment of the dockyard company. All that is understood by the contractor is that the redundancy provisions for the new entrants would be consistent as far as possible with those in his employment, not with those employed by the dockyard company.
  This is an important distinction. There is a possibility under the tender documents of having two classes of employee. We must decide whether to take these documents seriously. We got them only this afternoon and, because we have to read them quickly, we may get the wrong idea. Earlier this evening, I alluded to the DGSR being responsible for day-to-day project management, and the Minister of State, in his wisdom, shook his head and said that that would not happen. Should we take these documents seriously or not?
  I put it to the Minister that under the tender documents it is possible to have two classes of employee. Such a situation will certainly produce many effects, but it will not produce harmony in the dockyards. The Minister of State is obligated at this late stage of the Bill to give us some assurances. He must give the employees some assurances about the long-term prospects in relation to pension rights and redundancy payments.
  If there are to be two classes of employee, let us hear about it here and now; let us not have any pussy-footing about. Let us hear that this House is passing an enabling Bill to give the Government some authority to say to contractors, "The first time around, be good boys and everyone must be on all fours with the existing Civil Service arrangements but later, even during the period of the seven-year contract, you could have two classes of employee.". The right hon. Member for Plymouth, Devonport (Dr. Owen) raised an important point about the next round. The same contractor might not be fortunate—or unfortunate—enough to bid in terms of continuity. What happens then to the redundancy scheme? Do we then have to accept a redundancy and/or pension scheme that is consistent with the best practices within industry? The

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  Government are trying by sleight of hand to make savings through cheeseparing with pension arrangements or redundancy provisions. We are dubious about those savings.
  I support the thrust of the two new clauses. The Minister of State has the opportunity to clear the air now before the Bill goes to the other place.
  Mr. Norman Lamont: The criticisms of the hon. Member for Clackmannan (Mr. O'Neill) were essentially the same, although in a slightly lower key, as the criticisms made in Committee. I cannot satisfy hon. Members in every respect, but I believe that the anxieties and fears expressed in Standing Committee were exaggerated. Much of what was said about the possibility of worsening conditions of employment was unfounded. I did not and I do not want to give rise to unnecessary fears.
  In providing for the introduction of commercial management in the dockyards, the Bill treats the transfer of employees to the dockyard companies as a transfer to which the Transfer of Undertakings (Protection of Employment) Regulations 1981 apply. Those regulations essentially safeguard employees' rights when a business or undertaking is transferred to a new owner—thus the new owner takes over the contracts of employment of all the employees. There is no picking and choosing. All the collective agreements are in force. It is as though the contracts of employment with the previous employer had from the start been made with the new employer. This means, for individual dockyard employees, that, on their first day of employment with the new dockyard company, with the exception of some aspects deriving directly from Crown service, their terms and conditions of service will be the same as if they were in the Civil Service.
  This has led some hon. Members to see TUPE as something of a qualified blessing. It provides protection on the first day but offers no kind of guarantee thereafter. I do not think it should. That would be absurd. [Interruption.] I shall spell out in more detail precisely what we are doing. Hon. Members are either interested in these points or they are not. It would be absurd if the effect of the regulations were to continue to apply permanently to a new employer criteria deriving from his predecessor. All employers at some time wish to prepare and negotiate changes to terms and conditions. It is the essence of the Bill that it enables the dockyards to be managed outside the Civil Service in a commercial environment with the commercial manager accepting the full responsibility for managing the terms and conditions of his company.
  It was pointed out in Committee that TUPE does not apply to pensions. We intend to set up pension schemes, one at each dockyard, for transferred employees to reproduce —hon. Members objected when my hon. Friend the Under-Secretary of State for Defence Procurement used the word "replicate"—as closely as possible the provisions of the principal Civil Service pension scheme. It is not possible—this was explained in Committee but was not fully taken on board—to reproduce the PCSPS in its entirety.
  The PCSPS is statutorily based and certain payments can be made out of it which private sector schemes, set up as they are under trustees and governed by Inland Revenue regulations, cannot parallel. The right hon. Member for Llanelli (Mr. Davies) accepted this with respect to
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  redundancy payments, but it is not just a matter of redundancy payments. There are certain other types of provisions. For example, the way widows are treated is something that could not be mirrored in an Inland Revenue approved scheme. That is why we have used the words, both now and earlier on in Committee, "reproducing as fully as possisble".
  Mr. Douglas rose—
  9.30 pm
  Mr. Lamont: With regard to pensions, we intend to see that schemes are set up which embody the same calculations of retirement benefits, reckonable service and pensionable pay as the PCSPS. The scheme would allow, for the same index-linking and retirement age, all the same factors.
  Shortly, we will be issuing a consultative document about pensions, which will set out the scheme that we envisage. It will describe the nature of the transfer scheme and the options open to civil servants transferring to the dockyards in regard to their accrued benefits. It will describe the actions that will have to be taken to set up the funds. The question of contributions will be discussed with the trade unions and contractors. The initial contribution rate is likely to be about 16 per cent. of the pensionable pay of the members of the schemes. We will obviously discuss this with the trade unions when we have issued the consultative documents.
  Mr. Douglas: I am grateful to the Minister, and I apologise for interrupting him. These are very complicated matters. Am I correct in assuming that the employing company would, at all times, be the dockyard company? That is the company with which, at the end of the seven years, the Secretary of State or whoever would renegotiate terms of contracts. Why are the Government implying that there may be variations in TUPE over the period if the employing company is the permanent employer of the dockyard employees? Why should there be variations over a seven-year period or several seven-year periods?
  Mr. Lamont: I am sorry—would the hon. Gentleman repeat his question on variations?
  Mr. Douglas: I accept that these are complicated matters. If the employer of the dockyard employees is the dockyard company plc, that is a continuing entity. The contractors are not continuing entities. Why should there be provision for variations in either redundancy payments or pensions throughout the period? Why should there be differences for new entrants? Why can we not have consistency in relation to the TUPE regulations throughout the period?
  Mr. Lamont: I think I have explained the philosophy. If a company is in the private sector, it would be inappropriate to embody in law something that is going on in perpetuity. It is as simple as that.
  There will be a legal safeguard as regards TUPE. The hon. Member for Dunfermline, West (Mr. Douglas) is quite right in what he says about the distinction between new entrants and existing employees. That is not to say that people will automatically make a distinction between new entrants and existing employees, but it is something that, theoretically, could happen. That is the simple reason why we would not put in the Bill the sort of provision enshrined in the amendment.

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  The pension schemes will be funded schemes. The Government will pay a transfer payment in respect of the past service of those employees who elect to transfer their past service rights into the scheme. Thereafter, contributions will be made from employer and employees and the assets will be invested. The funds will have trustees who will be independent of the dockyard companies. They will be managed by a trustee body whose board will include persons nominated by the dockyard company, the commercial manager, the Government and the members of the scheme. Those trust funds will be a secure basis for the future of the pensions of the ex-civil servants employed by the dockyard companies.
  Given all that, one could argue that the amendment is a worthwhile addition to the Bill. Placing a statutory guarantee over the pension arrangements would be a suitable reinforcement of the intentions inherent in setting up the schemes. But, as I have explained, such an argument would be misguided. The management of the funds will rest with the trustee boards, which will have the same responsibilities, such as investment, as any pensions trustee board in the private sector. Just as it is appropriate to ensure that the commercial manager has responsibility for the terms and conditions of service governed by the TUPE regulations, so it would be inappropriate to superimpose on the trustee boards a requirement in law to maintain benefits which permanently tie the schemes to the PCSPS and would be incompatible with the trust fund arrangements.
  The Government are determined that the arrangements for the initial funding, benefits and management of the scheme will be secure, but the ongoing management of the scheme lies properly with the trustees. The object of the Bill is to enable the dockyard to be run in a commercial manner outside the Civil Service. In that sense, the amendment goes against the overall aim.
  New clause 4 is not dissimilar in its intentions, in particular on the funding of redundancy compensation. Procedures for declaring and managing redundancies in the Ministry of Defence follow the overall Civil Service pattern and are set out in the Ministry's staff manual. They cover such matters as the order in which staff are made redundant, fields of redundancy, length of notice and so on. Again, under TUPE, those proceedings will transfer to the new employer with such changes as are necessary to reflect the fact that the dockyards will then be two separate and independent commercial companies rather than part of the Civil Service. But overall they will be largely unchanged and the new employer will operate those procedures until change is negotiated. Redundancy compensation in the Civil Service is calculated on a basis related to length of service and levels of pay. The benefits are set out as a chapter of the PCSPS rules.
  I have previously referred to the Inland Revenue rules governing private sector pension schemes and to the factor, which the right hon. Member for Llanelli acknowledged, that the rules do not allow for redundancy compensation levels as set out to be paid out of pension funds. That means that compensation for any staff who are made redundant after vesting day will, in the new companies, have to be paid out of company funds. That is the point to which right hon. and hon. Members objected in Committee. It is the standard practice in the private sector. However, just as redundancy procedures will
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  transfer to the new company, so will the need to provide levels of compensation as good as those in the Civil Service.
  Here again, there are some areas where precise resolution will have to be discussed with the unions, the contractors and the Inland Revenue. But the overall intention will be to set up a scheme paying redundancy benefits either exactly the same or of equivalent value, and reckonable service accrued under the Crown will not be lost. An ex-civil servant made redundant by the dockyard company after vesting day will be paid compensation calculated on the total length of service with the company and with the Civil Service.
  The right hon. Gentleman asked about redundancy having to be borne by the companies. I made the point that that was what normally happened in the private sector. As I am sure right hon. and hon. Members are aware, under the rules for winding up a company, a certain priority is given to redundancy payments. But if the astonishing happened and the contractor, who had been awarded the contract, went bankrupt, the Government would be taking over the assets and the labour force would transfer back. I think that that is an extremely unlikely contingency but that the answer I have given meets it.
  Mr. Denzil Davies: I understand the Minister's point. The contingency may well be unlikely. However, our concern is not what happens if the company goes into liquidation but what happens if, after vesting day, the company declares redundancies. I think that the Minister has said that there will be negotiations to try to provide a level of redundancy payment more or less comparable to the present Civil Service scheme. We understand that, but we want to know where the money is to come from. There will be a company with one contract. In the case of pensions, the money will come in the end from the Ministry of Defence, by way of an extra charge. Will the money for future redundancies also be added to the bill and come, in effect, from the Ministry of Defence?
  Mr. Lamont: The right hon. Gentleman has quickly summed up the situation. We have never disguised the fact that the cost of any redundancies, if there are any, will have to be funded by the contractor. Prior to vesting day, they would be paid for by the Government; after vesting day, by the company.
  The right hon. Gentleman is moving on to a different point of concern. I have answered his previous point. He said in Committee that the real danger was that the company would not be able to meet—
  Mr. Davies rose—
  Mr. Lamont: I will answer the second point too. I am only pointing out that when I answer one point, the right hon. Gentleman dances round to another one. Both points are serious, and there are answers to both.
  The right hon. Gentleman's original point was about the viability of the company. As regards the level of benefit after the transfer of the employees, TUPE applies, and the company will have to pay the same levels of redundancy benefit. It may subsequently negotiate with the trade unions again. However, many of the benefits—not necessarily the level of redundancy pay—have been negotiated. They are not all built into statute.
  Mr. Davies: Let us suppose that, a year after vesting day, one of the two companies declares 1,000 people

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  redundant, and that there has been no renegotiation of redundancy payments. The Minister says the TUPE applies and that the level of redundancy payments made to the 1,000 people will be more or less equal to what they would have received from the Civil Service pension scheme.
  My question is simple. Where will the company find the money? The problem is the same as the problem of funding pensions. The company has nothing except a contract. Will that contract contain an extra increment to cover such an eventuality?
  Mr. Lamont: I answered that point quite directly. The money comes out of the company's income—its cash flow. I repeated that a few moments ago. I admitted the logic of what the right hon. Gentleman had said. That has been taken account of in the costings. It is taken account of in the global figures that I gave on the first new clause.
  I am trying to calm down some of the fears about lack of adequate benefit. Some of the comments made in Committee, which have not been repeated, I am glad to say, on the Floor of the House—
  Mr. Hancock indicated assent.
  Mr. Lamont: I see that the hon. Member for Portsmouth, South (Mr. Hancock) realises that what I say is realistic. The cost will fall on the company. That is entirely in line with the practice in industry. Any employer must assess the economic implications for the company of declaring staff redundant. So will the dockyard company. Companies bidding for the contract will have to estimate the need for, and cost of, any redundancy and include that in their business planning. They will have to meet those costs from their own income and funds. That income will come from the customers, as the right hon. Member for Llanelli pointed out.
  The proposed new clause also seeks statutorily to impose the same levels of redundancy compensation on the company. The same amendments have been tabled to this clause as for that on pensions. For the reasons I have outlined, I cannot accept them, but I stress once again that the Government have been mindful of the interests of the employees in the dockyards. We are concerned to see dockyard companies set up which safeguard continuity of employment and employees' interests in respect of conditions of service, redundancies and pensions. I do not believe, despite what was said in Committee, that there is any real ground for anxiety. Therefore, I invite the House to reject the new clauses.
  9.45 pm
  Mr. O'Neill: The Minister gave the game away in the last couple of minutes when he said that the income to meet the cost of redundancies will have to come from the customers. The customer in this case is the Ministry of Defence. At present, the money comes not from the Ministry of Defence but from the principal Civil Service pension scheme which, as I understand it, is funded by the Exchequer. Therefore, if the Government are telling us that they are making alternative arrangements for post-vesting day, we have to conclude that they have made some calculation of likely redundancy figures in the early years after vesting day. We know that those figures have
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  been surmised and suggested. It is a measure of the Government's lack of confidence in the proposals that they are refusing to let us know those figures today.
  It is clear that these two clauses are necessary, because we do not share the confidence of the Government that everything will eventually be all right. We do not share their view that there is some prospect that, after vesting day, the legislation which these two new clauses will provide in perpetuity will be to the disadvantage of the working people who are employed in the dockyards at present.
  We have been told repeatedly that the Government do not want the hands of the new employers to be tied. We do not share that view if it means that the wages and conditions of the pension and redundancy arrangemens of the employees of the new organisations will be deleteriously affected by the process of privatisation. It is for those reasons that I call on my right hon. and hon. Friends to support the new clauses.
  Question put, That the clause be read a Second time:—
  The House divided: Ayes 175, Noes 214.

  Division No. 122]

  [9.48 pm

  AYES

  Adams, Allen (Paisley N)

  Dixon, Donald

  Archer, Rt Hon Peter

  Dormand, Jack

  Ashdown, Paddy

  Douglas, Dick

  Ashley, Rt Hon Jack

  Duffy, A. E. P.

  Atkinson, N. (Tottenham)

  Eadie, Alex

  Bagier, Gordon A. T.

  Eastham, Ken

  Barnett, Guy

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

  Beckett, Mrs Margaret

  Evans, John (St. Helens N)

  Beith, A. J.

  Ewing, Harry

  Bell, Stuart

  Fatchett, Derek

  Benn, Rt Hon Tony

  Faulds, Andrew

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

  Field, Frank (Birkenhead)

  Bermingham, Gerald

  Fields, T. (L'pool Broad Gn)

  Bidwell, Sydney

  Flannery, Martin

  Blair, Anthony

  Foot, Rt Hon Michael

  Boothroyd, Miss Betty

  Forrester, John

  Boyes, Roland

  Foster, Derek

  Bray, Dr Jeremy

  Foulkes, George

  Brown, Gordon (D'f'mline E)

  Fraser, J. (Norwood)

  Brown, Hugh D. (Provan)

  Freeson, Rt Hon Reginald

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

  George, Bruce

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

  Gilbert, Rt Hon Dr John

  Brown, Ron (E'burgh, Leith)

  Godman, Dr Norman

  Bruce, Malcolm

  Golding, John

  Buchan, Norman

  Gould, Bryan

  Caborn, Richard

  Gourlay, Harry

  Callaghan, Jim (Heyw'd & M)

  Hamilton, James (M'well N)

  Campbell, Ian

  Hamilton, W. W. (Fife Central)

  Campbell-Savours, Dale

  Hancock, Michael

  Carlile, Alexander (Montg'y)

  Harman, Ms Harriet

  Cartwright, John

  Hart, Rt Hon Dame Judith

  Clark, Dr David (S Shields)

  Haynes, Frank

  Clarke, Thomas

  Healey, Rt Hon Denis

  Clay, Robert

  Hogg, N. (C'nauld & Kilsyth)

  Clelland, David Gordon

  Home Robertson, John

  Clwyd, Mrs Ann

  Howell, Rt Hon D. (S'heatn)

  Cocks, Rt Hon M. (Bristol S)

  Howells, Geraint

  Cohen, Harry

  Hoyle, Douglas

  Cook, Frank (Stockton North)

  Hughes, Robert (Aberdeen N)

  Corbett, Robin

  Hughes, Roy (Newport East)

  Corbyn, Jeremy

  Hughes, Sean (Knowsley S)

  Craigen, J. M.

  John, Brynmor

  Crowther, Stan

  Kaufman, Rt Hon Gerald

  Cunliffe, Lawrence

  Kennedy, Charles

  Dalyell, Tam

  Kilroy-Silk, Robert

  Davies, Rt Hon Denzil (L'lli)

  Kirkwood, Archy

  Davies, Ronald (Caerphilly)

  Lambie, David

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

  Lamond, James

  Deakins, Eric

  Leighton, Ronald

  Dewar, Donald

  Lewis, Terence (Worsley)

  109

  Litherland, Robert

  Robertson, George

  Livsey, Richard

  Robinson, G. (Coventry NW)

  Lloyd, Tony (Stretford)

  Rogers, Allan

  McCartney, Hugh

  Rooker, J. W.

  McKay, Allen (Penistone)

  Ross, Ernest (Dundee W)

  McKelvey, William

  Sedgemore, Brian

  McNamara, Kevin

  Sheerman, Barry

  McTaggart, Robert

  Sheldon, Rt Hon R.

  Madden, Max

  Shore, Rt Hon Peter

  Marek, Dr John

  Short, Ms Clare (Ladywood)

  Marshall, David (Shettleston)

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

  Martin, Michael

  Silkin, Rt Hon J.

  Mason, Rt Hon Roy

  Skinner, Dennis

  Maxton, John

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

  Maynard, Miss Joan

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

  Meacher, Michael

  Snape, Peter

  Meadowcroft, Michael

  Soley, Clive

  Michie, William

  Steel, Rt Hon David

  Mikardo, Ian

  Stott, Roger

  Millan, Rt Hon Bruce

  Strang, Gavin

  Miller, Dr M. S. (E Kilbride)

  Thomas, Dafydd (Merioneth)

  Mitchell, Austin (G't Grimsby)

  Thomas, Dr R. (Carmarthen)

  Morris, Rt Hon A. (W'shawe)

  Thompson, J. (Wansbeck)

  Morris, Rt Hon J. (Aberavon)

  Thorne, Stan (Preston)

  Nellist, David

  Tinn, James

  O'Neill, Martin

  Torney, Tom

  Owen, Rt Hon Dr David

  Wallace, James

  Park, George

  Wardell, Gareth (Gower)

  Parry, Robert

  Wareing, Robert

  Patchett, Terry

  Weetch, Ken

  Pavitt, Laurie

  White, James

  Pike, Peter

  Wigley, Dafydd

  Powell, Raymond (Ogmore)

  Wilson, Gordon

  Prescott, John

  Winnick, David

  Radice, Giles

  Young, David (Bolton SE)

  Randall, Stuart

  Redmond, Martin

  Tellers for the Ayes:

  Rees, Rt Hon M. (Leeds S)

  Mr. John McWilliam and

  Richardson, Ms Jo

  Mr. Mark Fisher.

  Roberts, Allan (Bootle)

  NOES

  Ancram, Michael

  Gardner, Sir Edward (Fylde)

  Arnold, Tom

  Garel-Jones, Tristan

  Ashby, David

  Goodlad, Alastair

  Atkins, Robert (South Ribble)

  Gorst, John

  Beaumont-Dark, Anthony

  Gow, Ian

  Best, Keith

  Gower, Sir Raymond

  Body, Sir Richard

  Grant, Sir Anthony

  Boscawen, Hon Robert

  Gregory, Conal

  Bowden, Gerald (Dulwich)

  Griffiths, Sir Eldon

  Brinton, Tim

  Griffiths, Peter (Portsm'th N)

  Buchanan-Smith, Rt Hon A.

  Grist, Ian

  Burt, Alistair

  Ground, Patrick

  Carlisle, John (Luton N)

  Hamilton, Hon A. (Epsom)

  Chope, Christopher

  Hamilton, Neil (Tatton)

  Clark, Sir W. (Croydon S)

  Hampson, Dr Keith

  Cockeram, Eric

  Hanley, Jeremy

  Coombs, Simon

  Hannam, John

  Cope, John

  Hargreaves, Kenneth

  Couchman, James

  Harris, David

  Cranborne, Viscount

  Harvey, Robert

  Currie, Mrs Edwina

  Haselhurst, Alan

  Dorrell, Stephen

  Hawkins, C. (High Peak)

  Douglas-Hamilton, Lord J.

  Hawksley, Warren

  Durant, Tony

  Hayes, J.

  Eyre, Sir Reginald

  Hayhoe, Rt Hon Barney

  Fairbairn, Nicholas

  Heathcoat-Amory, David

  Favell, Anthony

  Heddle, John

  Fenner, Mrs Peggy

  Henderson, Barry

  Fletcher, Alexander

  Hickmet, Richard

  Fookes, Miss Janet

  Hill, James

  Forth, Eric

  Hind, Kenneth

  Fox, Marcus

  Hogg, Hon Douglas (Gr'th'm)

  Franks, Cecil

  Holland, Sir Philip (Gedling)

  Fraser, Peter (Angus East)

  Holt, Richard

  Freeman, Roger

  Hordern, Sir Peter

  Fry, Peter

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

  Galley, Roy

  Howell, Rt Hon D. (G'ldford)

  Gardiner, George (Reigate)

  Howell, Ralph (Norfolk, N)

  110

  Hubbard-Miles, Peter

  Rhodes James, Robert

  Jessel, Toby

  Rhys Williams, Sir Brandon

  Jones, Gwilym (Cardiff N)

  Ridley, Rt Hon Nicholas

  Jones, Robert (Herts W)

  Roberts, Wyn (Conwy)

  Jopling, Rt Hon Michael

  Robinson, Mark (N'port W)

  Joseph, Rt Hon Sir Keith

  Roe, Mrs Marion

  Kellett-Bowman, Mrs Elaine

  Rossi, Sir Hugh

  Key, Robert

  Rowe, Andrew

  King, Roger (B'ham N'field)

  Rumbold, Mrs Angela

  Knight, Greg (Derby N)

  Ryder, Richard

  Knight, Dame Jill (Edgbaston)

  Sackville, Hon Thomas

  Knowles, Michael

  Shaw, Giles (Pudsey)

  Lamont, Norman

  Shaw, Sir Michael (Scarb')

  Lang, Ian

  Shelton, William (Streatham)

  Latham, Michael

  Shepherd, Colin (Hereford)

  Lee, John (Pendle)

  Shepherd, Richard (Aldridge)

  Leigh, Edward (Gainsbor'gh)

  Shersby, Michael

  Lennox-Boyd, Hon Mark

  Silvester, Fred

  Lester, Jim

  Sims, Roger

  Lewis, Sir Kenneth (Stamf'd)

  Skeet, Sir Trevor

  Lilley, Peter

  Soames, Hon Nicholas

  Lloyd, Peter (Fareham)

  Spencer, Derek

  Lord, Michael

  Spicer, Jim (Dorset W)

  Luce, Rt Hon Richard

  Spicer, Michael (S Worcs)

  McCrindle, Robert

  Stanbrook, Ivor

  McCurley, Mrs Anna

  Stanley, Rt Hon John

  MacKay, Andrew (Berkshire)

  Steen, Anthony

  MacKay, John (Argyll & Bute)

  Stern, Michael

  McNair-Wilson, M. (N'bury)

  Stevens, Lewis (Nuneaton)

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

  Stewart, Allan (Eastwood)

  Madel, David

  Stewart, Andrew (Sherwood)

  Major, John

  Stewart, Ian (Hertf'dshire N)

  Malins, Humfrey

  Stokes, John

  Marlow, Antony

  Sumberg, David

  Mather, Carol

  Taylor, John (Solihull)

  Maude, Hon Francis

  Taylor, Teddy (S'end E)

  Mawhinney, Dr Brian

  Terlezki, Stefan

  Mayhew, Sir Patrick

  Thompson, Donald (Calder V)

  Merchant, Piers

  Thompson, Patrick (N'ich N)

  Meyer, Sir Anthony

  Thornton, Malcolm

  Miller, Hal (B'grove)

  Thurnham, Peter

  Mills, Iain (Meriden)

  Townend, John (Bridlington)

  Moate, Roger

  Townsend, Cyril D. (B'heath)

  Monro, Sir Hector

  Trippier, David

  Montgomery, Sir Fergus

  Twinn, Dr Ian

  Moore, Rt Hon John

  van Straubenzee, Sir W.

  Morrison, Hon C. (Devizes)

  Viggers, Peter

  Morrison, Hon P. (Chester)

  Waddington, David

  Mudd, David

  Walden, George

  Neale, Gerrard

  Walker, Bill (T'side N)

  Nelson, Anthony

  Wall, Sir Patrick

  Newton, Tony

  Waller, Gary

  Nicholls, Patrick

  Ward, John

  Onslow, Cranley

  Wardle, C. (Bexhill)

  Oppenheim, Phillip

  Warren, Kenneth

  Oppenheim, Rt Hon Mrs S.

  Watts, John

  Ottaway, Richard

  Wells, Bowen (Hertford)

  Page, Richard (Herts SW)

  Wells, Sir John (Maidstone)

  Parkinson, Rt Hon Cecil

  Wheeler, John

  Parris, Matthew

  Whitfield, John

  Patten, Christopher (Bath)

  Whitney, Raymond

  Pawsey, James

  Wilkinson, John

  Peacock, Mrs Elizabeth

  Winterton, Nicholas

  Pollock, Alexander

  Wolfson, Mark

  Porter, Barry

  Wood, Timothy

  Powell, William (Corby)

  Woodcock, Michael

  Powley, John

  Yeo, Tim

  Prentice, Rt Hon Reg

  Price, Sir David

  Tellers for the Noes:

  Proctor, K. Harvey

  Mr. Michael Neubert and

  Rathbone, Tim

  Mr. Gerald Malone.

  Question accordingly negatived.

  BUSINESS OF' THE HOUSE
  Ordered,
  That, at this day's sitting, the Dockyard Services Bill may be proceeded with, though opposed, until any hour.—[Mr. Durant.]

New Clause 4

  REDUNDANCY FUND: PAYMENTS FOR DOCKYARD WORKERS
  'In pursuance of the arrangements made hereunder the Secretary of State shall out of money provided by Parliament set up a redundancy fund for the benefit of all qualified dockyard employees declared redundant after the transfer of the dockyard undertaking and payments made out of such fund shall be no less in amount and value then payments that otherwise would have been made under the Superannuation Act 1972.'.—[Mr. Denzil Davies.]
  Brought up, and read the First time.
  Question put, That the clause be read a Second time:—
  The House divided: Ayes 179, Noes 214.

  Division No. 123]

  [10.01 pm

  AYES

  Adams, Allen (Paisley N)

  Faulds, Andrew

  Archer, Rt Hon Peter

  Field, Frank (Birkenhead)

  Ashdown, Paddy

  Fields, T. (L'pool Broad Gn)

  Ashley, Rt Hon Jack

  Fisher, Mark

  Atkinson, N. (Tottenham)

  Flannery, Martin

  Bagier, Gordon A. T.

  Foot, Rt Hon Michael

  Barnett, Guy

  Forrester, John

  Beckett, Mrs Margaret

  Foster, Derek

  Beith, A. J.

  Foulkes, George

  Bell, Stuart

  Fraser, J. (Norwood)

  Benn, Rt Hon Tony

  Freeson, Rt Hon Reginald

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

  George, Bruce

  Bermingham, Gerald

  Gilbert, Rt Hon Dr John

  Bidwell, Sydney

  Godman, Dr Norman

  Blair, Anthony

  Golding, John

  Boothroyd, Miss Betty

  Gould, Bryan

  Boyes, Roland

  Gourlay, Harry

  Bray, Dr Jeremy

  Hamilton, James (M'well N)

  Brown, Gordon (D'f'mline E)

  Hamilton, W. W. (Fife Central)

  Brown, Hugh D. (Provan)

  Hancock, Michael

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

  Harman, Ms Harriet

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

  Hart, Rt Hon Dame Judith

  Brown, Ron (E'burgh, Leith)

  Haynes, Frank

  Bruce, Malcolm

  Healey, Rt Hon Denis

  Buchan, Norman

  Hogg, N. (C'nauld & Kilsyth)

  Caborn, Richard

  Home Robertson, John

  Callaghan, Jim (Heyw'd & M)

  Howell, Rt Hon D. (S'heath)

  Campbell, Ian

  Howells, Geraint

  Campbell-Savours, Dale

  Hoyle, Douglas

  Carlile, Alexander (Montg'y)

  Hughes, Robert (Aberdeen N)

  Cartwright, John

  Hughes, Roy (Newport East)

  Clark, Dr David (S Shields)

  Hughes, Sean (Knowsley S)

  Clarke, Thomas

  John, Brynmor

  Clay, Robert

  Kaufman, Rt Hon Gerald

  Clelland, David Gordon

  Kennedy, Charles

  Clwyd, Mrs Ann

  Kilroy-Silk, Robert

  Cocks, Rt Hon M. (Bristol S)

  Kirkwood, Archy

  Cohen, Harry

  Lambie, David

  Cook, Frank (Stockton North)

  Lamond, James

  Corbett, Robin

  Leighton, Ronald

  Corbyn, Jeremy

  Lewis, Terence (Worsley)

  Craigen, J. M.

  Litherland, Robert

  Crowther, Stan

  Livsey, Richard

  Cunliffe, Lawrence

  Lloyd, Tony (Stretford)

  Dalyell, Tam

  McCartney, Hugh

  Davies, Rt Hon Denzil (L'lli)

  McKay, Allen (Penistone)

  Davies, Ronald (Caerphilly)

  McKelvey, William

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

  McNamara, Kevin

  Deakins, Eric

  McTaggart, Robert

  Dewar, Donald

  Madden, Max

  Dixon, Donald

  Marek, Dr John

  Dormand, Jack

  Marshall, David (Shettleston)

  Dubs, Alfred

  Martin, Michael

  Duffy, A. E. P.

  Mason, Rt Hon Roy

  Eadie, Alex

  Maxton, John

  Eastham, Ken

  Maynard, Miss Joan

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

  Meacher, Michael

  Evans, John (St. Helens N)

  Meadowcroft, Michael

  Ewing, Harry

  Michie, William

  Fatchett, Derek

  Mikardo, Ian

  112

  Millan, Rt Hon Bruce

  Short, Ms Clare (Ladywood)

  Miller, Dr M. S. (E Kilbride)

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

  Mitchell, Austin (G't Grimsby)

  Silkin, Rt Hon J.

  Moore, Rt Hon John

  Skinner, Dennis

  Morris, Rt Hon A. (W'shawe)

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

  Nellist, David

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

  O'Neill, Martin

  Snape, Peter

  Owen, Rt Hon Dr David

  Soley, Clive

  Park, George

  Steel, Rt Hon David

  Parry, Robert

  Stott, Roger

  Patchett, Terry

  Strang, Gavin

  Pavitt, Laurie

  Thomas, Dafydd (Merioneth)

  Pendry, Tom

  Thomas, Dr R. (Carmarthen)

  Penhaligon, David

  Thompson, J. (Wansbeck)

  Pike, Peter

  Thorne, Stan (Preston)

  Powell, Raymond (Ogmore)

  Tinn, James

  Prescott, John

  Torney, Tom

  Radice, Giles

  Wainwright, R.

  Randall, Stuart

  Wallace, James

  Redmond, Martin

  Wardell, Gareth (Gower)

  Rees, Rt Hon M. (Leeds S)

  Wareing, Robert

  Richardson, Ms Jo

  Weetch, Ken

  Roberts, Allan (Bootle)

  White, James

  Robertson, George

  Wigley, Dafydd

  Robinson, G. (Coventry NW)

  Wilson, Gordon

  Rogers, Allan

  Winnick, David

  Rooker, J. W.

  Young, David (Bolton SE)

  Ross, Ernest (Dundee W)

  Sedgemore, Brian

  Tellers for the Ayes:

  Sheerman, Barry

  Mr. John McWilliam and

  Sheldon, Rt Hon R.

  Mr. Dick Douglas.

  Shore, Rt Hon Peter

  NOES

  Ancram, Michael

  Griffiths, Peter (Portsm'th N)

  Arnold, Tom

  Grist, Ian

  Ashby, David

  Ground, Patrick

  Atkins, Robert (South Ribble)

  Hamilton, Hon A. (Epsom)

  Best, Keith

  Hamilton, Neil (Tatton)

  Body, Sir Richard

  Hampson, Dr Keith

  Boscawen, Hon Robert

  Hanley, Jeremy

  Bowden, Gerald (Dulwich)

  Hannam, John

  Brinton, Tim

  Hargreaves, Kenneth

  Buchanan-Smith, Rt Hon A.

  Harris, David

  Burt, Alistair

  Harvey, Robert

  Carlisle, John (Luton N)

  Haselhurst, Alan

  Chope, Christopher

  Hawkins, C. (High Peak)

  Clark, Sir W. (Croydon S)

  Hawksley, Warren

  Cockeram, Eric

  Hayes, J.

  Coombs, Simon

  Hayhoe, Rt Hon Barney

  Cope, John

  Heathcoat-Amory, David

  Couchman, James

  Heddle, John

  Cranborne, Viscount

  Henderson, Barry

  Currie, Mrs Edwina

  Hickmet, Richard

  Dorrell, Stephen

  Hill, James

  Douglas-Hamilton, Lord J.

  Hind, Kenneth

  Eyre, Sir Reginald

  Hogg, Hon Douglas (Gr'th'm)

  Fairbairn, Nicholas

  Holland, Sir Philip (Gedling)

  Favell, Anthony

  Hordern, Sir Peter

  Fenner, Mrs Peggy

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

  Fletcher, Alexander

  Howell, Rt Hon D. (G'Idford)

  Fookes, Miss Janet

  Howell, Ralph (Norfolk, N)

  Forth, Eric

  Hubbard-Miles, Peter

  Fowler, Rt Hon Norman

  Jessel, Toby

  Fox, Marcus

  Jones, Gwilym (Cardiff N)

  Franks, Cecil

  Jones, Robert (Herts W)

  Fraser, Peter (Angus East)

  Jopling, Rt Hon Michael

  Freeman, Roger

  Joseph, Rt Hon Sir Keith

  Fry, Peter

  Kellett-Bowman, Mrs Elaine

  Galley, Roy

  King, Roger (B'ham N'field)

  Gardiner, George (Reigate)

  Knight, Greg (Derby N)

  Gardner, Sir Edward (Fylde)

  Knight, Dame Jill (Edgbaston)

  Garel-Jones, Tristan

  Knowles, Michael

  Goodlad, Alastair

  Lamont, Norman

  Gorst, John

  Lang, Ian

  Gow, Ian

  Latham, Michael

  Gower, Sir Raymond

  Lee, John (Pendle)

  Grant, Sir Anthony

  Leigh, Edward (Gainsbor'gh)

  Gregory, Conal

  Lennox-Boyd, Hon Mark

  Griffiths, Sir Eldon

  Lester, Jim

  113

  Lewis, Sir Kenneth (Stamf'd)

  Sackville, Hon Thomas

  Lilley, Peter

  St. John-Stevas, Rt Hon N.

  Lloyd, Peter (Fareham)

  Shaw, Giles (Pudsey)

  Lord, Michael

  Shaw, Sir Michael (Scarb')

  Luce, Rt Hon Richard

  Shelton, William (Streatham)

  McCrindle, Robert

  Shepherd, Colin (Hereford)

  McCurley, Mrs Anna

  Shepherd, Richard (Aldridge)

  MacKay, Andrew (Berkshire)

  Shersby, Michael

  MacKay, John (Argyll & Bute)

  Silvester, Fred

  McNair-Wilson, M. (N'bury)

  Sims, Roger

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

  Skeet, Sir Trevor

  Madel, David

  Soames, Hon Nicholas

  Major, John

  Spencer, Derek

  Malins, Humfrey

  Spicer, Jim (Dorset W)

  Marlow, Antony

  Spicer, Michael (S Worcs)

  Mather, Carol

  Squire, Robin

  Mawhinney, Dr Brian

  Stanbrook, Ivor

  Mayhew, Sir Patrick

  Stanley, Rt Hon John

  Merchant, Piers

  Steen, Anthony

  Meyer, Sir Anthony

  Stern, Michael

  Miller, Hal (B'grove)

  Stevens, Lewis (Nuneaton)

  Mills, Iain (Meriden)

  Stewart, Allan (Eastwood)

  Moate, Roger

  Stewart, Andrew (Sherwood)

  Monro, Sir Hector

  Stewart, Ian (Hertf'dshire N)

  Montgomery, Sir Fergus

  Stokes, John

  Moore, Rt Hon John

  Sumberg, David

  Morrison, Hon C. (Devizes)

  Taylor, John (Solihull)

  Morrison, Hon P. (Chester)

  Taylor, Teddy (S'end E)

  Mudd, David

  Terlezki, Stefan

  Neale, Gerrard

  Thompson, Donald (Calder V)

  Nelson, Anthony

  Thompson, Patrick (N'ich N)

  Neubert, Michael

  Thornton, Malcolm

  Newton, Tony

  Thurnham, Peter

  Nicholls, Patrick

  Townend, John (Bridlington)

  Onslow, Cranley

  Townsend, Cyril D. (B'heath)

  Oppenheim, Phillip

  Trippier, David

  Oppenheim, Rt Hon Mrs S.

  Twinn, Dr Ian

  Ottaway, Richard

  van Straubenzee, Sir W.

  Page, Richard (Herts SW)

  Viggers, Peter

  Parkinson, Rt Hon Cecil

  Waddington, David

  Parris, Matthew

  Walden, George

  Patten, Christopher (Bath)

  Walker, Bill (T'side N)

  Pawsey, James

  Wall, Sir Patrick

  Peacock, Mrs Elizabeth

  Waller, Gary

  Pollock, Alexander

  Ward, John

  Porter, Barry

  Wardle, C. (Bexhill)

  Powell, William (Corby)

  Warren, Kenneth

  Powley, John

  Watts, John

  Prentice, Rt Hon Reg

  Wells, Bowen (Hertford)

  Price, Sir David

  Wells, Sir John (Maidstone)

  Proctor, K. Harvey

  Wheeler, John

  Rathbone, Tim

  Whitfield, John

  Renton, Tim

  Whitney, Raymond

  Rhodes James, Robert

  Wilkinson, John

  Rhys Williams, Sir Brandon

  Winterton, Nicholas

  Ridley, Rt Hon Nicholas

  Wolfson, Mark

  Roberts, Wyn (Conwy)

  Wood, Timothy

  Robinson, Mark (N'port W)

  Woodcock, Michael

  Roe, Mrs Marion

  Yeo, Tim

  Rossi, Sir Hugh

  Rowe, Andrew

  Tellers for the Noes:

  Rumbold, Mrs Angela

  Mr. Gerald Malone and

  Ryder, Richard

  Mr. Francis Maude.

  Question accordingly negatived.

Clause 1

  TRANSFER OF PERSONS ENGAGED IN DOCKYARD SERVICES TRANSFERRED TO PRIVATE SECTOR
  Mr. Lee: I beg to move amendment No. 2, in page 2, line 8, leave out
  'the whole or any part of'.
  Mr. Deputy Speaker (Sir Paul Dean): With this it will be convenient to discuss Government amendments Nos. 3, 4 and 10.
  Mr. Lee: The first three amendments have been tabled by the Government following the debates in Committee on clause 1(2)(b) and remove any doubt that the dockyards might be split into different parts. Amendments Nos. 2 and 4 make it clear that only one company will be set up by my right hon. Friend the Secretary of State for Defence for each dockyard. Amendment No. 3 does no more than tidy up the clause to remove any doubt which might otherwise have been caused over the transfer of dockyard employees. Amendment No. 10 brings clause 1(8) into line with clause 1(4), thus meeting the concerns expressed in Committee by the right hon. Member for Llanelli (Mr. Davies).
  As the House knows, the vast majority of those employed in the dockyards will transfer to the dockyard company, but not all will so transfer. Therefore, I invite the House to agree to amendments Nos. 2, 3, 4 and 10.
  Mr. Denzil Davies: As the Under-Secretary of State has said, these amendments reflect the debates in Committee. We are grateful to him for responding to the points that we made. We have no objection to any of the amendments.
  Amendment agreed to.
  Amendments made: No. 3 in page 2, line 9, after `undertaking', insert
  `(disregarding their services for this purpose)'.
  No. 4, in page 2, line 10, leave out 'any of the'.—[Mr. Lee.]
  Mr. Lamont: I beg to move amendment No. 5, in page 2, line 22, leave out 'transfer of the'.
  Mr. Deputy Speaker: With this it will be convenient to take the following: Government amendments Nos. 6, 7 and 9.
  Amendment No. 8, in page 2, line 24, after second 'a', insert 'commercial'.
  Mr. Lamont: All these amendments are concerned with TUPE, which we discussed earlier and on various aspects of which we had a debate in Standing Committee.
  The right hon. Member for Llanelli (Mr. Davies) said that TUPE had good parts and was probably a beneficial addition to our law relating to the transfer of undertakings. The right hon. Gentleman conceded that the regulations protect many rights which perhaps were not protected before. The purpose of one of his amendments was to ensure that TUPE applies not just to the present transfer but to a transfer to any future management. The Government and the Opposition are as one in wanting to ensure that TUPE applies.
  In Committee the right hon. Gentleman said that he was broadly satisfied with what we proposed, with one exception, which was that in his view, unless the Bill made it clear that the dockyard undertaking was to be treated as a commercial business, TUF'E could not be guaranteed to apply. I undertook to consider further whether an amendment along the lines that he was suggesting was necessary. I have since written to the right hon. Gentleman confirming that in my view such an amendment is not required to ensure, as we both want, that there is no doubt that TUPE applies in this case. The legal advice that I have been given—we have gone into this matter in some detail — is that the dockyard undertaking at each dockyard is an undertaking within the 1981 regulations.
  The right hon. Gentleman knows that I was satisfied that the Bill was therefore sound in this respect. None the less, further consideration has been given by the draftsmen

  115
  to the wording of clause 1(4). I hope that the right hon. Gentleman will accept that amendments 5 to 9 are directed towards the result that we all want. Clause 1(4) remains directed towards the application of TUPE to the transfer of the employees alone.
  As we have said before, there was a legal doubt, although not the legal doubt which the right hon. Gentleman raised. I give this explanation because I think that the right hon. Gentleman and his hon. Friends might otherwise think that I am introducing this amendment because of the point which the right hon. Gentleman made. It is, in fact, a different point, despite the wording of the amendment. There was a legal doubt whether the transfer of the employees alone, without more, would be an undertaking within the meaning of TUPE. With the amendments which we are debating now, the subsection removes any doubt, by providing that the services of the employees, without more, shall be treated as part of the undertaking capable of being transferred as a business. As a result, I think it is beyond doubt that TUPE will apply to the transfer of the services to a company formed by my right hon. Friend.
  Clause 1(4) in the Bill as printed was sound, but the approach which I have just described avoids any argument and I hope that the House will agree that it makes clear beyond any doubt the application of TUPE. For this reason, I hope that hon. Gentlemen will not press their amendment but will support what we have proposed.
  Mr. Denzil Davies: The Minister of State has explained why these amendments have been brought forward. We shall certainly not claim any false victory and I accept entirely that it is through his hard work and that of his officials that these amendments have been brought forward. TUPE does not seem to be too easy for anybody, as far as I can see.
  With regard to the points we raised in Committee about the commercial operation of the dockyards, I am grateful to the hon. Gentleman for his letter. His lawyers have managed to find a case, although I do not think it is as good as the case that I found, and I accept that the dockyards, although they are not a commercial venture, are perhaps in the nature of a commercial venture. I am sure that there is a lot of room for debate even there, but, since TUPE is a good thing, we want to see it applied. We shall not be pressing the objections which we pressed in the Standing Committee, and we welcome the amendments that have been made.
  Amendment agreed to.
  Amendments made: No. 6, in page 2, line 23 leave out 'the transfer of.
  No. 7, in page 2, line 24 after 'undertaking', insert 'capable of being transferred'.
  No. 9, in page 2 line 26 leave out 'any'.
  No. 10, in page 3, line 16 after second 'of', insert 'any of'.—[Mr. Norman Lamont.]

Clause 3

  EXPENSES OF SECRETARY OF STATE
  Mr. Denzil Davies: I beg to move amendment No. 11, in page 3, line 44 leave out 'or operation'.
  Mr. Deputy Speaker: With this it will be convenient to take the following amendments: No. 12, in page 4, line 2 after 'dockyard', insert
  'or the operation of any such company wholly owned and controlled by the Secretary of State'.
  Amendment (a) to amendment No. 12, in line 2, leave out 'and controlled'.
  Mr. Davies: The object of the amendment is to make clear, which the Bill does not, the expenses incurred in the formation and operation of any company—the crucial word is "operation".
  As the Bill is drafted, the Secretary of State could come to the House and assort money for the operation of any company to run the dockyards. In other words, if A and P Appledore International could not do so, under clause 3 the Secretary of State could get money from taxpayers to do so. That might or might not be a good thing, but I do not believe that it was intended. It would have extraordinary effects. The Under-Secretary of State said that that was not intended, and we have tabled the amendments to put the Government's intention in words.
  I see from the Government amendment to our amendment No. 12 that there is not the word "resist". At last the Under-Secretary of State and the Minister have got their way, and have been allowed to accept one of our amendments. The Minister shakes his head, and perhaps that remark was premature, but I think that on this occasion we can claim a small victory.
  Mr. Lee: As the right hon. Member for Llanelli (Mr. Davies) said, clause 3(a), among other things, allows my right hon. Friend the Secretary of State to pay out of money voted by Parliament expenses incurred in operating any company formed by my right hon. Friend at either of the dockyards. When that was raised in Committee, I said that that provision in clause 3(a) would allow my right hon. Friend to incur expenses in the event of his operating the dockyards as a Government-owned public limited company.
  The right hon. Gentleman said that the clause does not refer specifically to a Government-owned plc. He is quite right; it does not. But if one looks at the rest of the subsection it is, I believe, clear enough what is intended. The clause refers to expenses of my right hon. Friend incurred in connection with the operation of any company formed with a view to the provision of dockyard services at a designated dockyard. What expenses would my right hon. Friend incur, if the company were not being operated by a Government-owned plc?
  I accept, however, that amendments on the lines of those suggested by the right hon. Gentleman would make explicit what I believe is already implicit. Therefore, I would not wish to oppose the right hon. Gentleman's amendment to remove the words "or operation" in page 3, line 44. So it is victory. Obviously, however, as the right hon. Gentleman's further amendment implies, if the words "or operation" are to be removed, they would have to be replaced by others to ensure that my right hon. Friend could operate a government-owned plc at each dockyard if he wished.
  I hope that we can leave Report stage on a note of agreement. I cannot, however, agree the wording of the right hon. Gentleman's second amendment to this subsection in its present form. If the words
  "wholly owned by the Secretary of State"

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  are included, no purpose would be served by including the words "controlled by". I have therefore proposed an amendment to the right hon. Gentleman's amendment which is as he has proposed, but without the tautology.
  I could not accept the right hon. Gentleman's amendment to leave out the words "or operation" without
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  a substitute. I would not, however, oppose it, if the amendment I have proposed were acceptable to the right hon. Gentleman and his hon. Friends.
  Amendment agreed to.
  Amendment made: No. 12, as amended, in page 4, line 2, after 'dockyard', insert
  'or the operation of any such company wholly owned by the Secretary of State'.—[Mr. Denzil Davies.]
  10.25 pm
  Mr. Norman Lamont: I beg to move, That the Bill be now read the Third time.
  We have had a long line of reports on the past performance of the dockyards, and the shortcomings and problems have been extremely well documented. Nobody could do other than agree, and I think that the right hon. Member for Llanelli (Mr. Davies) accepts this, that change is greatly needed in the dockyards. Right hon. and hon. Members may not agree with the particular method we have chosen, but the case for some change is extremely strong, given the record of the dockyards. We would certainly not have put forward this scheme unless we were strongly convinced that substantial improvements in performance and savings to the Exchequer could be achieved.
  During the debate on new clause 1, I attempted to indicate some of the calculations behind the overall calculation that we have made of savings of £21 million in the first 10 years and of a higher amount after the initial costs have been amortised. Ever since I have been connected with this Bill I have always emphasised that these costs are, in a sense, illustrative. They are based on certain assumptions. The efficiency savings assumed could be even greater.
  I repeat the point I made when we were discussing new clause 1. Many of the costs that people have been so anxious to analyse and investigate in these debates would have to be incurrred in any genuine attempt to improve the performance of the dockyards. I refer to proposals such as setting up new management accounting systems. It is a terrible comment on the state of the dockyards that it should actually be necessary to go to such lengths to install proper management control and accounting systems. If Opposition Members were genuine in saying that they wanted to improve the efficiency of the dockyards, they would admit that costs such as to cost of having consultants advising on those systems and the cost of hardware and software would have to be incurred.
  The hon. Member for Clackmannan (Mr. O'Neill) said that I did say what would be the cost of setting up a trading fund. That question cannot be answered, because the answer depends precisely on what level of efficiency it was assumed a trading fund would achieve. The cost of buying out restrictive practices is the same either under a trading fund or under commercial management, but there is a crucial difference. Under the trading fund there is not a separation of the customer and the supplier. That is really one of the key reasons why we have gone for the introduction of this method of commercial management rather than simply setting up a trading fund whereby, because the customer and supplier are so closely related, it is possible for the supplier merely to price himself into profit.
  Part of the debate that we had in Committee and again today has been about the effect on the work force and what would happen in the cases of pensions and entitlements to redundancy benefits and other negotiated benefits. I believe I managed to demonstrate to the House that there is no reason to think that people would be worse off; there is a considerable safety net. One cannot guarantee security for people for ever in any world, and certainly when people have moved into the private sector there are
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  changes. Naturally, big changes will be brought about, but there will be a core programme. Obviously, we believe that there will be continuing work for the dockyards.
  Particularly as regards Rosyth, I am amazed at what Labour Members are prepared to say about the effects of commercial management, when we contemplate even for a moment their proposal to get rid of our independent deterrent, because getting rid of Trident would remove 40 per cent. of the work load at Rosyth. It is absurd for right hon. and hon. Gentlemen to spread scare stories about the cost of redundancy when what they propose in relation to the independent deterrent would leave a gaping hole in the work load at Rosyth. I wish to refer to letters written by the Leader of the Opposition to workers at Devonport and Rosyth. They show the utmost cynicism. The letters were identical except that three sentences in the letter to Devonport workers referred to the need to get rid of Trident and there were no references to Trident in the letter to Rosyth workers. The second paragraph in the Devonport letter states:
  "You know of the plans to cut the workforce by 400 by next April. Behind that comes the threat to a further 4,000 jobs under the proposals of the 'Levine Report which, fostered by Michael Heseltine, prepares the way for the privatisation of the Royal Dockyard as a 'managing agency'. At the same time, the Government is locked into the Trident programme which will swallow at least £12 billion of defence expenditure and strip the rest of British defence provision."
  The Rosyth letter states:
  "You know of the plans to cut the workforce by 400 next April."
  and so on, except that the sentences about Trident are omitted. I shall gladly give way to any Labour Member who will tell me why those sentences are left out. Labour Members always want to intervene during my speeches, but they do not want to do so this time. What possible reason, other than the greatest cyncism, can they have? They know that their proposals will have a devastating effect on Rosyth. The number of jobs at risk under our proposals are as nothing compared with the effect of the Labour party's defence policy.
  Mr. Gordon Brown: Nonsense.
  Mr. Lamont: It is not. It is the absolute truth, as the hon. Gentleman well knows. I make no apology for mentioning those letters, because they should be on the record. They were cynical letters.
  By introducing commercial management into the dockyards we seek to achieve full value for money from the defence budget, a climate of maximum competition, freedom for local management from public sector constraints, enabling them to operate effectively in a competitive environment, better levels of efficiency, a clear separation between the dockyards as suppliers and the Navy as customer, financial and accounting arrangements which reflect normal commercial practice and scope for commercial management to expand employment opportunities in the regions concerned by bidding for some of the commercial work available as well.
  Mr. O'Neill: Argentina.
  Mr. Lamont: Even the hon. Gentleman might think occasionally that it is a long way to come from Argentina for a ship refit. I do not think that that is likely.
  Mr. O'Neill: Touche Ross referred to it.
  Mr. Lamont: Touche Ross listed all the navies in the world. If the hon. Gentleman cannot do better than that, he should go away and do a little more studying.
  There are good, sound reasons why commercial management must be introduced if we are willing to face up to the problems which Governments have so often identified in the dockyards. The difference is that no one has been prepared to do anything about those problems. That is why we have the Bill. I am confident that it will give better value for money and a better service to the Royal Navy.
  10.33 pm
  Mr. Denzil Davies: The Minister made a knockabout speech, and we understand why. He knows that he has a weak case. It was clear in Committee that his heart was not in the legislation. He had to come back to it, jetlagged from the Khyber pass, or wherever he had been, and was thrown straight into Second Reading. There were many problems in the background when the Bill was in Committee, including the famous Lygo letter and the difficulties at the Department of Trade and Industry, from which the hon. Gentleman had just come. He found it difficult to concentrate in Committee on this little Bill. He had played no part in its preparation—not that that was his fault.
  The Minister knows very well that the Bill does not make any sense and that it is part of the frenetic ideology of the former Secretary of State for Defence, the right hon. Member for Henley (Mr. Heseltine). Were it not for the right hon. Member for Henley, I do not think that we would have had this Bill tonight.
  The Bill was ill-thought-out and ill-considered. None of the options were considered, and certainly none were costed. This scheme was not costed, and that was clear from our debates in Committee.
  The Minister discussed unemployment in Scotland, but under his Government unemployment in Scotland has trebled. Given the Government's record, I do not think that the Minister should say anything about unemployment in Scotland.
  The Bill is neither one thing nor the other. It is not privatisation, and it is not public sector. It is an extremely hybrid scheme and it has no basis. I do not think that any other country, including the United States of America, operates, or would operate, its dockyards in the way that the Government propose for Rosyth and Devonport.
  The Minister spoke of the great difficulty of introducing other schemes, but there would be no difficulty in doing so. It is possible to run the dockyards under a trading fund. The royal ordnance factories were run very successfully under such a fund. The Minister was extremely insulting when he kept on referring to the ordnance factories as pricing themselves into profit. That was not the case. The ordnance factories operated commercially and profitably. The problems have arisen after privatisation. The ordnance factories are now being run down and are facing redundancies. Their future is insecure. I do not wish to spread alarm, but, frankly, if this proposal goes through I can see the same thing happening to the dockyards.
  The ordnance factories operated well under a trading fund. We hear that we had to buy all those computers and all that hardware and software. I counted the number of times that the Minister mentioned hardware and software.
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  He talked about enough hardware and software to sink an aircraft carrier. Apparently all the costs would go on hardware and software—how ridiculous.
  The Minister has still not answered the question about costs. He said that according to the Government's figures—pretty ropy figures—£21 million a year over 10 years would accrue to the Exchequer. I asked what the deficit would be to the budget of the Ministry of Defence, but he was afraid, properly from his point of view, to answer.
  The deficit, a coincidental figure, will be £21 million a year. The Minister knows that, because it is in the documents. That deficit has gone up since the original calculations in June 1985. The deficit will be £21 million, and multiplied by 10 that is over £200 million deficit to the Ministry of Defence's budget. The Minister knows that, and he should have answered the question.
  That deficit comes partly from having to pay £11 million a year for this new organisation. Another 800 new staff will be taken on—that is what the efficiency is about. The staffing level will rise by 800. Other functions and other co-ordinations will have to be carried out. Secretaries will have to be employed, and they in turn will require secretaries. We know what will happen—the bureaucracy will increase. A further 800 new staff are to be employed while 2,500 dockyard workers at Rosyth and Devonport are apparently to be sacked. Is that the sort of efficiency that we can expect from this commercial management?
  The Ministry of Defence will also have to pay the pensions, which means another £9 million a year. Altogether, it adds up to £20 million a year out of the Ministry's budget. On top of that, if there are redundancies the cost will be charged to the Ministry. When we discussed new clause 3, the Minister admitted that the only way to replicate the redundancy payments under the Civil Service pension scheme if the contractor did not have the money to make the payments would be to put the cost of such payments on the price of the article and the customer would pay, as the customer always does.
  That again will come out of the Ministry of Defence's budget, so the figure of £200 million that I mentioned earlier is a conservative estimate. The Minister of State shakes his head. All he can say is that the Treasury will somehow or other look at the matter, think about it and take it into account. I am sure that he does not believe that the Treasury will hand over £200 million to the Ministry of Defence to pay for the scheme. The money will come from the Ministry of Defence's budget, and the Minister knows that well.
  The Bill may be given its Third Reading, although the Government's majority has been going down and down. Perhaps we should have put down a few more amendments. Last time they had a majority of 34 or 35. I can understand why the Minister of State galloped through his speech. He is having difficulty keeping his troops here. The Minister of State, Department of Trade and Industry, has apparently gone abroad rather than vote for this legislation. Nobody believes that the Bill will improve efficiency in the dockyards or that costs will be saved. As I said earlier, the Royal Navy will receive an inferior service, and it will do so at a higher cost. That will be the effect of what the Government are doing.
  Even if the Bill receives its Third Reading this evening, may I suggest, gently and kindly, to the Minister that he should put the Bill to one side, forget about it and leave it where it should have been left before the right hon.

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  Member for Henley tried to introduce it. It will be damaging to the Government, to the dockyard workers and to Britain's defence.
  Mr. Deputy Speaker: Miss Janet Fookes.
  Hon. Members: Oh!
  10.43 pm
  Miss Janet Fookes: I hear noises from Labour Members, but I hope that I am entitled to speak, particularly on Third Reading.
  I want to put two points to my hon. Friend the Under-Secretary. First, I want from him assurances about the terms and conditions of the employees. I am well aware that that has been discussed at length in Committee, but it is appropriate that on Third Reading the assurance should be given that, so far as possible, the terms and conditions for employees should be no less good than before. Indeed, I am rather more optimistic than Labour Members because I hope that in the fullness of time they will be better. We should now look on this as an opportunity for things to be made better rather than simply assuming, as Labour Members seem to assume, that they will be made worse. It is obviously of importance to individual employees that they have those assurances. I know that many rumours have abounded in the city quite understandably in the period of uncertainty and transition, and it would be helpful to have that assurance tonight.
  Looking now at the rather broader issue of commercial management, my hon. Friends on the Front Bench will know my reservations about that. When the management put in its bid I was greatly encouraged because I genuinely believe that that represents the best way forward and the other assurance that I would like from my hon. Friends tonight is that they will be looking at the management's bid seriously. Clearly, I do not expect it to be successful regardless of the management's capacity to perform. It must operate in fair competition with any other company. I believe that only one consortium is in competition. But it is of the greatest importance to me that that assurance should be given. I have the highest regard for the management at the dockyard, particularly for the managing director. If anyone can make a success of this for the employees, the dockyard and the city it is Mr. David Johnston. I have backed his bid strongly right from the beginning—from the time when I first knew about it. However, I do not want window-dressing. I need to know that the Government are serious about the hid. I believe that if the management team can win the competition for the commercial management it will be a very good thing for the city and the employees —especially as I understand that the management would wish to buy locally many of the supplies that now have to come from other parts of the country. That would be very good for the economy of the city.
  I hope, too, that the new company will be able to find opportunities to take on other work not related to the Royal Navy. I recall that that was one of the original objectives of the major change that is to be made. I hope very much that it will come to fruition, because it must be for the good of the dockyard and the city if other work can be found apart from the immediate Royal Navy work. The amount of that work has always fluctuated. I remember a newspaper report some 20 years ago making dire
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  predictions of a downturn in the amount of work provided by the Royal Navy for the dockyard. If those fluctuations can be evened out by other work not related to the Royal Navy, that will be to the good of the dockyard.
  Mr. Douglas: Such as?
  Miss Fookes: I do not pretend to be an expert on what might be done in that dockyard. I believe that there is an enormous residue of skilled labour there because generations of Plymouthians have gone into the dockyard. I do not believe that it is beyond the wit of man—or, specifically, of Mr. Johnston — to find other opportunities for all the skills there. I would not pretend to teach Mr. Johnston his business, but I believe that those opportunities exist.
  I conclude with those two points, and ask for those assurances.
  10.47 pm
  Dr. Owen: Listening to the hon. Member for Plymouth, Drake (Miss Fookes), I am reminded of T. S. Eliot's line:
  "Not with a bang but a whimper "
  There was a moment when the hon. Lady joined us in opposing the Bill on a cross-party basis. If this is the end of her opposition, she would have done much better never to start it. Whatever one's view on the hon. Member for Plymouth, Sutton (Mr. Clark) and whether or not he should resign from the Government, at least his views on the Bill are so perfectly clear that he has sought neither to be here nor to vote on it. With such support, I certainly think that the city of Plymouth has a right to draw some attention to what has been happening.
  I must say that I am angry tonight. This is a bad Bill. It is very bad for the city of Plymouth. It is a poor way of repaying years of loyalty to successive Governments by the people who work in the dockyard. Furthermore, it is my fear and belief that the service to the Royal Navy will be damaged, and that thereby the Navy will be damaged too.
  I have no doubt, too, from our earlier discussions on the costs, that all this will be achieved at a heavy price. It is time that hon. Gentlemen on the Government Benches, and the hon. Lady, realised that the defence budget is now being cut by 7 per cent. in real terms over the next three years. The additional extra cost which no one has denied will fall on the dockyard over the next few years will damage the defence of this country.
  There is little to be gained by going over old arguments. The Government have got what they wanted, on paper. They will get the Bill. They have been able to take out of the Government service a very large number of people. On paper, the Civil Service will be much reduced. That the Government have achieved. In the process, they have also declared substantial redundancies. Most of the redundancies have been voluntary, and I am pleased about that, but 2,000 jobs have been lost in Plymouth and in my view more will be lost over the next decade. I believe that eventually the dockyard will employ about 7,000 people.
  I face the fact that the Government have the power, but I ask them not to use it. There is no doubt that there is a massive body of opinion, much of it in the Tory party, a substantial number of industrialists and an increasing number of people in the Navy who are waking up to what is really happening to them. They say to the Government "Create Devonport plc, but do not fragment the

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  dockyard". It is nonsensical to cut into the dockyard in the way that has been done, separating the management from the control of the assets. We have heard today and seen in the report what substantial assets there are. If anything can be salvaged out of this mess let it be a rolls royce solution in that the Government have a commercial company. The employees are no longer civil servants, but at least let them all be employed and operate one single industrial enterprise which would be Devonport dockyard and Rosyth dockyard. It is not what we wanted and it is not ideal but if the Secretary of State were to go to the unions and say that he would be prepared to not implement the Bill he would find that there would be a response and, even at this late stage, I hope that the Secretary of State will look at that.
  On the matter of employment prospects at Rosyth, I want to make it clear that although we have opposed this Bill with the Labour party we do not hold its view on what should happen to Polaris. We would not decommission Polaris. It would continue for its natural life. Even though we would cancel Trident, I believe that it would be possible, by expanding the SSN build rate, to pick up the slack and retain a substantial dockyard and submarine refitting at Rosyth. I do not believe that the cancellation of Trident, provided it was with the continuation of Polaris to the end of its natural life—which is certainly until 1997 — need harm Rosyth dockyard. It also need not harm employment at Vickers because we would be increasing the submarine build rate to take up a good deal of the slack.
  That having been said, the substantive issue is the Bill. The Bill deserves to be rejected. My hon. Friend the Member for Portsmouth, South (Mr. Hancock), who was on the Committee for the Social Democratic party and the alliance, and I will vote against this as will many of my right hon. and hon. Friends. We shall do so because we think that it is a damaging Bill. It is bad for the Navy and bad for employment. It is a relic of the right hon. Member for Henley (Mr. Heseltine) that should be dispatched to the wastepaper basket. If the present Secretary of State had any sense he would have nothing to do with the Bill.
  10.52 pm
  Mr. Henry Bellingham: I am aware of the fact that I do not have any expert knowledge on this matter and I do not have a constituency interest. However, I was on the Standing Committee along with other right hon. and hon. Members. The right hon. Member for Plymouth, Devonport (Dr. Owen) mentioned that his hon. Friend the Member for Portsmouth, South (Mr. Hancock) was on the Committee. He came and went; as I remember, he did a runner and did not come back, or at least I cannot remember his coming back. However, I understand that he then issued press releases, took on the Government single-handed and did a great deal of good in getting them to change their mind. However, I do recall the hon. Gentleman doing a runner.
  One of the characteristics of the Committee was the number of contributions from different hon. Members. It was a good-natured Committee. The Bill has met widespread opposition from many quarters, but it is easy to forget the background. Many local industry groups, local Members of Parliament, trade unions, the City and local authorities agree that change is vital for the long-term future of the dockyards.
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  The past 15 years have seen many reports, reviews and studies on the performance of the dockyards and many of them make extremely grim reading. Until now, no Government have dared to grip the situation. In 1978 there was a report and the then Labour Government had the opportunity to introduce a trading fund but they ran away from that. They had an ideal opportunity, but nothing was done. I do not feel that doing nothing in this case was a viable option. That is why I congratulate the Government on having the courage to make a brave attempt to tackle head on a situation that was becoming extremely serious.
  I have a number of reservations on that matter, as have other Conservative Members, and my preference was for a trading fund. However, I am a realist and it would be churlish of me not to support the Government tonight, as they are making an attempt to do something positive and constructive.
  I hope that the Minister will clarify two points which are causing me concern. The first relates to costs. The right hon. Member for Llanelli (Mr. Davies) raised three points which relate to additional costs which will arise as a result of the Bill, but other costs were mentioned in a series of press articles towards the end of last week and I should be grateful if the Minister would comment on them.
  The first point relates to the estimated £30 million consultancy fees and to an unquantified cost in Ministry of Defence staff time. There is also the sum of £46 million to ensure the continuation of a supply service to the Ministry of Defence and the matter of VAT which will now have to be paid on dockyard contracts. Another point which the right hon. Member might have mentioned was the fact that the dockyards will be supplied by the Ministry of Defence with a management financial ledger—an accounting package for the use of contractors—and that will lead to an additional cost.
  It is surprising that detailed figures have not been given. There is an urgent need for those additional figures and I urge the Minister, if he cannot give them tonight, to provide them in the very near future.
  The final point which concerns me is that the Comptroller and Auditor General will no longer have access to the books of the dockyard operators. Therefore, there will not be, as I understand it—I may be wrong and I hope that the Minister can clarify this for me—any accountability to Parliament once the Bill reaches the Statute Book.
  I am worried about those points, but I congratulate the Government on tackling this matter, on biting the bullet and on coming forward with a positive and constructive Bill. I wish the Bill every success and I am pleased that I had the chance of serving on the Standing Committee.
  10.58 pm
  Mr. Gordon Brown: This is a bad Bill, which no amount of amending could have improved. It is very interesting to note that the main argument from the Conservative Back Benchers who have spoken in favour of the Bill tonight is that they have no expertise in the matter of dockyards. They would have done better to adopt the course taken by the hon. Member for Plymouth, Sutton (Mr. Clark), who, knowing that he could not succeed in the amendments that he wanted and that he could not get the guarantees he sought about removing the possibility of foreign control, absented himself from the House and said that, if he had been here, he would have had the guts at least to have voted against the Bill.

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  There are no guarantees in this very short Bill about apprenticeships, conditions of service or preventing foreign control. We have seen in the documents issued today that the possibility of a foreign state holding in the dockyards is being contemplated. There are no guarantees about security and, in the documents, the Ministry of Defence contemplates that the Ministry of Defence police may pass into private hands within a year of the privatisation exercise. There are no guarantees in the Bill about those matters.
  The Ministry of Defence civil servant leading the operation was right to tell the Public Accounts Committee and the Select Committee on Defence that the Bill is the high-risk option for the future of the Navy and for the efficiency of the fleet. When risks are involved in the dependability of the service to the Navy, in the reliability of that service and the capability of the dockyards to respond in times of emergency, the only certainty about the Bill is that it will cost the defence budget more.
  Nothing that the Minister has said so far today alters the Opposition's view that, in the first years, in the first decade and indeed until the end of this century, the Bill will cost the taxpayer more. At the same time jobs will be lost both at Devonport and at Rosyth. It ill befits the Minister of State to talk about Labour's policies when his Government have been responsible for closing Chatham, for the reorganisation of Portsmouth and in the last year for a cut of 2,000 jobs at Devonport and 400 jobs at Rosyth.
  That is not the end of the matter. In the documents which we should have had days ago but which have only been made available to us today, it is made clear to the contractor that the Government expect substantial job cuts at both Rosyth and Devonport as a result of privatisation. Indeed, the contractors are asked
  "to list the scope for cost effective subcontracting and how this could affect the size of the work force and facilities."
  They are also asked
  "to state their intentions for taking work out of the dockyard"
  not bringing work in—
  "for completion in other parts of their organisation or through subcontracting".
  Mr. Norman Lamont: The hon. Gentleman made that point in Committee and alleged that we never answered it. It is true that contractors were asked whether they would take work out. I am sure the hon. Gentleman will agree with me that it is a good thing that we should know whether they intend to do that. He will know too that the document also asked whether they would bring work in. If the hon. Gentleman quotes one, he should quote the other. We want to know what will happen. The hon. Gentleman is totally misrepresenting the position, not for the first time.
  Mr. Brown: The Minister is right to say that the document asks what work will be taken out and what work will be brought in. Of course, the assumption behind the whole manoeuvre and behind the costings, which have not been properly brought to the House, is that jobs will be lost as a result of the scheme. [Interruption.] I shall give one illustration of that in the document that was issued today.
  It says that contractors
  "should also indicate how they would minimise the impact on the local community of any future reductions in the dockyard work force."
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  If that is not the Ministry of Defence expecting job reductions as a result of the scheme, I do not know what evidence the hon. Member for Plymouth, Drake (Miss Fookes) needs.
  It is all confirmed in the report to the Public Accounts Committee by the Ministry of Defence last summer, when the Ministry of Defence specifically asked that the figures that it had given about the possibile redundancies resulting from the privatisation scheme should be kept secret by being marked "confidential" and therefore denied to hon. Members and to the public.
  The Bill's proposals have found no favour with any organisation or committee that has examined the future of the dockyards since the war. They have been rejected as options by them all. The proposals have been resisted unanimously by every section of the work force in Devonport and Rosyth; they have caused anger among the work force, because this is a change not by consent but by the unilateral imposition of the Minister's own ideas.
  The proposals threaten jobs, risk the efficiency of the Navy, risk the dependability of the service to the Navy and involve additional costs. Indeed, now that we have debated them for 70 hours in Committee and for five or six hours today, it is obvious that the proposals are just privatisation for the sake of privatisation. No shares will be issued, so there is no mass capitalism. No savings will come to the public sector borrowing requirement, because the Government will still have to fund all new investment. The Minister has satisfied neither us nor any of the Committees of the House that have examined the matter that savings will come on day-to-day costs. The Minister would do better to drop the proposals by refusing to implement the Bill if it ever gets through both Houses.
  11.3 pm
  Mr. Hancock: We have had a long debate today and we spent many hours on the Bill in Committee. The hon. Member for Norfolk, North-West (Mr. Bellingham) made an intervention to criticise my performance in Committee. That was a bit rich, when his only two contributions in Committee were, first, to inquire whether or not we should leave the room when the fire alarm went off, and secondly, to congratulate the Minister of State on his considerable leadership and charisma on the issue. Having missed the Report stage, he should not have come in on Third Reading to try to score a cheap point.
  We have today explained as best we can that the only winners tonight will be the Government, but that there will be many losers in the future because of the Bill's effect on the Navy, on dockyard workers and on the country's defence.
  You have been in the Chair for a substantial part of the debate, Mr. Deputy Speaker, and I am sure that you cannot have failed to accept the valid arguments that have been raised time and again about the problems that the Bill will create. The sadness that fills my heart arises from the fact that I have seen the dockyard in Portsmouth being run down. In my lifetime, the work force has fallen from 30,000 to about 5,000 now in the Navy base. I have seen what such devastation can do to a city, and I have nothing but fears for Rosyth and Devonport. I am sorry that I do not have the enthusiasm of the hon. Member for Plymouth, Drake (Miss Fookes). I do not see the opportunities, but only the enormous problems that the Bill will create for the nation and those who have worked loyally on our behalf.

  129
  Many hon. Members have offered Ministers suggestions about what they should do after the Bill receives a Third Reading. Some have suggested that Ministers should sit on the Bill, others have suggested that it be put in the dustbin. Ministers should take a tip from those who have examined the Bill carefully. They should take the advice that my right hon. Friend the Member for Plymouth, Devonport (Dr. Owen) and Labour Members have offered. They should not try to enact the Bill. They should not inflict such damage on people who have been loyal or risk damaging the effective and efficient operation of the Navy. The Bill is a mistake, and although the Government may win tonight, the nation will lose in the long run.
  11.6 pm
  Mr. Douglas: It is interesting to reflect on the country's response to legislation as it passes through Parliament. When, for example, in the Defence Select Committee and in discussions with responsible local authorities in Fife and elsewhere, we first examined the Government's proposals, the Government claimed that this was a good and necessary measure. They told us that everyone agreed that change was necessary.
  One would therefore expect that, since the Bill was published, there would have been a great wave of public support and acclaim for this great new measure designed to improve efficiency and to ensure that the Royal Navy got not the service to which it has been used, but an improved one.
  After 70 hours in Committee and on Report, we have heard from only two Conservative Back Benchers. That is a measure of the number of friends that the Bill has acquired in the House and the country. With such friends, the Bill does not need enemies, one might argue. The Government have manifestly failed to enthuse dockyard workers, the Navy or the areas concerned. The more the Bill has been explained and exposed, the more support for it, even from Conservative Back Benchers, has diminished.
  The hon. Member for Plymouth, Drake (Miss Fookes), in an engaging revelation, told us that she is not an expert. All the experts who have examined this proposal damn it. It is damned by the Navy, by the locality, by the Select Committee on Defence, upon which the Government have a majority, and by the Public Accounts Committee. The only way in which to get approval for this nasty, paltry little measure is to impose a three-line Whip and drive the Government's majority through the Lobby.
  This Bill has no friends. The Minister said that this expenditure will be needed anyway. If it is so essential to set up an organisation in Bath to monitor future project management day by day, why not do it now? If this is a device to make the dockyards more efficient, why not do it now without the Bill? What is the difficulty about employing Peat Marwick Mitchell and Co. or Touche Ross and Co. to examine the dockyards' accountancy system without the passage of this stupid, paltry little measure?
  The hon. Member for Drake said that she supports the managing director over the management buy-out of the Plymouth dockyard, but she said not a word about the possibility of a conflict of interest. Is there no conflict of interest for serving naval officers and men who are engaged on the refitting and repair of naval vessels in working hand in hand with private enterprise groups with which they will have to consort to achieve the Government's aims in this Bill? Does not that disturb right
  130
  hon. and hon. Members on the Government Benches? This is a devilish and stupid little measure that does not provide for efficiency in the fleet. I have sought overwhelmingly to prove that it will be costly both to the Exchequer and to the budget of the Ministry of Defence.
  The Minister of State for Defence Procurement referred to the damage which he said Labour party policy would cause to employment in Rosyth. I am willing to go to Rosyth and Dunfermline this weekend and debate the Government's policy for Rosyth compared with the Labour party's policy. I make that open challenge to the Minister. I take the view about patriotism that was expressed the other week by the right hon. and learned Member for Richmond, Yorks (Mr. Brittan). Who are the patriots now? We are witnessing the ending of 500 or 600 years of history. For 500 or 600 years the dockyards have been in the public domain. They have served the navy and the national interest. They have served not just Rosyth, Devonport and Plymouth but the national interest as a whole.
  The patriots on the Conservative Benches are putting aside the interests of the nation because of their view about what private enterprise should do. I feel that I speak for the whole of the Labour party when I say that we give notice to contractors that if they spend valuable managerial time going through the proliferation of documents that have been issued today, it will have been wasted. The Labour party believes that the Navy is in the public domain and that therefore the dockyards should also be in the public domain. When Labour is returned to power it will bring back the dockyards into the public domain.
  11.14 pm
  Mr. O'Neill: It is two years since Mr. Levene visited Rosyth. He spent two hours there and produced the recommendations which have borne fruit in this Bill. The only thing upon which hon. Members on both sides of the House agree is that the status quo is not an option. No hon. Member can be happy with the prevailing conditions at Rosyth, but the Opposition object to the manner in which the initial investigations were conducted. We object to the so-called consideration of the options and the farce of the consultation process. We now object to the implementation of the preferred option. We disagree with the assumptions on the costs and benefits. We disagree with the impact of the new contracts on industrial relations We have received no assurances tonight that wages, conditions, redundancy arrangements and pensions will be copper-bottomed or guaranteed by the Government or by the legislation. We expect that the redundancies that will ensue after vesting day will be met with bitterness and industrial strife, which will render all the Government's ambitions to improve the efficiency of the yards as naught.
  The Opposition disagree with and disapprove of the arrangement in its entirety. It will be bad for those who work in the yards and for the communities surrounding them. It may be acceptable to the hon. Member for Plymouth, Drake (Miss Fookes) that 2,000 jobs should go in Devonport through voluntary redundancy. What about the lost opportunities for apprentices? That statement shows no consideration of what alternative employment can be found in a community which I understand to be in considerable economic difficulties. We hear nose arguments from Rosyth and from the trade unions. It might have been better had the hon. Lady drifted into the

  131
  Standing Committee now and again and heard those arguments being repeated hour after hour as we considered the Bill.
  Miss Fookes: The hon. Gentleman's point is less than fair. I did not drift into the Committee because I was chairing another Committee, which I am required to do as a member of Mr. Speaker's panel of Chairmen.
  Mr. O'Neill: I am sorry about the hon. Lady's priorities, and I accept the point that she made—[HON. MEMBERS: "Withdraw".] I am sorry that the priorities of the House intervened in this way. I did not mean it in the other sense. But the hon. Lady told the House that she was not expert in the workings of the dockyards and then proceeded to make those points, ignoring the fact that 2,000 jobs were lost to the community—2,000 jobs that could have been taken by people apart from those who were prepared to give them up.
  Miss Fookes: When I said that I was not expert, I was referring to one specific point. I was asked whether I could suggest ways in which the dockyard could be used for outside work. I said that, in that respect, I could not offer expert advice but I knew that people such as Mr. Johnston, the managing director, had ideas in that direction and I was prepared to accept his view that this could be done. Others also suggested it.
  Mr. O'Neill: All that I can say is that work which is being carried out on Merseyside, Tyneside and on the Clyde will go to other parts of the country because of the reorganisation, and that the misery that exists in some areas will be compounded by the foolhardiness of the Government's proposals.
  The Bill is bad for workers and for the prospects of ship repair and ship-fitting for the Navy. It will damage the Navy incalculably and will be bad for Britain's security. The only prospect for change is a change of Government and direction so that Britain can be properly defended by people who are happy and confident in the knowledge that their work will continue.
  11.19 pm
  Mr. Lee: I am pleased that the right hon. Member for Plymouth, Devonport (Dr. Owen) has returned, because even at this late hour I want gently to tease him and ask whether he recalls writing an article in October 1983 in the Economic Affairs magazine entitled
  "Agenda for Competitiveness with Compassion."
  In it he said:
  "The SDP has not yet developed a strategic view on the role of the commercial public sector. Is it just a staging post between public and private ownership, or can it be the vehicle for the imaginative, practical and enthusiastic development of industrial democracy … Franchising could be a very attractive approach for it provides a way of enabling enterprises to act competitively, but within a framework which protects the public interest in a way which entirely unregulated competition would not."
  Dr. Owen: Why does the Minister not go on to mention the passage about the dockyards and why that is not appropriate for the dockyards? It is in the same speech.
  Mr. Lee: It is a long speech.
  Dr. Owen: I think that it would be appropriate.
  Mr. Lee: Certainly, the dockyards were referred to, but those quotes stand. As I said in my opening comments, I was half teasing the right hon. Gentleman. Nevertheless, he flirted with franchising at that time.
  I have no intention of repeating all the arguments used on Second Reading, in the 25 Committee sittings or today on Report. As my hon. Friend the Minister said earlier, over the years our naval dockyards have had any number of reports and investigations, and have been calling out for radical change. The Bill will introduce commercial management and, for the first time, a real separation between the Royal Navy as customer and the dockyards as supplier. Financial benefits will come to taxpayers, especially in the long tem. The Navy will benefit from greater efficiency and the speedy return to operational service of its fleet.
  I am grateful for the speech of my hon. Friend the Member for Plymouth, Drake (Miss Fookes), who has taken a deep and continuing interest in the progress of the Bill and in the dockyards. I am sorry about some of the remarks made in criticism of her. Regarding terms and conditions, I am happy to give her the assurance for which she asks. TUPE will apply, and was covered extensively in the earlier speeches of my hon. Friend the Minister.
  I am also grateful for the speech of my hon. Friend the Member for Norfolk. North-West (Mr. Bellingham) and for his participation in our lengthy Committee stage. The questions of costs and accountability were fully covered by my hon. Friend the Minister earlier, and I can tell my hon. Friend that VAT is not payable on production work in the dockyards.
  Our approach, involving the private sector in management while retaining the physical assets in public ownership, is innovative. It is being studied overseas, and may even have application in other areas of the United Kingdom public sector. I commend it to the House.
  Question put, That the Bill be now read the Third time:—
  The House divided: Ayes 213, Noes 171.

  Division No. 124]

  [11.23 pm

  AYES

  Ancram, Michael

  Fraser, Peter (Angus East)

  Arnold, Tom

  Freeman, Roger

  Ashby, David

  Fry, Peter

  Beaumont-Dark, Anthony

  Galley, Roy

  Bellingham, Henry

  Gardiner, George (Reigate)

  Best, Keith

  Gardner, Sir Edward (Fylde)

  Body, Sir Richard

  Garel-Jones, Tristan

  Boscawen, Hon Robert

  Goodlad, Alastair

  Bowden, Gerald (Dulwich)

  Gorst, John

  Brinton, Tim

  Gow, Ian

  Burt, Alistair

  Gower, Sir Raymond

  Carlisle, John (Luton N)

  Grant, Sir Anthony

  Clark, Sir W. (Croydon S)

  Gregory, Conal

  Cope, John

  Griffiths, Sir Eldon

  Couchman, James

  Griffiths, Peter (Portsm'th N)

  Cranborne, Viscount

  Grist, Ian

  Currie, Mrs Edwina

  Ground, Patrick

  Dorrell, Stephen

  Hamilton, Hon A. (Epsom)

  Douglas-Hamilton, Lord J.

  Hamilton, Neil (Tatton)

  Durant, Tony

  Hampson, Dr Keith

  Eyre, Sir Reginald

  Hanley, Jeremy

  Fairbairn, Nicholas

  Hannam, John

  Favell, Anthony

  Hargreaves, Kenneth

  Fenner, Mrs Peggy

  Harris, David

  Fletcher, Alexander

  Harvey, Robert

  Fookes, Miss Janet

  Haselhurst, Alan

  Forth, Eric

  Hawksley, Warren

  Fowler, Rt Hon Norman

  Hayes, J.

  Fox, Marcus

  Hayhoe, Rt Hon Barney

  Franks, Cecil

  Heathcoat-Amory, David

  133

  Heddle, John

  Prentice, Rt Hon Reg

  Henderson, Barry

  Price, Sir David

  Hickmet, Richard

  Rathbone, Tim

  Hind, Kenneth

  Renton, Tim

  Hogg, Hon Douglas (Gr'th'm)

  Rhodes James, Robert

  Holland, Sir Philip (Gedling)

  Rhys Williams, Sir Brandon

  Holt, Richard

  Ridley, Rt Hon Nicholas

  Hordern, Sir Peter

  Roberts, Wyn (Conwy)

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

  Robinson, Mark (N'port W)

  Howell, Ralph (Norfolk, N)

  Roe, Mrs Marion

  Hubbard-Miles, Peter

  Rossi, Sir Hugh

  Jackson, Robert

  Rowe, Andrew

  Jessel, Toby

  Rumbold, Mrs Angela

  Jones, Gwilym (Cardiff N)

  Ryder, Richard

  Jones, Robert (Herts W)

  Sackville, Hon Thomas

  Jopling, Rt Hon Michael

  Sainsbury, Hon Timothy

  Joseph, Rt Hon Sir Keith

  St. John-Stevas, Rt Hon N.

  Kellett-Bowman, Mrs Elaine

  Shaw, Giles (Pudsey)

  King, Roger (B'ham N'field)

  Shaw, Sir Michael (Scarb')

  Knight, Greg (Derby N)

  Shelton, William (Streatham)

  Knight, Dame Jill (Edgbaston)

  Shepherd, Colin (Hereford)

  Knowles, Michael

  Shepherd, Richard (Aldridge)

  Lamont, Norman

  Shersby, Michael

  Lang, Ian

  Silvester, Fred

  Latham, Michael

  Sims, Roger

  Lee, John (Pendle)

  Skeet, Sir Trevor

  Leigh, Edward (Gainsbor'gh)

  Smith, Tim (Beaconsfield)

  Lennox-Boyd, Hon Mark

  Soames, Hon Nicholas

  Lester, Jim

  Spencer, Derek

  Lilley, Peter

  Spicer, Jim (Dorset W)

  Lloyd, Peter (Fareham)

  Spicer, Michael (S Worcs)

  Lord, Michael

  Squire, Robin

  Luce, Rt Hon Richard

  Stanbrook, Ivor

  McCrindle, Robert

  Stanley, Rt Hon John

  McCurley, Mrs Anna

  Steen, Anthony

  MacKay, Andrew (Berkshire)

  Stern, Michael

  MacKay, John (Argyll & Bute)

  Stevens, Lewis (Nuneaton)

  McNair-Wilson, M. (N'bury)

  Stewart, Allan (Eastwood)

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

  Stewart, Andrew (Sherwood)

  Madel, David

  Stewart, Ian (Hertf'dshire N)

  Major, John

  Stokes, John

  Malins, Humfrey

  Sumberg, David

  Marlow, Antony

  Taylor, John (Solihull)

  Mates, Michael

  Taylor, Teddy (S'end E)

  Mather, Carol

  Terlezki, Stefan

  Maude, Hon Francis

  Thompson, Donald (Calder V)

  Mawhinney, Dr Brian

  Thompson, Patrick (N'ich N)

  Mayhew, Sir Patrick

  Thornton, Malcolm

  Merchant, Piers

  Thurnham, Peter

  Meyer, Sir Anthony

  Townend, John (Bridlington)

  Miller, Hal (B'grove)

  Townsend, Cyril D. (B'heath)

  Mills, Iain (Meriden)

  Trippier, David

  Moate, Roger

  Twinn, Dr Ian

  Monro, Sir Hector

  van Straubenzee, Sir W.

  Montgomery, Sir Fergus

  Viggers, Peter

  Moore, Rt Hon John

  Waddington, David

  Morrison, Hon C. (Devizes)

  Walden, George

  Morrison, Hon P. (Chester)

  Walker, Bill (T'side N)

  Moynihan, Hon C.

  Wall, Sir Patrick

  Mudd, David

  Waller, Gary

  Neale, Gerrard

  Ward, John

  Nelson, Anthony

  Warren, Kenneth

  Newton, Tony

  Watts, John

  Nicholls, Patrick

  Wells, Bowen (Hertford)

  Norris, Steven

  Wells, Sir John (Maidstone)

  Onslow, Cranley

  Wheeler, John

  Oppenheim, Phillip

  Whitfield, John

  Oppenheim, Rt Hon Mrs S.

  Whitney, Raymond

  Ottaway, Richard

  Wilkinson, John

  Page, Richard (Herts SW)

  Winterton, Nicholas

  Parkinson, Rt Hon Cecil

  Wolfson, Mark

  Parris, Matthew

  Wood, Timothy

  Patten, Christopher (Bath)

  Woodcock, Michael

  Pawsey, James

  Yeo, Tim

  Peacock, Mrs Elizabeth

  Pollock, Alexander

  Tellers for the Ayes:

  Porter, Barry

  Mr. Michael Neubert and

  Powell, William (Corby)

  Mr. Gerald Malone.

  Powley, John

  134

  NOES

  Adams, Allen (Paisley N)

  Hattersley, Rt Hon Roy

  Alton, David

  Haynes, Frank

  Archer, Rt Hon Peter

  Healey, Rt Hon Denis

  Ashdown, Paddy

  Hicks, Robert

  Atkinson, N. (Tottenham)

  Hogg, N. (C'nauld & Kilsyth)

  Barnett, Guy

  Home Robertson, John

  Beckett, Mrs Margaret

  Hoyle, Douglas

  Beith, A. J.

  Hughes, Robert (Aberdeen N)

  Bell, Stuart

  Hughes, Roy (Newport East)

  Benn, Rt Hon Tony

  Hughes, Sean (Knowsley S)

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

  John, Brynmor

  Bermingham, Gerald

  Kaufman, Rt Hon Gerald

  Bidwell, Sydney

  Kennedy, Charles

  Blair, Anthony

  Kilroy-Silk, Robert

  Boothroyd, Miss Betty

  Kirkwood, Archy

  Boyes, Roland

  Lambie, David

  Bray, Dr Jeremy

  Lamond, James

  Brown, Gordon (D'f'mline E)

  Leighton, Ronald

  Brown, Hugh D. (Provan)

  Lewis, Terence (Worsley)

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

  Litherland, Robert

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

  Livsey, Richard

  Bruce, Malcolm

  Lloyd, Tony (Stretford)

  Buchan, Norman

  McCartney, Hugh

  Caborn, Richard

  McKay, Allen (Penistone)

  Callaghan, Jim (Heyw'd & M)

  McKelvey, William

  Campbell, Ian

  McNamara, Kevin

  Campbell-Savours, Dale

  McTaggart, Robert

  Canavan, Dennis

  Madden, Max

  Carlile, Alexander (Montg'y)

  Marek, Dr John

  Cartwright, John

  Marshall, David (Shettleston)

  Clark, Dr David (S Shields)

  Martin, Michael

  Clarke, Thomas

  Maxton, John

  Clay, Robert

  Maynard, Miss Joan

  Clelland, David Gordon

  Meacher, Michael

  Clwyd, Mrs Ann

  Michie, William

  Cocks, Rt Hon M. (Bristol S)

  Mikardo, Ian

  Cohen, Harry

  Millan, Rt Hon Bruce

  Cook, Frank (Stockton North)

  Miller, Dr M. S. (E Kilbride)

  Corbett, Robin

  Mitchell, Austin (G't Grimsby)

  Corbyn, Jeremy

  Morris, Rt Hon A. (W'shawe)

  Craigen, J. M.

  Morris, Rt Hon J. (Aberavon)

  Crowther, Stan

  Nellist, David

  Cunliffe, Lawrence

  O'Neill, Martin

  Dalyell, Tam

  Owen, Rt Hon Dr David

  Davies, Rt Hon Denzil (L'lli)

  Park, George

  Davies, Ronald (Caerphilly)

  Parry, Robert

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

  Patchett, Terry

  Deakins, Eric

  Pavitt, Laurie

  Dixon, Donald

  Pendry, Tom

  Dormand, Jack

  Penhaligon, David

  Douglas, Dick

  Pike, Peter

  Dubs, Alfred

  Powell, Raymond (Ogmore)

  Duffy, A. E. P.

  Prescott, John

  Eadie, Alex

  Radice, Giles

  Eastham, Ken

  Randall, Stuart

  Evans, John (St. Helens N)

  Redmond, Martin

  Ewing, Harry

  Rees, Rt Hon Peter (Dover)

  Fatchett, Derek

  Richardson, Ms Jo

  Faulds, Andrew

  Roberts, Allan (Bootle)

  Field, Frank (Birkenhead)

  Robertson, George

  Fields, T. (L'pool Broad Gn)

  Robinson, G. (Coventry NW)

  Fisher, Mark

  Rogers, Allan

  Flannery, Martin

  Rooker, J. W.

  Foot, Rt Hon Michael

  Ross, Ernest (Dundee W)

  Forrester, John

  Sedgemore, Brian

  Foster, Derek

  Sheerman, Barry

  Foulkes, George

  Sheldon, Rt Hon R.

  Fraser, J. (Norwood)

  Shore, Rt Hon Peter

  Freeson, Rt Hon Reginald

  Short, Ms Clare (Ladywood)

  George, Bruce

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

  Gilbert, Rt Hon Dr John

  Silkin, Rt Hon J.

  Godman, Dr Norman

  Skinner, Dennis

  Golding, John

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

  Gould, Bryan

  Snape, Peter

  Hamilton, James (M'well N)

  Soley, Clive

  Hamilton, W. W. (Fife Central)

  Stott, Roger

  Hancock, Michael

  Strang, Gavin

  Harman, Ms Harriet

  Thomas, Dafydd (Merioneth)

  Hart, Rt Hon Dame Judith

  Thomas, Dr R. (Carmarthen)

  135

  Thompson, J. (Wansbeck)

  Wigley, Dafydd

  Thorne, Stan (Preston)

  Wilson, Gordon

  Tinn, James

  Winnick, David

  Torney, Tom

  Young, David (Bolton SE)

  Wainwright, R.

  Wallace, James

  Tellers for the Noes:

  Wardell, Gareth (Gower)

  Mr. John McWilliam and

  Wareing, Robert

  Mr. Chris Smith.

  White, James

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

  EUROPEAN COMMUNITY DOCUMENTS
  Motion made, and Question put forthwith, pursuant to Standing Order No. 80(5) (Standing Committees on European Documents.):—

  SPECIFIC TRAINING FOR GENERAL MEDICAL PRACTICE
  That this House takes note of European Community Document No. 11387/84, a proposal for a directive on making specific training for general medical practice mandatory in all member states of the Community; notes that the United Kingdom already has a mandatory vocational training scheme lasting three years for doctors wishing to establish themselves as principals in general medical practice in the National Health Service; and welcomes the prospect of similar mandatory training schemes lasting a minimum of two years being established throughout the European Community.—[Mr. Maude.]
  Question agreed to.

  OUTER SPACE BILL [LORDS]
  Order for Second Reading read.
  Motion made, and Question put forthwith, pursuant to Standing Order No. 69(6) (Second reading committees.)
  That the Bill be now read a Second time.
  Question agreed to.
  Bill accordingly read a Second time.
  Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills.)

  SCOTTISH GRAND COMMITTEE
  Ordered,
  That, in the course of its consideration of the matter of the development of the proposals for Scotland in the Green Paper on "Paying for Local Government", the Scottish Grand Committee may meet in Edinburgh on Monday 28th April at half-past Ten o'clock.—[Mr. Maude.]

  EDUCATION, SCIENCE AND ARTS
  Ordered,
  That Mr. Clement Freud be discharged from the Education, Science and Arts Committee and Mr. David Evennett be added.
  —[Mr. Fox, on behalf of the Committee of Selection.]

  SOCIAL SERVICES
  Ordered,
  That Mrs. Edwina Currie be discharged from the Social Services Committee and Mr. John Powley be added. —[Mr. Fox, on behalf of the Committee of Selection.]

  ENVIRONMENT
  Ordered,
  That Mr. David Alton be discharged from the Environment Committee. — [Mr. Fox, on behalf of the Committee of Selection.]

  AGRICULTURE
  Ordered,
  That Mr. Albert McQuarrie be discharged from the Agriculture Committee and Mr. John Carlisle and Mr. Paul Marland be added.—[Mr. Fox, on behalf of the Committee of Selection.]

PETITION

  Social Security Reform
  11.35 pm
  Mr. Archy Kirkwood: I seek the permission of the House to present a petition in relation to proposals originally published by the Government in December in the White Paper as a consequence of the social security reviews undertaken by the Secretary of State for Social Services.
  The petition has garnered 32,641 signatures since that time, across the length and breadth of the four kingdoms. The petition is addressed to the proposals contained in the White Paper on reform of social security, which will lead to millions of needy people losing benefits. They will seriously affect pensioners, women, young people, the unemployed and those with exceptional needs such as the chronically sick and disabled.
  The petition concludes:
  "Wherefore your petitioners pray that your honourable House do not proceed with legislation arising from the proposals set out in the White Paper on the reform of social security."
  I beg to present the petition.
  To lie upon the Table.

  Huddersfield School of Architecture
  Motion made and Question proposed, That this House do now adjourn.—[Mr. Maude.]
  11.36 pm
  Mr. Barry Sheerman: I am grateful for the privilege and opportunity to introduce the subject of the Huddersfield polytechnic school of architecture by way of an adjournment debate.
  This is an appropriate but sad day on which to have the debate. Many polytechnics up and down the country have heard today of further cuts announced by the Government and the National Advisory Body for Public Sector Higher Education. This will affect educational opportunities in our country.
  In March 1986, the Secretary of State for Education and Science announced his provisional decision to stop recruitment of students to the undergraduate BA architecture degree and postgraduate diploma in architecture courses at the Huddersfield polytechnic school of architecture, with effect from September 1986. The reason for the decision would make a suitable subject for a doctoral thesis for any student of modern Government processes who wished to illuminate how Government Departments should not assess evidence and make decisions.
  The Department of Education and Science made it clear early in the 1980s that it wanted cuts in architectural education. In due course NAB and the University Grants Committee set up a transbinary architecture group, which was otherwise known as the Esher Committee. Its recommendations were considered further by the architectural intake working party AIWP. These are complex acronyms, but I hope that the House will bear with me.
  The result was a recommendation that six schools of architecture should be lost to the country either by closure or merger. Since then, four have been deleted from the list, and two remain: Huddersfield and the North-East London polytechnic. At present, both schools are listed for closure.
  To make sense of the proposals, we need to consider some history, if the House will bear with me. I remind the House that there are three weeks for appeal against the preliminary decision for closure. There have been three weeks from 11 March to appeal against the preliminary decision on closure. Hon. Members therefore have good reason to appeal on an all-party basis to the Minister to think again before an irrevocable decision is made.
  It is important to consider the criteria on which Huddersfield is said to have been judged and failed—location, size, quality and cognate courses. On no reasonable basis can one say that Huddersfield polytechnic school of architecture has failed any of those criteria. In terms of location, the arguments against Huddersfield are the same as those against, for example, Manchester, Glasgow, Liverpool or Edinburgh.
  A target of 150 students and 15 staff has been recommended. Huddersfielcl has 130 students on degree courses and, unlike other schools of architecture, another 70 students taking the higher national diploma for architectural technicians— 200 students in total. Also, Huddersfield has a full-time equivalent of 20 staff. In the

  139
  university sector, six departments have nowhere near as many—for example, Cambridge university, with 110 such students, is much smaller.
  In terms of quality, degree and honours degree status was granted by the Council for National Academic Awards in 1983. Unlike many other schools in polytechnics which have lost the ability to give an honours degree or have not yet achieved that status, in 1985 the Royal Institute of British Architects gave the maximum recognition for the longest period in its power to courses at Huddersfield polytechnic. Notes were made on the quality of the courses. Attention has been drawn to aspects of the school's work where the Government wanted to encourage study — for example, advanced work in computer applications in architecture.
  In terms of cognate courses, it is true that professional architects and technicians are educated together at the Huddersfield school, which must surely be a plus. Related courses in art, design and building are run in parallel with architectural courses. The teaching staff at the polytechnic are from several departments. The architectural department is in the school of engineering. The criteria in the cognate disciplines are a model for other schools of architecture.
  The decision against the Huddersfield school and NELP was the result of a long process. Before coming to a final decision, Ministers must weigh the closure of Huddersfield and NELP against the original policy objectives for pursuing cuts in architecture. We believe that those policies were wrong-headed. The thrust of the closures is to reduce expenditure on architectural education, to stabilise the size of the architectural profession, to prevent the unemployment of graduates from these schools and to protect the profession's income levels. Those criteria are hopeless. Paring the system down to two schools of architecture will not result in significant overall savings. If the Government had taken on the profession more boldly and had cut architectural education back from seven to five years, they might have done something more sensible.
  Better alternatives exist in terms of reducing costs. We now know that the statistical basis for the Esher report's diagnosis of the problems was faulty. The architectural profession, rather than being stabilised, will be reduced by a third.
  The report also failed to look at the impact of European Community regulations on the United Kingdom. In the United Kingdom, 95 per cent. of our architecture graduates get jobs; indeed, 100 per cent. of the graduates of the Huddersfield school get jobs in architecture. In line with the European influence on our lives, European graduates from any part of the EEC will be able to come to practise in Britain. Last year, almost 100 per cent. of the graduates of the two schools of architecture in Dublin were unemployed. If we do not have our own supply of architects, those graduates will be able to seek employment in Britain.
  This policy is hardly in line with the deregulation philosophy for trades and professions to which the Government are supposed to be committed. We need more architects. Yesterday I telephoned eight architects in Yorkshire, and all were looking for architectural staff but could not find them. In West Yorkshire, Yorkshire and
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  Humberside we desperately need more architects to rebuild the infrastructure—private and public—because it is in such a desperate state.
  Mr. Richard Wainwright: In pursuance of the point which the hon. Gentleman has reached, does he agree that in West Yorkshire, in Huddersfield and in the architectural profession generally it has been well noted that in all these recent inquiries into the Huddersfield school of architecture there were only two at which the polytechnic authorities had a fair and proper chance to set forth the record of the school and its plans? In those two cases, the reputation of the school was fully vindicated and both the National Advisory Committee and RIBA have endorsed the claims for the Huddersfield polytechnic school to continue.
  Mr. Sheerman: The hon. Gentleman is absolutely right. Whenever the school got the opportunity to put its case to an impartial group of assessors, their assessment of the quality of the school and its importance were in favour of the continuation of the school.
  Anyone who looks at the decision-making process with regard to schools of architecture will be amazed. There has been a shambles of decision-making. None of the rules of natural justice has applied in this case. The outcome borders on the irrational. There has been no sensible and fair assessment of the general objectives of Government policy in relation to schools of architecture or the fair application of the criteria originally laid down.
  What makes me most cross is that the staff of the department and the students have been appallingly treated. Many young people's aspirations to become architects will be dashed by the Government's decision. The Government have given the money for next year's courses but they have said that the first-year course cannot recruit in 1986. That means that young people in Huddersfield will not have a chance to become architects. Their futures have been ruined by the dilly-dallying, shilly-shallying attitude of the Secretary of State. It is a cruel thing to do to young people on the threshold of a career.
  Irrationality breeds a lack of confidence in the administration and in its decision-making. It forces institutions, faced by that type of irrational behaviour, to go in for political in-fighting and to pull weight wherever they can. That is the only reason I can find for the fact that Huddersfield and the North-East London polytechnic are the only schools of architecture to be closed. It is not on the basis of qualtiy or of any rational criteria but because they did not have friends at court or political muscle which could pull behind the scenes to keep them in business.
  The House should hear the case for the Huddersfield polytechnic. The Minister still has a chance to reverse the decision and to make sure that a thriving school that does so much for the community and the nation will succeed in future.
  11.49 pm
  Mr. John Whitfield: I am grateful to the hon. Member for Huddersfield (Mr. Sheerman) for permitting me a short space of time before my hon. Friend the Under-Secretary replies to back up the majority of the points that he has made. The hon. Gentleman packed many facts into his speech and I am sure that my hon. Friend will have taken those fully on board.
  The one point that I want to make is that, although the Government, rightly, are seriously examining the number

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  of polytechnic places which are, or ought be be, properly available throughout Britain, in the future of the Huddersfield school of architecture a rather curious process of elimination has been embarked upon. That is illustrated most clearly by the fact that the Huddersfield school of architecture has recently been granted the right to award honours degrees in architecture whereas the Leeds school of architecture, which is only just down the road for those who are not familiar with our part of the world, has recently lost that right.
  My hon. Friend may rightly say that perhaps there are too many schools of architecture in the country—there are two schools in Manchester and Liverpool, and one in Huddersfield, Leeds and Hull in our part of the world. It is extraordinary, however, that of those schools the Huddersfield school of architecture should, within a short space of time of being granted the right to award honours degrees, be faced with closure.
  11.51 pm
  The Parliamentary Under-Secretary of State for Education and Science (Mr. George Walden): I am grateful to the hon. Member for Huddersfield (Mr. Sheerman) for bringing to the attention of the House his concern over the provisional decision by my right hon. Friend the Secretary of State for Education and Science to direct that the part I course in architecture at Huddersfield polytechnic should cease to be provided. This provisional decision was relayed to the polytechnic and its maintaining authority in a letter from the Department dated 7 March 1986.
  The hon. Gentleman talked about the complexities of a doctoral thesis, but I want to stress that one man's doctoral thesis is another man's scrupulously careful procedures. It is important that hon. Members fully understand the background from which this provisional conclusion has emerged.
  The number of registered architects has risen over the 12 years from 1973 to 1985 by no less than 21 per cent., leading inevitably to under-employment within the profession and a resultant fall in real earnings. The quarterly statistics produced by the professional body, the Royal Institute of British Architects, show that to be the case. At the same time, as I remind hon. Members, the education and training requirement for architects prior to registration is seven years —I am glad that the hon. Gentleman alluded to that—of which five are spent in full-time study, each of them grant-aided in respect of tuition fees and maintenance from public funds. That means, if I may borrow a rather telling phrase from the Financial Times, that
  "three architectural students take up as much in grant as five ordinary undergraduates, a fact not well appreciated by the general public."
  It was against a background of excess supply that the transbinary architecture group, chaired by Lord Esher, and so known as the Esher group, was established in 1983, under the aegis of the National Advisory Body for Public Sector Higher Education and the University Grants Committee. The group reported in September 1984. The central recommendation of the Esher group was that policy should be directed to stabilise the size of the profession at the level it would reach by 1990, when the 1984 student intakes had qualified. Esher forecast that this would give a profession in the 1990s of about 31,000 architects. The fact is that since publication of the report numbers have
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  continued to increase at a rate that was underestimated by Esher, so that the total number of architects on the statutory register maintained by the Architects Registration Council of the United Kingdom already stood at 29,692 at 31 December 1985.
  The conclusions of the Esher group on the need to stabilise the size of the profession by limiting intakes to training were accepted by both the National Advisory Body and by the University Grants Committee. They have also been accepted by my right hon. Friend the Secretary of State. Following acceptance by the NAB and the UGC of the central recommendations of the Esher report, a joint architecture intakes working party was established to consider how the reductions recommended by Esher might be implemented and to advise its parent bodies accordingly. The working party reported in August 1985.
  When it considered the AIWP's proposals, the NAB board accepted the recommendation that the Huddersfield and NELP school should be closed. Subsequently, the NAB committee accepted the board's advice in respect of NELP, but recommended that an intake be maintained in 1986 at Huddersfield. It resolved, however, to review intakes at Huddersfield in the context of the NAB's 1987–88 planning exercise in the light of further consideration of the factual material. In a statement on 20 December 1985, in response to NAB's advice about academic provision and the distribution of the advance further education pool in 1986–87—I apologise for all this jargon, but I think that most hon. Members are familiar with it—my right hon. Friend the Secretary of State indicated that he could not accept the NAB's advice that the reduction in intakes to public sector part architecture courses should be accomplished solely by the closure of the NELP school. Instead, he said that he would review the position over one or two months. That is another example of the extraordinary care and scrupulousness with which the provisional decisions were taken.
  In the light of that further review, my right hon. Friend reached his provisional decision that there should be no intake to the part I course at Huddersfield in 1986
  The preparatory work for the review was undertaken by officials of my Department. Corrections and clarifications of the factual information before the AIWP and NAB were sought and meetings arranged between officials and representatives of both Huddersfield and NELP. Thus an opportunity was afforded to both polytechnics to comment on factual and other aspects of the reviews undertaken successively by the Esher group, the AIWP and the NAB. Thereafter, at the request of the Department, further information was submitted by both institutions. Officials reported the results of this work to my right hon. Friend.
  Mr. Andrew F. Bennett: Can the Minister confirm that provisional offers have been made to students for the start of the autumn term of the 1986 course? Is it not grossly unfair to snatch away those provisional offers at this stage?
  Mr. Walden: Not for the first time, the hon. Gentleman is dramatising the situation. I am describing how carefully and considerately we approached an admittg,dly difficult question, which will inevitably—I sympathise with the spirit of what the hon. Gentleman says —involve some discomfort, to put it mildly, to some students.
  In the light of the work undertaken by officials, my right hon. Friend noted that the AIWP report had described

  143
  the criteria adopted for the purposes of its work but had not indicated how the working party had applied those criteria to produce its recommendations involving institutional closures. As a first step, therefore, he considered whether the working party had acted reasonably in its general approach in selecting the criteria for its review and in seeking evidence from those it had approached. In the light of the available evidence, he was satisfied as to the reasonableness of the AIWP's general approach. Thereafter, he considered whether on the basis of the evidence before the working party, amended on points of fact as necessary, it would be reasonable for him to come to the same conclusion, namely, that the part I courses in architecture at Huddersfield and NELP should have zero intakes in 1986. He carefully reviewed the sources of information used by the working party and NAB, together with the corrections and clarifications reported to him by officials.
  The AIWP has identified four criteria as relevant to its consideration of institutional allocations. As the hon. Member for Huddersfield said, these were size, location, quality and relationship to cognate disciplines. In practice, a fifth criterion must be added, since the working party received evidence on the resources available to architecture schools as one factor underpinning the quality of existing courses and their potential for future development and expansion.
  With regard to school size, the first criterion, my right hon. Friend noted that the full-time equivalent numbers in 1984–85 undertaking architectural training at Huddersfield polytechnic were the lowest of all public sector schools regardless of whether allowance was made for overseas and full-cost students. As for location, the second criterion, Huddersfield's school is situated in one of the main concentrations of provision identified by the Esher report. In the light of provision accessible elsewhere in the region, the role of the Huddersfield school in relation to continuing professional development was also not regarded by my right hon. Friend as sufficient to exclude it from further consideration.
  Satisfied that it was not unreasonable on the criteria of size and location to consider the cessation of intakes to the part I course at Huddersfield, my right hon. Friend considered the more judgmental criteria of resources, quality of work and relationship with cognate disciplines. It was noted that the polytechnic had challenged some of the judgments made by Her Majesty's Inspectorate with regard to resources available to the school, but it was considered, in any event, that the school's resources did not emerge as superior to those available to the other schools located in the area.
  As to quality and relationship to cognate courses, my right hon. Friend had close regard to the advice of HMI that while all public sector architecture schools were clearly above an acceptable threshold of quality, there were perceptible differences between them which facilitated the identification, within that range, of those schools which were above and those which were below average quality. My right hon. Friend concluded, in the light of HMI advice — which remained as given to AIWP and NAB — that closure of the school at Huddersfield in the context of an overall reduction in intakes would not represent a significant loss of quality from architectural training.
  Mr. Sheerman: Is it not a fact that HMI has never sent an inspector who specialises in architecture to Huddersfield polytechnic? There has been no proper assessment at any time by HMI of the quality of that school.
  Mr. Walden: The hon. Gentleman is casting aspersions on the work of HMI, as I understand it. May I reiterate what I said earlier on numerous occasions throughout my speech? My right hon. Friend the Secretary of State made a careful review of all the steps taken before reaching his provisional decision. I think that it is important, and that it will be helpful to all hon. Members if I get the Government's view on record.
  My right hon. Friend also took account of factual material bearing on quality and relationship to cognate disciplines, to which attention had been drawn by representatives of the polytechnic in its discussion with officials. In this context, the reported views of the validating body, the CNAA, and the professional body, RIBA, were noted. In the judgment of my right hon. Friend, however, these did not by themselves render unreasonable the identification of the school at Huddersfield polytechnic for a zero intake to its part I course in 1986.
  It was against that background that my right hon. Friend took his provisional decision that there should be no intakes to the part 1 course at Huddersfield in 1986. I must however re-emphasise, as I have on several occasions during my speech, the essentially provisional nature of the decision, the basis of which was set out in the Department's letter of 7 March to the polytechnic's maintaining authority, which also conveyed an invitation to make further representations in the light of its contents.
  I am grateful to my hon. Friend the Member for Dewsbury (Mr. Whitfield) for attending the debate, because the broader hearing the Government case has the better we like it. I can assure the hon. Member for Huddersfield, my hon. Friend the Member for Dewsbury and other hon. Members that my right hon. Friend will give careful consideration to whatever representations are made by the deputation that he will shortly receive from the polytechnic and the maintaining authority. He will proceed to a final decision only in the light of those representations.
  It was valuable for me and for the Government to hear the views of the hon. Member for Huddersfield, and I sympathise with his concern and with the concerns of his constituents. I know that other hon. Members also have an indirect but vital interest in this matter and I was grateful to hear their comments tonight. I hope that I have stressed sufficiently in my remarks that the Government have adopted a cautious approach to this complicated problem. The European dimension raised by the hon. Member for Huddersfield introduces a further complexity into this matter.
  Mrs. Elizabeth Peacock: Will my hon. Friend note that there are many students with an offer from Huddersfield who do not know where they stand at present? Will he assure us that a decision will be taken reasonably quickly so that these young people will know whether or not they have a place at Huddersfield?
  Mr. Walden: I appreciate the element of uncertainty which my hon. Friend has raised and I hope that in my speech I have stressed that inevitably a balance must be

  145
  struck between the need for a reasonably prompt decision on the one hand, and on the other the equally pressing need for careful review of this extremely complicated situation.
  I was about to conclude my remarks by mentioning the European dimension raised by the hon. Member for Huddersfield. In this connection, it has been argued that the new directive for freer movement will facilitate a net outflow of registered architects to Europe and may therefore have the effect of reducing the number of practising architects in the United Kingdom. On the other
  146
  hand, the issue of the EC directive was discussed by both the NAB board and committee, which foresaw an influx of European-trained architects into the United Kingdom, which would, of course, exacerbate the over-provision of training places already identified by the Esher group.
  The Question having been proposed after Ten o'clock on Tuesday evening, and the debate having continued for half an hour, Mr. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
  Adjourned at Six minutes past Twelve o'clock.

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  East London River Crossing
  Strategic Defence Initiative
  Strategic Defence Initiative
  Computers
  Computers
  Radioactive Waste
  Radioactive Waste
  Greenham Common
  Greenham Common
  Ulster Defence Regiment
  Ulster Defence Regiment

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

Coolscar Limestone Quarry, Yorkshire Dales
Lord Hunt: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they are yet in a position to make a statement about the application of Eskett Quarries Ltd. to extend their operations in Coolscar Limestone Quarry, in the Yorkshire Dales National Park.
The Minister of State, Department of the Environment (Lord Elton): My Lords, my right honourable friend the Secretary of State for the Environment is urgently considering the applications by Eskett Quarries Ltd. and hopes to come to a decision shortly.
Lord Hunt: My Lords, I am grateful to the noble Lord for that Answer. Does he recall that when I raised this Question with him four and a half months ago, on 28th November last year, he assured me then:
"the decision should be made very soon"—[Official Report, col. 971.]?
As it is now more than eight months since the inquiry into that matter was concluded, can the noble Lord tell the House what further considerations have arisen to delay so long a decision by his right honourable friend?
Lord Elton: My Lords, this is a sensitive and very complex case. I have to say to the noble Lord that I do expect a decision to emerge—I am tempted to use the words "very soon", but they are identical to the words I used in November, and I wish to convey a greater sense of immediacy than that.
Lord Molson: My Lords, can my noble friend say whether, as I hope is the case, under planning legislation it is possible to take into account the quality of the limestone, so that limestone that is valuable for industrial purposes is not indiscriminately used simply as ballast for roads or for railways?
Lord Elton: My Lords, the quality of the limestone is certainly relevant to the case.

Holiday Resort Beaches: Pollution
2.39 p.m.
Lord Campbell of Croy: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they are satisfied that beaches used by holidaymakers at resorts in the United Kingdom are free from pollution.
Lord Elton: My Lords, about half the United Kingdom bathing waters meet the exacting standards set out in the EC bathing waters directive. Some £200 million has been spent on relevant schemes in the last five years and the authorities plan to spend about £150 million more in the next five years. A survey is being made of more than 350 of the most popular bathing waters in the United Kingdom. That will be published and will provide a basis for planning any necessary further actions.
Lord Campbell of Croy: My Lords, I am grateful to my noble friend for that reply, which is reassuring to some extent. However, why are only 27 of our beaches (which is considerably less than half) designated as being free from pollution in accordance with the EC criteria? And apparently none of them is in Scotland. Can the Government dispel the impression that the other beaches are below standard or are unsafe, because they surely cannot be worse than some of the beaches in the Mediterranean, which is a closed sea?
Lord Elton: My Lords, as to the first of my noble friend's supplementary questions, the directive does not set out precise criteria for the indication of beaches. It was considered appropriate to base selection on the use of bathing water rather than the use of the adjacent beach. Most bathing waters are relatively lightly used compared with the use made of beaches. As to the other beaches, I am advised that even where the waters do not meet the standards there is no health risk. Many schemes to bring about further improvements are nonetheless in progress.
Lord Cledwyn of Penrhos: My Lords, is the noble Lord aware that the beaches on the west coast of Wales are in a disgraceful state? I saw them for myself over the Easter Recess. The noble Lord told us of a very large sum of money that is being spent in various ways, and there is a further £150 million to come. Can he say how that money is being spent; through which agencies it is being spent; and precisely on what it is being spent? Can he further say whether the places that are now vacant on the Lancashire and Western Sea Fisheries Committee following the dismantling of the metropolitan authorities have been filled by the successor district councils?
Lord Elton: My Lords, as to the noble Lord's first supplementary question, I was not aware until he told me that the beaches of West Wales were in a disgraceful condition. The European directive is concerned with the biological state of the water in which the swimmers swim and not with the aesthetic condition of the beaches above the bathing line, if I may so phrase it. The money is being expended through the agencies of the authorities responsible for the quality, among other things, of outfall waters.
The joint committee to which the noble Lord referred was funded in part by two of the metropolitan county councils; namely, Greater Manchester and Merseyside. He is correct in his belief that a great

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number of the districts in Greater Manchester and in Merseyside do not feel that the condition of fisheries on the west coast is their direct concern. Therefore, they have decided not to continue with the funding. That is of course a decision for them.
Lord Winstanley: My Lords, the noble Lord will recollect that I put questions to him on this specific matter in a debate in your Lordships' House very recently. Is he yet in a position to say whether the Government will now take over the very important role of monitoring coastal pollution in an area from Cardigan Bay to St. Bees Head, which includes discharges from Sellafield and which was formerly being undertaken by the body to which he has just referred?
Lord Elton: My Lords, I respectfully remind the noble Lord that the Question is about beaches used by holidaymakers at resorts in the United Kingdom, whereas the joint committee is a committee examining the quality of water and its effect on fish and shellfish, which is a different matter.
Lord Inglewood: My Lords, may I ask my noble friend to ensure that the beaches at West Cumberland are made as clear of pollution as is possible because of the very special risks there from pollution from Sellafield and surrounding works? There is considerable anxiety in that neighbourhood and I should like to feel that people are free from anxiety as well as from the actual pollution.
Lord Elton: My Lords, the Government are aware of and, or course, share the concern about the Sellafield question. My noble friend will be aware of the vigorous steps we have already taken on that matter.
Lord Underhill: My Lords, is not the reply that the noble Lord gave to my noble friend Lord Cledwyn one of great concern? Is not this a matter of seriousness that arises from the abolition of the metropolitan county councils? Do not the Government have some responsibility to do something about it?
Lord Elton: My Lords, the facts are as I stated. The decision rests with the districts, as I stated that it did, and they have taken it in the sense in which I said that they had. My understanding is—and I have to say that I would need to take advice on the detail—that the staff of the joint committee is likely to be reduced but that the work will not cease.
Lord Campbell of Croy: My Lords, can my noble friend confirm that for the large majority of United Kingdom beaches it is sewage that is the polluting substance which is being assessed and not radioactivity from man-made sources, which is infinitesimal in comparison?
Lord Elton: My Lords, my noble friend is perfectly right. I should like to repeat the assurance I gave earlier that the quality of bathing water polluted by sewage does not become a health hazard until it becomes such aesthetically that one would not wish to take the risk anyway.
Lord Northfield: My Lords, can the noble Lord say just when, approximately, we shall be able to meet the EC quality objectives on most of our beaches? The noble Lord gave the money which is to be spent, but how long will it take to clear up the rest of them?
Lord Elton: My Lords, I think it will take a considerable time. I cannot be more precise than that.
Lord Ezra: My Lords, will the noble Lord indicate what the Government are doing about the report of the Keep Britain Tidy group on the deposition of litter at sea and the consequent littering of beaches? Is the noble Lord aware that this report was referred to with some concern in the last report of the Royal Commission on Environmental Pollution?
Lord Elton: My Lords, I am grateful to the noble Lord for drawing attention to the valuable work of Keep Britain Tidy. I have to say that the clearance of litter from beaches is, of course, the responsibility of the local district councils.

Criminal Injuries Compensation Board: Workload
2.46 p.m.
Lord Taylor of Blackburn: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they are aware of the number of outstanding cases awaiting payment from the Criminal Injuries Compensation Board and what action they are taking to improve the position.
The Parliamentary Under-Secretary of State, Home Office (Lord Glenarthur): My Lords, we monitor continuously the workload of the Criminal Injuries Compensation Board, including the number of outstanding cases. At the end of 1985 there were some 48,000 applications at varying stages of resolution. The financial provision for the board in 1986–87 allows for an increase in staff and in compensation, which will help the situation, and we are assessing the appropriate provision for 1987–88 and future years.
Lord Taylor of Blackburn: My Lords, while being grateful for the Answer that the Minister has given to the House, I should also be very grateful if he could speed up the process still further. Is the noble Lord aware that there are a number of cases that have been going on for some time? I am sure it gives the Minister concern, as well as all Members of this House.
Lord Glenarthur: My Lords, about 75 per cent. of the cases are resolved in a year or so, but the rising volume of applications to the board over a number of years has substantially increased the board's workload. However, this is a matter which is continually kept under review, as I indicated in the original Answer.
Lord Allen of Abbeydale: My Lords, is it the practice to make interim payments if the final conclusion is likely to take some time?
Lord Glenarthur: My Lords, in some cases, yes, interim payments are awarded.
Lord Elwyn-Jones: My Lords, can the noble Lord say how many outstanding cases awaiting payment now exist? Is not shortage of staff a relevant factor?
Lord Glenarthur: My Lords, the number of applications received in 1985 was 38,000. That was higher than in any previous year and 4,100 more than in 1984. The number of cases in progress, therefore, has increased by nearly 8,000, so the number actually in delay at various stages is about 48,000.
Lord Mishcon: My Lords, is the noble Lord the Minister aware of the report of the compensation board for the year 1984–85, which I believe was published in December 1985? It includes the following two sentences. The first reads:
"In the past 10 years the number of applications received by the Board has increased by 145 per cent. without any corresponding increase in staff."
The second sentence reads:
"In the Board's view it is essential that early action should be taken not only to redress the balance but also to provide sufficient resources to match the inevitable increase in demand in future years."
Having regard to the Minister's statement that monitoring is continuous by his Ministry, can he kindly tell the House what numbers by way of increase are now proposed in resources for the following year?
Lord Glenarthur: My Lords, in 1983 the board's staff complement was increased by 20 (that is, from 163 to 183) and a further increase of 13 staff has recently been agreed. My right honourable friend the Home Secretary is aware of the difficulties and is considering whether it is possible to provide further increases of staff. So far as concerns finance, for Great Britain as a whole provision has been made for £44.7 million compensation and £5.2 million worth of administration expenditure. This will allow for an increase in staff and in compensation in the terms that I gave. I can give further figures about the overall expenditure if the noble Lord would like to have them.
Lord Donoughue: My Lords, will the noble Lord explain why some victims of the atrocity at the Grand Hotel, Brighton, have been paid and some have not? If the explanation relates to an interpretation of the legal implications of certain persons having been arrested in relation to that crime, does he not agree that the role of the compensation board is to compensate those who have been injured and has nothing to do with those who may have inflicted the injury? In replying, will the noble Lord bear in mind that Members on all sides of this House feel compassion for those who were injured, consider that they should be compensated and hope that the compensation will not be delayed by what I think might be called bureaucratic legalism?
Lord Glenarthur: My Lords, I share the views of the noble Lord and the sympathy which he has expressed for those who were injured as a result of the Brighton bomb outrage; but it is the board's established practice not to make awards while related criminal proceedings are pending. Even in cases which are apparently as
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clear cut as bomb outrages, the board considers itself bound not to take action which might prejudice the fair trial of a defendant. Nevertheless, I note the noble Lord's point.

Tourism Industry in United Kingdom
2.52 p.m.
Baroness Lane-Fox: My Lords, I beg leave to ask the Question standing in my name on the Order Paper.
The Question was as follows:
To ask Her Majesty's Government whether they are satisfied with the state of the tourism industry in the United Kingdom.
The Secretary of State for Employment (Lord Young of Graffham): My Lords, in view of the record figures for incoming tourism during 1985 which were announced in February, we are satisfied that the industry is making a significant contribution to the economy. These figures saw overseas visitor spending increase by 19 per cent. on the 1984 figure, which was itself a record.
Baroness Lane-Fox: My Lords, is my noble friend aware that those of us who live in London and who see and hear the number of foreign visitors can hardly be surprised at the good news contained in his reply? In thanking him for that reply, may I ask whether he can tell us of any plans for maintaining and perhaps extending that development?
Lord Young of Graffham: My Lords, we live at a time when tourism continues to enjoy a worldwide growth, and it is important for the prospects for employment and growth in the United Kingdom economy that we take our fair share of tourists and encourage them to return. The Government play their part by giving support in the form of grant-in-aid to the tourist boards, but in this regard we look primarily to the industry itself, which I know is making great efforts to improve the standards of service, welcome, accommodation and tourist attractions. At the end of the day we must do all that we can to ensure that our visitors want to come back.
Baroness Seear: My Lords, is the Secretary of State satisfied with the training provision in the tourist industry in relation to catering, service and knowledge of languages for the people who will be serving our visitors in this coming year?
Lord Young of Graffham: My Lords, I am rarely satisfied on matters of training. All I can say is that YTS is making a significant contribution to the professionalism of the tourist industry and that for the very first time there is a national two-year training programme which can lead to improved standards. However, I suspect that we still live in a world where we equate service with servility and it is difficult to persuade young people of the worthwhile occupations that exist within the tourism industry.
Lord Ponsonby of Shulbrede: My Lords, can the noble Lord say whether he is satisfied that there is a

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sufficiency of hotel rooms in central London to cope with the tourist demand?
Lord Young of Graffham: My Lords, we are looking forward to receiving a report which will consider the adequacy of hotel rooms. I suspect that there are not a sufficient number, but I also know that this is a matter for local democracy in terms of town planning.
Lord Boyd-Carpenter: My Lords, is my noble friend aware that the Government could help the tourist industry very much by getting the Shops Bill on the statute book as quickly as possible and by proceeding to amend our archaic, if slightly comic, licensing laws?
Lord Young of Graffham: Yes, my Lords.
Lord Bruce of Donington: My Lords, although I appreciate the positive news that the noble Lord is able to give us, will he take the opportunity at some time of reminding some hotels, and particularly those in London, of the dangers inherent in grossly overcharging, and will he ask them whether it would perhaps be better to look after the long-term interests of the industry rather than take the opportunity, which they all too frequently do, of a short-term rip-off?
Lord Young of Graffham: My Lords, I have always found that those who take short-term advantage of situations pay the price. I hope very much that the tourism industry and hotels in central London and throughout the United Kingdom are aware of conduct which is in the industry's best long-term interest. However, I must say that the spending of overseas visitors to the United Kingdom—and they contributed £5,500 million in 1985, which, as I said, was an increase of 19 per cent.—is still a minor part of the total spend on tourism in this country, which was £13,000 million. The majority of the money spent on tourism in the United Kingdom is still spent by Britons travelling in Britain.
Lord Molloy: My Lords, does the noble Lord agree that the Shops Bill applies only to one single day but that the archaic licensing laws apply to every day and are an embarrassment every day? Can he further say whether the Government are prepared to look at the debate that took place in this House last night and the tremendously erudite and realistic propositions contained therein, which I think will undoubtedly help the tourist industry?
Lord Young of Graffham: My Lords, I shall read that debate with great interest, and I hope that the conditions that prevail inside your Lordships' House may one day prevail throughout the country.

Business
2.57 p.m.
The Earl of Swinton: My Lords, at a convenient moment after 3.30 this afternoon, my noble friend Lord Lyell will, with the leave of the House, repeat in the form of a Statement an Answer to a Private Notice Question in another place on the safety of members of the Royal Ulster Constabulary and their families.

Land Registration Bill [H.L.]
The Lord Chancellor (Lord Hailsham of Saint Marylebone): My Lords, I understand that no amendment has been put down to this Bill and that no noble Lord has indicated a wish to move a manuscript amendment or to speak in Committee. Unless, therefore, any noble Lord objects, I beg to move that the order of commitment be discharged.
Moved, That the order of commitment be discharged.—(The Lord Chancellor.)
On Question, Motion agreed to.

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

Latent Damage Bill [H.L.]
2.59 p.m.
The Lord Chancellor: My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, That the House do now resolve itself into Committee.—(The Lord Chancellor.)
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD ABERDARE in the Chair.]
Lord Hacking Lord Hacking moved Amendment No. 1:
Before Clause 1, insert the following new clause:
("Amendment of Limitation Act 1980, s.2.
.—(1) The Limitation Act 1980 shall be amended as follows.
(2) In section 2 before the words "An action founded" there shall be inserted the words—
"Save for an action for damages for negligence to which section 2A applies".
(3) After section 2 there shall be inserted—
"2A. An action for damages for negligence shall not be brought after the expiration of 6 years from the date (or, if more than one, from the last of the dates) on which the breach of duty, either by act or omission, occurred and upon which such action (but for this section) would be founded".")
The noble Lord said: This amendment concerns the problem arising out of the accrual point for causes of action. Some Members of the Committee may remember that I asked an Unstarred Question that directed the attention of your Lordships' House to this problem on 10th February. However, for those noble Lords who did not attend that debate, it may be helpful if I say a few words about the problem. The Bill is concerned with limitation of actions and focuses particularly on the problem of latent damage. Limitation is under statute a procedure by which claims cannot be brought after certain specific periods of time. Concerning negligence and contract, with the

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exception of personal injuries, the period is six years from the point of the accrual of the action.
For many years, it was accepted that the accrual point in negligence and in contract and under statutory duty occurred roughly at the same time; namely, when the wrongful act was perpetrated. In more recent times, there has been a widening of time between the accrual point for causes of action in contract and the accrual point for causes of action in negligence. This happened because the courts, and particularly the Court of Appeal, led by my noble and learned friend Lord Denning, focused on the problem of latent damage in cases like Sparham-Souter, and in Anns v. London Borough of Merton. The Court of Appeal took the view that while actions in negligence started at the accrual point, that accrual point did not occur until damage had been sustained. It took this view for the logical reason that the plaintiff was not suing for anything until he was suing for damages. Until he had been damaged, he was not in a position to sue.
As a result, the accrual point for actions in negligence moved a long way on in time from the date when the original wrongful act was perpetrated. For example, in cases of latent damage to buildings, that event did not occur until significant cracks or other significant damage took place in the building. That will be a long time after the wrongful act was done—the wrongful act that would be the starting point for the accrual of action in contract. The result has been that actions are often found to be statute-barred in contract, starting from the date of the defect, but are still actions that can be brought in tort.
Under the preamble of the Bill, and under the ambit of the Law Reform Committee, this amendment seeks in effect to bring together the starting point for the period of limitations of actions for negligence to the same point in time as that of contract. The purpose is to bring the commencement date for the period of limitation for actions for damages into line with the commencement date for actions for breach of contract. It is on that basis that I ask the noble and learned Lord to consider the amendment.
Lord Denning: I hope that your Lordships will not accept the amendment. We have had these cases of builders putting up houses on a rubbish heap, not providing proper foundations and the like, and after many years a house begins to sink and to crack. When does the cause of action accrue? As I have understood the common law, in negligence there are three elements: the duty of care, the breach of it, and the ensuing damage. The damage is the gist of the action, and the common law has always said that the cause of action accrues when the damage occurs. That is fundamental. My noble friend's amendment would date it back to the original breach of duty. That cannot be right. The controversy that has arisen because of the Bill is that very often a man whose house has been built on rubbish or on insecure foundations does not know anything about it and cannot discover anything about it for years. The common law said that, in those circumstances, time does not run against him until he knows of it or he could, with reasonable diligence, discover it. That is the common law.
The trouble arose because, in the House of Lords, in the Pirelli case, it was put a little differently. This was
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the case of a great chimney which had been designed wrongly by the engineer. Unbeknown to anyone, cracks appeared at the top of the chimney. This occurred in the Pirelli works in Southampton. No one knew about it at all for years afterwards. The House of Lords, held that the time ran from the date when the cracks appeared at the top of the chimney even though no one knew anything about this or could have discovered it. It is to remedy that situation that the Law Reform Committee proposed an alteration to the law, bringing it back substantially to what appears in this Bill and providing that time does not run against a man until he knows of the damage, or with reasonable diligence could have discovered it. My noble friend's amendment would go back on that, saying that time runs against him from the date of the breach of duty even though no one knew anything about it. That would be a retrograde step, and I hope that the Committee will not accept the amendment.
Lord Hacking: I hesitate to interrupt, but that was not the purport of my amendment. I am not attempting to put back the clock. The matters that the noble and learned Lord, Lord Denning, has rightly called to the attention of the Committee are more than adequately dealt with in the Bill. I am not seeking to disturb those provisions. I am simply asking for a common starting point for all accruals of action so that the anomaly of contract and tort starting at wholly different times can be put right. I am attempting in no way to disturb the Bill. My recollection is that the noble and learned Lord, Lord Denning, gave me full support when I argued the point on 10th February. I should like to adopt his remarks made at that time in support of the argument that I was presenting to the House. It is an argument that I am now presenting in the same form albeit under an amendment in this Committee.
Lord Scarman: I should also like to oppose the amendment and I hope that the Committee will reject it. The trouble about the amendment is that it confuses the procedural law with the substantive law. The Law Reform Committee of which I had the honour to be a member considered this proposal and rejected it. The proposal was rejected not because it was outside the committee's terms of reference but because of the confusion. That confusion has practical results. For instance, if the amendment was introduced, it would be possible for the period of limitation to run out before the cause of action had accrued. Of course, one could achieve the object of the amendment—that the time should expire six years after the breach of duty—by changing the substantive law; that is to say, by saying that the accrual of the cause of action for negligence arises not when damage is suffered but when the breach of duty is committed. That would put the law of tort in the same position as the law of contract. But the amendment does not do that. It seeks that result while not changing the substantive law. It has always been a menace to our common law that procedure should take control over substance.
This amendment is an unfortunate and dangerous way, I suggest, of achieving a reform which may or may not be of value but which cannot be considered in a limitation Bill. We cannot in a law reform Bill limited to limitation go into the profound questions as

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to the rightness or otherwise of common law principles which have stood the test of centuries of time.
Lord Elwyn-Jones: I respectfully agree with what has been said with such authority by the noble and learned Lords who have spoken. What surprises me is that I do not think that the noble Lord, Lord Hacking, intended his amendment to have the deplorable consequences which would flow from it if it became part of our law.
The Lord Chancellor: I think that my task has been facilitated. The effect of the amendment would result in time running against the plaintiff before the cause of action accrued and for that reason it is unattractive to me, and I hope to the Committee.
What my noble and learned friend Lord Scarman said is also an objection. One cannot alter the substantive law in the course of what is a very limited procedural measure to deal with a specific form of grievance. There are difficulties in relation to the law of negligence which arise out of the fact that negligence can be a breach of contract as well as of tort. But this is limited to the tort position, and for the reasons given by two noble and learned Lords I would ask the noble Lord, Lord Hacking, not to pursue this matter unduly.
Lord Hacking: I would be a very bold noble Lord to press forward my amendment in the light of the comments that have been made from such powerful authority in your Lordships' Chamber. I am not sure that my amendment has been wholly understood. I have a slight feeling of hurt that it has been misunderstood from all quarters of the Committee. But I am content in the circumstances to withdraw it.
Amendment, by leave, withdrawn.
Clause 1 [Time limits for negligence actions in respect of latent damage not involving personal injuries]:
Lord Denning Lord Denning moved Amendment No. 2:
Page 1, line 18, at end insert—
("( ) In this section "damages" consists of or includes damages for physical damage to property or financial loss to the plaintiff or any other person: "negligence" means a breach of duty of care, (whether the duty arises by reason of common law or by virtue of a contract or of provision made by or under a statute or independently of it).").
The noble and learned Lord said: My amendment is seeking to clarify what I think would otherwise be uncertain and obscure in the Bill and might give rise to a lot of litigation.
The committee, under my noble and learned friend Lord Scarman, was to consider the question of latent defects. The Bill is headed the Latent Damage Bill. In other provisions it shows that what Parliament is considering is damage to property—latent damage to buildings such as houses which fall down, or the chimney which was designed improperly and the like. That is the whole burden of the Bill as I see it at the moment.
However, there is an important paragraph in the report of the committee which says that several people wanted to limit the Bill to those kinds of cases—to latent damage. That is what it really means: hidden
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damage to property which is not disclosed until afterwards.
In paragraph 4.22 the committee said:
"It is probably true to say that the majority of claims for latent damage arise out of building and construction work and consequently a solution limited to these areas of activity would resolve much of the present difficulty in the law and could be tailored precisely to meet the needs of that industry. It would also avoid imposing upon professional advisers outside the construction industry any more lengthy liability than they already bear".
In a way, they have said that the main objectives of the Bill are dealing with the building and construction industry.
3.15 p.m.
They then go on to deal with what I may call financial loss. That is not the case of an engineer who designs a building improperly but that of a solicitor who is guilty of negligence, does not injure any property, but causes financial loss to his client. The committee went on to say:
"However we do not find these arguments convincing. Although the majority of claims for latent damage occur in relation to building and construction work there is no doubt that such damage can also occur in other fields, and we can see no reason in principle why a plaintiff who has, for instance, suffered damage as a result of a negligently drawn lease should be in any worse position than a plaintiff whose house has defective foundations".
That is why in the definition of damage I have sought in this amendment to say that it includes not only physical damage but also financial loss. In other words, this is covering the very case of the solicitor which I have mentioned, as well as the others.
The position is quite different in our courts on solicitors' liability. Sir David Cairns in a recent case of Forster v. Outred said:
"The considerations which apply to the case of economic loss are different from those which fall to be taken into account when the negligence relied on is negligence in regard to the building of a house and the damage which is suffered is damage arising because of defects in the house".
The first part of my amendment therefore is to say that damage not only extends to physical damage but also to financial loss because that covers the cases such as the solicitor and the like. The first part is with regard to that kind of damage; and the other part is again almost equally important. Negligence is not defined in this Bill at all. Negligence in law is very different from negligence in common speech. In common speech negligence means carelessness, inadvertence, matters of that kind. But in the law negligence requires first a duty to use reasonable care; secondly, a breach of that duty; thirdly, damage from it.
How can that duty of care arise? Let me take the ordinary case of a solicitor. Let me tell you that for almost one hundred years the courts said that that duty of care did not arise in tort; it arose in contract. There was a great case of Groom v. Crocket I remember in 1939 in which Lord Greene declared that it had been so accepted. The duty of care on the solicitor arose out of contract and not out of tort. In the lower courts we have been saying that it can also be put in tort. But the House of Lords' Committee have not decided that. There is a recent article in the 100 Law Quarterly Review which says, "let us wait and see what the House of Lords says". It is therefore important to get it clear that this duty of care exists whether it arises out of contract—that is the second part of my amendment—or out of the common law.
I have then added the reference to the breach of a statutory duty. Building regulations often say that there is to be six inches of concrete in the foundation. Supposing the builder, to save himself money or maybe inadvertently puts in only three inches. Is that a breach of a duty of care, or is it a breach of a statutory duty? If it is a breach of a statutory duty under the building regulations, does it come within this Bill?
I have dealt with the breach of contract. I have dealt with the common law. On this question of breach of statutory duty I think I ought to refer to some wise words said as long ago as 1940 by Lord Wright in a case called Caswell v. Powell Duffryn when he had to consider a breach of statutory duty. That was whether one kept machinery fenced or not under the Factories Act or the miners Act. He had to consider whether or not the breach of statutory duty qualified as negligence.
At page 177 of the law report he said:
"I do not think that an action for breach of a statutory duty such as that in question is completely or accurately described as an action in negligence. It is a common law action based on the purpose of the statute to protect the workman, and belongs to the category often described as that of cases of strict or absolute liability. At the same time it resembles action of negligence in that the claim is based on a breach of a duty to take care for the safety of the workman. The cause of action is sometimes described as statutory negligence and it is said that negligence is conclusively presumed."
He is there speaking of a breach of statutory duty.
In this amendment I say that a breach of statutory duty—for instance, whether the concrete has to be six or three inches thick—also ranks as a breach of a duty to use care and therefore comes within the whole spirit of this Bill. We need to know what the position is, otherwise the courts will have to decide it hereafter. In my amendment I suggest that negligence means a breach of the duty of care, whether the duty arises by reason of common law or out of a contract or out of a breach of a statutory duty. My amendment is really a clarifying suggestion and would save the courts having to argue about it and people going before the courts discussing it. It is a clarifying amendment, and I hope that my noble and learned friend the Lord Chancellor will be able to accept it. I beg to move.
Lord Campbell of Alloway: With the greatest deference and respect, I beg leave to question whether this limited technical Bill is an appropriate vehicle for a clarifying amendment of this kind. The amendment seeks to include a definition section in two parts: one as to damages and the other as to the meaning of "negligence".
As to damages, surely an action for damages for negligence, at lines 14 and 15 on page 1 of the Bill, includes all the matters, such as financial loss to the plaintiff, referred to in the amendment. As to the definition of "negligence", the noble and learned Lord, Lord Wilberforce, said at Second Reading that this Bill was designed to right a definite wrong and to remove a definite difficulty. It was limited in this way. Surely it is not appropriate to include in a Bill which has such a narrow intendment a definition of negligence which is readily definable as a matter of jurisprudence in the courts.
The Lord Chancellor: Naturally enough, in the short time that I have had since these amendments were tabled I have taken very great care to consult those who are more expert in draftsmanship than I am as to the value of each one of them. Of course this was especially the case when I saw this amendment and other amendments in the name of my noble and learned friend Lord Denning.
This amendment is in two parts, containing two proposed definitions. One refers to the arguments in relation to damages and the other refers to arguments in relation to negligence. The arguments are not identical in each case, but they are rather similar in parts of each case. The Bill as drafted, apart from damages for personal injuries and death resulting from negligence, which are excluded for reasons which were fully gone into in previous debates, deals with all damages for negligence and it thus applies to claims for damages in respect of damages caused, for instance, by cracked foundations in the building industry, to which my noble and learned friend referred; but it also applies to damages for negligence resulting in financial loss.
There is the case of Ross V. Caunters, where a beneficiary lost her legacy as a result of a negligently-drawn will. I am advised that the Bill covers that. I am bound to say that I find it difficult to see any form of damages for negligence, other than those expressly included, which are not included in the Bill as drafted. For instance, I think that this would equally apply to a case like Dutton v. Bognor Regis Urban District Council, which my noble and learned friend will remember very well because he presided in it, and the case of Anns v. Merton London Borough Council, where the decision was followed by your Lordships' House. It is quite clear that the negligent breach by local authorities in the performance of their duties under the building regulations is not excluded by the Bill as drafted. Therefore, I would respectfully suggest that the first limb of the proposed definition clause is superfluous, rather as was suggested by my noble friend Lord Campbell of Alloway.
As regards the proposed definition in relation to negligence, I think that there is a more substantial objection to the proposed change. This Bill is limited to actions for tort for negligence and, so far as tort is concerned, it is of course true, as we discussed on the last amendment, that a duty of care can arise under two heads: it can arise under contract and it can arise under tort. However, this Bill is not designed to alter the law of contract and does not in fact do so. The cause of action in contract, if the action is brought in contract, arises out of the agreement between the parties. Whether, and to what extent, there may be liability for breach of it primarily depends on the terms of the agreement, expressed or implied, between the parties, subject of course to the unfair contracts Bill which passed under the aegis of the noble and learned Lord, Lord Elwyn-Jones, during the last Labour Government. Therefore, it is rather inappropriate to this Bill to include it in that form.
However, where the duty of care arises under a contract, the action may be brought in tort, and where the damage is latent, the Law Reform Committee's recommendations already apply. With respect, the same is also true in relation to statutory duty. There

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are all sorts of actions for breach of statutory duty where the statute lays down the extent to which liability can arise. It may be absolute; it may exclude certain types of negligence, and so on. On the other hand, where the action is brought in tort for the negligent performance of a statutory duty, as in the local authority cases to which I have referred, as I am at present advised, the cause of action is covered by the Bill.
I am very grateful to my noble and learned friend for bringing my attention to the point. If my noble and learned friend withdraws the amendment, as I shall suggest he does, I will take further advice as to whether what I have said is correct or incorrect. At the moment, I am acting on the advice I have received and upon the opinion I have formed myself. My feeling is that the first part of the proposed definition is unnecessary, and the second is open to potential objection as well as being in large part unnecessary. I would therefore suggest that my noble and learned friend does not press this amendment.
3.30 p.m.
Lord Denning: My noble and learned friend has said that he will think about it again, and I hope he will. He said, for instance, that my bit about financial loss is surplusage. It is much better to have in a little surplusage and get it clear than to have arguments afterwards in the courts as to whether it includes it or not.
The other point, whether it is tort or not, I made clear: it is for a breach of a duty of care. The rest of it is only what it arises under. So again it is tort. I have only put them in for the sake of clarity. If it remains as obscure as it is in the Bill, the lawyers will have a field day of it. I would much rather have my little amendments in. However, in view of what my noble and learned friend has said, I shall not press the amendment.
Amendment, by leave, withdrawn.
Lord Hacking Lord Hacking moved Amendment No. 3:
Page 2, line 14, leave out ("any potential") and insert ("the").
The noble Lord said: Amendment No. 3 is linked with Amendment No. 5. With the leave of the Committee, I intend to address the Committee on both Amendments 3 and 5. This is the simplest amendment that I have tabled for this Committee. It seeks to change the words in subsection (5) from "any potential plaintiff" to "the plaintiff". Then it seeks to remove the following paragraph in that subsection which only arises because of this description of "any potential plaintiff", which I am seeking to have removed.
This problem is one of identification of the person whose knowledge is relevant for the purpose of the starting date of the extended period of limitation under subsection (4)(b) of the new Section 14A. One would expect that the only person whose knowledge is relevant for this purpose will be the plaintiff in the action. This seems to be the principle applied under the comparable provisions in the Limitation Act 1980 in respect of personal injury actions (I refer to Section 11(4)(b) of that Act) with extensions only to deal with cases where the injury has resulted in death.
However, subsection (5) of the new Section 14A, to be inserted by Clause 1 of this Bill, makes the extended period run from the earliest date on which "any potential plaintiff" first had the relevant knowledge. "Any potential plaintiff" means not only the actual plaintiff in the current action but anyone in whom a cause of action is for the time being vested in respect of the negligence alleged in the current action. At first sight, it might seem that this wider definition is meant to deal with the successive causes of action created by Clause 3 of the Bill when the property contained in the latent damage is transferred. However, it is difficult to understand how this can be so since a new cause of action is only created by Clause 3(1) where the predecessor in title had not discovered a defect.
Furthermore, the "potential plaintiff" under subsection (5) of the new Section 14A would include not only those with successive causes of action but also those with separate, concurrent causes of action in respect of the same act of negligence. Thus, for example, in the Ross v. Caunters case, which is a solicitor negligence case and which concerned the preparation of a will, the testator himself and a number of different potential beneficiaries would have had separate, concurrent causes of action.
Therefore, the argument is: why should the state of knowledge of one of these potential plaintiffs cause the extended limitation period to run against others who do not have the same relevant knowledge? Hence, my amendment would have the effect of making the starting date for the extended period of limitation depend solely on the state of knowledge of the actual plaintiff in the action concerned. With respect to this Committee, that seems to me, even though this is an argument that I myself am moving, to be a logical argument, and that is why I move this amendment.
The Lord Chancellor: In replying to the noble Lord on the Cross-Benches, perhaps I should say, totally irrelevantly but for the convenience of the Committee, that I understand the Statement has been cleared. Therefore, when this amendment is disposed of I shall move that the House be resumed for the purpose of hearing the Statement.
I think I detected behind the reasoning of the noble Lord a doubt which had arisen in the minds of the Law Society. Behind the hand of Jacob I thought I detected the voice of Esau. I must modestly confess that I had a word with Esau through my officials, and I think I have persuaded him that, although he was a hairy man, his amendment had been made upon a false assumption that the effect of the reference in the new Section 14A(5) to "any potential plaintiff" is to cause the starting date to run at large against all potential plaintiffs as soon as any potential plaintiff has actual knowlege that he has suffered damage. This is not so.
The provision turns on a plaintiff being aware of the damage he has suffered in respect of which he claims damages. It is not left to the actual, subjective knowledge of the individual concerned. The test, as laid down in subsection (6) of the proposed new clause, is whether the damage is such as would lead a reasonable person who has suffered such damage to consider it sufficiently serious to justify his instituting proceedings for damages against a defendant who did not dispute liability and was able to satisfy a judgment.

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So we follow the hallowed steps of the reasonable man in our text.
Such a plaintiff would allege in his statement of claim, for instance in the will case, that the will was negligently drawn, and that that negligence robbed him of his inheritance and that he only discovered the damage within the limitation period. The defendant would challenge the circumstances of discovery on the ground in subsection (6) that a reasonable plaintiff would have commenced these very proceedings earlier in respect of the damage and that time has run out. He may even show, as a matter of evidence, that earlier, albeit separate, proceedings had actually been commenced as he alleged.
The point is that each potential plaintiff is to be judged on his or her merits, on the Bill as it is drafted. I am therefore at the moment of the opinion that the proposed amendment is based on a false premise. If those who initiated this are still worried about it, they can have further discussions, but for the moment I am not persuaded that the amendment is an improvement on the Bill. I would suggest that it should not be pressed at this stage at any rate.
Lord Hacking: It is not my intention to press this amendment at this stage, but Jacob will certainly consult Esau and ascertain whether Easu has been satisfied. I may, therefore, come back again at Report stage, either as Jacob or as Esau. I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
The Lord Chancellor: I beg to move that the House do now resume.
Moved, accordingly, and, on Question, Motion agreed to.
House resumed.

RUC: Safety of Officers and their Families
3.39 p.m.
The Parliamentary Under-Secretary of State, Northern Ireland Office (Lord Lyell): My Lords, with the leave of the House, I shall now repeat a Statement being made in another place by my right honourable friend the Secretary of State for Northern Ireland. The Statement is as follows:
"In the last month there have been 138 attacks on off-duty members of the RUC and RUC Reserve and their homes and families. The vast majority have taken place in predominantly Protestant areas. The whole House will wish to join me in condemning utterly these cowardly and disgraceful attacks on the men and women of the Royal Ulster Constabulary who have given such loyal and courageous service to defend the Province against terrorism and to uphold law and order.
"The chief constable, with the full support of the Police Authority for Northern Ireland and of the Superintendents Association and the Police
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Federation, has put arrangements in hand to provide quick and effective assistance to police officers and their families who are subject to attack or other forms of intimidation. Extra patrols are being mounted in vulnerable areas and steps have been taken to provide suitable alternative accommodation for those unfortunate enough to have to move from their homes. In addition, the police are making strenuous efforts to bring the people responsible for this criminal behaviour to justice, and a considerable number have already been charged with serious offences associated with it.
"I welcome the fact that the churches and the more responsible political leaders have condemned without any qualification these outrages.
"I look to the whole community to join together to defeat these acts of terrorism against its own police force and to give every possible support to bring those responsible to justice."
My Lords, that concludes the Statement.
Lord Prys-Davies: My Lords, in their unqualified and utter condemnation of the death and destruction wrought in Northern Ireland over the last few weeks and of the attacks on 138 RUC homes the Government can be confident that they have behind them the wholehearted support of the Opposition. We hope that the condemnation will also be endorsed by the vast majority of people in Northern Ireland and in the Unionist tradition in particular. We extend our sympathy to those officers of the RUC and their families who have suffered injury and loss. We hope that this Statement will bring some comfort to the officers who are now being subjected to the full pressure of malicious and divisive propaganda, violence and threats of violence.
I have three or four specific questions which I should like to put to the Minister. First, the chief constable of the RUC is reported as being satisfied that there is "a very sinister hand" behind the attacks on the policemen's homes. Those were his words. Do the Government have good grounds for accepting the chief constable's assessment of that evidence?
Secondly, is the Minister able to tell the House how many RUC officers have sought transfer to a police force on the mainland since the treaty was signed and how many of those applications for transfer have been successful? If an application is not successful, is there an established machinery to enable an officer to appeal against the decision?
Thirdly, will the Minister assure the House that where an officer is injured in the course of his duties, or where an officer's property is damaged or destroyed, his claim for compensation can be, or is, fully and quickly settled?
Finally, if I may go a little wide of the Answer, will the Government continue to make it clear to Ulster politicians of both traditions that in a democracy there can be no room for any person who engages in violence? Can the Minister go further? Has he grounds for believing that all responsible politicians in the Unionist tradition who have not already dissociated themselves from attacks on RUC homes will now do so?
3.45 p.m.
Lord Donaldson of Kingsbridge: My Lords, I should like to endorse every word my noble friend on the Labour Front Bench has said. I think that this should be, and I ask the Government that they should make it, a watershed in the aftermath of the Irish agreement; so much and no more.
This is damage being done to a police force that the minority have always alleged was partisan to the majority. The majority have always denied this and said, "Of course the police force is not partisan; the Nationalists are simply making a fuss about nothing". When the RUC is showing in a number of cases that it is far from partisan, such is the—I was going to say ignominy—of the majority that they are now raiding policemen's homes in order to make them partisan. This is a disgraceful situation and such an upset that everybody deplores it and one must look at it from that point of view.
Both the noble Lord the Minister and my noble friend on the Labour Front Bench talked about unqualified dissociation of political leaders from the violence. I do not know whether other noble Lords saw a television programme last night with a gentleman called Robinson, I think, who is the Number 2 to Mr. Paisley. His dissociation from the violence was, in my opinion, totally qualified. What he said, if I remember rightly—and I may have got it wrong because I was boiling at the time—was that if you use the sort of violence implied by coming to an agreement with the South, this would naturally provoke counter violence. That is not an unqualified dissociation and I think we ought to insist on one. I should like to see that followed up.
One further point: the chief constable, as has been mentioned, has suggested that there is a power behind this. There have always been individuals who were the powers behind these things. In my day everybody knew exactly who they were; I am sure the chief constable knows exactly who they are and I think they ought to be arrested immediately, without evidence for the moment. This is as far as the rebellion should be allowed to go, in my opinion, and I think the whole country will be behind the Prime Minister and the Government if they do whatever is necessary to stop this. God knows what that may be.
Lord Lyell: My Lords, we are particularly grateful for the support which has been given by the noble Lord, Lord Prys-Davies, and the noble Lord, Lord Donaldson. Above all, on a personal basis, I should like to add my tribute to the brave men and women of the Royal Ulster Constabulary.
The noble Lord, Lord Prys-Davies, asked first about the comments of the chief constable of the Royal Ulster Constabulary, as indeed did the noble Lord, Lord Donaldson. We believe that the chief constable has good grounds for making the statement that he did yesterday. I am sure your Lordships will accept that it would not be for me to go further into the sources for the chief constable's statement, since I would not wish to comment further and I think that further disclosure would not be helpful to the chief constable in his difficult job.
The noble Lord, Lord Prys-Davies, also asked about transfers from the Royal Ulster Constabulary. First of
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all, Royal Ulster Constabulary personnel do not apply for transfers as such. I understand the procedure is that any person wishing to leave applies to the police force which he wishes to join and, if accepted, would then resign from the Royal Ulster Constabulary. I understand that there has been no noticeable difference from the normal pattern in either transfers to other police forces or in resignations since the signing of the agreement, or indeed recently.
As for appeals, which the noble Lord, Lord Prys-Davies, asked me about, I am not aware of any particular machinery, but I think this is covered by the normal disciplinary machinery of the Royal Ulster Constabulary. If there is further detailed information that I can obtain for the noble Lord, Lord Prys-Davies, perhaps I may communicate with him in writing. I do not have it in front of me.
The noble Lord also asked about assistance for personal injury and for damage, and any compensation. I am advised that there is a statutory compensation scheme for criminal damage to persons for injuries. That scheme applies to all members of the Royal Ulster Constabulary as it does to all other members of the community in Northern Ireland. So far as I am aware, it is being operated expeditiously and swiftly.
The noble Lord asked about support from other politicians in Northern Ireland. I think the whole House will agree that the events which I have disclosed this afternoon underline the need to have talks between politicians in Northern Ireland and the Government as soon as possible, for violence and intimidation make it far more difficult to start this particular process.
The agreement was mentioned by the noble Lord, Lord Donaldson, and by the noble Lord, Lord Prys-Davies. I reiterate once again that the Government will not suspend the agreement but we are ready to discuss all issues likely to be raised by the Unionists, and that includes devolution.
We are very grateful to the noble Lord, Lord Donaldson, for his tributes to the Royal Ulster Constabulary. I should reiterate that the Government, and above all the people of Northern Ireland, have good reason to be proud of the proven high professional standards and above all the devotion to duty of the Royal Ulster Constabulary. I use those words advisedly, but the shameful efforts of those who call themselves loyalists will not deter the RUC from doing their duty and evenhandedly upholding the law. I remind your Lordships that over 220 members of the Royal Ulster Constabulary, men and women, have laid down their lives since the beginning of the troubles, as we call them, in 1969. I believe that in the region of 4,000 have been injured, some very seriously, as your Lordships will be aware.
The noble Lord, Lord Donaldson, was concerned about the television programme last night. I am afraid that I did not see it. I have no information about the Government's view on it, but the noble Lord and your Lordships will be able to draw your own conclusions from the views that were expressed by sundry persons who appeared on television.
Lord Hunt: My Lords, the Royal Ulster Constabulary, which hardly needs my additional

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words of praise and admiration for its present evidence of courage and loyalty, is undergoing a very difficult time. Everybody in your Lordships' House is also aware of the degree to which the Ulster Defence Regiment, which acts in close support of the Royal Ulster Constabulary, has suffered at the hands of the IRA over the whole period of time. Can the Minister give the House any information as to whether in the current very serious situation there have been any attacks on the persons and homes of members of the Ulster Defence Regiment? In this situation, which is so serious, can he assure the House of the loyalty and steadfastness of the Ulster Defence Regiment?
Lord Lyell: My Lords, I think that the Royal Ulster Constabulary will be particularly grateful for the tribute paid by the noble Lord, Lord Hunt. I shall see that his words are noted by everybody in Northern Ireland and by the Royal Ulster Constabulary. As your Lordships will know, he has a unique connection with Northern Ireland.
I too pay my unreserved tribute to the brave men and women of the Ulster Defence Regiment in all that they do. To my knowledge, so far there have been no attacks, though I heard one rumour just before I came into your Lordships' House within the past hour that there had been an attack upon a member of the Ulster Defence Regiment; but I am afraid that I have no further knowledge of that. Once again, I pay my tribute to these brave men and women.
Lord Blease: My Lords, I should like to have the opportunity to join the Minister, the noble Lords, Lord Prys-Davies and Lord Donaldson, and other noble Lords in welcoming and warmly supporting the Statement made by the Secretary of State in another place about the actions of Government in support of the members of the RUC. I also welcome recent statements by the RUC chief constable, Sir John Hermon, in support of the dedicated and impartial upholding of the law by all levels of RUC personnel. I wish to ask the Minister whether he can confirm that the unit that has been established is adequately staffed and financed to meet the housing and other essential needs of RUC personnel and their families, including the reserve and part-time members of the RUC who have suffered such disgraceful criminal attacks in these recent episodes.
May I conclude by saying that there are dangerous undercurrents in force in Northern Ireland? The police ought to be aware of the strength and whereabouts of these undercurrents. I suggest that perhaps the best way we could help from this House is to use our influence and for the Government to give every support to members of the public and to members of all the security services by ensuring that they have help and goodwill to assist them in their efforts to uphold law and order impartially. I welcome what the Minister has said: that moves towards constitutional political measures and dialogue ought to be fostered and promoted at all levels in Northern Ireland rather than allow this situation to drift into further and total anarchy and bloodshed in the Province. I see that as a dangerous situation that presents itself at this time.
Lord Lyell: My Lords, we are grateful for the thoughts and good wishes of the noble Lord, Lord
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Blease. I reiterate what the chief constable has said. We pay tribute to the Royal Ulster Constabulary, who carry out their duties, as the noble Lord put it, in a dedicated way. He and I both know how very dedicated they are and how professionally they do their difficult job. They also do it impartially.
On the point about the adequate staffing of support mechanisms and support personnel for the Royal Ulster Constabulary, I understand that the chief constable and the Royal Ulster Constabulary are satisfied that they are obtaining all forms of adequate support in these difficult times. I understand that the varying forms of support, the personnel, the finance and other forms of support, are indeed adequate and are doing what is needed at the moment.
As for the sinister and unpleasant undercurrents to which the noble Lord referred, all of us use all the influence that we have in your Lordships' House and elsewhere to try to persuade politicians, above all from Northern Ireland, that any progress is through talks and through the normal political process. I pay a personal tribute to the noble Lord, Lord Blease. His influence in Northern Ireland is very welcome. We are all very grateful for everything that he has been able to do. I reiterate that the only way forward is for politicians from Northern Ireland to have talks with the Government as soon as possible.
I hope your Lordships will forgive me if I reiterate one point to the noble Lord, Lord Hunt, who asked me about the Ulster Defence Regiment. I have had it confirmed that one member of the Ulster Defence Regiment was killed this afternoon. I understand that it happened in the region of Killeter, which, as the noble Lord will know, is in the far west of County Tyrone. That is all the information I have, but I wish to pay my tribute to these brave men and women and to express my sorrow at this dreadful event.
Lord Fitt: My Lords, I first apologise for not having heard the Minister's Statement, as I was urgently engaged otherwise. I associate myself with the remarks that were made in relation to the RUC. As one who suffered in much the same way as at present the RUC is suffering, having for 11 years been stoned and petrol-bombed in my home, I fully understand and sympathise with the awful position in which they find themselves. Throughout my political life I have condemned members of the minority community for attacking and killing members of the RUC, and in even more forceful terms I level my criticism at the majority community; that is, allegedly the loyalist community in Northern Ireland.
It is not sufficient for one political group or persuasion in Northern Ireland to compliment the RUC when it appears to be acting in the interests of that community but to criticise it and to set the atmosphere when it appears to be acting in the interests of the other. I see the RUC as acting in full support of the whole community in Northern Ireland, both the majority and the minority. In calling upon politicians to condemn those who were responsible for this attack we are appealing not only to loyalist politicians but to the minority representatives as well. It is only with the concerted action of all the elected representatives that we can hope to bring this terrible trend to an end.
Lord Lyell: My Lords, once again I shall see that the noble Lord's tributes to the Royal Ulster Constabulary are passed on. All of us admire the noble Lord for his courageous efforts in his political life in West Belfast as he has described them, somewhat humbly, in your Lordships' House. All of us know what he had to put up with. We shall see that his words of commendation are passed on to the chief constable.
Once again there comes forcibly from the noble Lord the need for every single person in Northern Ireland to support the Royal Ulster Constabulary in all that it does to enforce the rule of law for everybody's benefit in Northern Ireland quite impartially. I am sure that his plea and comments will be noted. We shall do everything we can to see that his words are brought to the notice of everyone in Northern Ireland, particularly to those sections of the population to whom he was referring; we know to whom he was referring. We shall see that the noble Lord's words go in that direction.

Latent Damage Bill [H.L.]
4.3 p.m.
House again in Committee on Clause 1.
The Chairman of Committees (Lord Aberdare): In calling Amendment No. 4, I have to point out that if this amendment is agreed to I cannot call Amendment No. 5.
Lord Hacking Lord Hacking moved Amendment No. 4:
Page 2, line 14, leave out from ("knowledge") to end of line 41 and insert ("of such facts about the damage that was attributable in whole or in part to the act or omission in respect of which damages are claimed, as would lead a reasonable person who had suffered such damage to consider it sufficiently serious to justify his instituting proceedings in which such damages are claimed.").
The noble Lord said: This is a friendly amendment. All the amendments that I have tabled are intended to be friendly, but I should like to give particular emphasis to the friendliness of the present amendment, friendly to the Bill and to the report of the noble and learned Lord, Lord Scarman. It is also intended to be loyal to the report of the noble and learned Lord. If he intervenes in Committee, which I anticipate he will on this amendment, and if he should say in his submission that this amendment in some way or another is neither friendly nor loyal to his report, then I would be particularly hurt.
When I spoke at Second Reading I went through in some detail the criticisms concerning subsections (5) to (9) of this clause. Before I spoke at Second Reading the noble and learned Lord himself, if my recollection is right, said that he recognised that some may think that these provisions are "too cumbersome". It is my submission to the Committee that they are indeed too cumbersome and that is the reason why I have tabled this amendment.
The provisions of subsections (5) to (9) seek to set out the "knowledge" that should be required of a plaintiff who seeks the extended three-year period of limitation from the date of his knowledge. It involves tests and sub-tests. If I may, I shall take the Committee through these tests and sub-tests again to illustrate why
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I believe they are too cumbersome and why I am inviting the Committee to remove them from the Bill. Having gone through the preamble with the words:
"any potential plaintiff first had knowledge",
the test goes on, in paragraph (a) of subsection (5), with the following words of having "knowledge both":
"of the material facts about the damage in respect of which damages are claimed",
and, on the next test:
"of the facts relevant to the current action mentioned in subsection (7) below".
Having established those two tests, the Bill then proposes to go on to further definition and further sub-tests.
Thus for the test of material facts, the Bill goes to subsection (6) with these words:
"For the purposes of subsection (5)(a) above"—
and that is the one to which I have referred—
"the material facts about the damage are such facts about the damage as would lead a reasonable person who had suffered such damage to consider it sufficiently serious to justify his instituting proceedings for damages against a defendant who did not dispute liability and was able to satisfy a judgment".
I suppose it could have gone a little bit further in relation to, say, a defendant who was not going to die or in the case of a limited company or corporation which was not going to go into liquidation—short of giving the personal characteristics of the defendant. I say to your Lordships that this is far too cumbersome a series of sub-tests and it is only going to provide lawyers—and here is one lawyer who does not wish to be provided with it—with a feast of argument and litigation and is going to go right against the whole purpose of the Bill which is to provide clarity and certainty.
Then let us go to the next sub-test which is following through from subsection (5)(b). These are the facts which are relevant as for that subsection. I am reading now from subsection (7):
"The other facts referred to in subsection (5)(b) above are—

(a) that the damage was attributable in whole or in part to the act or omission which is alleged to constitute negligence; and

(b) the identify of the defendant; and

(c) if it is alleged that the act or omission was that of a person other than the defendant, the identity of that person and the additional facts supporting the bringing of an action against the defendant".

I suggest in my amendment that all of those subsections should be removed from the Bill and a much simpler and shorter phraseology should replace them. Doing my best—which may not be sufficient—I have attempted, in my amendment, to bring out the best of the actual text of those subsections which I have suggested, as a whole, should be deleted because of their length and unnecessary complexity.
The report of the committee of the noble and learned Lord, in approaching the question of knowledge, considered three possibilities. The first was to define knowledge fairly generally. I am referring to paragraph 4.5 of the report. The second possibility was whether to adopt a more complicated or "more precise formulation", which was the formulation used, and still used, in Section 14 of the 1980 Act relating to personal injuries and which is the section that these proposed provisions of the Bill attempt to follow.
The third possibility that the noble and learned Lord's committee considered was to disregard

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constructive knowledge altogether and to define knowledge solely in terms of what the plaintiff actually knows. That one went quickly out of the window. The noble and learned Lord's committee did not think that that was the right approach. They were left therefore with the two that I have brought to the Committee's attention.
The Law Reform Committee, having considered the three possible approaches to defining negligence for this extended period of limitation, went against the general knowledge test and went for the more defined test which is extracted from Section 14 of the main Act. However, as set out in paragraph 4.47 of the report, their main concern was that the plaintiff should have knowledge of sufficiently serious damage (I am quoting):
"to justify the institution of proceedings."
Thus this proposed amendment brings into account this test of knowledge without going through all the other tests which, while enacted to a personal injuries case, are not, in my submission, suitable or necessary for latent damage cases and which provide benefits to plaintiffs—for example, the prerequisite of knowledge of identity of the defendant—not otherwise available to plaintiffs in any other situation where a limitation point arises.
As recognised by the Law Reform Committee, the complex test used in Section 14, to which I have referred the Committee, for personal injuries does have disadvantages. Indeed, I suggest that it runs in the end to the disadvantage of both plaintiffs and defendants if the law provides tests which are so complicated that they inevitably result in litigation.
Finally, I would suggest there is no particular logic in picking up—in the phraseology used by the noble and learned Lord on Second Reading—"textually" Section 14 for these new provisions. On the contrary, I suggest that a better approach would be for these proposed provisions relating to latent damage to be put into better form in the hope that the cumbersome provisions relating to personal injuries cases may later be reformed. It is on that basis that I beg to move.
Lord Scarman: I should like to reassure the noble Lord, Lord Hacking, that I certainly regard the intention behind this amendment as helpful and loyal to the Bill. As the committee made quite clear in the passage to which the noble Lord has referred, there is a balance of advantage and disadvantage to be considered here. The committee went into it very carefully and gave their conclusions in paragraph 4.7 that although the proposed amendment has the advantage of simplicity the more complicated formula for which the committee opted gives more guidance to a plaintiff uncertain as to his position than does this simple proposal. Again, clearly, this is a balance of advantages and the committee has come down in favour of more detailed guidelines than are possible in the simple formulation proposed by the noble Lord, Lord Hacking.
I would add only one further point. It is of course entirely a matter for the Committee to consider, and I am only here to indicate why the committee took the view that it did. Perhaps it would be helpful to look, not at the committee's report but at the Bill as it stands
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at the moment. Although the Bill is more detailed than the noble Lord, Lord Hacking, would have it, those details are not difficult and they are not legal jargon: they are indicating to a plaintiff and his adviser the sorts of matters which they have to consider in making up their minds as to whether the damage is sufficiently serious.
Subsection (6) is really neither here nor there. It says the same thing as this amendment, but in slightly more words, and I think those words are helpful. I will say no more about that. Subsection (7) is what really matters. In deciding whether damage is significant or serious, a number of facts have to be considered, including these: that the damage was attributable in whole or in part to the act or omission. That is not difficult; it is helpful. They have to make quite sure that the damage is attributable to the act or omission which constitutes the breach of duty.
4.15 p.m.
Another matter to which they have to pay attention, as has the court, is whether there was knowledge of the identity of the defendant. It is a very important matter, easily overlooked if all you have is "sufficiently serious" in the legislation. Finally, if it is alleged that the act or omission was that of a person other than the defendant, it is necessary to know the identity of that person and the additional facts supporting the bringing of an action against the defendant. Here is a great safeguard for a plaintiff. He is not to be fixed with knowledge unless he has a knowledge not only of the gravity of the damage but of its attributability to the breach of duty and as to the identity of the person who can be shown to have done the damage.
Those, I think, are useful guidelines, protecting a plaintiff uncertain as to his position. It is for those reasons, though I see the persuasive strength in the argument of the noble Lord, Lord Hacking, that for once I would prefer more words rather than fewer. In this case, brevity may be the soul of wit but it is not the soul of explanation.
Lord Elwyn-Jones: I respectfully agree that the inclusion of the words from line 14 down to line 41 will be helpful to a plaintiff and will produce certainty where otherwise the generality of the proposed amendment would not have the same result. I appreciate that this flies slightly in the face of the previous doctrine of the noble and learned Lord, Lord Scarman, who has rather favoured a generality of expression in some legislation. I say that without, I hope, teasing him; but on this occasion I certainly agree with what the noble and learned Lord has said.
The Lord Chancellor: I do not want to prolong matters, when what I wish to say has been said very largely by my noble and learned friend Lord Scarman and by the noble and learned Lord on the Opposition Front Bench. The matter, for those who are interested in argumentation, is set out in paragraphs 4.5 to 4.8 inclusive of the report of the Law Reform Committee. The draftsman has endeavoured to give effect to the rather careful argumentation in those paragraphs. I have never set myself up as a very grand draftsman but I personally prefer, for the reasons given by my noble and learned friend on the Cross-Benches, the effort of the draftsman rather than the well-intentioned

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amendment—and I do not in the least do other than applaud the intentions of the amendment—which desires to shorten it.
I am never particularly either frightened or allured by the phrase which sometimes occurs in our debates about "a field day for lawyers". We do our best to understand what Parliament intends. In this case, the draftsman has suggested that Parliament should spell it out; and spelling it out is what I recommend the Committee to do in this particular case. The reasons have been stated by my noble and learned friend and therefore I will not repeat them.
Lord Hacking: At this stage of the Committee, I am rather looking for a "friendly" voice in my favour. I thought I might get a friendly voice from the noble and learned Lord, Lord Scarman, for the brevity of my amendment, as opposed to the series of tests that are set out in the Bill. However, with great respect to the noble and learned Lords who have spoken—and I am taking a bold course now in disagreeing with them—the problem does not lie in the tests themselves. In my submissions I have not suggested that any of those particular tests are difficult to understand. I am looking at the matter from a practical point of view. I ask the Committee to look at the matter from a practical point of view. The practical problem is that if the matter gets to the court, the court must append each of these tests against the potential plaintiff. That is the complication.
A further complication is that even if the matter does not go to a court, insurance companies, the plaintiff and the defendant have to decide upon their positions. They have to decide whether they are statute barred. That is a contentious issue. If we are therefore inviting the plaintiff and the defendant to go through the tests set out here, the result of that, in my submission, will be—contrary to the spirit and the intention of the Bill—more litigation, because there will be more room for argument. Hence matters will not become settled as quickly and easily as they could have been if the Committee were prepared to adopt the simpler—after all the words are taken from these lengthy proposals in the Bill—and the more general tests that I am seeking to persuade the Committee to adopt.
I am not a noble and learned Lord, and I am three down, anyway, in the arguments in this Committee. Therefore I shall not be so bold as to press the amendment at this stage, but I would ask the noble and learned Lord the Lord Chancellor to give some consideration to the arguments that I have presented; and I would, with the greatest respect, ask the other noble and learned Lords to think upon the arguments that I have attempted to present on this amendment. Having said that, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Hacking Lord Hacking had given notice of his intention to move Amendment No. 5:
Page 2, leave out lines 19 to 23.
The noble Lord said: It is not my intention to move this amendment because this amendment was discussed when I moved Amendment No. 3.
[Amendment No. 5 not moved.]
The Deputy Chairman of Committees (The Earl of Listowel): I have to point out that if Amendment No. 6 is agreed to, I cannot call Amendment No. 7.
Lord Silkin of Dulwich Lord Silkin of Dulwich moved Amendment No. 6:
Page 3, line 14, after ("(1)") insert ("Subject to subsection (3) below").
The noble and learned Lord said: I hope that it will be for the convenience of the Committee if, with Amendment No. 6, I discuss Amendment No. 13, to which Amendment No. 6 is a paving amendment. The substance of the matter is in Amendment No. 13. May I also take the opportunity to mention to the Committee that in the printed copy of the Marshalled List Amendments Nos. 7 to 10 inclusive appear to be shown against my name and that of the noble and learned Lord, Lord Denning? In fact, the name of the noble Lord, Lord Hacking, should have been inserted above Amendment No. 7. I have no responsibility for anything below Amendment No. 6, other than Amendment No. 13, I hope that is clear.
In the Second Reading debate there was general agreement that the broad principle should be accepted that a person who, through someone else's wrong, suffers damage, should not be prevented from obtaining compensation merely as a result of the lapse of time, particularly in circumstances in which he may be quite unaware of his rights when the time might expire. It is to deal with the difficult problems that arise in practice from that principle that these amendments have been put down.
In paragraph 4.2 of the report, the Committee advanced three principles of great importance, from which I do not dissent. I would myself advance three other principles which I hope are at least equally acceptable. First, to summarise what I said a moment ago, the person who has suffered a loss through another person's wrong should have a remedy unless the public interest requires otherwise. The second is that the public interest requires that there should not be avoidable delay in pursuing a remedy as that may tilt the balance of fairness against the alleged wrongdoer. The third is that even unavoidable delay may so prejudice the alleged wrongdoer that it would be unfair to give any remedy against him.
The first of those principles probably needs no elaborate support. From what I read of what was said in the debate on Second Reading of this Bill and of the 1975 legislation which was introduced by my noble and learned friend Lord Elwyn-Jones, the principle commands general acceptance.
On the second principle, perhaps I may cite those provisions of the law, and Clause 2 of this Bill, which disregards the period of disability. That period is disregarded because the delay is not avoidable and, therefore, despite the potential prejudice of that delay to the alleged wrongdoer he is required to accept it. The arguments in relation to uncertainty and so on go by the board in that case.
The third principle involves the balancing of circumstance against circumstance in order to achieve equity. That cannot be done with justice by a fixed, immutable limitation period. Circumstances vary; cases differ; and prejudice on one side or the other will alter from one case to another. Therefore, the best way to give effect to the third principle is to provide the

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court of trial with a limited degree of discretion. That was recognised in 1975 in the case of personal injuries. It was recognised primarily because of the emergence of the latent personal injury of diseases such as pneumoconiosis which may take many years to become apparent. It was to meet such cases that the 1975 Act introduced what was then described as a novel concept of giving a discretion to the courts.
When introducing the Bill, my noble and learned friend, dealing with the particular clause which gave the discretion, said:
"New Section 2(D) provides that the court shall have a general discretion to override time limits if to do so would be fair as between the plaintiff and the defendant. The court must consider all the circumstances of the case; but guidelines are given in the Bill, specifying the matters to which the court should have particular regard. These include the length of the plaintiff's delay, and the reasons for it; the conduct of the defendant; disability suffered by the plaintiff after his injury; and the nature of any expert advice given to him, whether sound or whether misleading".
In parenthesis, I shall say that the arguments put forward by the noble and learned Lord, Lord Scarman, on the last amendment that we discussed, in relation to specifying the guidelines, apply just as much in relation to this matter as in relation to that, in my view. My noble and learned friend continued:
"it is only one of the factors the court will take into account in assessing whether it would be equitable, in the broadest sense of the meaning of that word, to override the limitation defence, having regard to the prejudice to the plaintiff if he is not allowed to proceed, and to the defendant if he is".—[Official Report, 1/5/75; col. 12.]
That was the view taken on that issue by the then government, your Lordships' House and Parliament.
It was entirely clear to all that this then novel concept would create difficulties for the court and would also erode the certainty which is ideally desirable. In fact, the noble and learned Lord, Lord Edmund-Davies, in a notable maiden speech, quoted the then Law Reform Committee which pointed to the difficulties which a judge would face in weighing these matters on one side or the other. He said:
"There have been moments when I have wondered whether the resultant uncertainty is too big a price to pay, but reflection has, on balance, led me to the firm conclusion that the provision makes for justice, and I respectfully recommend its acceptance".—[Official Report, 1/5/75; col. 18.]
4.30 p.m.
The view of the House was very strongly expressed by the late Lord Morris of Borth-y-Gest. He also looked at the difficulties that discretion would necessarily provide for the court; and he said:
"I welcome giving discretion to the court to say that the case may proceed despite the fact the time has gone by. The Bill uses the word 'equitable'. In the context that simply means 'fair'. Is it fair in all the circumstances?
I can see objections to this provision. It will be said that there is some uncertainty. It will be said that probably there would be no appeal because, if the judge had weighed all the considerations and did not express himself as having considered something that he ought not to have considered, it might well be that it would be difficult to appeal against any ruling of the judge. It might well be that the judges will not entirely welcome having this rather difficult duty imposed upon them. But, having said all that, I still think it a reasonable course to follow. I believe it is the fair way to deal with this difficult situation".
He went on to say:
"For my part, I would trust the judges in matters of this kind. They are given the guidelines; they must assess all the difficulties on either side and then finally say, 'Is it fair or unfair?'".—[Official Report, 1/5/75; cols. 25, 26.]
That was certainly the view taken in relation to personal injuries and, as I said, very largely in relation to injuries which are likely to be of a latent character, such as pneumoconiosis, which lie buried for a long period of time, and therefore where this difficulty is most likely to arise. The principles which I have been reciting from the speeches on that occasion apply with equal force to the diseased building as to the diseased lung. It is for that reason that I have tabled my amendments to Clause 1.
Like the drafters of the late 1975 legislation in relation to personal injuries, I have sought faithfully to follow the principles which were so cogently advanced in that debate and the language in the legislation which ultimately gave effect to the principles of that debate. For that reason, I have sought to go into detail rather than take the course of laying down generalities in the way that we discussed on the previous amendment.
I regret that to this extent—and only to this extent—I differ from the very cogent and persuasive report of the committee chaired by the noble and learned Lord, Lord Scarman. That committee invoked what it rightly described as a relatively novel concept in English law—the long stop device. That is at paragraph 4.10. It considered the by now not quite so novel concept of a discretion to extend the period but concluded that the value of the long stop would be lost if there was a judicial discretion to postpone it. I would prefer myself to say that justice can, in the case of the diseased building as in that of the diseased body, be more clearly and certainly done if each case can be determined by the court which is seized of all the facts than if a fixed line is drawn which cannot be altered.
The committee considered three lines, at 12 years, 15 years and 20 years. It struck a balance with 15 years. I do not consider that it would be doing violence to that balance if it was struck at such point between 15 years and 20 years as a trial judge considers to be equitable in all the circumstances of the particular case, applying the guidelines that Parliament lays down as proper and which have in relation to personal injuries stood the test of time since the 1975 Act. It is for those reasons that, in my view, the amendment would be an improvement on the Bill.
Lord Denning: I support this amendment. We are dealing with latent damage to property: for instance, after bad foundations have been put in. The weakness and the cracks may not appear for years—15, 20 or 25 years—and the law until now has said that time does not run against a plaintiff if he did not know of the damage and could not have discovered it with reasonable diligence. That is quite intelligible and fair to the plaintiff. But now the committee says—and I can understand why it is said—that that will not protect the defendant sufficiently from stale claims, so it has introduced a long stop.
It is a new concept in our law. It is to run not from the date of knowledge but from the date of the original breach, when the foundations were put in wrongly, when the concrete was not thick enough. It runs from that very date. The committee has said, and the Bill says, that even though the plaintiff had no knowledge whatever and could not have discovered it for 20 years, nevertheless he is to be barred by the long stop. I can understand that reasoning. I can understand it

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applying, as the committee thought, to the 15 years, but what I suggest is that 15 years ought not to be absolute. It ought to be able to be extended in special cases, the same as with personal injuries, which my noble and learned friend Lord Silkin has pointed out already applies.
I should like to refer to paragraph 4.13 of the report. It says:
"We have considered periods of twelve years, fifteen years and twenty years. We have come to the conclusion that a period of twelve years, although it would probably work satisfactorily in most cases, might bar some worthy claims. At the other extreme we think that a twenty year period might permit some very stale claims and expose many defendants to the risk of litigation for an unreasonable length of time. We have concluded that a fifteen year period strikes the right balance between justice for plaintiffs and certainty for defendants and we so recommend".
There it is. I can understand that reasoning. That applies to the 15 years. But, equally, in the special circumstances which our amendment suggests, is it not right in justice to the plaintiff and all the provisions there to protect the defendant from unreasonably stale claims?
I suggest that the amendment for those additional live years, the long stop, should not be absolute; but in a special case where the plaintiff is suffering injustice and where the defendant had not been put in any difficulty, judicial discretion would be a very wise amendment. I should like to support the amendment.
Lord Howie of Troon: This is a highly legalistic Bill and most speakers so far have been lawyers. It is, however, a Bill which bears heavily on the construction industry, and as a civil engineer I should like to say a word or two about the effect of this amendment on that industry.
First, the noble and learned Lord, Lord Silkin of Dulwich, remarked that the amendment might result in some uncertainty, as he put it. I believe that he meant massive uncertainty. That is important. The problem that underlies this Bill and the debate we are having, although as yet unspoken, is the damages that may be paid to a, successful plaintiff and from where those damages will ultimately come. For the most part, they will come from insurance and from the capability of the construction industry, which will be the defendant as a rule, to insure itself.
In order to make sure that insurance is affordable and does not throw undue burdens upon the construction industry—and hence on the costs of building and in due course on the cost of living as a whole—there must be certainty so that the construction industry and the insurers can come to a reasonable arrangement about the cost of the necessary insurance. That will depend totally on there being as near to absolute or decently absolute certainty in the period of liability as can be attained.
The amendment would remove that, in so far as the insurer would look at the proposition and would not think of it as the period between 15 years and 20 years but always as a matter of 20 years. The effect of the amendment would be to add five years under the period of insurance liability to be carried by the construction industry. I believe that that would be a totally unreasonable addition to the burdens that the Bill already proposes to place upon the industry.
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I shall say just a few words about defects that occur after 20 years or so. There has been a general assumption throughout the debate so far that such defects are, as a rule, the result of latent defects of some sort or of improper building at some stage in the construction. I recall that during the Second Reading debate a short time ago the noble and learned Lord, Lord Silkin, spoke of a house of his acquaintance that had shown damage some 25 years after it had been built or after he had become acquainted with it. In his remarks earlier today the noble and learned Lord spoke of such a building in a useful analogy as being a diseased building.
That is a useful enough analogy but it is not necessarily a correct one to make. The building might not necessarily have been diseased in the course of the 20- or 25-year period about which the noble and learned Lord was speaking. It might merely be that circumstances may have changed in the environment in which the building exists. I shall give the Committee an example.
Because of the decline in industrial activity in London and elsewhere in recent years, there has been a substantial reduction in the demand for water for industrial use. The effect of that has been to raise the level of the water table in London and elsewhere in the country, sometimes by several feet. That increase in the height of the water table has resulted in flooding in basements here and there, and such flooding is not necessarily because of the defect in the building itself but because of a change in the physical circumstances that existed when the building was originally constructed.
If a basement became flooded during the 20-year period to which the noble and learned Lord, Lord Silkin, has referred, no doubt people would immediately claim that that was due to some latent defect in the building. The case would go to court and be argued for a substantial length of time. A decision would then be made as to whether the building was originally diseased or whether circumstances had changed. In the example that I have cited such would be the case. All that would mean a lengthy and unreasonable court process to determine what was the cause of the defect and what should be the period from which the case should start.
I believe that the amendment is mistaken. It is well intentioned, as amendments always are in your Lordships' House. Nonetheless, it is wrong. I hope that the noble and learned Lord will quietly withdraw his amendment, or, if he does not do so, I sincerely hope that the noble and learned Lord the Lord Chancellor will do so for him.
The Lord Chancellor: I cannot do so.
4.45 p.m.
Lord Scarman: The noble Lord who has just sat down has emphasised the facts that the committee had very much in mind when it proposed a long stop without judicial discretion to extend it. I wish to say only a few words to the Committee about the views of the Law Reform Committee, which I believe are perfectly plain, on its report.
The Law Reform Committee was concerned with three principles. They appear in paragraph 4.2 at page 15 of the report. As soon as I read them to the

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Committee, your Lordships will appreciate that, as so often in the law, they are three principles that have to be adjusted from time to time so that they may all live together. The first principle is:
"That plaintiffs must have a fair and sufficient opportunity of pursuing their remedy".
That of course is given by other provisions of the Bill to which your Lordships' attention has already been directed.
The second principle is that:
"Defendants are entitled to be protected against stale claims".
The Committee has just heard an eloquent speech indicating the importance of protecting defendants against stale claims. The fact that defendants may belong to such prosperous and unpopular circles as the world of the construction and insurance industries does not disentitle them from that protection.
Thirdly, there is this principle:
"Uncertainty in the law is to be avoided wherever possible".
The committee went on to state—I hope your Lordships will think wisely—that:
"We would not find any proposal for reform of the law acceptable"—
and here come the important words; they are in a sense words of compromise, like the 39 articles in affairs ecclesiastical—
"which failed in any significant respect to satisfy these criteria".
In the words of the market place, the proposals of the Law Reform Committee are a package, endeavouring to give the community as a whole the best of three principles, recognising, however, that no section of the community can have the whole of the principle that it likes if to let it have it means that some other section of the community loses the essential protection of another principle.
For those reasons, the Law Reform Committee stated in paragraph 4.19 on page 23 that:
"We have considered whether there should be a discretion to extend the new limitation periods that we are proposing. The value of the long stop would be lost if there was a judicial discretion to postpone it".
That has nothing to do with trust or distrust of judges. Of course the judges would exercise the discretion perfectly well on the circumstances of the case. But how would a plaintiff or a defendant be able to tell which way the discretion would go? It is the essence of the discretion that it is the judge's discretion. That is long after the event and therefore to introduce that discretion, even in the worthy and trustful hands of a judge, would be to do two things: it would put a defendant at risk of a stale claim which he no longer has the evidence to meet and would introduce uncertainty into the law.
Of course there are formidable arguments to be adduced for giving a discretion on grounds of equity to extend the long stop. They have been well put by the noble and learned Lord, Lord Silkin, and by the noble and learned Lord, Lord Denning. But one should view this proposed amendment against the background of the three principles to which I have referred and bear in mind that we have to prepare a package which does not help everybody all the time but, à la Jeremy Bentham, helps most of the people most of the time. That is the rationale of the Bill and it is entirely a
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matter for the Committee as to whether it feels that is right or wrong. I do not think I ought to take it any further.
Lord Hacking: I rise to oppose this amendment, not because I seek on one amendment to this Bill to be on the winning side—clearly I am on the losing side on every other amendment—but for two specific reasons. The first is—and this argument has already been partially advanced by the noble Lord, Lord Howie—that the plaintiff himself is not served by pursuing a stale claim: a claim that is so stale that even if he can discover the identity of the defendant he cannot find him, or on tracing him finds that the defendant no longer exists. That is the first reason why I suggest that the Bill is right and that the noble and learned Lord's committee is right in insisting on the absoluteness of the 15-year long stop period, or whatever period of years is eventually decided upon.
The second reason is that the plaintiff—taking into account the position the insurance industry has intimated it is prepared to take—is also put to some advantage by the 15-year certainty of a long stop period. The insurance industry has clearly intimated that it is prepared to cover the defendant, at reasonable rates, up to the end of the long stop period and thereafter prepared to provide insurance cover for the plaintiff. Within that structure, I suggest that the prudent plaintiff is capable of looking for insurance cover and, if he is a prudent plaintiff and seeks to provide himself with insurance cover is also served by the long stop provision. For those two reasons, I oppose this amendment.
The Lord Chancellor: This has been a very interesting debate and has given rise to differences of opinion. In somewhat more controversial circumstances I have ventured to say that the two great things to be avoided in public life are the false analogy and the suppressed false premise. I propose to suggest that this amendment is based on a false analogy, both in its draftsmanship and in the speeches with which it was supported.
There is no kind of analogy at all between the discretion given in the case of damages for personal injury in 1975, or thereabouts—which is how this amendment has been drafted and the debate which gave rise to most of the more cogent arguments in the mouth of the noble and learned Lord, Lord Silkin, who supported it—and this proposal in the Bill based on the Law Reform Committee's proposals. The whole point about the personal injury limitation was that we were taking away from a plaintiff his almost indefinitely established limitation period of six years—dating from 1623—and substituting a period of three years: that we were taking something away from him because it was thought that six years was too long.
That was then mitigated. The wind was tempered to the shorn lamb by saying, "Ah, but based on discoverability, or whatever, you shall have a way out if, in fact, the court thinks it right on certain guidelines to give you the way out and you can go back to an extent greater than three years". In this case it is the opposite of what we are attempting to do if we adopt the report of my noble and learned friend, Lord Scarman. We are starting from the premise that we are

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giving to the plaintiff something which he has never had before. He already has his immemorial right to six years. In addition, we are giving him an indefinite period—apart from the long stop—based on an additional three years starting at discoverability; which may or may not take place within six years but which I am entitled to assume in a large number of cases will take place after the lapse of six years. Therefore, we are giving him something which he has never had before.
We are giving him that with the addition of two indefinite additions. The first is that a defendant shall not derive any advantage from his own deliberate concealment or fraud, or whatever (and that is contained in a subsequent clause); and the second is that minority or incapacity from mental illness does not count against a plaintiff. So, he has the three years from discoverability, he has the disregard of incapacity and he has the disregard of deliberate concealment on the defendant's part. We are giving him something which he does not have.
If noble Lords go back to the debate on Second Reading, and earlier to the Unstarred Question raised by the noble Lord, Lord Hacking, a few weeks before, they will realise that the whole weight of criticism against the report of my noble and learned friend, Lord Scarman, was based on those who said it was unfair to potential defendants. We have heard that very clearly and persuasively argued on the facts in this debate by the noble Lord, Lord Howie of Troon. I am bound to say to the Committee that the object of the report is to hold the balance as far as possible evenly between the additional rights given to the plaintiff and the additional burden which is placed on potential defendants over and above the original six years—the immemorial six years. It was for that reason that my noble and learned friend Lord Scarman reminded the committee that in, I think, paragraph 4.2 the Law Reform Committee deliberately said that after giving the additional right to the plantiff they must protect defendants to some degree against stale claims and they must give a certain measure of certainty to the law.
5 p.m.
The committee went on to say, in the paragraph to which my noble and learned friend referred specifically in his speech, that a discretion had to be excluded if one were going to impose the long stop. If one is going down the route of the long stop and giving it no less than 15 years from the original breach of duty, discretion will destroy the degree of certainty required by the third of the three principles and deprive the defendant, as the noble Lord, Lord Howie of Troon, reminded us, of practically all the advantages of certainty with which the long stop provides him, leaving him at the mercy of the insurance market to protect himself as best he may by a premium against the consequences of something which may take place 15 years after he has done the work.
I should have thought that that is an injustice, but whether it is an injustice or not, it would certainly upset the balance of my noble and learned friend's report. When I am attempting to introduce a little piece of law reform—and this is a little piece of law
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reform—I always try to follow the reports as they are delivered. Of course, one departs from the report sometimes. Even my noble and learned friend does not speak from Sinai. However, on the whole this report has been carefully researched, it is carefully thought out and it has been widely consulted upon. I am sorry to tell the noble and learned Lord, Lord Silkin—whose personal and painful experience cannot have been far from his mind when he spoke today, as it was not when he spoke at Second Reading—that be would be driving the proverbial coach and horses through the balance of the report as it was presented by the Law Reform Committee.
Having said that, I am bound to say that I side with my noble and learned friend Lord Scarman in this respect, as I do with the noble Lords, Lord Howie of Troon and Lord Hacking. I stick to the report out of conviction and not simply because my noble and learned friend has said so. Therefore, I suggest that we, as a Committee, ought to stick to it.
Lord Silkin of Dulwich: Perhaps I may begin by assuring the noble and learned Lord the Lord Chancellor that I am not moving this amendment as a result of the circumstances that affected me personally, because, notwithstanding the lapse of 25 years since the construction of the building, I was in the fortunate position of being able to obtain recompense through my insurer. However, I could not help feeling when that mishap occurred that there would be other people who were not so fortunate. I had them in mind particularly if the circumstance were such—and I do not suggest that this was the case of my own house—that the serious defect which arose was the result of negligence, whether negligence of the original builder, the architect or somebody else associated with the development.
It was in the light of that circumstance that I proceeded from the position that one is assuming that there has been a wrongdoer—if there has not, the situation does not arise—and that is a question of fact which a court would have to decide for itself; and that as a result of the wrongdoing somebody else is made to suffer considerable loss, and again that is a question of fact which the courts would decide. It was in those limited circumstances that I looked at the provisions of the Bill and the basis of the report on which the Bill was put forward. I took the view that, without doing any real violence to the principles set out in the report itself, one could go a little further than the report or the Bill.
The noble and learned Lord the Lord Chancellor suggests that the analogy of personal injuries is a false analogy. It is perfectly true to say that every fact in relation to the two cases is not identical—I accept that entirely—but, in my view, and in my submission to the Committee, the basic principles are not such as to enable one to say that in one case it is right and in the other case it is wrong. In relation to the personal injuries claim, in the 1975 Act Parliament guarded the position extremely carefully so as to protect defendants by the language used and by the hoops, if one likes, through which the plaintiff was compelled to go before he could establish that he ought to have a period longer than that which was normally provided for. In the same way the analogy—which I suggest is a

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right and fair analogy—is that comparable hoops should exist in a case of this kind.
Many of the points that have been made in this debate were made on that occasion. The term "massive uncertainty" which was used by the noble Lord, Lord Howie of Troon, is not one that I would accept though I quite agree, of course, that there is some uncertainty. It is so in the case of the personal injuries remedy. Again, in that earlier debate the insurance difficulty was specifically referred to by my noble and learned friend the then Lord Chancellor, Lord Elwyn-Jones, and by others who said that there could be difficulties, but it was felt that on balance they ought to be accepted in order that fairness and equity could prevail.
I see no real difference between the two situations. One could make a distinction between them in the way that the noble and learned Lord the Lord Chancellor did but I can see no real difference, and I hope that there may be further consideration of whether there is any real difference. If we shut the door in this case, we may be saying that in the pneumoconiosis type of case, which I would regard as similar to the poor foundation type of case, it would not be right for the courts to exercise the very wide powers that they possess under the 1975 Act. Therefore by resisting my amendment Parliament would in fact be saying, "Well, we went too far in 1975 and the courts ought to look carefully at the way in which they interpret the discretion that was given to them in that case". I hope that point will be considered.
I appreciate that I shall not succeed, even if I wished to divide the Committee on a matter which has clearly created a good deal of difference of view. Even if I were likely to succeed in obtaining agreement to my amendment, I do not think that I wish to divide the Committee in those circumstances. I hope that what I have said will be sufficient to persuade the noble and learned Lord the Lord Chancellor and the noble and learned Lord, Lord Scarman, to look at the points which have been made.
I do not suggest for one moment that every recommendation of his committee is unblemished—the noble and learned Lord has not suggested that—and perhaps we can return to the matter at a later stage. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Hacking Lord Hacking moved Amendment No. 7:
Page 3, line 14, leave out ("An") and insert ("Notwithstanding section 14A of this Act no").
The noble Lord said: This is indeed an amendment that I tabled. I am grateful to the noble Lord who chairs this Committee. I should perhaps say that Amendments Nos. 7, 8, 9 and 10 are all amendments that I have tabled. I am more than happy if the noble and learned Lord, Lord Silkin, or the noble and learned Lord, Lord Denning, wish to move these amendments, but they are in fact amendments that I have tabled. They are not tabled by the noble and learned Lords, Lord Silkin and Lord Denning.
With the leave of the Committee, I should like to address my remarks not only to Amendment No. 7 but also to Amendments Nos. 9 and 10. Those two
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amendments are linked with Amendment No. 7. The amendment seeks to produce an alternative starting point for the long stop period, a starting point based on the completion date. It does not seek to disturb the principle of the first starting point, which may not be the first in time but will be the first in consideration, that is based on breach of duty. That is my terminology rather than that of the Bill.
My amendment also seeks to cut down the lengthy—I will not use the word "cumbersome"—provisions of subsection (1)(a) and (b) and subsection (2)(a) and (b). In view of what the noble and learned Lord, Lord Scarman, said in regard to my earlier attempt to produce brevity out of length, I do not anticipate, if the noble and learned Lord is still of the same frame of mind, that I shall have his support in making the attempt again. However, I might gain a few marks from him for trying to reduce the provisions of the Bill to a shorter form. I shall not address the Committee on that aspect of my proposal. I hope, however, that the Committee will appreciate that I am endeavouring to reduce the length of these subsections.
The amendment should be considered as an alternative approach to the amendments of the noble Lord, Lord Howie of Troon—Amendments Nos. 11 and 12—that I anticipate he will be moving. The problem is that the noble and learned Lord the Lord Chancellor, in presenting the Bill to the Committee, seeks to deal with latent damage across all activity that it might concern, whether that activity relates to the building of houses, the making of products or the provision of services such as solicitors' services. In order to cover all activities where latent damage may arise, the noble and learned Lord has in fact gone for breach of duty. The difficulty is one of generality. For that reason, I have sought in my amendment to make a special case of the construction industry.
I have gone for a completion date for the construction industry. The noble Lord, Lord Howie, has kept his amendment, if I have understood it correctly, on a broader base, to cover that activity, when he also seeks to go for the completion concept. However, I have narrowed it down to the construction industry. I have no embarrassment in selecting a single industry. The noble and learned Lord and his colleagues on the Law Reform Committee recognised that the great majority of problems stemmed from buildings and other structures. The application of the Bill will be preeminently found, I venture to suggest, in matters concerning the building and construction industry. In my submission, it would be an advantage in terms of achieving a finer and clearer point than breach of duty to go—as an alternative—for a completion date for buildings and constructions. That is what I seek.
5.15 p.m.
As the noble and learned Lord the Lord Chancellor may know, there have been discussions between his officers and other Ministers of the Government with members of the construction industry and those representing them relating to their concern about how the long stop period should start. As, again, the noble and learned Lord may know, only recently was unanimity achieved among those in the construction and building industries. My amendment like, I believe, that of the noble Lord, Lord Howie, seeks to represent

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the consensus now found in the building and construction industry. I would emphasise, however, that the responsibility for the terms of the amendment rests with me. The amendment is the responsibility of no-one else, whether articulate or inarticulate—the Committee will recall this reference on Second Reading—connected with the construction and building industry.
The reason that I invite the Committee to go for a completion date is that the concept of breach of duty produces problems in ascertaining a clear starting date in matters concerning the building and construction industry. A breach of duty can occur, relating to the same defect, on a number of different occasions: when the building was incorrectly designed; when the building, although correctly designed, was incorrectly drawn on the relevant plans; when plans, either incorrectly designed or drawn, are submitted for the contractors' tender; when the defect is constructed or assembled; when the premises, or part of the premises, containing the defect are improperly inspected; or when the building is handed over for completion, and so forth.
I have drawn to the Committee's attention no less than six different occasions when breach of duty could occur relating to the same defect at different points in time. If the principle of my amendment was adopted, the Committee would go for a completion date based, where possible, on a certificate of completion. The Committee will have seen the reference contained in subsection (3) of my proposed amendment. By going for the concept of completion date with, if possible, a certificate of completion, there is a certain date for the starting of the long stop period.
The period I have chosen in tabling the amendment is a period of 12 years as against 15 years from breach of duty. I am not entering into a debate over whether there should be a period of 10, 15 or 20 years. My proposal is merely intended to provide a parallel period of time to the breach of duty period of 15 years. Another difference, as the Committee may have noted, between my amendment and that of the noble Lord, Lord Howie, is that the noble Lord invites the Committee to consider different periods relating to both the breach of duty and the completion date. I am not doing so, for the purposes of the amendment. That is perhaps a debate that can take place when the noble Lord, Lord Howie, moves his amendment. I am adhering to the principles of the Bill and merely suggesting a completion date period that relates to the 15 year breach of duty period. For those reasons, I ask the Committee's support for the amendment.
Lord Howie of Troon: As the noble Lord, Lord Hacking, has said, the amendment that we are now discussing is in a sense an alternative to my amendments, Amendments Nos. 11 and 12. It may be convenient if we discuss them together. I can then come to move my amendments later. Otherwise, we shall be holding two debates that are virtually identical. The important matter of insurance has already been mentioned. We have to distinguish between a factor that was prominent in our earlier debates and what is the reality of the problem facing the construction industry.
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We have tended to speak of defects appearing in the foundations of a bungalow, or somebody's home, or some equally homely artifact of that nature. Naturally in these circumstances the sympathies are with the plaintiff. We have also spoken of the inarticulate plaintiffs faced by the massively articulate and highly organised building industry which seems at long last, after weeks of striving, to have reached some kind of consensus—implicit at least, if not totally explicit.
It is not quite like that. We should be thinking of latent defects arising in big structures where the inarticulate plaintiff might be a body such as the Central Electricity Generating Board, which could hardly be described as inarticulate—not in the person of the noble Lord, Lord Marshall, who recently joined us here. That is where the big problem arises because of the vast cost of insuring against a lengthy period covering latent defects, say, in the foundation of a power station, a foundation which has taken several years to design and construct, and which might show a defect some while later on. The noble Lord, Lord Hacking, indicated a number of occasions on which the breach of duty might occur in a building construction. It may be worth going over these again to underline them and to indicate the length of time over which these possible breaches of duty might be spread.
If we take the foundation of a power station, which fails for some reason eventually within the period about which we are talking, the breach of duty might be on the part of the contractor building the foundation. It might have been on the part of the supplier of the materials—the reinforcement, the cement, the sand and the gravel, even the water or any other additives to the concrete. That is an earlier period. It might have been in the detailing, the drafting of the drawings, for the foundation at an earlier period again. The breach of duty might have been in the design upon which these drawings were based. That is an earlier period yet again. But the breach might go further back in time even than that. It might be shown eventually through a lengthy court process that the defect did not lie in the foundation at all although the foundation failed. The defect could be in the soil mechanics investigations and information which were provided to the designers of the foundation at yet another earlier period. The period over which the breach of duty might occur therefore could be several years.
When we talk of certainty we are talking of a beginning date which is totally uncertain. That is why both the noble Lord, Lord Hacking, and I have introduced the concept of the date of completion as the best possible, most sure, secure, and certain date from which to start the long stop period. However, in looking at this matter, both the noble Lord and I have tried to reach some kind of compromise with the Bill itself. We are suggesting that the date should be from the breach of duty or from the date of completion.
There are two differences between us. The noble Lord has limited his amendment to the construction industry. I have great sympathy with him in that respect and support the general nature of his amendment—which will surprise nobody, I imagine. The advice which I was given was to draft amendments which were in harmony with the Bill and which covered a much wider range than the construction

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industry only. Whether I was right or wrong, that is what I have done. My amendments therefore go rather wider than the construction industry. However, the construction industry is the major area in which I am interested.
I differ from the noble Lord, Lord Hacking, again concerning the length of time which is involved here. I was moved to a very great extent by the notion that it might be as well to keep the long stop period in accord with what I understand to be Continental practice. That is the basis for my 10 years from the date of completion.
I notice that the Explanatory Memorandum to the Bill says that there are no EC implications in the Bill. In general terms that may be so. However in a few years from now somebody will be building the Channel Tunnel. It is conceivable—if the hybrid Bill to enable the Channel Tunnel to be built goes through—that our end of the tunnel would be under a liability for 15 years and the French end of the tunnel would be under a liability of only 10 years. I hardly think that that is likely to lead to Anglo-French amity. It may be that there are implications which have been overlooked here.
I hope that the Committee and the noble and learned Lord the Lord Chancellor will consider the nature of these two sets of amendments, will recognise the compromise which both of us in our separate ways have sought to achieve, will consider them carefully, and I hope accept them.
Lord Campbell of Alloway: Perhaps I may leave aside, very briefly, the difference in period between these two sets of amendments; and also with the Committee's permission leave aside the limitation to the construction industry which arises on one set of amendments but not on the other. I should like to go straight to the point of principle common to both: the completion date as the starting-off period.
That was considered, as I understand it, by Lord Scarman's committee who sat for some four years' consideration. That was rejected by them. Then, as I understand from my noble and learned friend the Lord Chancellor, it was considered by the official referees and rejected out of hand by them although I am not quite certain on what ground. Perhaps the ground does not matter for the moment because there is a natural reluctance, the Committee may feel, to go against the view of a committee which considered the point over a period of four years and the view of the official referees, whatever reasons they may have had.
Lord Elwyn-Jones: Perhaps I may briefly intervene in this matter, first, to reassert the principle which was stated by the noble and learned Lord. A high-powered committee with eminent membership—the Law Reform Committee—has considered the matter over the course of four years. When one looks at all the pages in the appendix—and it may even amount to five pages—showing the bodies that have been consulted, which is relevant to the consideration of this matter, one would be rather reluctant, putting it at its lowest, to depart from the recommendations. Although, obviously, no recommendation of a committee is sancrosanct, I would require very considerable reasons indeed to depart from the
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conclusions. The committee considered the approach of the completion date, and for reasons which they have indicated—which I find convincing—rejected it.
When it comes to the balance between 12, 15 and 20 years, they sought to achieve the balance by the recommended 15 years, which incidentally I think was also the view of the Law Society. I say this without prejudice to the admirable argument of my noble and learned friend Lord Silkin, which he will canvas later, but in my view of this matter the conclusions of the committee and the compromise figure of 15 which is suggested seems to me to be reasonable and acceptable and achieves a fair balance between the interests of the plaintiffs and the need for certainty and for the protection of the defendants against stale claims.
5.30 p.m.
The Lord Chancellor: All this is interesting, but again I come down on the side of the committee's report as it is translated into draftsmanship by the Bill. I am talking only of the amendments in the name of the noble Lord, Lord Hacking, because I do not think that the rather different amendments of the noble Lord, Lord Howie of Troon, could be moved if these were agreed; they are inconsistent with them; they are sometimes based on the same arguments and sometimes based on different arguments.
However, the principal effect of these amendments would be to provide two alternative long stops: in one case 15 years from the breach of duty, and in the case of defects to premises 12 years from completion of the work. It is rather on the same basis as Animal Farm—all animals are equal but some are more equal than others. I am bound to say therefore that I start from want of attraction to this additional complication to the Bill.
I also find it odd that, in the case of defects to premises, when they have been given a good 15 years from the breach of duty, there should be members of the construction industry who stab themselves in the belly by asking for 12 years from the date of completion as the basis for the long stop. They might find that they were committing hari-kari in that particular set of circumstances, because the latter could be less beneficial to them than the former.
As has been pointed out by my noble friend Lord Campbell of Alloway and by the noble and learned Lord, Lord Elwyn-Jones, this very suggestion of the date of completion as the terminus a quo for the long stop, was very carefully considered indeed by the Law Reform Committee. They said:
"We are doubtful though whether this is really a satisfactory alternative and in particular we can see formidable difficulties in adapting the concept of completion to all the types of circumstances (other than personal injury) where latent damage might arise. There is also the possibility of injustice to defendants where "completion", on a very large project for instance, takes place many years after the relevant breach of duty. Accordingly we recommend that the long stop should start to run at the date of the defendant's breach of duty."
My noble friend Lord Campbell of Alloway pointed out that the official referees had seen no advantage in the completion date as the date from which to start, and I would agree with that. They thought that, apart from the absence of any advantage, it would lead to a great deal of expensive and unnecessary argument in court.

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The construction industry was not by any means united in favour of the completion date, and if I looked up my papers sufficiently I think I could give examples of those bodies within the construction industry which did not agree with the completion date as the terminus a quo. The overwhelming balance of those concerned—I think 19 of those bodies concerned—stuck to 15 years rather than 12 years as the length of the long stop. In particular I must point out that the Consumers' Association, which has backed this Bill throughout, would be bitterly opposed to the reduction of the period for any particular class of potential defendant. Although, like everybody else, it is far from being infallible, I would be very reluctant to fly in its face after the report in its favour for the very reason which I gave on Second Reading; namely, that the potential plaintiff who is being given an additional advantage by the earlier provisions of the Bill is an unidentifiable group of persons (because no one thinks of himself in this connection as a potential plaintiff), whereas the potential defendants are very well organised, very articulate and very powerful.
Therefore, I come down once more on the side of the Scarman Report, and that is the advice which I give to the Committee.
Lord Hacking: It is my intention to withdraw this amendment; but before doing so, I should like to make two comments. The noble and learned Lord suggested that I was seeking to cut down the period proposed in the Bill from 15 to 12 years. That was not my intention, and indeed I hope that it is not the effect of my proposed amendments. I have left the period of 15 years as the concept in the Bill for the breach of duty period. I have suggested a 12-year period from completion date for the solid and good reason, which runs wholly in the interests of plaintiffs, that the completion date must take place after the breach of duty and invariably takes place some time after the breach of duty. Therefore, the Consumers' Association need not tremble—in any event because I shall not press this amendment to a Division—that I seek to reduce this 15 year period.
Secondly, although it is quite true that I am seeking to take a different course from that contained in the noble and learned Lord's report—I cannot claim loyalty to his report in this respect because I am urging on noble Lords a course which runs against the recommendation of his report—it is, as is recognised, always a matter of balance; and in a very balanced and fair report the noble and learned Lord, Lord Scarman, and his colleagues considered the argument. This is what they said:
"We have given this suggestion"—
that is, the suggestion that the construction industry should be treated separately—
"particularly careful consideration and we can see its attractions. It is probably true to say that the majority of claims for latent damage arise out of building and construction work and consequently a solution limited to these areas of activity would resolve much of the present difficulty in the law and"—
I hope my amendment here succeeds—
"could be tailored precisely to meet the needs of that industry. It would also avoid imposing upon professional advisers outside the construction industry any more lengthy liability than they already bear. However, we do not find these arguments convincing".
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And then the noble and learned Lord represented the arguments, in a fair balance, on the other side.
All I am suggesting in tabling this amendment is that there is a balance on the other side. I am merely suggesting—and this is where I differ from the noble and learned Lord—that the balance should come the other way from the balance found by the noble and learned Lord in his report. That is why I move this amendment. I clearly do not have the support of this Committee, and anyhow it is not my intention concerning any of my amendments to divide the Committee, and therefore I beg to withdraw this amendment.
Amendment, by leave, withdrawn.
Lord Hacking Lord Hacking moved Amendment No. 8:
Page 3, line 15, at end insert ("and claims for contribution to which section 10 of this Act applies,").
The noble Lord said: This amendment concerns Section 10 of the Limitation Act 1980, and seeks to include in the provisions of the long stop period contribution claims. Section 10 of the main Act gives the right within two years from the relevant date for contribution claims to be made. The relevant date is either fixed upon a judgment in civil proceedings or an award in arbitration, or it is based on the date upon which one of the parties agrees to make compensation to the other, and when that liability occurs the two-year period begins to run.
The effect under Section 10 therefore is that defendants can bring third party or fourth party proceedings at any time up to two years from the date of the judgment. But the effect of that is considerably to increase the long stop period, because it is quite identifiable that contribution claims can be brought well after the 15-year period. Let us take, for example, a case in which a plaintiff brought his action because there was latent damage at the tail end of the 15-year period. Let us put that at 14 years for the date of the issue of the writ. Then, although lawyers work swiftly and industriously, it takes five years for the claim to reach the point at which judgment is given. Therefore, we have 19 years, and then another two years under Section 10.
I say that that goes against the principal in the Bill of the long stop period. For that reason my amendment seeks to bring into the proposed long stop period not only claims for damages for negligence but also contribution claims. I beg to move.
The Lord Chancellor: I understand from what the noble Lord has said that the purpose of the amendment is to extend the long stop provision in new Section 14B of the consolidation Act to actions to recover a contribution under the Civil Liabiliity (Contribution) Act 1978. The intended effect is that a defendant should be prevented from claiming a contribution from another person after 15 years from the original breach of duty of care owed by the defendant to the plaintiff.
But the effect would be in some cases to bar proceedings to recover contribution before the right to recover a contribution had arisen. This would not be an attractive proposition. Incidentally, the amendment is technically defective because an action to

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recover a contribution is not an action for damages for negligence, and as drafted therefore the amendment would not achieve the result apparently desired.
5.45 p.m.
The fact is that the purpose of the amendment is not really desirable. In some cases a defendant against whom judgment has been awarded would be prevented from bringing his own proceedings against a joint tortfeasor, for example, to recover a contribution in respect of the joint tortfeasor's share of responsibility for the negligently caused damage which the plaintiff had suffered, merely on the ground that the 15-year long stop period between the plaintiff and the defendant had expired.
I do not think that the removal of an opportuniity to apportion damages for losses contributed to by others would be regarded with much favour by the original defendant or by his insurers. They would end up by collecting the whole bill for the damage for which others were partly to blame.
If negligence proceedings against the defendant are instituted before the 15-year period and judgment is awarded against a defendant after 15 years, contribution proceedings may, of course, take place and the Bill does not change that, or wish to. But these further proceedings will not be as stale as might be suggested. For one thing, most issues of contribution are dealt with at the conclusion of the original proceedings because most, if not all, of the parties against whom there may be a claim will have been joined in the original action. Secondly, Section 10 of the Limitation Act 1980 applies a short, but only two-year, period of limitation within which to start contribution proceedings before they become time-barred. This is plainly to encourage parties to institute proceedings with due dispatch. I would therefore submit to the Committee that the Bill as drafted presents a juster solution than that proposed in the amendment.
Lord Hacking: As with my other amendments it is my intention to withdraw this amendment, but I make two points to the Committee. The noble and learned Lord takes a drafting point against me. I have no special skills in the drafting of statutes. Indeed, in my experience when I have moved any amendment in Committee, in one way or another my amendment has had some lack in drafting texture.
Having made that point, I seek to draw to the Committee's attention the terms of my amendment. I am not seeking to bring claims for contribution under the umbrella of actions "for damages for negligence". Indeed, reading both the Bill and my amendment together it reads as follows:
"An action for damages for negligence other than one to which section 11 of this Act applies, and claims for contribution to which section 10 of this Act applies, shall not be brought after the expiration of 15 years".
I think that is plain. If my drafting is defective, I do not think that the meaning of my amendment is defective.
The noble and learned Lord makes another point—that it is unfair that parties should be deprived of bringing their contribution claims before they themselves were liable. While it is not on all fours with the proposition that I am about to make, it is right to
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draw the Committee's attention to the terms of the long stop provision. These terms are set out—albeit in the section I sought at an earlier stage to have removed from the Bill but it is still there in solid form—in Section 14B(2)(a). Now that section bars the right of action in a case in which Section 14B applies, notwithstanding that the cause of action has not yet accrued.
Therefore, it has to be faced as a fact, if this Bill becomes law and the long stop provision is part of it, that there will be plaintiffs who will be statute barred before their cause of action accrues. It is for that reason that I suggest that the point that the noble and learned Lord makes has less force. Indeed, my amendment is in line with the nature of this provision which is, as a procedural ground of English law, to prevent plaintiffs bringing actions after 15 years. That is on the basis that the noble and learned Lord, Lord Silkin, does not successfully press his amendment to the Bill at a later stage.
Those are all the observations I seek to make, and on that basis I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Hacking Lord Hacking had given notice of his intention to move Amendment No. 9:
Page 3, line 16, leave out ("not").
The noble Lord said: I shall not formally move this amendment. It is attached to the arguments I presented under Amendment No. 7, and in view of what I said on that amendment and in view of the fact that I have withdrawn Amendment No. 7, I do not propose to move Amendment No. 9.
[Amendment No. 9 not moved.]
Lord Hacking Lord Hacking had given notice of his intention to move Amendment No. 10:
Page 3, line 16, leave out from ("of') to end of line 34 and insert—
("(a) fifteen years from the date (or, if more than one, from the last of the dates) on which the breach of duty, either by act or omission, occurred and upon which such action for damages (but for this section) would, in whole or in part, be founded; or
(b) in the case of alleged defects relating to any premises, or any separate part thereof, 12 years from the date on which such premises, or any separate part thereof, was completed or from such later date when further work to such premises, or such separate part of such premises, to rectify work already done, was completed;
whichever period of limitation prescribed by this section first expires.
(2) "Premises", to which subsection 1(b) above applies, shall be any dwelling, building or structure which (at the relevant date for the commencement of the period of limitation prescribed by this section) is affixed, as the case may be, to land, or river bed, or sea-bed.
(3) The date of the issue of a Certificate of Completion relating to the premises, or as the case may be, to a separate part of the premises, shall be conclusive evidence of the date when the premises, or the separate part of the premises, was completed." ").
The noble Lord said: I should like to do exactly the same so far as Amendment No. 10 is concerned. I shall not formally move it because it is attached to the earlier amendment which I have already withdrawn.
[Amendment No. 10 not moved.]
Lord Howie of Troon Lord Howie of Troon had given notice of his intention to move Amendments Nos. 11 and 12:
Page 3, line 16, leave out ("fifteen") and insert ("twelve").
Page 3, line 23, at end insert—
("Provided that where the act or omission which is alleged to constitute negligence occurred—

(i) during the performance of a contract, whether between the plaintiff and the defendant or otherwise; or

(ii) during the discharge of any statutory duty,

an action for damages for negligence thereon shall not be brought after the expiration of ten years from the date on which the beneficiary under such contract first acquired title to or an immediate right to the possession or use of the subject matter thereunder or the discharge of such statutory duty was completed, as the case may be.").
The noble Lord said: I said all I need to say on Amendment No. 11 at an earlier stage. The response by the noble and learned Lord the Lord Chancellor was scarcely encouraging and, by the look of it, it does not seem as if he will be more encouraging now.
I think I shall consider what I said at an earlier stage and reserve my position, perhaps coming back at Report stage. In the meantime, I shall not move Amendments Nos. 11 or 12.
[Amendments Nos. 11 and 12 not moved.]
[Amendment No. 13 not moved.]
Lord Howie of Troon Lord Howie of Troon moved Amendment No. 14:
Page 3, line 34, at end insert—
("14C. Where any action for breach of contract or for breach of statutory duty is based on an act or omission which could also constitute negligence (whether so pleaded by the plaintiff or not), sections 14A and 14B of this act shall apply to such action.".")
The noble Lord said: This is a largely legal amendment in so far as I understand it, and perhaps I am not the man to be moving it today. However, as the Law Reform Committee noted in its report, a breach of duty may give rise to a liability in both contract and tort, to which may also be added liability for breach of a statutory duty, I believe. Yet the provisions of the Bill, both in relation to the discoverability of a latent defect and as far as the long stop period is concerned are confined to actions in negligence only. It follows that in many cases the benefits which the Bill seeks to introduce in respect of latent damage arising from negligence could be lost, I believe, by way of clever pleading.
The amendment would do much to ensure uniform treatment of all actions for latent damage, whether in contract, in negligence or in statutory duty. However, torts other than negligence are not covered and this is unlikely, I am told, to lead to difficulty. The proposed Section 14C will bite on cases only where the acts or omissions complained of are negligent, whether or not negligence is pleaded. I think the amendment is demonstrably within the scope of the Long Title of the Bill. I beg to move.
Lord Denning: I support this amendment very firmly. It goes back to what I said at the beginning on my first amendment: when you have an action for negligence, it is a duty of care. It can be put as common law, it can be put as a breach of a statutory duty and, if you please, it can be put in any other way which is available.
It is a principle of law that the ordinary rules of limitation ought not to be able to be avoided by pleading in one form or another. The technicalities of pleading ought not to affect the period of limitation. Whether the action is put in negligence, simpliciter,
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whether it is put in breach of contract like a solicitor's breach of contract to use care, or whether it is in breach of building regulations under a statutory duty, whichever it is, the position is just the same. It is merely formulated differently in law.
I would wholeheartedly support the view in this amendment that:
"Where any action for breach of contract or for breach of statutory duty is based on an act or omission which could also constitute negligence (whether so pleaded by the plaintiff or not) … this Act shall apply to such action".
To me that is sensible, getting rid of any technicalities in this limitation point, and I would support the amendment altogether.
The Lord Chancellor: Despite the intervention of my noble and learned friend, I have been a little disconcerted by the fact that I had assumed that Amendments Nos. 12 and 14 might be spoken to together. In the event this has not proved to be the case, but I can only repeat what I thought I said in reply to an earlier amendment this afternoon. There is a basic fallacy in what has just been said. In the law of negligence in tort the cause of action arises at the moment when damage is suffered. This is true of a whole class of torts. In some the cause of action arises when the wrong is done, trespass being the obvious example, and in others where the damage is suffered.
In the case of negligence the cause of action runs from the moment at which the damage is suffered. This is otherwise in the case of the cause of action in contract. The cause of action in contract arises out of a breach of a promise and derives from the protection which the promise gives and at the moment when the promise is broken. It gives rise to a much wider range of remedies than an action for damages for negligence or an action for damages at all. There may in contract be the equitable remedies of specific performance, rescission or rectification. In addition to that, there are different rules in relation to contract and tort and in relation to contribution and remoteness of damage. There are procedural differences, including matters of limitation. The period of limitation for actions which are based on contract will run from the act or omission constituting the breach of contract. In tort, the period of limitation begins to run from the date when damage occurs.
These and the other differences that I have mentioned reflect the distinctions between tort and contract. In tort, the duties are primarily fixed by the law; in contract they are fixed by the parties themselves and depend upon the terms of the contract, subject, of course, to the Act which was passed by the noble and learned Lord when he was Lord Chancellor about the unfair clauses which is now part of our law.
This illustrates a point which was dealt with quite firmly by the committee when it came to consider this rather limited piece of law reform. Quite apart from its terms of reference, it came down firmly against introducing into the law which it proposed in its report and which is now embodied in the Bill either changes in the law of contract or changes in the date at which the right of action begins.
It would be a fundamental error that would lead to endless confusion to use this Bill, which is related solely to cases of latent damage in cases of negligence.

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as a vehicle for widespread changes in the law of contract and in the law of statutory duty. It would complicate the law of limitation. It would create confusion, and the negligence complained of can arise out of the performance of contract. It may be not merely a contract between the plaintiff and the defendant but a contract between any other party or where it arises out of the performance of the statutory duty. This has been dealt with by implication in our earlier discussions and the amendment is an unfortunate confusion of what is otherwise an absolutely simple piece of legislation.
6 p.m.
Lord Howie of Troon: I should hate to fall into a basic fallacy. But if I have done so, I take some comfort in that I am joined there by the noble and learned Lord, Lord Denning. I was greatly impressed by the reply of the noble and learned Lord the Lord Chancellor. I feel that once I have studied his remarks in Hansard, I shall know a great deal more about this matter than I did a few moments ago when I moved the amendment. I shall study his reply carefully. I shall take what advice I can and consider whether it is worth bringing this matter forward in a modified form at a later stage. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Clause 1 agreed to.
Clause 2 [Provisions consequential on section 1]:
Lord Hacking Lord Hacking moved Amendment No. 15:
Page 4, leave out lines 20 to 25 and insert—
(" "(5) Subsections (1) and (2) above shall not apply to the periods of limitation prescribed in sections 14A and 14B of this Act." ").
The noble Lord said: We now turn to Clause 2, but more significantly we are on to my last amendment and the last amendment to be considered on this Bill as currently tabled. This amendment concerns Section 32 of the Limitation Act 1980 and seeks to take up a point made by the noble and learned Lord, Lord Wilberforce, at Second Reading. Section 32 creates the provision that extends the period of limitation in circumstances where there has been fraud, concealment or mistake and it extends the period of limitation,
"until the plaintiff has discovered the fraud, concealment or mistake (as the case may be) or could with reasonable diligence have discovered it".
In the first place I attempt to relate Section 32 of the Act, with the new proposed Sections 14A and 14B, with greater clarity than the proposed terms of the new subsection (5) appears to do on page 4 of the current draft of the Bill. As pointed out by the noble and learned Lord, Lord Wilberforce, this proposed new clause is so difficult to understand that reference has to be made to the report of the Law Reform Committee before comprehension can be reached. Indeed, it could be said that in concealing its own meaning it is concealing its own "concealment".
In the second place, I have attempted to deal with the substantive point raised in this regard by Lord Wilberforce on Second Reading. Contrary to the recommendation of the Law Reform Committee and
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the proposal in the Bill to bring into effect this recommendation, it seems to me that the operation of Section 32(1)(b)—that is the relevant subsection in Section 32—should be excluded from the operation of the new proposed periods of limitation set out in the proposed Sections 14A and 14B. By their very nature latent defects are concealed from a plaintiff and may also be "deliberately concealed", which is quoting from the terminology of Section 32.
In my proposed amendment I have also sought to exclude the fraud and mistake provisions of Section 32(1), to which I have just referred, from the operation of the proposed Sections 14A and 14B. Technically since the proposed Sections 14A and 14B relate only to actions for damages for negligence they do not cover actions based on "fraud" or actions for relief from the consequences of a "mistake" because fraud constitutes a separate and distinct cause of action as do causes of action in contract which are grounded upon mistake. It may not be easier for parties and in some cases for the courts to grasp these legal concepts and since therefore there is worry relating to the concept of mistake, as it could relate to the provisions contained in Sections 14A and 14B, I thought it better to attempt—I shall be unsuccessful in this attempt—to sweep the whole of Section 32 out of the operation of the new provisions of Sections 14A and 14B. Those are my reasons for moving this amendment. I beg to move.
Lord Denning: I should like to oppose this amendment. The committee was quite clear in paragraph 4.13 that the provisions under Section 32 of the 1980 Act, fraud, concealment and mistake, should still apply. In other words the period of limitation should not bar an individual in circumstances where it is due to fraud, deliberate concealment or mistake by the defendant. It has occurred in many cases. It is a valuable provision, and as the committee said:
"We believe that it would be no less repugnant to most people's sense of justice to allow such defendants to take advantage of a long stop provision, and we therefore make no recommendation in this area. Accordingly, the long stop will come into play in those latent damage cases where there has been negligence by inadvertent or careless acts or omissions but not where there has been, in the words of section 32(2) a 'deliberate commission of a breach of duty in circumstances in which it is unlikely to be discovered for some time'.".
I oppose the amendment.
Lord Wilberforce: I spoke on this subject at Second Reading. I re-read recently what I then said and rather to my surprise I found that I still agreed with it. It is necessary to be precise about this amendment and about subsection (5) which is in the Bill in page 4 at line 20. One is liable to be misled if one is not careful by the reference at line 17 to:
"(postponement of limitation period in case of fraud, concealment or mistake)".
I have a suspicion that my noble and learned friend Lord Denning was possibly misled by that reference. That is simply taken from the side note to Section 32 of the 1980 Act. It has nothing to do with the matter which we are now considering or discussing. What we are now discussing is a limited point which is brought out at line 21 on page 4 which refers to:
>"any action to which subsection (1)(b) applies".

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That is all we are concerned with. All that subsection says is:
"any fact relevant to the plaintiff's right of action has been deliberately concealed from him by the defendant".
We are not concerned with fraud or mistake but we are concerned with deliberate concealment.
The innocent man might think that deliberate concealment is just as bad as fraud, that someone is a dishonest man and should not be given the benefit of the long stop. What all this does at the end of the day when one has worked out all the references is to say that whoever this applies to is not to have the benefit of the long stop of 15 years which is in Section 14B. That is what is being done. One has to go on to look at Section 32 (2) which is absolutely vital. That says:
"For the purposes of subsection (1)"—
which we have just been considering—
"deliberate commission of a breach of duty in circumstances in which it is unlikely to be discovered for some time amounts to deliberate concealment of the facts involved in that breach of duty".
We have a special concept there of concealment which provides what one might call an objective test: it has to be unlikely to be discovered for some time. Anybody who is familiar with these building cases knows that those words typify the cases in which actions are brought after some time. Something is covered up in circumstances in which there is unlikely to be discovery for some time. It is not a question of dishonesty, it is not a question of defrauding anybody; it is just a case that an inspector may decide to cover up and he is guilty of negligence in doing so. He is not trying to defraud anybody or deliberately to conceal but the fact is that the defect is unlikely to be discovered for some time.
One has to ask oneself as a matter of policy whether it is right that that case, which is typical of many, is one in which the defendant should be deprived of the long stop provision in new Section 14B in this Bill. It is a matter of policy to be considered. I know that it was considered by the committee of the noble and learned Lord, Lord Scarman, and that it is debated fairly in the paragraph which deals with it. The committee thinks, using words which also cover fraud, that,
"such a person should not have the benefit of the long stop".
It is for your Lordships' Committee to decide. What impressed me at Second Reading, and about which I still feel considerable doubt, is whether it is right in these cases which will occur very frequently. There is the case of Anns, the case of Dutton and the case of Pirelli. Almost all these cases are cases in which something was concealed in circumstances in which it was unlikely for the defect to be discovered for some time. That is an exact description of what happens, and that is what I thought we were legislating about. The Committee may say that there is something wrong there and such a person ought not to get the benefit of the long stop. The view which commended itself to me was that that is just what this legislation is supposed to be doing, to give a final period of 15 years to deal with these cases.
I would suggest to the Committee that there is considerable merit in the amendment. It may be that the amendment proposed by the noble Lord, Lord Hacking, goes further than is necessary. I am not committing myself entirely. I am not going with him
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necessarily as far as that; but I venture to suggest that this provision in the Bill deserves reconsideration, in spite of the decision, taken after internal debate no doubt, by the Scarman Committee. If the Committee were to pass this clause as it is at the present time, it would be depriving the Bill of a good deal of its utility as regards cases which the courts have had to deal with and which the courts have thought probably demanded adjustments to the limitation period. I support in principle the amendment of the noble Lord without necessarily agreeing with the detail.
The Lord Chancellor: I always take extremely seriously what my noble and learned friend Lord Wilberforce says. This alone would cause me to say that I shall read again what he says and take advice upon it. But I must say to the Committee that I am advised that the effect of this amendment in practice—and the only effect of it—is to make the long stop provision absolute even in cases where the defendant has deliberately concealed damage from the plaintiff to enable him to raise the defence of limitation. The defendant would thus benefit from his own wrong doing by escaping liability to proceedings in negligence.
To my mind, and subject to what I have said about taking further advice, that offends against my moral judgment. Take, for instance, a case—and I think this may have been a case which actually has happened—where a defendant deliberately commits a breach of duty which is unlikely to be discovered for some time. For example, supposing in a local authority case a building inspector deliberately allows defectively laid foundations to be covered up by the contractor in order to conceal the defect which he has seen. The amendment before the Committee would allow the inspector, and possibly also the contractor, to escape liability to proceedings in negligence after 15 years from his breach of duty to the victim of the negligence.
My present judgment is that it cannot be right in circumstances of this kind to allow a wrongdoer to take advantage of his wrongdoing by the lapse of time. It is against my moral feelings in the case and it is also against Section 32 of the Act of 1980. Incidentally, it is contrary to the judgment which has been referred to of the Scarman Committee. I cannot accept this amendment this afternoon. I shall reflect on what my noble and learned friend said, but as of now I am not attracted by the proposition.
Lord Hacking: As with my other amendments, I am not going to press this one and in a moment I shall withdraw it. It is, however, a rather special moment for me in this Committee which has been progressing now for over three hours because I have had a voice of support from the noble and learned Lord, Lord Wilberforce. He could not come the whole way to support the terms of my amendment—that would be asking too much—but he was prepared to accept the principle of it in so far as subsection (1)(b) of Clause 32 is concerned. The noble and learned Lord the Lord Chancellor has kindly said that he is prepared to give this matter a little further consideration. On that basis, I beg leave to withdraw my amendment.
Amendment, by leave, withdrawn.
6.15 p.m.
On Question, Whether Clause 2 shall stand part of the Bill?
Lord Hacking: Unless anybody else has anything to say, perhaps I may make two comments concerning Clause 2. My comments will also refer to Clause 1 if I have the Committee's leave also to refer to it. I have been something of a lone voice throughout this Committee. I have had little support. The noble and learned Lord, Lord Wilberforce, has just supported me, as also has the noble Lord, Lord Howie. He has been kind enough to support me in this amendment, as I would have supported him in his amendments if he had moved them separately from mine. The views that I have tried to express to the Committee—and it may be that I have not done it with sufficient eloquence or accuracy—are views that are being expressed outside the House and views that relate to genuine concerns by a number of persons outside the House who will be directly affected by these provisions.
For that reason, I ask the noble and learned Lord whether he can take an oversee view of all the points that I have sought to make—and other points that other noble Lords have made during the Committee—before we come to the Report stage of the Bill. As I have said to the Committee, I do not hold a special mantle for perfection in the presentation of the views but I have tried to present views that are seriously held outside this House.
There is another small point—an elementary point rather than a small point—that I would make. It is that time moves on. Before the 24th report, the Law Reform Committee sat for its 21st report, which was the final report—and I would stress those words—on the limitation of action; and that report was presented to Parliament by the "Lord High Chancellor by command of Her Majesty" in September 1977. This was a most detailed and careful report and in so far as the 21st report considered latent damage—and it considered latent damage only in a peripheral manner—it considered it not to be a problem.
Only in a short time, such was now the problem, the noble and learned Lord the Lord Chancellor requested the Law Reform Committee in its 24th report to consider latent damage. It is now considered a serious matter, so serious a matter, indeed, that the noble and learned Lord has moved this Bill. Time moves on! For that reason, too, I would ask the noble and learned Lord (because there is this concern outside your Lordships' House) to consider, if he would be so kind, not my remarks as such but the remarks that have been made throughout this Committee and the comments and criticisms that have been made of the Bill, not in any way to wreck the Bill but to assist its passage, assist its clarity and make it a much better Bill.
The Lord Chancellor: I do not think that I can respond in very great length to what the noble Lord, Lord Hacking, has said. Of course, we are all deeply indebted to him for putting forward a view in various forms which members of the constructions industry in particular wish to say in criticism of this Bill. But the genesis of this Bill, as he rightly surmises, was the
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reference by myself to the Law Reform Committee of a matter which had become, to my mind, extremely urgent and which resulted in the Law Reform Committee, in its 24th report, producing the policy upon which this Bill was based. It was a policy which I think gave a measure of justice to potential plaintiffs and a measure of protection to potential defendants—a measure of protection they certainly would not have had but for this Bill.
The policy of the 15-year period, which is by some criticised as too short and by others as too long, was supported by a really formidable number of consultees, including the Law Society, the Institute of Chartered Accountants, the Institute of Building Control Officers, the Building Employers' Confederation, the Official Referees, the Queen's Bench Masters, the Country Landowners' Association, the London Chamber of Commerce and Industry, the Holborn Law Society, the Consumers' Association, the Society of Parliamentary Agents, the Incorporated Society of Valuers and Auctioneers, the Bar Association for Commerce, Finance and Industry, the Society of Investment Analysts, the British Property Federation, the Landed Property Consultative Council and, last but not least, the Chancery Bar Association. With that formidable body of support and the noble and learned Lord, Lord Scarman, in addition, I am bound to say that of course I will reflect on what the noble Lord, Lord Hacking, has said, but I do not want to offend any of those bodies either.
Lord Howie of Troon: Before the noble and learned Lord sits down, will he take note that in the formidable list he has read out there was only one construction industry organisation noted and we must assume that the rest were opposed?
The Lord Chancellor: No; I do not think that is quite right. The list I read out were those which backed the 15-year period. The noble Lord represented one branch of the construction industry, but it was in fact divided on the matters which he raised.
Lord Hacking: Before the noble and learned Lord sits down, I wonder whether he has also got a formidable list of the opposers.
The Lord Chancellor: I do not think it is so formidable. They are all published in some sort of document and so I do not think we need swap names. But there is a formidable list of people in support of this Bill, and what is much more important is that it is really a case, I think, of this Bill or nothing else. The law can be left in its present unsatisfactory state: otherwise you have to make some sort of balance between potential plaintiffs and potential defendants when the Law Reform Committee has said that the present law does justice to neither.
Lord Elwyn-Jones: May I respectfully draw the attention of the Committee to the fact that we are not on the Third Reading of this Bill?
Clause 2 agreed to.
Remaining clauses agreed to.
House resumed: Bill reported without amendment.

Lothian Region (Edinburgh Western Relief Road) Order Confirmation Bill
6.25 p.m.
The Minister of State, Scottish Office (Lord Gray of Contin): My Lords, I beg to move that this Bill be now read a second time.
It might be for the convenience of your Lordships' House if I were at this stage to explain the position of my right honourable friend the Secretary of State for Scotland, under the Private Legislation Procedure (Scotland) Act 1936 in relation to this confirmation Bill. The Secretary of State's role in introducing the Bill is essentially formal. Under the 1936 Act, the Secretary of State is responsible for introducing into Parliament, with a confirming Bill, a provisional order which has been approved by parliamentary commissioners following an inquiry. The Secretary of State's role is in general confined to providing the Bill with the necessary facilities to enable it to become an Act if that should be the wish of Parliament. In the case of the Western Relief Road, the commissioners appointed under the procedure recommended, following an inquiry which sat on a total of no less than 52 days over a period of more than three months, that the order should be issued with modifications.
Successive Secretaries of State have honoured the undertaking given during the passage of the Private Legislation Procedure (Scotland) Act 1933, which was consolidated in the 1936 Act, that the Secretary of State would treat such recommendations with the fullest respect and would not set them aside, other than in exceptional circumstances. Accordingly, my right honourable friend submitted this order to Parliament in the form of the confirmation Bill which is now before the House. A petition against the order comprised in the confirmation Bill was presented timeously at Second Reading in the other place and the matter was referred to a Joint Committee of both Houses of Parliament, as provided for in the 1936 legislation. The Joint Committee, in presenting their findings on 5th March, did not accept any of the amendments that had been proposed and were of the opinion that the order ought to be confirmed without amendment.
Your Lordships may find it helpful if I say something very briefly about the financing of the Western Relief Road should your Lordships approve the confirming Bill. I am conscious that a number of your Lordships may have been concerned by recent press reports which suggested a difference of view between the regional council and my department on funding. However, I can give an assurance that there is no difference of view. There are, however, expenditure constraints and other priorities. I understand that the regional council is planning to spend some £14 million in the coming financial year on the outer-city bypass, and in the light of discussions between my officials and representatives of the regional council over the last week or so the council have now decided to fund the project through a covenant scheme.
This approach will have many advantages for the region, mostly notably that it will allow early progress to be made without threat to any of the council's other capital projects. I should like to make it quite clear that
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the decision to proceed in this way is entirely one for the regional council and we have no criticism to make of it. Indeed, we have told the region that we will take full account of this arrangement in determining its capital allocation for roads in future years when repayment of the borrowing is being made.
Thus, the Motion before the House that the Bill be now read a second time is quite clearly competent. It is now for the House to decide whether a sufficient case has been made out. My Lords, I beg to move.
Moved, That the Bill be now read a second time.—(Lord Gray of Contin.)
6.30 p.m.
Lord Ferrier Lord Ferrier rose to move, as an amendment to the Motion that the Bill be now read a second time, to leave out all the words after ("that") and insert ("this House declines to give the Bill a Second Reading until after the results of the forthcoming elections to the Lothian Regional Council are known.")
The noble Lord said: My Lords, I need not repeat the amendment as it is clearly set out on the Order Paper. I will say only that I speak as a native of Edinburgh with a long family connection with the city.
On 16th February 1961, a few days over a quarter of a centry ago, I proposed the following Motion in your Lordships' House:
"That in the opinion of this House it is necessary to expedite measures to facilitate the movement of long-distance traffic round the City of Edinburgh."—[Official Report, 16/2/61; col. 908.1
A number of Peers took part in the debate, and the House agreed to the resolution without a Division. I mention that only to set a timescale, as it were, for the proposal contained in my amendment, which involves suggesting a delay of two months. Incidentally, in the course of that debate the then Minister of State for Scotland, mildy chiding me for my extravagant ideas, said:
"The question we have to ask is whether an estimated (and I underline the word 'estimated') 4,000 vehicles a day some time in the future justifies the building of a new by-pass now at a cost of £2 to £4 million."—[Official Report, 16/2/61; col. 937.]
About one-third of the bypass has now been built at a cost of £48 million. The estimated cost of the Western Relief road is in the neighbourhood of £113 million. I only mention that, as I say, to set a timescale to compare with that of my amendment—say a couple of months. Had your Lordships' recommendation been complied with, it is fair to say that a quarter of a century later the congestion in Corstorphine would not have been such as to drive the voters of the consituency to promote the Western Relief Road.
It is not my intention to take up your Lordships' time going over the recent deliberations. I am utterly opposed to the Bill, which appears to many to be premature, if, indeed, it is worthwhile at all, although, of course, I respect the promoters' dedication and the work that has gone into the preparation of the Bill. The fact the House is now facing is that the Bill has come from the other place and has reached its Second Reading here.
A good deal of water has flowed under the bridge since I set down the amendment on 19th March. It is now abundantly clear from letters in the press—my noble friend Lord Gray of Contin has mentioned it, and my fan mail supports it—that there is an

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increasing measure of opposition to the Bill despite the claim that that opposition represents only a minority opinion. Be that as it may, there has been more and more unease at the steps taken by the promoters to commit the city to substantial expenditure on a proposal which is, after all, based largely on conjecture.
The objectors feel that they have not been given adequate opportunity to make their case against the measure, and, as a result of the promoters' tactics, the matter has drifted into a party political wrangle. After all, there was a considerable element of filibuster during the last stages in another place. The objectors have a feeling of helplessness in the face of the party manoeuvring and can hardly understand why the Western Relief Road has become a party issue except, of course, that the Conservatives in the constituency are anxious to gain favour with electors in preparation for the next general election, as they are entitled to do, but the cost is excessive.
As set out in the papers attached to the Bill in the other place, there are 38 objectors. They include the National Trust for Scotland, the Scottish Civic Trust, the Architectural Heritage Society, the Cockburn Association and some local residents' associations, none of which carries party labels.
The procedure adopted by the promoters, as outlined by my noble friend, is wide open to criticism. The objectors feel that the proper route would have been a planning inquiry, and it has been said (and I repeat) that the adoption of this method of taking out a Bill that has proved to be so controversial looks very like an abuse of Parliament. There is, of course, a case for bypassing Corstorphine, but surely that may be achieved by the completion of the outer city bypass which is due in four years' time. If the massive change in the whole pattern of Edinburgh traffic which will stem from the bypass fails to relieve the pressure, then, and I feel only then, will it be a solution to introduce a so-called relief road of this nature.
The passage of the Bill through the other place created the Joint Select Committee which was chaired by my noble friend Lady Carnegy of Lour, who will be speaking this afternoon. I look forward to hearing what she has to say. It is as well to remember that at an earlier stage in this whole transaction the parliamentary inquiry gave not only advice but strong legal advice that the legislation was defective. Powerful objection to this whole matter came in the shape of a letter from the Lord Provost which has been widely circulated. I need not refer to it as I think that most Members of this House have received a copy of it. It is not the latest because since I drafted the amendment I have had a letter from a district councillor. I will read only the last paragraph. He objects to the Bill and says:
"I make this plea because I believe the future of Edinburgh's Georgian new town outweighs a local traffic problem in one part of West Edinburgh. The issue is whether Lothian Regional Council should be able to short-circuit recognised planning procedure and jeopardise Edinburgh's priceless heritage which has been protected by generations of its councillors and its citizens."
I now understand that the Labour Party has declared its intention, if it takes power in the May elections, to reject the whole proposal and to cancel the Western Relief Road. Even if the Bill is passed and contracts are rushed through by the promoters, the
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Conservative and Alliance groups, almost inevitably more expense will lie ahead. To prevent more extravagance my amendment would appear to be the remedy.
Too much treasure, too much toil and too much time have already been spent on this controversy, and it may well be that the right thing to do is to defer giving the Bill a Second Reading tonight. On the other hand, if the electors, after the further consideration that a little delay may provide, return the present authorities to power, so be it! I accordingly beg to move.
Moved, as an amendment to the Motion that the Bill be now read a second time, to leave out all the words after ("that") and insert ("this House declines to give the Bill a Second Reading until after the results of the forthcoming elections to the Lothian Regional Council are known.")—(Lord Ferrier.)
6.41 p.m.
Lord Carmichael of Kelvingrove: My Lords, I should like to thank the noble Lord, Lord Ferrier, for giving us the opportunity to speak on this aspect of the Bill—the delay of the Bill and not the total and outright condemnation and rejection of the Bill. It seems a sensible and reasonable amendment to put forward at this time. I am sorry that the situation is such that sometimes in a local authority important things that affect all the citizens, quite apart from what I consider to be purely party politics, become a party political issue. That is unfortunate. If this amendment is carried, and if there is a change in the composition of the new regional council, I hope that it will sit down and look with fresh eyes at what is proposed in order to see whether such a relief road is needed.
It is impossible not to speak about roads in general and city roads in particular when discussing a Bill such as this, although the Bill itself is rather a narrow one. It has been said several times in the other place that Edinburgh has a living city centre. This is an important point to make about Edinburgh. I hope that over the next 10 years in Glasgow we shall surpass that position because we are now recovering from a road mania. That is why I feel stongly about our having time to look at the Edinburgh position. We had a road-building hysteria for a period in Glasgow and we are just beginning to recover from it. During that period—about four or five years ago—I remember going through Edinburgh with a number of people from another place on an all-party visit. I said to one of the people who was an Edinburgh man but not of my party, "One of the great things about Edinburgh is that the good, thoughtful people have decided to hold on to their city centre and not let it be totally messed up by traffic". The Edinburgh man said to me, "That's not really the reason. The reason is that they were far too mean to make a lot of changes and now fashion has caught up with them". The sad thing is that they seem to have caught up with the old fashion, I think rather later than should be the case.
I am not anti-motorist. I love motoring and I love driving. I am very involved in driving. I am very conscious of the benefits that personal transport has brought and how important it is to many people. But it has many less happy effects. If I speak about Glasgow, it is because I know it, but I think the lessons can be learnt from Edinburgh. I can think of three

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specific examples from the period of road building in Glasgow. One was the Maryhill expressway: another was the Crow Road expressway; and a third involved changes to the Great Western Road. I should like to speak for a moment about the Great Western Road. It went through part of my old constituency. The rest of it was very largely in the constituency of the late Tom Galbraith. I accepted at the time many of the figures of the experts. They were extremely courteous and they were very well valued. Tom Galbraith and I sat down with them all. We looked at the figures and I found myself changing my mind halfway through. I decided that the Great Western Road expressway was not required although a lot of land had been bought for it and a lot of alterations had been made. That was 10 years ago. The Great Western Road expressway was never built. The Maryhill expressway was never built. The Crow Road expressway was never built.
What has happened? Of course there are hold-ups. You cannot drive through these roads as though you were on a motorway. I use these roads almost daily—and certainly weekly—because they are in the area in which I live. It would not have been worth tearing the city to pieces in order to get rid of these hold-ups in the way that was suggested. From the maps I have looked at and from my little knowledge of Edinburgh—not all that little—I believe that we should think, think and think again about the Western Relief Road.
I do not drive to Edinburgh if I am going to the centre of Edinburgh. I use the train. There is a half hourly service from Glasgow to Edinburgh. It takes 45 minutes. It is crazy to take a car into the centre of a city such as Edinburgh. I do the same in Glasgow; I take a train or the underground. But I know that when I drive through Edinburgh I face hold-ups in Princes Street. I do not think it is worth the upheaval we are going to face with a road as expensive as this, particularly when other things are on the way. For instance, the Sighthill section of the city by-pass is expected to be finished by 1990. I believe that the date has been brought forward, and it might even be earlier than that. It would be crazy to go ahead with this road and force it through in the next month despite what the noble Lord the Minister has said about the type of financing, which I hope he will be able to explain more fully when he comes to reply. I was not quite clear what he meant with regard to how the financing will be dealt with. If the amendment fails and if the Bill receives a Second Reading, there will be a tremendous rush to let contracts and to rush ahead with the Bill and commit the next administration to something on which it would be better to take a little more time.
If the new council came in—whichever new council—and endorsed the idea of the Bill, I would accept it. If a new council accepts it, I shall accept it. It must be a big issue in Edinburgh. I do not know a great deal about the local politics of Edinburgh but this must be a very big issue there. All the electors of Edinburgh must be conscious of the fact that if they change the composition in the Lothian region there will be a change of attitude to the road. It must be a big factor. If the new Lothian region decided to go ahead with this road it would be quite impertinent of me to try and change its idea. If there is a change in Edinburgh I hope that the new grouping will consider
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the position with considerable care, not from the point of view of, "You said yes, we say no", but will look at it without this terrible rush. The idea that it should be done as quickly, as is suggested, is far too hasty. The possibility of the Sighthill section of the new road coming through—from what I have heard we shall wait only another two years—will surely change considerably the traffic on the proposed new road. If the relief road goes through you must not think that that will be the end of it, because experience in Glasgow (until the citizens began to take a grip and until some of their councillors began to take a grip) showed that every new road led to more new roads being required. It merely meant that the bottleneck was pushed a wee bit further forward.
Looking at the map, I could see that the next development might be—and I would not put it past some road builders I have come across—that Usher Hall would be in great danger, if we carried on in the way that we are doing. I hope that the House will think very carefully. I am not anti-road. I only say that this matter has to be watched with great care before we rush into something. I hope that the amendment put forward by the noble Lord, Lord Ferrier, will be given consideration and will be carried by the House.
Lord Mackie of Benshie: My Lords, before the noble Lord sits down, is he saying that the Labour group, if they take power in the region next time, would reconsider their attitude? I understood that they had given a firm commitment that they would not proceed.
Lord Carmichael of Kelvingrove: My Lords, I said that I hoped they would reconsider their attitude. I do not know enough about the composition of the Lothian group. I just feel that matters such as this should not be tied up with party politics as they sometimes are—and I am speaking as a very committed party person.
6.50 p.m.
Lord Wilson of Langside: My Lords, I am encouraged by the circumstance that the noble Lord is not speaking from his Front Bench. He asserted that approval of this Bill would be crazy. He said that it would be crazy to rush it through. How detached from reality is that approach to this important matter of government?
In the background to the saga—because it has been a saga—of the Edinburgh Western Relief Road, there have been touches here and there of farce. I have great respect for the noble Lord, Lord Ferrier, and the evidence that he gave to the Joint Committee of this House, of which I was a member, was extremely valuable, useful and interesting, but I venture to suggest that approval of the amendment would reduce this saga of the Edinburgh Western Relief Road to one of complete farce.
That is not to say that there are no lessons to be learnt from the way in which the matter has been handled from beginning to end. I was a member of the committee. There were two lawyers on that committee: Mr. Fairbairn and myself. Throughout the proceedings, and up until the last day (when we came to be of the same mind), on almost every major issue

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that was raised we were in complete disagreement. There were many matters, incidental and otherwise, in which some of the lay members of the committee were not exactly completely unanimous. I mention that simply because I wish to pay tribute to the chairman of the Joint Committee of your Lordships' House and of the other place for her remarkable achievement of completing the work of the committee in a week less than the estimate, involving people of such different viewpoints as those I have described. That was a considerable achievement and we are all surely indebted to her.
There are of course lessons to be learnt from the proceedings and from the way in which the matter was handled. The first lesson—and it is an important one—stems from this question: why were the Scottish law officers not involved before the matter was referred to the Joint Committee under Section 9 of the 1936 Act? That got the committee's work off to a bad start. I wonder whether that lesson has been learnt by those with responsibility in the matter, in this unprecedented situation of the reference of a matter that had already been considered by a provisional order inquiry to a Joint Committee of both Houses. The matter came to us at large.
I am astonished that it should be asserted that the objectors to the proposals were not given an adequate hearing. It may have been that a planning inquiry would have been better from a variety of points of view. However, there was nothing unconstitutional, of which I am aware, about the chosen approach. Not only did the first inquiry spend the time to which reference has already been made (and I have forgotten how long it was) but we spent six weeks looking at the evidence. We heard all the evidence.
The matter was not a simple one but we reached the conclusion—and this was the matter before us—that the preamble to the Bill that sets out the circumstances under which the regional councils sought the construction of the road was proved. That was our opinion, after listening to the evidence and weighing it carefully.
I myself took pains to learn nothing about the rather pathetic party bickering that I gather has been going on in Edinburgh. The question we had to decide was this: is the preamble to the Bill proved? It was not a simple and straightforward question. It has to be approached judicially. Speaking for myself, I am bound to say that, on balance, I thought the quality of the evidence that was presented on behalf of the promoters was better than that presented on behalf of the petitioners. That was my view. It was on that basis that I found myself eventually persuaded that the preamble to the Bill was proved.
The second lesson to be learnt from the proceedings that we have had over the past year or two is that matters that are the subject of party political squabbles are perhaps not best sent to committees of Parliament. There may be room for that argument to be presented. It is a fact that about one mile or two miles of the railway between Glasgow and Edinburgh and between Edinburgh and Dundee had to be realigned because it was thought necessary to have the one form of inquiry; and the form of inquiry under the Private Legislation (Scotland) Procedure Act 1936 was the one that was chosen
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The third lesson that I hope will be learnt by those with responsibility in this area is that the implications of Section 9 of the Private Legislation (Scotland) Procedure Act 1936 should be looked at. To me, it is not wholly clear. We had some difficulty at the outset when an argument was presented as to whether our inquiry—and this point was pressed upon us and appeared at one time to receive acclaim from some members of the committee—should limit the remit that Parliament had sent to us.
As I understand it, it was finally accepted that there could be no limit on our remit to the Joint Committee because the other place had not put any remit on it. We took the view that it was not for us to limit the scope of our inquiry. Accordingly, for practical purposes we have all the evidence that was presented to us. That is why I find it very difficult to hear the complaint, still being repeated, that the objectors have been unfairly treated. It is an argument which was presented to us when the question of whether we should proceed with a full inquiry was being put. I find myself becoming increasingly impatient hearing it again urged upon your Lordships at this late stage. Of course it would have been better if the matter had gone to a planning inquiry; at least to the extent, if no further, that the objectors (the petitioners) if unsuccessful could not have blamed the Government.
I am conscious that I have perhaps not addressed myself as much as I should have done to the amendment of the noble Lord, Lord Ferrier. But I cannot believe that in the circumstances your Lordships will consider that at this stage it would be appropriate and proper to delay the implementation of the scheme for the Edinburgh relief road, the case for which two committees have found to be established. Accordingly I hope that your Lordships will reject the amendment proposed by the noble Lord.
7.1 p.m.
Lord Sanderson of Bowden: My Lords, I, too, hope that the House will reject the amendment in the name of my noble friend Lord Ferrier. I start by saying that the most important word in the whole Bill is "relief". The dictionary definition gives the meaning as "anything that relaxes tension". I have the doubtful privilege of driving in Edinburgh almost every week, unlike the noble Lord, Lord Carmichael, who is able to take the train. In the Borders we do not have trains so I have to drive my car.
Anyone who uses the Edinburgh road system will appreciate, particularly coming from the west end of the cit, that a bypass for the communities of Gorgie, Dalry and Corstorphine is something which the people who live there desperately need and have asked for. One need only go to the other end of the city to see the great developments in progress there now: that prong of the A1 which is going in from the outer city bypass, round the communities of Musselburgh and Portobello, taking the A1 right into the centre of Edinburgh. The people of Musselburgh, I know only too well, are longing for the day later this year when that bypass will open.
The communities in the western section are exposed to large volumes of traffic and this is mainly concentrated on the two principal roads—the A8 to

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Glasgow and the A71 to Lanarkshire. Consequently, these roads are overloaded, resulting in severe conflicts between through traffic, public transport, local traffic, shopping needs, pedestrians and schoolchildren, thus causing accidents, delays and frustration. Why should we in this House deny to the communities of Corstorphine, Gorgie and Dalry what is very quickly to become a reality in Musselburgh and Portobello?
I shall not rehearse the long chapter of stories about the planning of roads in Edinburgh. The city owes a great debt of gratitude to my noble friend Lord Ferrier for the actions he has taken to see that the outer city bypass is going to become a total reality by 1990. I am also glad of the assurance from the Lothian Regional Council that nothing will stand in the way of that being its first priority.
In March 1982 the Conservative Party manifesto for the Lothian Regional Council elections stated, under the heading "Roads", that,
"there are and will continue to be key areas of congestion such as Corstorphine Road … we will proceed with a limited programme in such cases including West Approach road"—
that is, the Corstorphine bypass. Since that date there have been many debates in the council chamber and outside it. More recently, in your Lordships' House a Joint Select Committee under the chairmanship of my noble friend Lady Carnegy of Lour has gone into the major arguments which have been put forward by the objectors to the scheme. I do not wish to go over that ground again but I believe that Members of this House will appreciate the point that local authorities are entitled to try to deliver a manifesto commitment given in 1982.
Objections there have been, but for me the arguments in favour outweigh the "no-road" option. One argument in particular is noteworthy; that is, the prospect of fewer accidents and relief from environmental pressure in Gorgie, Dairy and Corstorphine. Both the A71 and the A8 roads at present have a high accident rate, particularly at Gorgie/Dalry. There are about 300 accidents in west Edinburgh every year, about 100 of them involving pedestrians. The streets with the highest personal injury accident rate are those where there is conflict between a heavy volume of traffic and a concentration of parked cars, service lorries and pedestrians. The relief road will attract a substantial amount of traffic from these streets and in consequence reduce traffic conflict and accidents. Incidentally, it is the best way to improve conditions for public transport bus services on the main routes of the A8 and A71.
I know that objections have been raised that the road will increase the amount of traffic entering the historic part of Edinburgh. This was gone into fully by the Joint Committee and it has come out in favour, by a majority, of going ahead with the scheme. I do not want to elaborate on that tonight. All I would say is that the evidence which I have read convinces me that over a period of time the volume of traffic entering central Edinburgh has increased very little, despite a much larger increase in the volume of traffic on the outskirts of the city.
For example, an examination of the records of Lothian Regional Council's permanent automatic traffic counters shows that on the outside edge of the built-up area traffic growth amounted to 2·5 per cent.
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per annum, whereas in the central area traffic growth was virtually, zero. This restraint has been a consequence of restricting the number of car park spaces available. The restriction of parking in central Edinburgh remains the policy of Lothian region and that is the effective restraint on cars entering the city. I should say that the recommended route which involves the re-alignment of the railway has the highest road user benefits and the least detrimental environmental impact on the surrounding area. Above all, the adjoining communities will be relieved of real congestion in the streets.
I know the Edinburgh roads very well, particularly at rush hours, and I can tell your Lordships that it is not a pleasant experience trying to drive on these main roads out of the centre of the city. As a Scotsman I am also conscious of the beauty of Edinburgh and its unique setting. I am satisfied that the line of this road will do nothing to destroy that setting. With the removal of one single house and the greatest possible care in landscaping, this road will be a feature of which planners can be proud.
It will link that long-awaited outer bypass system and will be useful at the outer edge of the city. It will enable a shopping centre to be developed at that outer edge of the city in the western sector. Various stores such as Marks and Spencer and Asda have plans. I understand, to develop a large shopping centre on the edge of the city. It will bring needed employment opportunities for many people in the construction industry, and I understand that the Transport and General Workers' Union has given its wholehearted support to the development of the Western Relief Road. For those reasons I commend the Bill to the House and I hope that the amendment for delay will be rejected.
7.10 p.m.
Lord Beloff: My Lords, it is customary in addressing your Lordships' House to declare an interest in the matter under consideration. Perhaps the converse should be true, and so I wish to declare that I am totally disinterested in the subject under debate this afternoon. I rarely visit Edinburgh, I do not drive a motor car and therefore I have no personal information or desire for further information on the substance of the subject. In fact my disinterest is such that I might almost be described as uninterested.
However, I address your Lordships for two reasons. First of all, because it seems desirable that at least one speaker in this debate should not be a Scotsman. After all, this is the Upper House of the Parliament of the United Kingdom and it seems to me appropriate that it should fulfil its role. Of course it may be that at some future date the Act of Union will be repealed. Sometimes when I have to listen to Scottish business being debated I would not profoundly object to that coming about, but as long as we have the Union we are the Parliament of the United Kingdom. I think it is desirable that this should be recognised outside and even in Scotland.
The noble Lord, Lord Ferrier, referred to a large number of communications for and against the proposed road which he thought had reached many noble Lords. Not a single communication has been addressed to me and I can only assume that people feel

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that only Scottish Peers have a voice in matters that affect Scotland. That, then, is my first reason for speaking.
My second reason is that I wish to appeal to the noble Lord, Lord Ferrier, to withdraw his amendment, and I do so on constitutional grounds. As has been explained by the noble Lord the Minister and the noble and learned Lord, Lord Wilson of Langside, the procedures which have been laid down for considering matters of this kind have been fully carried out. The Bill that we are considering has passed through all its stages in the other place and has received its final reading there. There has been a joint committee which has inquired exhaustively into the subject and reached a conclusion on grounds which my noble friend Lady Carnegy will shortly be putting before the House. In the light of that situation, it would seem to me that the normal course for the Upper House to take in the case of a Bill to confirm an order of this kind is to give it a Second Reading. I assume that the choice of date for today's Second Reading was agreed through the usual channels and that there is no objection on grounds of undue haste.
The amendment suggests that the House should subordinate its consideration of the Bill to local elections taking place in the Lothian region. This seems to me to cast considerable doubt on the sovereignty of Parliament itself. If Parliament has gone through the prescribed procedures and is proceeding to legislate, can it seriously be asked to delay this process because local elections are taking place, even when, as it is agreed, they are occurring in the area which is most immediately and directly affected? If we accept that view, it seems to me that we lay down a precedent for the future.
Let us assume that the party political composition of the council changes and that the new majority produces some alternative scheme which again goes through the procedures of Parliament and comes before us. By that time more elections may be about to take place and we may again be asked to postpone our decision in case the new elections restore the majority which exists today. That does not seem to me to be a dignified position for the Mother of Parliaments, and we, as part of Parliament, ought not to accept this kind of subordination.
If we think that the Bill is right, if we are convinced that the procedures have been correct and if we have confidence in the report of the Joint Select Committee, it seems to me that our business is to give the Bill a Second Reading without further ado. Because I am sure that, with all his devotion to his own views of the future of transport in Edinburgh, the noble Lord, Lord Ferrier, thinks, as do all noble Lords, that in the end the Constitution is the most important thing that we must here preserve, I appeal to the noble Lord to withdraw his amendment.
7.15 p.m.
Baroness Carnegy of Lour: My Lords, from its inception the noble Lord, Lord Ferrier, has been the doughty fighter that we know him to be against this road. As has been said, I was chairman of the joint committee. We spent 17 days examining in great detail the evidence for and against this road. At the end
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we decided by a clear majority that the case for the road had been made and that it should be built. We then had a number of amendments proposed to us, and among them was an amendment that would have had the same effect as the amendment moved this evening by my noble friend. We rejected that and the other amendments, and our final decision, by a clear majority, was as stated by my noble friend Lord Gray, that the order ought to be confirmed without amendment and that we would report our decision to both Houses.
I do not like to disappoint my noble friend Lord Beloff, but in the circumstances of a joint committee of this kind it was not our duty to produce a report giving our reasons. It was simply the decision that was required; that was our advice and that was what we gave. Because we did not produce a report, there are not agreed reasons why we came to the conclusion that we did, and so in justice I must give my own reasons and what I believe are those of the majority of my colleagues on the committee, though I cannot speak for all of them.
Having known very little indeed about the issues of the relief road beforehand, apart from what I had read in the press, I became convinced that the road was not only needed but urgently needed and that the need was mounting every day. I came to the conclusion that the road is extremely carefully and well designed to meet the need it is required to meet. That is not at all like the need in Glasgow about which the noble Lord, Lord Carmichael, was talking before that other road was built. It is a different need which requires a different solution. It is not at all an out-of-date road. It is a road designed for travelling at only 40 mph, a road designed to fit into the scene as far as it possibly can and a road designed to meet the constraints of the rest of the policy, agreed by both region and district in Edinburgh, that it is desirable that no more vehicles should be allowed to enter Edinburgh than enter at the moment. It is designed to meet all those factors, and I came to the conclusion that it was a design that was going to work.
I also agreed with the majority of my colleagues that we should not accept an amendment delaying the Bill. Every day puts up the cost. The delay caused so far by all the discussion on the road has cost a great deal of money, as my noble friend Lord Ferrier told us. The cost will go on rising if the delay continues. In my view, it would be quite wrong to ask the people of Lothian region to reconsider the issue as they would have to reconsider it if it became part of the emotional atmosphere of an election campaign.
It was, as my noble friend Lord Sanderson has reminded us, a manifesto commitment the last time round. Since then, millions of pounds of ratepayers' and taxpayers' money have been spent on designing the road, consulting the public and responding to the public consultation; and on two hearings, one of 52 days and another of 17, with learned counsel on both sides, almost entirely paid for by the ratepayers of Lothian region and Edinburgh district. That consideration would become mixed up with all the other election issues that are bound to arise. There is no such event as a single issue election. The election will doubtless be concerned with employment, education and rates issues as well as other matters.

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Those are the reasons I voted against amending the Bill and so delaying it. Those reasons, I suggest, should be your Lordships' reasons this evening. In passing, I must say that it is, as I see it, by no means certain that the Labour Party, if it came to power following the elections, would not want the Bill. As your Lordships have heard, at least one big union, a very big union the Transport and General Workers, is strongly in favour of the road as, I believe, are others. So are very many people who live in the area and in other parts of Edinburgh who are doubtless Labour supporters. It is not a clear-cut political issue.
From the evidence before the Joint Committee, the need for the road was, in my mind and in the minds of the majority of the committee, definitely proved. Eighty thousand people are living amid traffic congestion that is far worse than the level accepted Internationally as tolerable. Some of the roads at present have more than twice the congestion that is acceptable. One, St. John's Road, has more than four times the amount that is considered acceptable. We heard detailed factual evidence of unacceptable noise levels, unacceptable accident levels, problems for shoppers and problems for those wishing to cross the road. We heard an estimate of traffic increasing by 10 per cent. between 1983 and 1988, an increase of 5,000 vehicles a day. As drivers avoid bottlenecks, where there are especially bad blockages, traffic is increasingly going on to side streets in the area. The situation is deteriorating for more and more people. Anyone who travels, as I do regularly, to and from Edinburgh through these streets knows the problem well. The committee went to see for itself. But it was above all the facts that we heard that established the need.
As my noble friend Lord Ferrier said, a large number of groups, many of them small groups, but also large groups, have objected. One of those is the National Trust for Scotland. I do not know on what grounds it objected, or how it came to its conclusion. I have not been able to find out. I am a life member of the National Trust, and no one consulted me. I respect the decision made by an excellent organisation. I have great faith in it. I do not know, however, the extent of the evidence that was before it or how up to date that evidence was. The Bill has been considerably amended since it was first discussed.
My noble friend Lord Ferrier hopes that the bypass and the extension of the M.8 motorway from Glasgow will be enough to relieve the congestion. But it became clear to the committee that this will not be the case. This road is part of a package designed to take those who want to get to the other side of Edinburgh round a ring road without entering the city and to enable those wishing to reach the centre of the city to do so without causing congestion and discomfort to people living along the route. It is also the aim that the result should not be more vehicles in the centre of the city. The package is the outer city bypass, the extension of the M.8, relief roads at Musselburgh and Portobello in the east of Edinburgh, following the same idea as that in the west but under way without any fuss, and the relief road in the west.
If the relief road that we are now discussing is built, there will be further traffic and environmental
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improvements in Edinburgh that would not be possible without it. My noble friend Lord Ferrier suggests that we should wait to see if the bypass and the M.8 extension work before going ahead with the relief road. Quite apart from increasing congestion over the next two or three years until those roads are opened, we heard in the committee the figures relating to the effect of the opening of the committed roads in the area we are talking about. When those roads are opened, with all the other roads that are planned, there will be some relief all along the A.8 road, the present Glasgow Road, and to parts of the A.71 to Kilmarnock. But, without the relief road, some roads will be considerably worse as a result of the other new roads in the package. Gorgie Road will have 34 per cent. more traffic, Dairy Road will have 9 per cent. more and Stevenson Drive 31 per cent. more. It cannot be said that there is no urgency about this.
My noble friend Lord Ferrier's concern that the money for the relief road might delay completion of the bypass was dispelled entirely by what my noble friend the Minister said. The committee was assured that the region had in hand the funding of the roads being built simultaneously. Last week, with Scottish Office agreement, the region underlined this ability by introducing more flexibility in its treatment of the capital programme and the revenue programme. As your Lordships will know, a road is financed by borrowing. An arrangement is being made involving private money and deferred purchase agreements in order to introduce more flexibiity. We can be sure of only one thing—that delay in building the road would put up the costs. To delay further will put them up very likely beyond reach. It seems essential to allow the road to go ahead now.
It is possible that some noble Lord will query the costs for the petitioners, as reported in the press, not quite correctly but very nearly correctly. The committee was asked to amend the Bill to add to the costs that had been awarded to the petitioners by the commissioners in their findings in Edinburgh.
As a general rule in Private Bill proceedings, parties pay their own costs. We would advise that under the Parliamentary Costs Act of 1865, as applied by the Private Legislation Procedure (Scotland) Act 1936, a joint committee such as ours on an Order Confirmation Bill may award costs to petitioners against promoters where a preamble is not proved, or the committee has amended the Bill for the protection of petitioners, and where, at the same time, petitioners are thought to have been unreasonably or vexatiously subjected to expense in defending their rights. Neither of these conditions applied. The preamble was proved. No amendment was made to the Bill. The Cockburn Association could not, in all honesty, be said to have been vexatiously treated, we felt.
The committee did all it could to fit in with the witnesses' convenience as to the times when they gave evidence. They did not do it all together at the time that had been planned. Some of them were coming to London anyway. The costs were not known because the Cockburn Association were sharing counsel with Edinburgh District Council and the facts were not available to us about how these costs were to be allocated. We therefore felt bound by the Act and could not add to costs already awarded by the commissioners on the face of the Bill.

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The road itself has been the subject of most careful planning to ensure that it looks as good as any road can with plenty of trees and shrubs, a cutting at one point to limit noise; at another point raised to avoid disrupting industry, with a number of exits, and a car park at the end so that people need not drive on into the city. It is planned so that no extra traffic will be forced upon the central area of Edinburgh. Your committee went into those facts very carefully indeed. It was interesting that the technical experts for the petitioners agreed with the promoters that it could not be proved that the traffic would increase.
The history of the road shows that until two years ago both regional and district councils were enthusiastic. It was two months after the present district councils was elected in May 1984 that they revoked the planning permission given by their predecessors.
It is interesting that no official of the district council gave evidence to us. Nor did the convenor of the council or the chairman of the planning committee. We had an excellent witness in the form of a local councillor who lives in the area affected, who was very helpful to us, but no one else from the district council itself.
Your Lordships have heard many arguments, and will hear some more. It may not be the details upon which you have judged the case. I have not given your Lordships all the figures; I cannot do so because there is not time. But I can only assure the House that we have been through this with a fine toothcomb and that we did it as objectively as we possibly could. Most of us began knowing very little about the case. We ended up knowing a good deal. I ask your Lordships to reject the amendment and to give this Bill a Second Reading.
7.35 p.m.
Lord Galpern: My Lords, as a member of the joint committee, may I join the noble and learned Lord, Lord Wilson of Langside, in paying a tribute to the chairmanship of the noble Baroness, Lady Carnegy of Lour, for her courteous and conscientious conduct of the proceedings.
The forum of this Order Confirmation Bill coming before us this evening ranks with the Halley's comet in its periods of appearances. The last one took place 75 years ago. I would have no hesitation in recommending the noble Baroness to preside over its next appearance if it ever occurs. However, I am confident of one thing: that I speak for all members of the joint committee that this form of procedure should never again happen. Although the noble and learned Lord, Lord Wilson of Langside, has indicated that he will vote against the amendment of the noble Lord, Lord Ferrier, the noble and learned Lord said that he felt a public inquiry would have been a more reasonable and just method of dealing with this highly complex matter.
It would be unfair of me to use the evidence of the objectors to the proposed road as the noble Baroness, Lady Carnegy of Lour has used the evidence of the promoters. It would keep your Lordships here all evening, and would be too complex. But it would have been fairer when the noble Baroness put forward some views as to how many accidents would be prevented, and how many minutes would be saved if we built this new road if, at the same time—as the noble Lord, Lord
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Beloff, would have liked here to do—the noble Baroness had put forward for consideration what the objectors' opinions were regarding their claims. That has not been done. However, I am glad that the noble Baroness has mentioned (I do not know whether it was reluctantly) that the findings of the confirmation of the preamble were by a majority. The noble Lord, Lord Sanderson also mentioned this. There was a very definite belief that the objectors presented a far stronger case against the relief road than the promoters put forward in favour of it.
Perhaps I may say how delighted I was to hear the declaration of the noble Lord, Lord Beloff, of disinterestedness in this project. The noble Lord would have made an excellent member of the committee because, if we had had some members with the same viewpoint of disinterestedness listening to the evidence, the noble Lord would not have made the speech he made this evening. He would have been supporting the amendment. I shall later on give the reasons why I believe that the noble Lord would have done so. He is able to judge facts upon their being submitted to him.
The 52 days spent by the parliamentary commissioners and the 17 days by the joint committee could have been avoided if the normal practice in such cases of road development had been followed; namely, the holding of an independent public inquiry. I am glad that the noble and learned Lord, Lord Wilson of Langside, supports that. This is not a world-wide debate that we are having here today. It is not even a national debate. It is a purely local issue affecting Edinburgh. As such a different procedure ought to have been adopted.
The noble Lord, Lord Beloff, said that we should not be called upon to postpone this because we are the sovereign body of Parliament, and all the procedures have been gone through. Those were all the procedures to which they were entitled. But they were not the only procedures. This is one of the critical matters and one of the important aspects at which we have to look tonight in asking that this matter be delayed until the Lothian elections.
The way that they should have proceeded, in which they were entitled to proceed, and which they launched in the beginning, was an entirely different way of dealing with this matter than by Parliamentary order. Just for the sake of giving the facts of the case, it should be noted that in its minute of 3rd October 1983 the Transportation Committee of the Lothian Regional Council carried a motion to construct the Western Relief Road and instructed the Director of Highways to submit a planning application—not a parliamentary order—in accordance with the drawings submitted to the Transportation Committee on 3rd October 1983; and instructed the regional solicitor to prepare a parliamentary order for authority to implement the necessary rail diversion.
There has been no mention so far this evening of the rail diversion; that is, the railway running between Glasgow and Edinburgh. It will require diversification which will cost millions of pounds to achieve. However, to obtain the powers to carry out that alteration will require the creation of a parliamentary order. Some people will say that there will be months when the line will be out of use altogether, and if it is

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ultimately carried out, then instead of a straight, direct line from Glasgow to Edinburgh, there will be a whole series of curves on the route, which nowadays we are trying to avoid in favour of straight lines.
Therefore, the Lothian Regional Council had actually decided to carry out the alternative method which was open to them: to make a planning application for the construction of the road; and, as required by law, to have a parliamentary order for the necessary rail diversion. This is where the parliamentary order first appears in the minutes of the Lothian Regional Council. Then, by a minute of 11th October 1983, the full regional council confirmed the Transportation Committee's decision by a majority. It was a very narrow majority and I do not have the exact figure, but it varies between a majority of one and a majority of two. I do not know how that was arrived at; but that was the size of the majority.
On 28th October the planning application for the road was submitted. Therefore, the intention is confirmed that they would proceed with a planning application, which would have led either to its acceptance or rejection, or in all probability to a public inquiry. Therefore, the action was to proceed with a planning application for the road—and that was done—and for the diversion of the railway by a parliamentary order. There was a way of saving the amount of money which would be spent on printing and the holding of hearings (about which we have heard) which I am sure must amount to at least £2 million or £3 million. That way was to hold a public inquiry.
The amendment proposed tonight by the noble Lord, Lord Ferrier, tries to remedy the situation. Why was there a change in the procedure? Having agreed on these two separate methods of approach—one for the road and one for the railway—why did they change the procedure? Is it reasonable to conclude that they were afraid of losing their case at a public inquiry because of the overwhelming objection to it? Mr. Michael Martin, Member of Parliament, who was chairman of the commission in Edinburgh, said in another place on 4th December (at col. 365 of Hansard):
"As Parliamentary Commissioners, we received strong legal advice from the clerks, who are also counsel to the Secretary of State for Scotland, that every statutory means should be used by the local authority before it sought a parliamentary inquiry".
That was advice given by the clerks to the Parliamentary Commissioners.
Nevertheless, again by a majority, it was rejected. In my 50 years of public life I cannot recall such tremendous public opposition to and so much controversy over the construction of a road as there was in this case. The noble Lord, Lord Ferrier, referred to the amount of publicity given to this road in the press. I have had to buy an additional briefcase to carry all the information which I have cut out just for the month of March. That illustrates the great controversy and this is the issue at stake tonight.
Lord James Douglas Hamilton said in another place on 4th December (at col. 356 of Hansard):
"For many years I have been a life member of the National Trust for Scotland and the Cockburn Association. If I believed for one moment that the Bill would damage their interests, I should not be proposing it".
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The honourable Member was a principal sponsor of this Bill in the House of Commons. Let us examine for a moment why the Cockburn Association and the other 37 objectors object to the Bill. My Lords, is there something wrong?
Lord Campbell of Croy: My Lords, the noble Lord has just moved from the point; but if he was quoting something said in the other House which was not said by a Minister during this current session, that would not be in order.
Lord Galpern: My Lords, I should have known that and I am sorry. I am getting on in years and after 50 years in public service I am not as young as I was, and my memory is not so good. I apologise. One can of course paraphrase but not quote directly?
Lord Campbell of Croy: My Lords, yes.
Lord Galpern: My Lords, the question to which I ask your Lordships to address yourselves is: what are the interests of the Cockburn Association and the National Trust for Scotland? Let us look at who is the president of the Cockburn Association. It is the honourable Lord Cameron, KT. The chairman of the council is the honourable Lord Cullen. One is an office bearer and the other is an honorary president. I want to quote them to show whether there are any political decisions in the opposition by the Cockburn Association. There is a total of 38 organisations against the Bill, representing at a minimum 300,000 citizens. Surely they are not against the Bill because of party political reasons. They have only one interest, which is the quality of life in Edinburgh, and that has been the mission of the Cockburn Association throughout its years of existence. Surely some regard ought to be paid to the position they have maintained throughout the years. They have saved Edinburgh from the kind of mismanagement, as referred to by my noble friend Lord Carmichael, that happened in Glasgow. I do not entirely agree with him, but nevertheless it could happen. Everything is all just projects, theory, and we do not know what will happen.
How can you estimate what the number of accidents will be on a new road? We wanted to move an amendment, as the noble Baroness, Lady Carnegy of Lour, has pointed out, that motorists will only be allowed to travel at 40 miles an hour. They wanted to make sure that that would be the case, and they moved an amendment that that should be included in the order. It was defeated on a vote, three to three. It was a simple, innocent, non-political measure to make sure that if the road ultimately succeeded and it was built, it should be restricted by law to 40 miles an hour; and the vote was three to three.
Baroness Carnegy of Lour: My Lords, does the noble Lord not agree that the reason some members of the committee did not want that speed limit to be on the face of the Bill was that one does not include in legislation points that need not be included? As the road is only designed, as I said, for travel at 40 miles an hour it cannot possibly be faster, so there was no need to make the amendment; and that was the reason.
Lord Galpern: My Lords, I am obliged to the noble Baroness. I have always understood, and I have heard it over and over again that our legal luminaries and judges, when they consider something under an Act of Parliament, say that they have to go by what the Act of Parliament says. If it was not included, then they are not going to accept it. Mere promises in a debate do not count: it is what appears in the final Act after it goes through both Houses of Parliament. We are only asking to ensure that we should restrict the speed to 40 miles an hour.
There are a lot of arguments. I did not want to go into detail in regard to the noble Baroness's presentation of the case. But let me list just a few of the objections made by the objectors. The proposal to construct a Western Relief Road is premature. It should be shelved until the effects of the outer-city bypass, which is scheduled for completion in 1990, are known. Now we know that the vital Sighthill section, presently under construction, will be opening ahead of schedule early next year.
A Western Relief Road will be contrary to the objectives of the Lothian region structure plan in relation to the reduction of traffic in central Edinburgh. The new road would probably increase the amount of traffic coming into the city. The scale of environmental relief forecast by Lothian region has been overestimated. The little, if any, environmental benefit which will arise will not justify the early construction of the road, and residential locations adjacent to the road will suffer badly.
Let me say here that the noble Baroness, Lady Carnegy, mentioned that Edinburgh District Council produced only one witness. She will recollect that on at least two occasions she made requests to the counsel who were appearing before us not to go over unnecessary evidence, and to restrict the evidence as much as they possibly could. In the light of that, and in view of what they had been asked to do, they said that they would alter the lists. One said that he would alter his list of witnesses in order to please the committee, if that was the committee's wish.
Any traffic volume produced by the new road will have an adverse effect on communities in central Edinburgh, including Lothian Road, Tollcross, and the historic new town. One of the main complaints was that they had not given full consideration to what are called the "no road options". Little if any thought has been given to alternatives such as traffic management measures, which are very important, junction improvements, marginal road alignments, and the introduction of long-stay parking restriction measures. The new road would involve the loss of valuable recreation and amenity ground, and undoubtedly create environmental problems through noise and pollution.
While Lothian region have carried out certain economic and environmental proposals it has been demonstrated that the benefits have been overstated, and certainly do not justify the expenditure of some £37 million. Of course we have had considerable millions added to that by the noble Lord, Lord Ferrier. I think he mentioned £94 million, or even more. We know that it will be rising to a figure, including interest and other charges, of somewhere about £94 million and not the £37 million we are asked to consider
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tonight. It is felt that expenditure of this magnitude could be directed to more pressing and deserving causes such as education, social work and health services.
May I say in conclusion that Lord Ferrier's amendment is a good sound, practical proposition? I understand that Lord James Hamilton said—and I am paraphrasing this time—that Edinburgh has been waiting for 50 years for this road, and that if natural justice was to be done they would not mind waiting a few weeks more. That is precisely what Lord Ferrier's proposition does.
They have made up their minds that if you support the amendment this evening it will allow the electors of the Lothian region to have an opportunity to express a viewpoint which was denied to them by the Lothian region failing to hold a public inquiry. There is nothing unfair in giving them that form of justice. No great harm will be done. Another few days' delay in order to give justice should merit support.
I hope that the amendment will be carried this evening. We will wait a few more days and deal with the situation. We are not rejecting the Second Reading. We are not rejecting this new length of road. We are simply asking that the people who are going to be involved in this in Edinburgh in a few weeks' time, by 8th May, should have an opportunity to express an opinion which was denied them and which could have been offered to them at an earlier stage.
Lord Wilson of Langside: My Lords, before the noble Lord, Lord Galpern, sits down, perhaps I may pursue two points he raised in his speech. He said that he was glad to see that I was in favour of a public local inquiry. If I gave that impression, I failed to express myself with clarity, either because, like the noble Lord, Lord Galpern, I am getting old, or perhaps, because of the lateness of the hour, I was anxious to say what I had to say as quickly as possible.
The reason that a local inquiry was not possible was because the purposes of the order, including moving a mile of the railway line, could not be effected without an order confirming them by Parliament. I meant, if I did not make it clear, that that was what excluded the public local inquiry, which I acknowledged, and in another context that would have had certain advantages. That is the first point.
The second point is that the noble Lord, in his well-deserved tribute to the noble Lord, Lord Beloff, said that it would have been a good thing had he been a member of the committee because he was completely disinterested. I am sorry the noble Lord, Lord Beloff, is not here. I agree that he would decorate any committee of your Lordships' House. I just hope that the noble Lord, Lord Galpern, did not unintentionally appear to imply that those who voted for the view, as I did, that the preamble of the Bill was proved—which was the only thing that really mattered—lacked disinterest.
Lord Galpern: My Lords, I am glad that the noble and learned Lord, Lord Wilson of Langside, has made this intervention. If I am wrong in thinking that he said during his speech that he was in favour of a public inquiry—and I am sure we shall see whether he did not say so in tomorrow's record of the debate—I apologise to him.
Lord Ross of Marnock: My Lords, may I say to my noble friend that we both need to apologise? I need to apologise to myself because I took down the words that the noble and learned Lord, Lord Wilson, used, and they were that it would have been better to have gone to a planning inquiry.
Lord Galpern: I do not know the exact words, my Lords.
Lord Wilson of Langside: My Lords, I explained myself as best I could. If I did say that, it was a silly thing to say, but I have heard the noble Lord say silly things here and I do not always ram them down his throat.
Viscount Davidson: My Lords, I think the House is getting out of order; the noble Lord has sat down.
8.2 p.m.
Lord Stodart of Leaston: My Lords, I say with some feeling that controversy in matters of transport seems always to concern the western part of Edinburgh. Some 10 years ago there was just a little controversy about a runway. If I may say this to the noble Lord, Lord Galpern, the one thing I am thoroughly sceptical about is statistics which are given in forecasts for 20 years hence.
I have had the advantage of reading much of the transcript of the Joint Committee's deliberations. One question which the noble Lord asked, or perhaps the answer he received, appealed to me. At one stage when figures were given for the number of motor cars in the year 2006, he asked "Might there not be no motor cars in 2006?". The answer was—and this is what appealed to me—"The Government have examined this with great care".
This did not cut all that much ice with me, because I can remember that over 20 years ago there were tremendous deliberations going on in another place, and maybe here as well, as to whether we ought to build the QE2. I remember Mr. Ernest Marples coming to reassure Back-Benchers. He said that the British Government and the Treasury research unit, which was unsurpassed for its ability to see into the future, had done a study and had come to the firm, rock-bottom conclusion that there would be enough people wanting to travel across the Atlantic up until the end of the century to warrant the building of this great liner. I think that no liner now sails across the Atlantic.
When I read these figures plucked from the future, I prefer to deal with the position as it is in Edinburgh at this moment. Of that position there is no doubt. The approach roads from both the east and the west into the city are heavily congested; in the east, as my noble friend Lord Sanderson of Bowden said, Musselburgh, which I think may fairly be described as the counterpart of Corstorphine in the west, is being bypassed at the moment, with unanimous approval as far as I know. The vehicles which are going through it every day—25,000 of them at the moment—will be reduced to 11,000 when that bypass is completed.
In the west, the roads through Corstorphine, and broadly speaking the Stenhouse area, are also carrying excessive loads. The accident figures have been given;
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I shall not repeat them. I merely say that the one figure that was not mentioned is that on those two roads there have been 21 deaths in the last three years, an average of seven every year.
It seems to me that there can be no question that the proposed new road, which will go right up in between the A.71 and the A.8, will relieve things. If I may say so to the noble Lord, Lord Carmichael, there is no question of it being an expressway; that is not the intention. It is a relief road.
Lord Carmichael of Kelvingrove: My Lords, I think perhaps the use of the term "expressway" was a technical one. I used it loosely. It is a technical term meaning that there are no impediments. It does not necessarily mean that it is a fast road in technical terms. It does not mean it has a 70 mile an hour limit; it means that there are no junctions or lights and people go through.
Lord Stodart of Leaston: My Lords, one gets the impression when the term is used of cars hurtling from Glasgow in their anxiety to reach the more salubrious atmosphere of Edinburgh, and maybe that is what they will want to do in the other direction. One should not ignore the fact—and this has not been mentioned—that the police in all their evidence have expressed strong opinions in favour of the building of the road.
Now we come to what I think is the major problem. It is what I would call the "Usher Hall" problem; the emergence of traffic onto Lothian Road. I am bound to say in all honesty that I am not convinced that a problem may not develop there. I know all the figures say that it will not. The fears of this may well be exaggerated. But before Lothian Road is reached there is to be a car park in which parking time is to be limited, entry to which can be gained only from the relief road and from which cars may emerge only onto the relief road and go west. They cannot get out onto Lothian Road from that car park. If it were not for that and for the fact also that in between the beginning, in the west, of the relief road and the Lothian Road end there are to be three slip roads, one into Roseburn, one into Dundee Street and one into Haymarket, I should say that indeed there would be unchallengeable substance for the "Usher Hall" objections.
If I may give an example of what I think will happen, many motorists at present drive through Corstophine into Murrayfield. They then turn left up Murrayfield Avenue, they go over Ravelston Dykes down into the Ferry Road area on the north. With the relief road, they will do exactly the same thing except that they will relieve the bottleneck in Corstophine. They will go up the relief road, go to the Rosemount Spur, turn left down into Murrayfield again and over to the old route.
There are some who say "Wait for the bypass". That is not what my noble friend's amendment is about. The bypass is not, as the noble Lord, Lord Carmichael, remarked, a matter of waiting two years. The bypass will not be complete until 1990. My noble friend's amendment suggests that we should wait until after the regional elections. I feel that the fact that it was in the region's manifesto is a considerable reason for giving the region liberty to carry out its commitments.

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Several of your Lordships have mentioned the indignation that there is in Edinburgh. I am not nearly as closely in touch with my old constituency as the present Member of Parliament, Mr. Fletcher, who has inherited part of it. Mr. Fletcher gave the opinion in another place that if Edinburgh were evenly divided on this there might be a majority against the road. I question that assertion. I still have many friends and I do not find these strong feelings.
It is not totally insignificant that at the height of the first inquiry by the Parliamentary Commission sitting in Edinburgh, with publicity galore, there was a by-election in the Murrayfield ward, the heart of the indignation. Why was there a by-election? The reason was that the convenor of the Lothian Transport Committee—some might say the evil genius who invented this ring road and who put tremendous energy into advocating it—had died. I agree with my noble friend Lady Carnegy that one cannot have a single issue dominating a by-election, but I did not expect that his successor in the same party would receive about 93 per cent. of the votes with that controversy going on at the time.
The provision having been in the manifesto and the preamble of the Bill having been found to be in order, I am very much in favour of allowing it to proceed.
8.13 p.m.
The Earl of Dundee: My Lords, to begin with there appears to be a strong case against this Bill, quite apart from the separate issue of the amendment which seeks to deny it a Second Reading tonight. This case is based on some very plausible assumptions about certain unwelcome effects which the proposed Edinburgh Western Relief Road might possibly produce. There is the allegation of its apparent irrelevance in purpose and in cost, given that a city bypass is to be constructed anyway; or irrelevance at least until the bypass has been completed in the first place. Then it can be seen to threaten the Lothian road, or the Usher Hall area, to which my noble friend Lord Stodart referred, where traffic congestion alleviated in the Gorgie-Dairy and Corstorphine area might simply be transferred. Equally it is contended that the greater ease of approach afforded by the relief road would encourage an increased number of vehicles and thus an unacceptable daily volume of traffic to the city centre.
Naturally these considerations have caused much anxiety, and in the absence of any professional evidence to the contrary they would constitute grounds for not proceeding with this Bill. As we know there is now such professional evidence to the contrary, which is why a parliamentary commission lasting for three and a half months came out in favour of the Bill; and more recently why a joint committee of both Houses of Parliament, lasting six and a half weeks under the chairmanship of my noble friend Lady Carnegy of Lour, reported it to Parliament without amendment.
During these processes, as we are also aware and as my noble friend Lady Carnegy has just reminded us, it has been demonstrated that the city bypass on its own, or in combination with more effective use of public transport, would not achieve the desired environmental objectives which can be brought about by the
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relief road. Secondly, the relief road will not significantly add to existing traffic in the city centre nor lead to greater and unacceptable levels of congestion in that area.
If we were debating this Bill before the Parliamentary Commission reported, many of us would have shared the misgivings concerning the Western Relief Road, even though these had not then had the chance to be examined. Those of us who might have started with fewer misgivings would still not have wished to support the Bill until professional evidence and opinion had been introduced and assessed.
I come now to the amendment proposed by my noble friend Lord Ferrier. At present there is a majority on the regional council who approve of the relief road. Next month, after the elections, there might be a majority who do not. Therefore, why should the final parliamentary stages of this Bill not be postponed until the newly-elected regional council is in office in May? Linked to this question is the nature and context of current opposition to the road, and the distinction between this and the previous context of opposition before the commission's report.
Long before the commission's inquiry, owing to the measure of uncertainty about the consequences of the relief road and to corresponding fears in the Edinburgh community, it was very natural that both party political and non-party political groupings should have been formed over the issue. This process has played a useful part in focusing public attention and in leading to an exhaustive parliamentary inquiry. However, after the conclusions of that inquiry the context of opposition inevitably becomes very different, even if the objections themselves may remain more or less the same. That is not to say that current objections are unimportant. There are those with sound knowledge and expertise in many aspects of town and road planning who are still worried about the proposal. Nor, of course, is professional evidence when given in this field (as is also the case in all other fields) in any way infallible. But while opposition to the relief road was able to lead to a full and useful inquiry in the first place, the continued opposition now, even if well informed and genuinely upheld, in context seems to amount to an amateur rejection of professional opinion.
Thus it is probable that serious opposition will not in fact be continued and sustained. Nevertheless, in May the regional council will either approve or not approve the Western Relief Road. For that reason alone it should be asked why the parliamentary stages cannot wait accordingly. While it would set a very unwelcome precedent, as my noble friend Lord Beloff has already explained to us, it would at least be logical if they did wait and hence also consistent for us to take note of the effect of there being a newly-elected council next month on our decision this month. Yet, equally, there is good logic in the converse, that we should take note of the effect of Parliament's decision this month on the newly-elected council next month. If we do not give the Bill a Second Reading and the parliamentary stages are still incomplete next month, then the newly-elected regional council, of whatever party political control, will have grounds for believing that the case for the relief road, as evidenced to the commission, does not have the full backing of Parliament.

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In my view the full backing of Parliament should now be given to the case for the relief road. For that reason I cannot support my noble friend's amendment, but instead would support that this Bill be given a Second Reading tonight.
8.19 p.m.
Lord Campbell of Croy: My Lords, I quite understand the concern of my noble friend Lord Ferrier. He has been a powerful advocate for an effective bypass of Edinburgh over many years, as he reminded us this evening. He has pressed for that and I know that he has worried because he thinks that this new Western Relief Road will hold up the work on the bypass. That is one of his concerns.
I have examined this as far as I can and I have been satisfied by the assurances that have been given that no resources are to be transferred to the Western Relief Road from the outer-city bypass and that that bypass should not therefore suffer any delay as a result of this Bill. We also have heard during the debate that some amenity bodies, very respectable amenity bodies in Scotland, raised objections at earlier stages. Again, they seem to have done this because of their estimates of traffic arriving in the centre of Edinburgh and what the effect would be on the centre of Edinburgh. The noble Lord, Lord Carmichael, spoke on that point and he was absolutely right to say that if that were a threat to the centre of Edinburgh many of us would be extremely anxious. But it is a matter of judgment and opinion, to a certain extent. I certainly do not think that the relief road would lead to great changes to the centre of Edinburgh.
He spoke about the situation in Glasgow. Whether or not one calls those new roads there expressways, they are roads which were deliberately built to go through the city and to the centre of the city, and that is a quite different intention from the relief which this proposed road would bring to the western area of Edinburgh. The need for a relief road to assist the residential and shopping areas and the communities on the west side of Edinburgh is there. Now, many stages have been completed for the project to go forward. A specially high grant, I understand, is coming from the Government for this new relief road. Much time in the past four years has been spent on enabling objections to be heard and I believe that this evening we should make sure that the Bill goes through.
8.22 p.m.
Lord Ross of Marnock: My Lords, I should apologise for the fact that my name does not appear on the list of speakers. I could not be here yesterday and I did not know that I was not going to be here; so that I could not be forewarned and send a letter to say that I should like to speak.
We are grateful to the Minister for doing what he could in respect of this road. I am not going to quote all the usual things, because the Government are supposed to be neutral on this; although I do not know how the Government could be neutral in respect of something that is probably going to cost up to £40 million by this time. If you take the interest charges and the rest, which I gather have been increased by the way they are now intending to fund the capital
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required, the cost will amount to something over £96 million. How the Government can be neutral on that I find very difficult to understand. I thought that if the noble Lord, Lord Beloff, was doing his usual thing of being interested in anything, he would have been interested as to whether or not this could be justified.
I think we are grateful, too, for the information given by the noble Baroness, Lady Carnegy of Lour, because she had the difficult task of chairing this controversial matter. One of the sad points about it is that right from the very start, from the consideration of this project by the regional council, there was no unanimous feeling about it. There was no clear opinion as to whether or not it should go ahead. The majority was only one. When it came to the parliamentary commissioners, there was no unanimity there; there was a majority; and the same was true when it came to the Joint Committee. Sadly, and I think quite wrongly, all through the whole thing has been dogged by politics.
We are dealing with a purely local matter and it really should not have come here at all. It has come here only because of the decision of the Lothian Regional Council. There had to be, and would have been, as is normal—and there still could be—an inquiry ordered by the Secretary of State because of a planning appeal. I think it was my noble friend Lord Galpern who went through the stages of that. Indeed, the Government can answer as to whether or not there is an appeal still lodged but it has been delayed and is still further delayed; so that even if this Bill did not go through one could go back to the beginning and have that appeal where everyone would get the opportunity quite freely of the informality of planning appeals.
I thought that this was the point the noble and learned Lord, Lord Wilson, himself was getting at when he said that everyone had the chance. But, with all due respect, not everyone has the chance of coming to London. It costs a bit, you know! Even if you are an old-age pensioner, your train fare is about £75.90 and then you have to put yourself up and wait; so that not everyone can afford to spend that kind of money to come down here, even with the pleasant prospect of speaking to the noble Baroness, Lady Carnegy, and to the noble Lord, Lord Galpern, and the noble and learned Lord, Lord Wilson. I forget who else was on that committee, but I think there were two Members of Parliament as well.
It is not fair to say that. It is like saying that everyone can have tea at the Ritz, provided they have the money. It says something for the Cockburn Association that they went ahead with their objections because they feel strongly about it. Anyone who knows anything about the Cockburn Association knows that their concern is Edinburgh; and rightly so. And there is the concern of the National Trust—and, after all, they are in Charlotte Square, right at the west end of Princes Street. I should know that because as Secretary of State I had a house next door. I too am a life member of the National Trust for Scotland and I was the vice-chairman of the National Trust for two years. They do not go idly into these matters. Their concern generally is for the whole amenity of life in the area.
I do not think there is another city in the whole country that would sponsor and pay up to £96 million for a few miles of road, and that few miles not

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bypassing Edinburgh but going into the very heart of Edinburgh. It is all very well for the noble Lord, Lord Sanderson, to talk about this. He comes along the Dalkeith Road. I come from the West. As Secretary of State, I travelled this road every weekend. I was very grateful when Glasgow did half of their ring road because instead of taking the A.71, I took the M.8 and the A.8. If you build a new road you attract new traffic.
There is no use in the noble Baroness, Lady Carnegy, shaking her head. It is a fact that has been proved time and time again. If you tell people that you will take them into the centre of Edinburgh three minutes early, you will get more traffic going in. I travelled that road on Friday. I was speaking at a conference of the Ramblers' Association, of which I happen to be the president in Scotland. They thought I was the best rambler in Scotland. It meant that I had to take that western road, get in, get through, get up Lothian Road, Tollcross, and cut across to the university where the conference was being held. It was a Friday evening.
Edinburgh is packed now. If this road is opened, it will be very much worse. Even the noble Lord, Lord Stodart, is quite right in being concerned about what is going to happen possibly at Usher Hall. He knows what will happen. You have already a jam up there at Tollcross Road and across. Dalkeith Road will not be improved as a result of this scheme. I think the noble Lord himself will appreciate that. All you do is change the traffic, and the congestion, instead of being in one area, goes somewhere else. This, if it were rightly named, would be named the Corstorphine Bypass: it is not an Edinburgh bypass.
We are going to have, and sooner than we had expected it, this change in respect of the outer city bypass, for which the noble Lord, Lord Ferrier, fought for years and years and eventually got, though not as quickly as he wanted. He wanted it in time for the Commonwealth Games, and it is not going to happen, But, my goodness, if we got this and people were going to the Commonwealth Games from the west, what a mess there would be! That is why the Cockburn Association is concerned. It is going to mess up not only the old town but the new town. As regards Dalkeith Road, you are going to shift the congestion into already congested areas.
I am surprised that the noble Lord, Lord Wilson, did not appreciate the fact that the Alliance supported this. They were part of the majority of one. But what they wanted was a package that included traffic management and restrictions. They have not got it. It was asked to be put in at various stages, even at the recent stage. The noble Baroness, Lady Carnegy, says it is not in of course because it does not need to be in; it can be done outside. There is no guarantee it will ever be done.
I have not finished yet. I am trying to hurry up because it is fair to other people, and the noble Baroness had her fair share. The noble Baroness says that this is going to be limited to 40 miles an hour. I can tell her today that part of the traffic in the area where there is congestion is limited to 40 miles an hour; but, as every Member here will know, if you have a limit of 40 miles an hour how many people go at 40 miles an hour? That is a matter for the police and
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for the Secretary of State. It is not in statute: but we could have put it in. The noble Lord, Lord Beloff, knows that we have sovereign authority. If we had put 40 miles an hour in it would have been 40 miles an hour. And we are not here to rubber-stamp everything that is done by any committee. We have sovereign authority, and we can do what we like. But the one thing we cannot do, with all due respect to the noble Lord, Lord Beloff, is to tell local authorities what they can do. They can change their minds.
The 40 miles an hour limit is ignored in the breach; and one of the causes of trouble today in Corstorphine, if we take the A.71 and the Dairy and Gorgie roads, is the fact that the police are not applying the law as it is. How many people go down those roads and find when they are approaching the lights at Murrayfield Avenue that there are cars parked where there are double yellow lines and where no car should be parked? If the law were properly applied and the restrictions were imposed today, it would be very much easier—and that, combined with the relief that is bound to come with the outer city road, would in itself lead to an improvement.
I have read the evidence that was given, and the suggestion was made that the relief will only be marginal for all this amount of money. This has been badly handled; and perhaps the noble Lord, Lord Gray of Contin, will tell me that they advised that this was a local matter and should have been the subject of a local inquiry. There is no reason why we should be dealing with this. Why should my noble friend Lord Graham, who knows nothing at all about this part of Edinburgh, sit here in judgment?
Lord Graham of Edmonton: Agreed!
Lord Ross or Marnock: My Lords, it should have been local, and that is why there is merit in the amendment that is put forward by the noble Lord, Lord Ferrier. Let the local people have another thought about it; and if it is held up by an election, it does not matter whether or not it is in manifestos. People will think about it again; because to my mind it would not happen in any other city in Britain or anywhere else, that you would build a special road to take traffic more quickly into the centre of the city. If you do that, people will use it. Of course they will; and that is why the National Trust is concerned and why the Cockburn Society is concerned.
I am sorry the Lord Advocate is not speaking today. The president, the honourable Lord Cameron, Knight of the Thistle, is the Lord Advocate's father. He is no rabid revolutionary, Jock Cameron. The honourable Lord Cullen is chairman of the council. There is not even a "pinko" Labour or an Alliance member near that body at the present time—and they are worried! If he had told the truth, so would the noble Lord, Lord Stodart, have been worried if he had still been a Member of Parliament. He did not tell us that Mr. Fletcher voted against it. It has not all been one-sided; and when it is in Edinburgh terms it is really not a matter for politics but a matter for common sense. People are getting these things mixed up, whether it be in the last election or in this election's manifestos, and it is nonsense. We are not just here to rubber-stamp what any committee has done. I think the amendment has merit and should be supported.
8.36 p.m.
Lord Mackie of Benshie: My Lords, I am grateful, quite honestly, that I was able to say that I could not serve on the committee. For the 15 days that were spent the whole House should be grateful to the members who sat on the committee and also to the members of the previous committee which also sat for a great deal of time and which visited Edinburgh. I would not be certain, but I understand the committee also sat there.
It is extraordinary how heat has been engendered over this matter. We have had all sorts of quotations. I must defend my noble and learned friend Lord Wilson. He said that it was a pity there had not been an inquiry, but he added that it might have satisfied more people had there been the same sort of exhaustive public inquiry as there had been parliamentary inquiries. That is quite different from saying that he thought there ought to have been.
Then we come on to the substance of the matter. It is extraordinary that all the people from Edinburgh, so far as I can see, are for the road, whereas indignation has been engendered among the three members of the Labour Party from the west, all of whom have the most enormous concern for Edinburgh, which is not traditional in people who come from Glasgow and the West of Scotland. But it is good to see that their concern is real and deeply felt.
I think the noble Lord, Lord Beloff, has a point when he says that this should be a subject for the Scottish Members, without boring the English with our local affairs. As your Lordships know, we on these Benches, to use a famous phrase, have always been in favour of devolution and there have been recent converts among people who were strongly against it at one time. So we have the constitutional question, and, as the noble Lord, Lord Ross, said, we are here to decide.
I do not want to go into all the arguments which the committees have gone into at such length, but it appears to me that no single subject has been more deeply investigated, with so much work done on it. Also it is a question of the Tory Party manifesto; but that is backed up by the Alliance, which has examined the whole issue without commitment and come to the strong conclusion that it is time this went ahead.
It looks to me fairly simple that the proposal will facilitate entry into the city. It will save a large number of injuries—I think the figures are something like 120 serious injuries a year—quite apart from the deaths mentioned by the noble Lord, Lord Stodart. I would say also that the figures which the experts produce can be wrong, but since the war they have gathered an enormous volume of evidence and experience of what a bypass or a road into the centre does. I am inclined to accept their figures. They say that they do not think that there will be any increase in the traffic. I prefer their opinions to the opinions of even distinguished people like former Secretaries of State.
Lord Galpern: My Lords, is the noble Lord suggesting that the people who gave their evidence on oath on behalf of the objectors were not highly qualified?
Lord Mackie of Benshie: My Lords, yes, I am a bit. It appears to me that the technical evidence in this case was on the side of the promoters. It is true that the National Trust for Scotland and the Cockburn Association are highly caring. They also have deep feelings and a great deal of knowledge, but the burden of the evidence has been for the scheme.
I must say that I have relied heavily on the opinion of Alliance members of the Lothian Regional Council who came to the matter unprejudiced and have examined it with enormous care. That has been backed up by two exhaustive inquiries. It appears to me that the House should decide against the amendment and in favour of the scheme. In a nutshell, that is it. I have spoken for five minutes; that is long enough to put the obvious.
8.40 p.m.
Lord Gray of Contin: My Lords, I think that we have had a useful and interesting debate. As I indicated when I moved the Second Reading of the Bill, the role of the Secretary of State for Scotland on occasions such as this is entirely formal. Therefore I shall not engage in the usual wind-up speech which one gives on the Second Reading of a Bill. However, there are two points to which I should like to return. First, there was the point initially raised by the noble Lord, Lord Carmichael, which was followed by the noble Lord, Lord Ross of Marnock, about the new method of funding which the region is to adopt. It is not really for me to describe or defend the method which is to be used. That is a matter for Lothian Regional Council.
Lothian Regional Council has decided to enter into a financing scheme by means of a covenant. Under that arrangement, costs of construction will be met in the first instance by a financial institution, and Lothian Regional Council will covenant to repay the loan, together with interest and management charges, over an extended period. Such an arrangement has many advantages for the region. In particular, it allows it to get on with the development without the need to defer or delay any other capital projects. It allows it to pay for the road later when its roads programme will, in any case, be in substantial decline. It has described the scheme to the Government and the Government have no criticism of the scheme. It seems to us a reasonable way for the council to proceed. I reiterate that that must be and is a matter entirely for Lothian Regional Council and its judgment. It has chosen to proceed in that way.
The second point that I wish to take up is the point raised by the noble Lord, Lord Galpern, who was, of course, a distinguished member of the committee. We heard impassioned speeches from members of the committee from both sides of the House this evening. The noble Lord called into question the whole procedure, whether it was as effective as it might be and whether it would ever be used again. He put that in some doubt.
It is fair to describe the circumstances surrounding this provisional order as exceptional. We must remember that a wide range of business has been conducted over the past 49 years under the procedures laid down in the 1936 Act, without, as far as I am aware, revealing them as severely defective. I have little doubt that my right honourable friend will read

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carefully the comments which have been made this evening and take note of what has been said.
We have heard some stong expressions of opinion this evening. The noble Lord, Lord Ross of Marnock, with his experience pointed out that on these occasions the Government traditionally adopt a neutral position. I would not wish to move from the view which was expressed in another place by the Parliamentary Under-Secretary of State who made a contribution and set out the Government's position during the progress of the Bill in that place. I therefore merely reiterate on behalf of my right honorable friend what I said at the outset when I moved the Bill, that the Government's position is basically a neutral one.
8.45 p.m.
Lord Ferrier: My Lords, I am instructed that I have a right to reply. I assure the House that I am not going to spend much time over it because the one thing that has been proved absolutely by this debate is the extent of the difference of opinion over this road that exists in Edinburgh.
There is one point of information that I wish to make clear to the noble Lord, Lord Carmichael. The Sighthill section of the bypass will be completed this year, so that the first relief which is required by the promoters of this relief road will become effective within a matter of months. Another point was raised by the noble Lord, Lord Campbell of Croy, but there is a misunderstanding. I have never taken the view that the cost of the relief road would affect the cost of the bypass. My objection to the road is entirely an environmental one. As the noble Lord, Lord Ross of Marnock, pointed out, I am concerned with Edinburgh. We do not want this road. That is a fact.
I think that I have said enough, because we have been on this matter for long enough. This gives me the opportunity to wish the noble Lord, Lord Ross of Marnock, happy returns of yesterday.
I have made my point about the Sighthill section. In some ways, the debate has been unsatisfactory because a number of points were made about the chairmanship of the Cockburn Association which were not correct. I propose to divide the House and I move that my amendment be accepted.
8.47 p.m.
On Question, Whether the said amendment to the Motion for Second Reading shall be agreed to?
Their Lordships divided: Contents, 27; Not-Contents, 96.

DIVISION NO. 1

CONTENTS

Beaumont of Whitley, L.

Kagan, L.

Birmingham, Bp.

Kirkhill, L.

Buckmaster, V.

Oxford, Bp.

Carmichael of Kelvingrove, L. [Teller.]

Parry, L.

Phillips, B.

Dean of Beswick, L.

Pitt of Hampstead, L.

Denington, B.

Ponsonby of Shulbrede, L.

Elibank, L.

Reay, L.

Ennals, L.

Ross of Marnock, L.

Ewart-Biggs, B.

Stoddart of Swindon, L.

Ferrier, L. [Teller.]

Taylor of Blackburn, L.

Galpern, L.

Underhill, L.

Graham of Edmonton, L.

Vaux of Harrowden, L.

Houghton of Sowerby, L.

White, B.

160

NOT-CONTENTS

Airey of Abingdon, B.

Kinloss, Ly.

Allerton, L.

Kitchener, E.

Arran, E.

Lawrence, L.

Attlee, E.

Layton, L.

Beloff, L.

Lindsey and Abingdon, E.

Boardman, L.

Lloyd of Kilgerran, L.

Boyd-Carpenter, L.

Long, V.

Brabazon of Tara, L.

Lucas of Chilworth, L.

Brougham and Vaux, L.

Lyell, L.

Bruce-Gardyne, L.

McFadzean, L.

Butterworth, L.

Mackie of Benshie, L. [Teller.]

Caithness, E.

Cameron of Lochbroom, L.

Macleod of Borve, B.

Campbell of Croy, L.

McNair, L.

Carnegy of Lour, B.

Mar, C.

Chelwood, L.

Margadale, L.

Coleraine, L.

Masham of Ilton, B.

Cork and Orrery, E.

Merrivale, L.

Craigavon, V.

Mersey, V.

Craigmyle, L.

Milverton, L.

Crathorne, L.

Montgomery of Alamein, V.

Crawshaw of Aintree, L.

Morris, L.

Davidson, V.

Mowbray and Stourton, L.

De La Warr, E.

Peyton of Yeovil, L.

Denham, L.

Radnor, E.

Drumalbyn, L.

Raglan, L.

Dundee, E.

Ritchie of Dundee, L.

Elliot of Harwood, B.

Rochdale, V.

Elliott of Morpeth, L.

Rodney, L.

Elphinstone, L.

St. Aldwyn, E.

Elton, L.

St. John of Bletso, L.

Ferrers, E.

Sanderson of Bowden, L. [Teller.]

Forbes, L.

Gardner of Parkes, B.

Seear, B.

Gisborough, L.

Selkirk, E.

Glanusk, L.

Skelmersdale, L.

Glenarthur, L.

Stodart of Leaston, L.

Grantchester, L.

Strathclyde, L.

Gray of Contin, L.

Swinfen, L.

Greenway, L.

Swinton, E.

Gridley, L.

Trefgarne, L.

Grimston of Westbury, L.

Trumpington, B.

Hanson, L.

Vickers, B.

Harris of Greenwich, L.

Whitelaw, V.

Hives, L.

Wilson of Langside, L.

Hooper, B.

Winstanley, L.

Hylton-Foster, B.

Wise, L.

Kilmarnock, L.

Wynford, L.

Kimball, L.

Ypres, E.

Resolved in the negative, and amendment disagreed to accordingly.
On Question, Bill read a second time; deemed to have passed the Committee pursuant to Standing Order (Private Business) 192, and reported without amendment.

Surrogacy Arrangements (Amendment) Bill [H.L.]
8.57 p.m.
The Earl of Halsbury: My Lords, I beg to move that the House do now resolve itself into Committee on this Bill.
Moved, That the House do now resolve itself into Committee.—(The Earl of Halsbury.)
On Question, Motion agreed to.
House in Committee accordingly.
[The LORD AIREDALE in the Chair.]
Clause 1 [Surrogacy arrangements to be void]:
Lord Denning Lord Denning moved Amendment No. 1:
Page 1, line 5, leave out from second ("is") to ("whether") in line 6 and insert ("unlawful").
The noble and learned Lord said: As the noble and learned Lord, Lord Simon of Glaisdale, is not able to be here, he has asked me to move this amendment on his behalf. It is quite an important point in law as to the status of these surrogacy arrangements. Are they merely void and unenforceable, or are they unlawful?
As the principles underlying this amendment run throughout our discussions, perhaps I may illustrate them by telling the Committee what a surrogacy arrangement is and what a surrogate mother is. They were defined in the Surrogacy Arrangements Act 1985. The present Bill amends that Act and I suggest that it is right in law that the phrases and the meanings of the words in the Act itself should be the same as in our amending provision. So the meaning of surrogacy arrangements and surrogate mother must be carried into the amending Bill.
The definitions are reasonably clear in the Act that was passed on the previous occasion; but I shall make the matter clearer by telling the Committee about the facts of two cases that have come before the courts showing what is a surrogacy arrangement and what is a surrogate mother. I shall first take the case of 1978. It is not reported in any of the ordinary law reports because it was only reported in 1985, in the Family Law Reports. That case concerned a man who had married a lady who was a good deal older than himself. They wanted a child but the wife would not or could not have one. They decided to contact a girl who would be artificially inseminated with the husband's semen.
They went along to Bow Street and found a prostitute there who acted as a go between. It was arranged that a girl of 19 should be artificially inseminated with the husband's semen in return for £3,000—with £500 going to the agency.
The girl went to a clinic. I suppose that the husband went there at some other time and his semen was, by masturbation, drawn off from him. The doctors then artificially inseminated the woman, and after nine months she bore a child. She then decided that she wanted to keep that child. The husband said that it was his child and that an arrangement had been made—clearly, there was a surrogacy arrangement. The husband said that he wanted the child and access to it. The courts refused to agree. The judge, Mr. Justice Comyn, stated quite clearly that in his view such was illegal. He stated:
"The agreement between the parties I hold as being against public policy. None of them can rely upon it in any way or enforce the agreement in any way".
The courts did not allow the man any access to the child, and the Court of Appeal upheld that decision. That is an example of a surrogacy arrangement on a commercial basis, as plain as can be. The courts held that the surrogate mother was the mother of the child and that the father could have no access to that child at all.
That is one case where the mother changed her mind. The other case is the Baby Cotton case, concerning an American couple. The woman could
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not have a baby, and so through some agency the couple came over to England and made contact with a Mrs. Cotton, who agreed to be inseminated with the husband's semen in return for £6,000. She bore the child and the husband wanted it. Who was to have it? The mother, Mrs. Cotton, agreed—and the court allowed to let the baby go to the husband in the special circumstances of that case. I suppose that Mrs. Cotton retained her £6,000. Those are two instances of surrogacy arrangements and of surrogate mothers coming before the courts.
As I have told your Lordships, the Court of Appeal has held that such an arrangement is unlawful and void. I may go on to state that that kind of situation was considered by the Warnock Committee, which reported clearly at page 43, in paragraph 8.5, of its report that:
"There is little doubt that the Courts would treat most, if not all, surrogacy agreements as contrary to public policy and therefore unenforceable. Where one party broke the agreement the other party could not expect to invoke the court's assistance. Thus, if the carrying mother changed her mind and decided she wished to keep the child it is most unlikely that the court would order her".
The committee stated on page 47, in paragraph 8.19, that:
"We recommend that it be provided by statute that all surrogacy agreements are illegal contracts and therefore unenforceable in the courts".
When the previous Bill was before Parliament and before your Lordships' House, the matter was left open. There is a provision in Section 1(6) that:
"This Act applies to arrangements whether or not they are lawful and whether or not they are enforceable by or against any of the persons making them".
In this new Bill, we are suggesting that the matter be made certain—not that it be left unknown. We are suggesting that it be made clear in accordance with the decision of the courts and with the recommendations of the Warnock Committee that such agreements are void and unenforceable—and that they are, at the suggestion of my noble and learned friend Lord Simon of Glaisdale, unlawful.
What is the difference between a contract being void and unenforceable and the addition of it being unlawful? I shall give your Lordships some illustrations of one side and the other of the line, in old cases. I shall deal first with a contract that is void and unenforceable and that is unlawful.
There is an old case of more than 100 years ago concerning some people who owned an elaborate carriage who let it out to a prostitute so that she could carry on her trade. It was hired out to her. She was ready to pay the money to the hirers. She paid £52 and then they called it off. That contract was held to be unlawful and contrary to public policy and public morals, and she was not entitled to recover her money.
The converse case where it was just void and unenforceable was that of a marriage broker's contract—that is, Herman and Childsworth in 1905. A woman who was anxious to find a husband went to a marriage bureau and in order to find a gentleman she was ready to pay £52 to the broker and another sum after she got her husband. It did not go through. The contract was held to be void and unenforceable, but not unlawful. She got back her money. If it had been unlawful she would not have got back her money.
That is what my noble and learned friend Lord Simon of Glaisdale wants me to suggest in a case of this kind. If there is an arrangement whereby £6,000 is to be paid by the commissioning mother to the surrogate mother and the surrogate mother changed her mind, can the woman who paid the money get it back? I hope that Members of the Committee will say, "No". That is the difference between void and unenforceable and unlawful. If it is only void and unenforceable, and not unlawful, she can get the money back. That is the distinction which my noble and learned friend Lord Simon of Glaisdale wants to suggest; that it is not only void and unenforceable but also unlawful. That is the distinct recommendation of the Warnock Report, which I read to your Lordships, that:
"It be provided by statute that all surrogacy agreements are illegal contracts and therefore unenforceable in the courts".
That is what I suggest is the right way of amending the first clause. I beg to move.
The Earl of Halsbury: These very fine distinctions between terms of art such as "void and unenforceable" on the one hand and "unlawful" on the other, are a little beyond my range of understanding. For my own part, I am happy to accept this amendment because of the character of the sponsors: my noble and learned friend Lord Denning who spoke to it and my noble and learned friend Lord Simon of Glaisdale who conceived it. However, if the Government have any doubts and my noble and learned friend feels moved not to press the amendment accordingly, I shall be content that he should not do so and leave the matter in his hands.
The Parliamentary Under-Secretary of State, Department of Health and Social Security (Baroness Trumpington): Far be it for me to argue with someone of the eminence of the noble and learned Lord, Lord Denning; but my legal advisers tell me that on a technical basis it is not really necessary for there to be legislation on this point as it seems fairly clear that in most circumstances a court would hold a surrogacy
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arrangement to be void, if not unlawful. This is particularly the case as I am advised that agreements to hand over a child are already unenforceable; for example, by virtue of Section 85(2) of the Children Act 1975.
The effect of making this amendment would, for example, be to remove any possibility that either the commissioning parents or the surrogate mother could recover sums due to them under a contract. It is possible that to make it clear beyond a doubt that a surrogate mother cannot be made to hand over a child in pursuance of a surrogacy arrangement, a situation might be created where there were unintended consequences which might be unfortunate.
In view of the Government's neutral stance on the Bill of the noble Earl, Lord Halsbury, my comments are directed solely at setting the scene on this amendment from my department's angle.
Lord Ennals: At this stage I want to be extremely brief and say only that the noble and learned Lord, Lord Denning, in moving this amendment, drew upon a recommendation in the report of the committee presided over by the noble Baroness, Lady Warnock. If we were to do that we could go right the way through, and what we really wait for is the Government's considered approach to this. It would be quite absurd to take a decision, one way or the other—on this amendment or the wording as it stands at present—at this time of night without having had that consideration. It does not make much difference to me whether we accept one form or the other. At a later stage I shall say why I think that it would be unwise to proceed either with the amendment or with the clause.
Lord Denning: I shall not press the amendment. In my view the clause as it stands is good enough. The amendment of my noble and learned friend Lord Simon would have been a useful addition but it is not necessary. Therefore, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
9.15 p.m.
On Question, Whether Clause 1 shall stand part of the Bill?
Lord Ennals: May I say, firstly, in case I forget to do so later, that I am speaking purely for myself. I am not neutral about the Bill and I am not speaking for my party, but only for myself. To save the time of the Committee, since I and the noble Lord, Lord Winstanley, have proposed that Clause 1 should not stand part of the Bill, that Clause 3 should not stand part of the Bill and that Schedules 1 and 2 should not be schedules to the Bill, I hope that the Committee will permit me to deal with them all in only one speech rather than make the same speech four times. I hope—and no doubt other Members will agree with me—that this will be the only speech I shall make on this Bill.
In my speech during Second Reading on 11th March I said that I was not happy about Clause 1 and Schedule 2. Since then I have also realised that I am not happy about Schedule 3 or Clause 3. I said that they seemed to me to imply opposition to surrogacy under any circumstances. I want to say that since then I have re-read the report of the committee which was presided over by the noble Baroness, Lady Warnock, and the Expression of Dissent presented and published by Dr. Wendy Greengross and Dr. David Davies as their considered view. The noble Baroness, Lady Trumpington, in that same Second Reading debate, at col. 587, said:
"Not all members of Warnock Committee felt able to support its recommendations".
As the noble Baroness, Lady Warnock, pointed out in her preface to the report, in this disagreement is reflected the range of views within society as a whole. There are those who view the area with complete distaste and would wish to see a total legislative ban on all forms of surrogacy; on the other hand, it is possible to disapprove of any organised surrogacy service, yet to look ambivalently on an informal arrangement made perhaps between members of the same family or between friends. I totally agree, and associate myself with the views expressed by the noble Baroness.
Thus, speaking for myself, I totally align myself with the position of the Government, except on neutrality. I honestly hope that this Bill will not pass through your Lordships' House because I believe that, except for the urgent need to bar commercial surrogacy agencies, as we have already done by a Bill quite properly put forward as a matter of urgency by the Government, we should now await the legislation that is to come. Perhaps I may just draw to the attention of the Committee a very few sentences in the Expression of Dissent:
"There are, we hold, rare occasions when surrogacy could be beneficial to couples as a last resort. On those occasions gynaecologists should not be denied the option of suggesting surrogacy to their patients".
At this stage it is interesting to note that this is the view of the British Medical Association, who state:
"The 1985 Annual Representative Meeting—comprising 600 representatives from all over the country—provided the first opportunity for debate on commercial and other forms of surrogacy. The representatives passed the following resolution: 'That this Meeting agrees with the principle of surrogate births in selected cases
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with careful controls'. An argument put forward during the debate at the Annual Representative Meeting was that very few babies are available for adoption and surrogacy might help some infertile women".
I return to the Expression of Dissent:
"The practice of surrogacy could lead to serious problems, and we do not wish to deny these problems. Equally we regard it as of immense importance that people considering getting involved in surrogacy, in whatever way, should be fully aware of the complications that could ensue".
It goes on:
"In our view the question of exploitation of the surrogate mother, or the treating of her as a means to other people's ends, is not as clear cut a moral issue as our colleagues assert …
Whatever we as an Inquiry may recommend, the demand for surrogacy in one form or another will continue, and possibly even grow … Having considered the risks on both sides of a finely balanced argument we have come to the conclusion that it would be a mistake to close the door completely on surrogacy being offered as a treatment for childlessness … We believe that it would be inappropriate for steps to be taken to provide that all surrogacy agreements are illegal contracts … We do not believe that public opinion is yet fully formed on the question of surrogacy, which has burst into prominence only in the last year or so. Thus we think it is too early to take a final decision one way or the other … We simply ask that the door be left slightly ajar so that surrogacy can be more effectively assessed".
That is precisely my view and where I stand. We are dealing with very difficult issues.
The noble and learned Lord, Lord Denning, during Second Reading and in moving his amendment a few moments ago, pointed out some very difficult circumstances. I think that those are precisely the sort of circumstances which we need to balance; but we also need to balance them against a possible development which we see from Mr. Steptoe and Dr. Robert Edwards may be a way forward, and that is, as I said in the Second Reading debate, an opportunity for mothers and fathers to produce babies which are the product only of the eggs of the mother and the sperm of the father. I believe therefore that we should not allow to go through Clause 1, Clause 3, Schedule 1 or Schedule 2, which in their various ways would close the door finally against surrogacy It would be a very unwise thing to do.
I hope that the Government will at some stage, in spite of their neutrality, give an indication of when they expect to come forward with their own Bill covering this whole issue. My view is absolutely clear. We should not deal with this complicated issue piecemeal. There are a whole range of issues and recommendations made by the Warnock Committee which this House, and this Committee, I believe, would want to consider carefully. If we pick on little bits we may find that if the Bill goes through some other private Member may come forward with another Warnock recommendation, and then another, and we shall find that we do not have a proper, fair and healthy debate ourselves, let alone a proper, fair and healthy assessment of the views of the public, which really must be taken into consideration.
I agree with those who say that at this stage public opinion has not formulated itself. A debate such as this is perhaps useful in helping people to formulate their views. I wish, with the support of the noble Lord, Lord Winstanley, to urge that these two clauses and two schedules should not stand part of the Bill.
Lord Winstanley: I shall not detain the Committee for long at this late hour. Indeed, I resisted the temptation to respond to the speech of the noble and learned Lord, Lord Denning, on the earlier amendment. I believe, frankly, I shall return to this in a moment—that the noble and learned Lord, if I may say so with the greatest respect, was rather confused about precisely what surrogacy is. Like the noble Lord, Lord Ennals, I, too, from this Front Bench, speak for myself alone. Nevertheless, I entertain the hope that many of my noble friends would agree with me. I am sure that the noble Lord feels similarly.
In general, I take the view that the noble Lord, Lord Ennals, has taken. I would endorse and add my name to every word that he said. Let me return at once to the point that I made about the speech of the noble and learned Lord, Lord Denning, on the earlier amendment. It seemed to me that the first of the cases that he described—a very distressing case in which a prostitute, I understand, was induced to take part in artificial insemination with the sperm of a husband and later to donate the resulting child, if there was a child, to a couple—is not surrogacy. Surrogacy, as I understand it, is an arrangement whereby the ovum of an allegedly infertile woman is fertilised in vitro with the sperm of her husband and the fertilised ovum is then implanted in the uterus of a third party for gestation, so that in the end a child is born that genetically is the child of the donor of the ovum and of the sperm. That is surrogacy.
Artificial insemination of some other party and the subsequent abandonment or transfer of the baby is not surrogacy. This illustrates that it is a very puzzling and difficult area. My description of what I take surrogacy to be does not mean that I am a passionate enthusiast for surrogacy arrangements. I believe, however, like the noble Lord, Lord Ennals, that there are perhaps some cases—they may be few—in which this is possibly the procedure of choice and the best possible course for parents who are unable to have a child and who are desperately anxious to have one. It gives them an opportunity of having a child that genetically is their own. In a world so full of unwanted children, we should consider anything that can be done to increase the number of positively wanted children and should not reject it without a great deal of thought.
I understand that the Government's view with regard to the Bill, the amendments, and so on, is one of benevolent neutrality. I find that a little puzzling. My views were expressed fully in your Lordships' House when we debated the report of the committee under the noble Baroness, Lady Warnock. I expressed my views fully then on this whole subject. I shall not go over them again. However, at that time, and on a number of subsequent occasions, the Government spokesmen in your Lordships' House and in another place have said that they were broadly in agreement with the main thrust of the Warnock recommendations and that after proper consideration and consultation they would in due course introduce legislation to enact those recommendations.
That seems to me to be a view which is extremely sensible. For the Government to be neutral to a Bill
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which pre-empts that course seems rather odd. This Bill does pre-empt it. As the noble Lord, Lord Ennals, said, it is dealing piecemeal with an extremely complex subject. If we are to deal with it piecemeal, surely we should deal with it piecemeal in the right order. The most important recommendation of the Warnock Committee was for a statutory body to examine this whole field carefully, to license those who are working in it, to exercise a continuing watch over what is going on and to report. That is surely the first thing to do. However, merely to legislate on one aspect of that complex report of the Warnock Committee seems to me to be unwise.
I do not take the view that surrogacy arrangements of one kind or another will necessarily figure prominently in the medical life of our society in the future, but I believe that this is a field in which advances are being made extremely rapidly, in which the work of Mr. Steptoe, Dr. Edwards and others is of immense importance and in which we should be unwise to impede such work unnecessarily at this stage. I also believe that while we have so many criminals in society, as indeed we do, we should not create new criminals out of people who are doing important work, intended to be helpful to society. I think that it is rather unwise to do that too hastily.
This Bill, and particularly the section to which we are referring, makes criminal certain acts which at the moment are being performed with the best possible motive so far as society is concerned. I do not want to be misunderstood. I do not think we are here to say "Yes, we think that surrogacy arrangements are admirable and that they should go ahead without limitation". They should be looked at extremely carefully. There are consequences regarding the status of the child that is born which are of immense importance. I would wholly agree with the noble and learned Lord that those must be resolved. But I do not think that one resolves them by making all surrogacy arrangements illegal—full stop—whether they are within the family, or however they are done.
I agree with the noble Lord, Lord Ennals, that it seems extremely unwise to proceed piecemeal in this legislation. This is a matter upon which the Government in both Houses of Parliament have stated repeatedly that they intend in the end that the recommendations of the Warnock Committee should be enacted and should arrive on the statute book in some form via legislation which the Government themselves will bring forward when they have had the opportunity to consult properly and to deal with all the matters concerned. To deal with the matter in this piecemeal way will be a grave mistake.
It is for that reason that I am glad to support the noble Lord, Lord Ennals, in his proposal and in his view that those clauses should not stand part of this Bill.
Lord Denning: I hope that I understand surrogacy. It is not only when the ovum of another woman is placed into the mother's womb. It also applies in the case, which I put, of a man's semen being placed there. But

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the two things are completely combined in the definition in the present Bill:
"'Surrogate mother' means a woman who carries a child in pursuance of an arrangement—

(a) made before she began to carry the child, and

(b) made with a view to any child carried in pursuance of it being handed over to, and the parental rights being exercised (so far as practicable) by, another person or other persons".

I should like to say this about the point made by my noble friend Lord Ennals. Surrogacy on a commercial basis is what is prohibited by this statute. Surrogacy such as has been suggested, with the sister coming in to help, not on a commercial basis, is not prohibited by the Bill at all. All this clause says is that it is void and unenforceable. Therefore, if the arrangement falls down and the carrying mother wants to keep her child, she can without being sued by anyone else, or vice versa. All I say is that the arrangements are only prohibited on a commercial basis. This clause says that if you make any agreement about it, that is void and unenforceable, but that is all.
9.30 p.m.
Under Clause 2, it is quite plain that the surrogate mother must be the mother who carries the baby the whole of the nine months. She certainly is the mother. Can anyone deny that? The courts have held that the unknown father does not come into that. I believe that Clauses 1 and 2 are very desirable and ought to be approved by the Committee.
Lord Coleraine: Perhaps I may add a few words to what the noble and learned Lord has said about the meaning of the word "surrogacy". The noble and learned Lord is of course correct. The meaning which he adduces is that used in the Warnock Report. Paragraph 8.1 of the report states:
"Surrogacy can take a number of forms. The commissioning mother may be the genetic mother, in that she provides the egg, or she may make no contribution to the establishment of the pregnancy. The genetic father may be the husband of the commissioning mother, or of the carrying mother; or he may be an anonymous donor. There are thus many possible combinations of persons who are relevant to the child's conception, birth and early environment."
Baroness Trumpington: In reply to both the noble Lords, Lord Ennals and Lord Winstanley, who more or less challenged me as to when the Government will bring in a Bill covering the whole of the Warnock Report, my answer is that the Government are fully aware of the strongly-held views on many of the issues dealt with in the Warnock Report and the Government intend to introduce legislation on those matters as soon as practicable. I am sorry that I cannot be more precise, but this debate is helpful and all the points made in it will certainly be taken into account in considering future legislation on the issues which are raised during the progress of this Bill.
The Earl of Halsbury: On the Question whether Clause 1 shall stand part of the Bill, perhaps I may rehearse the line which I took on the Second Reading of the 1985 Act, a year ago. I was extremely anxious to place an embargo on surrogate motherhood to prevent the building up of vested interests, whether
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professional or commercial, in advance of the Government making up their mind to introduce a Bill of their own and the terms in which they would recommend it. This was fully in line with the majority report of the Warnock Committee and was supported by many Members of your Lordships' House who wanted to stiffen up the terms of the Government Bill when it came before your Lordships' House.
The Government, through the usual channels, asked a number of people who wanted to stiffen up the Bill not to amend it at that particular point in time for fear of losing the Bill altogether in view of its late appearance in your Lordships' House very much towards the end of the Session. I was a party to persuading a number of noble Lords to withdraw their amendments on the understanding that I would resurrect them in a Private Bill to be introduced. I referred to all this on the Second Reading of this Bill.
One of the points which I made on those occasions was that in some respects the Warnock Committee was unanimous, but in other respects some of its decisions were majority decisions. You sometimes have to stay with a majority decision. When I was given the responsibility for deciding how to decimalise the currency, the committee working under my chairmanship, by a majority, came to a decision that we should keep the pound. That decision was referred to the Treasury, who again by a majority decision enforced it. It went to a Cabinet sub-committee, who also by a majority supported it, and the whole Cabinet, again by a majority, supported it. There were four stages of decision-making, in each case by a majority. You may have to live with majority decisions. We have to for most of the time.
I think it would be helpful to the Government—I said this earlier but I repeat it now—to know what the majority opinion of this Committee is. Does it divide on the same lines as the Warnock Committee, or does it lie on opposed lines? This information is something we badly need to have. In so far as the noble Lord, Lord Ennals, has thrown down a challenge to this Bill, I accept that challenge. He can pick up the gauntlet, if he wishes, by expressing himself "Not-Content" at a time when I express myself "Content".
Lord Vaux of Harrowden: I may be thought old-fashioned, but I happen to be a Roman Catholic, and our Lord God instituted the sacrament of marriage for the procreation of children. Nobody has a right to have children; it is the Almighty who fixes that. It is not for us—if I may use a crude word—to muck about with it, and I do not think that this surrogacy business should carry on at all. I think I am right, and that we should not do that. I think that probably the right reverend Prelate agrees with me.
Lord Winstanley: Before the noble Lord, Lord Ennals, decides what course he is going to take with regard to this clause, I would say in response to the noble Earl, Lord Halsbury, that I do not think that the Government would get much helpful evidence as to the balance of opinion in society through a Division on this particular clause in a Committee with this number of people at this hour of night. If my noble friend presses a Division, whatever the result, I do not think

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that the Government would be wise to regard that as giving any firm indication as to whether or not opinion in the Committee reflects the division of opinion in the Warnock Committee. I do not think that it possibly could do so.
Lord Ennals: I shall be brief because the noble Lord has just said half of what I was going to say. There are few of us here. Most of us are unwhipped, and some of us are unrepresentative. We speak for ourselves. I do not believe that at this hour of night, with this number of Members, we would learn anything about the views of the Chamber.
Secondly, clearly the passing of this Bill, or any single clause in it, would pre-empt the Government's position when they come to present the major legislation. I hope that the Government realise this. I do not expect that the noble Baroness will be able to give me the date when the legislation will come, but she and her right honourable friend must accept that if this Bill is passed, whether it includes Clause 1 or the rest, we shall have on the statute book something that inevitably affects what the Government are going to do with their own legislation.
Another little bit has been resolved which might seriously affect the broader vision that one hopes the Government will take. I hope that the moment will arrive when the Government will come off the hook or get away from their neutrality. Otherwise we shall have debates like this through the Report stage and Third Reading and we might even finish with a Bill that is very, very unrepresentative. I shall not suggest that we divide tonight. I shall not oppose the Question in the sure knowledge that the Government will eventually take a position.
Clause 1 agreed to.
Lord Skelmersdale: My Lords, before the Committee moves to Clause 2, I think it would be right to make a short business statement, which is as follows:
It has been agreed through the usual channels that the Housing (Multiple Occupation) Bill in the name of my noble friend Lady Vickers should not be given a Second Reading this evening.
Clause 3 [Status of Child]:
The Earl of Cork and Orrery The Earl of Cork and Orrery moved Amendment No. 2:
Page 1, line 7, leave out ("surrogate mother") and insert ("woman").
The noble Earl said: I have nothing particular to say about the substance of the Bill and I do not wish to express any views about what has been said by the noble Lord, Lord Ennals, or anyone else so far. My concern with the Bill is almost, but not quite, entirely semantic. I am reminded of an occasion many years ago, and it may be that the only other noble Lord present in the Committee who will recollect it is my noble friend Lord Craigmyle. He, like me, took part in the Second Reading debate on the British Standard Time Bill, which I think was in 1970 or thereabouts.
In that debate, our noble friend Lord Conesford, that doughty warrior on behalf of purity in the English
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language, criticised a particular section of the Bill by saying that it might have been drafted in a different way, more simply; it might have been drafted in the form that the winter shall be deemed to be the summer. There is a certain element of that in this Bill, strong enough at any rate to remind me of that far away occasion. It has to do with the definitions of "surrogacy", "surrogate mother" and so on.
I have put down a group of amendments, two here and two on the next page, Amendments Nos. 6 and 7, to do with this, and if I may I shall speak to the first two, which are really a single one. Amendments Nos. 2 and 4 are based on the simple idea that a child born to a woman is, to all intents and purposes, the child of that woman; or, put the other way round, the woman who has a child is, for all purposes in law, the mother of that child. I think that is true and that is what my amendment actually says. The Bill says, or at any rate implies, that the woman who has the baby is the mother of that child if she is a surrogate mother. This complication will become more acute in a minute if my noble friend Lord Coleraine will carry it a stage further and say that it is so; the woman is the mother of the child if she is a surrogate mother and also if she is the genetic mother of the child.
We are getting into pretty deep waters fairly early, and my noble friend Lady Trumpington gave a slight indication of how deep these waters may get in the Second Reading debate on this Bill by referring to surrogate pregnancies. This appears to me to be quite a long step nearer the idea of a surrogate baby.
However, at any rate we already have the idea that there are only two kinds of mother in this surrogacy arrangement, one of whom is the surrogate mother and the other is something which is not identified. We have had these two persons described in different ways. We have in fact—and this is on the Second Reading of this Bill alone—been told about the surrogate mother, the bearing mother, the social mother, the carrying mother and the genetic mother. The only character who does not appear anywhere in this Bill is the mother.
What about this unfortunate baby? Was he born by some process of osmosis or something that is the opposite of whatever that may be—of parthenogenesis? These are not idle frivolities, in my opinion. I ask that a simple statement should be put down and not be, if I may put it crudely, messed about with. Therefore I propose that Clause 2 shall be amended so that it reads:
"A child born to a woman in pursuance of a surrogacy arrangement shall for all purposes in law be regarded as the child of that woman".
That is a simple, straightforward statement. I beg to, move.
9.45 p.m.
Lord Denning: May I say that this adds nothing? We have the definition of "surrogate mother" in the Act which has already been passed. We do not want to use another word which some courts may say was different. The Bill states "born … in pursuance of a surrogacy arrangement". To know what a "surrogacy arrangement" is, one has to go back to the Act which is already in being. In a "surrogacy arrangement" a person would be a surrogate mother, so one has to have the definition of "surrogate mother" as already

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defined in the Act which has passed through Parliament. It would confuse matters a great deal if the word "woman" were inserted instead of "surrogate mother". I hope that the Committee will not accept this amendment.
Baroness Trumpington: I feel I should point out to the Committeee that if any of the amendments put down in the name of my noble friend Lord Cork and Orrery were accepted they would have implications for the 1985 Act which would need amendment in a number of other provisions thus causing further legislation in this matter.
The Earl of Cork and Orrery: I am well aware of these points, both those made by the noble and learned Lord, Lord Denning, and also by my noble friend the Minister. The reason that I had not touched on them in advance of my remarks was that I thought that my amendment was so simple and so obvious that I could get away with that one, get past it and proceed to the more important matter. As these matters have been brought up now perhaps I may proceed and speak also to Amendments Nos. 6 and 7. I hope that will meet with the approval of the Committee. They are intended to meet the objection of the noble and learned Lord that definitions have been made of "surrogate mother" and "surrogacy arrangements" in the Act. This is true and the Act was based on the Warnock Report which I suspect, though I am not sure, took the word "surrogacy" and its definition from some American source.
The noble and learned Lord, Lord Denning, said in his earlier speech on the first amendment—I think he did, I do not wish to misquote him—that there was no contradiction between the legal definition of "surrogacy" and the ordinary logical dictionary definition. With the greatest diffidence and a great deal of respect I venture to doubt whether that is true. Whether the noble and learned Lord said that, the dictionary definition is clear and simple. A "surrogate" is a substitute. There is no argument about that. If a surrogate is a substitute, how is the word used in the terms of the Bill and in the Act?
In bringing up this argument I am so bold as to say that the Act itself ought to be amended. This is what I am proposing to do with the amendments. The reason for amending the Act and not merely the Bill in my suggestion is that this matter will create more and more confusion. Every time someone mentions a surrogate mother or a surrogacy arrangement or a bearing mother, a caring mother, a genetic mother or any other kind of mother, he will immediately have to say what he means. With simple words one does not have complications. I believe this is worth the trouble. It is possible legislatively speaking to amend the Bill to stop the complication before it gets any worse, because I believe it will get worse and worse.
My proposal in Amendment No. 6 is to amend subsection (2). The Act says:
"'Surrogate mother' means a woman who carries a child in pursuance of an arrangement … made before she began to carry the child, and … made with a view to any child carried in pursuance of its being handed over to, and the parental rights being exercised (so far as practicable) by, another person or other persons".
This came to pass because we imagine a woman who cannot have a baby for some reason or another; so, as
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we well know by this time, another woman is enlisted to have the baby in her place. That woman is described as the "surrogate mother". But that woman is the mother, in my contention. It is all very well to in vent new definitions; but, if they are to be invented, they should not be precisely the opposite of what we already understand by the word when we read our dictionaries. This is what I was referring to when I referred to my late noble friend Lord Conesford: Let the winter be deemed to be the summer! Let the mother be deemed to be the surrogate mother!
The surrogate mother is the women who receives the baby and brings it up as an adopted child. The mother is the mother; and that, I think, is that. Therefore my amendment proposes to say in place of that section:
"'Surrogate mother' means a woman who, in pursuance of an arrangement made before the carrying of a child by its mother began, assumes the parental rights of a mother in relation to that child."
The word "assumes" may not be correct in law. I am not sure about that. But she is the surrogate mother by my definition.
Then we go on to subsection (3) which reads:
"An arrangement is a surrogacy arrangement if, were a woman to whom the arrangement relates to carry a child in pursuance of it, she would be a surrogate mother."
So the woman who has the baby is the surrogate mother. She is the substitute. But for what? For the real mother? No, she is the real mother. So, for what is she a surrogate? She is the surrogate, according to the logic (if that is not too strong a word to use in relation to what lies behind this Bill or Act) for somebody who cannot have a baby. But that does not make her a surrogate mother; it makes her a mother. The woman who gets the baby is the substitute for that original mother who hands the baby over by process of adoption.
This is the perfectly ordinary, simple, straightforward situation that actually occurs. It seems to me that although we understand what is the logic of the Bill and of the Act, the complications that are going to arise from it are great enough to make it wise to change the whole thing and put it into ordinary common English. Those are my arguments about the whole group of amendments. I beg to move Amendment No. 2.
Lord Coleraine: I wonder whether I could help my noble friend to come to a working relationship with the definition of "surrogate mother" in the Act and in the Bill if I suggest to him that he might think of "surrogate" and "mother" as both being nouns; so that when he is thinking of substitute mother he is thinking of somebody who is at once a substitute and a mother.
The Earl of Halsbury: I have much sympathy with the semantic conscience of the noble Earl who likes to see the English language properly used according to the meanings that one finds in the Oxford English Dictionary. But I am afraid that there are sad precedents aplenty for transatlantic misuses of our language to cross the Atlantic and establish themselves here as the jargon of some particular specialisation
I think that the term "surrogate mother", in the strict sense of the word, is totally misleading but I bow

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before the inevitable. It has invaded our jargon and I do not think that there is now any chance of getting rid of it. Strictly speaking, a surrogate mother would be somebody who acts as a substitute for a mother—that is, somebody who is a mother by adoption or one who adopts a child. That would be a correct use of "surrogate mother". But it is no longer going to be used in that sense. It is going to be used in the sense in which it is used in the Warnock Report and in the 1985 Act. I am afraid it is quite inescapable that that should continue. I believe that the noble Earl's three amendments really are an attempt to evade something that is more or less inescapable. There is another purely legal aspect of this about which we have to be very careful. When it comes to the construction of Acts in the courts there is a general principle that any variation of wording must be intentional. Debates in Parliament are not matters of which the courts take cognisance.
In seeking the intention behind a change of wording, the courts can upon occasion invent rather surprising intents to account for the variation. I have checked what I have just said with my noble and learned friend Lord Denning, and he tells me I am quite correct. So that we do not want to have "surrogate mother" used in one sense in this Act and in another sense in the 1985 Act. Nor do we want to invade the province of the Adoption Act 1976 because a "surrogate baby", if I may use that expression, can only become the child by adoption of those who have made the surrogacy arrangement, legal or illegal, by going through the procedures laid down in the 1976 Adoption Act. We really must not get our nomenclature so confused that we run into trouble with yet another Act.
For that reason I believe that the noble Earl's Amendments Nos. 2, 6 and 7 do not really amount to a sufficiently thought-out programme of reform for the semantics of this subject. I can only hope that he will not press them to a Division on this occasion but that he and I may perhaps get together and he may choose a new form for them at a later stage of the Bill.
The Earl of Cork and Orrery: I am most grateful to the noble Earl for his conciliatory reply to my suggestions. If he will have a little discussion with me between now and Report stage, I shall be more than happy. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
Lord Coleraine Lord Coleraine moved Amendment No. 3:
Page 1, line 8, after ("shall") insert (", in any case where the surrogate mother is the genetic mother of the child and").
The noble Lord said: I have tabled this amendment as a peg from which to fly a kite in relation to the particular kind of surrogacy to which the noble Lord, Lord Winstanley, referred in discussing the Question that Clause 1 stand part—the case of a childless couple where the husband is fertile and where, although the wife can ovulate, she cannot or should not carry her child to full term. The idea is that an egg is fertilised by the husband and implanted in a surrogate. The surrogate is to carry the child to birth and after birth the surrogate is to hand the baby to the commissioning parents to bring up as their baby.
My amendment provides that Clause 2 of the Bill does not apply to such commissioning parents. I am aware that the commissioning couple I have described have, at least before this evening, received scant sympathy in this Chamber. Last summer when we considered the Surrogacy Arrangements Bill the perceived problem was the Baby Cotton type of surrogacy situation. Surrogacy by implantation was hardly more than a cloud on the horizon of what we might have seen as a brave new world; yet already many Members of the Committee, including the noble Earl, Lord Halsbury, had given careful consideration to the problem and spoke strongly against surrogacy by implantation.
Clause 2 of this Bill reproduces the amendment put forward by the noble and learned Lord, Lord Denning, at Committee stage on 28th June 1985. That was widely supported by all who spoke, except for my noble friend the Minister, Lord Caithness, who saw reason to counsel caution. So I am aware that there is an innate hostility to a commissioning couple of the sort I have described.
I suspect that what lies behind this hostility can best be summarised in words used by my noble friend Lord Reading during the Second Reading of the Surrogacy Arrangements Bill last summer. They are to be found in col. 1532 of Hansard of 14th June 1985. He said:
"To fragment motherhood would be a heavy responsibility. It would produce an anguished question of identity for any child: the terrible dilemma summed up in the question, 'Who is my mother?' Fragmented motherhood ought to be impossible. The womb should naturally lead to the home. The one who carries should be the one who cares after birth. This is the natural order. I believe too that it is a God-given order. We put these things asunder at our peril."—[Official Report, 14/6/85; col. 1532.]
Those are telling words. I hold no brief for surrogacy in general for the very simple reason that it must in very many cases, if not most, lead the child of the surrogate birth, when he discovers his or her antecedence, to ask the questions: who are my mother and my father? Who am I?
10 p.m.
When it comes down to rock bottom, a couple who are prepared to bring a child into the world taking the chance that their child may grow up to ask those questions must be prepared to answer a charge of gross selfishness, however great may have been the wife's distress at not being able to carry her baby to term—a distress which may well in many cases have been compounded by frequent miscarriages. Nevertheless, we must accept that where pregnancy and birth take place following egg or embryo transplantation, whether the case is one of donations, with which we are not dealing tonight, or surrogacy, the essential functions of motherhood have, in fact, been fragmented. We shall not necessarily succeed in our endeavours if we try in our legislation to set aside physical laws.
Clause 2 provides that a child born to a surrogate mother is to be the child of that mother for all purposes in law. When the noble and learned Lord moved his amendment last year, my noble friend Lord Caithness pointed out that where the surrogate mother is also the genetic mother the law is clear, and she, the surrogate mother, is alone the parent of the child, but that where the commissioning couple have caused

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their egg and sperm to be implanted in a surrogate the law is unclear as to whether the commissioning mother or the surrogate is to be regarded as the lawful parent. My noble friend recommended on that occasion that it was too early to rush into accepting the amendment while the last point was still under discussion, and the noble and learned Lord withdrew his amendment on that occasion.
I am still for following the reasoning of my noble friend Lord Caithness on that occasion. I would be for giving statutory effect to what is clearly understood to be law while continuing to leave the rest for further consideration. I do not for one moment suggest that the commissioning couple should be treated as the parents of the child simpliciter, but merely that there is a case that the child should not be declared to be the child of the surrogate for all purposes in law.
I would say that the child himself has an even stronger case that his commissioning parents should not be so lightly dismissed by the law. In the majority instances of this type of surrogacy, I should imagine that the commissioning couple will receive and care for the child after its birth, and I hope that that would be considered a satisfactory conclusion to such an arrangement. I find it difficult to see how it could be shown to be demonstrably to the advantage of the child to be brought up by the woman who had merely received another couple's embryo as their surrogate and then kept the child, if only because the feelings of that child on discovering the true facts would surely be no less disturbing than those of a child brought up by commissioning parents on learning that his pregnancy had been passed in the womb of their surrogate.
If we take the case of a baby received by the commissioning parents from their surrogate after the birth, I can envisage several areas in which the commissioning parents ought perhaps to be recognised in law as being more than merely prospective adoptive parents. Should they not have the prima facie right to bring up the child as its parents? Is it not in the interests of the child that that should be so? It may be that the commissioning parents should go through some formal procedure before full recognition is given to their status in relation to the child, but should this be an adoption process, as Warnock suggests? Are we being fair to the child if we call him an adopted child when he is in fact, and has been brought up to believe himself to be, the true child of his own genetic parents?
If we take the converse case of a surrogate who decides to renege on her bargain and keep the baby she has carried and given birth to, I would not for one moment suggest that there is in principle any reason for suggesting a case for untying the bonds which are formed during pregnancy. All the same, what if the surrogate were seeking to keep the baby only as a means of extorting money from the commissioning parents? What if the surrogate proved unsuitable to look after the baby or wished to have it adopted? Should not the parents have at least greater inchoate rights than the rest of the world in respect of the child? Should they not have some right of application to a court to determine questions affecting the child?
I am not tonight suggesting any answers to those questions; I am only raising the questions. I do not think that the question is as clear as the Warnock Report puts it. I recommend that the law at this stage
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should not be clarified in the way proposed by Clause 2 of the Bill. I beg to move.
Lord Denning: So far as I understand it, when the surrogate mother is the woman with her own egg and she produces the child she is undoubtedly the mother for all purposes. The point which my noble friend raises relates to a situation where another woman provides the ovum and the medical man injects that ovum into what I call the mother's body. The sperm of a man is joined to it and then that woman carries the baby—the implantation and everything like that—through the whole nine months to its birth.
Who is the mother? Beyond doubt, I should have thought, the law and everyone would hold that it is the woman who carries the fertilised ovum in her body, from the moment of implantation right to the birth. Surely that is the mother. It is impossible to say that the mother who has provided the ovum through a medical man—in a test tube or whatever it may be—is the mother in the circumstances. The law ought to be made quite clear that the mother who has carried the baby all the way through from the conception to the birth is undoubtedly the mother.
You have to remember this. The Warnock Report has a principle of anonymity. You do not know who is the parent—one or the other. That is one of the principles in the report. At all events, let this be certain. The mother of the child is the one who carries it all the way through from conception to birth. I hope that the Committee will approve the Bill as it stands and not accept the amendment.
Lord Swinfen: I can see something in my noble friend's amendment in that the commissioning parents who provide the sperm and the egg would have a greater responsibility to the child, over and above the responsibility of other people in the world but after what is known as the surrogate mother. If something went wrong with the surrogate mother I can see that they would have a responsibility to take on and bring up that child.
I am not a doctor; I am a layman. My wife has had four children. Pregnancy, so far as I understand it, does not stop when the child is born. There are other changes in the woman's body. For a time after the child is born, she produces milk, and unless the doctors decide it is unwise for her or for the baby, she gives suck. A natural progression goes on from the time of birth to feeding that child, to looking after it, to bringing it up until finally it is adult enough to leave the nest. In my view, the child should stay with the mother who carries it during the nine months of pregnancy, who gives birth, and who then leads the child on through babyhood, childhood and young adulthood, until he is off into the world and making his own way.
If something goes wrong with the so-called surrogate mother then obviously the commissioning parents, where they have provided both the sperm and the egg, have a responsibility to that child—but not over and above that of what is known in the Act as the surrogate mother. I feel it is essential that the surrogate mother should have prime responsibility and call upon such a child.
Lord Winstanley: I rise to make two points very briefly. First, I believe that the noble Lord, Lord Coleraine, both in his amendment and in his speech upon it, has pointed to matters of immense importance and very great complexity. I agree with much of what he said. I agree also that perhaps such matters cannot be dealt with in this particular Bill in this particular way. Perhaps that reinforces my view that we should have waited for a much more comprehensive Government Bill—the one that we hope will presently come forward.
This gives me an opportunity to say to the noble Lord that of course it was wholly right to call me to task with regard to my definition of surrogacy. I accept that from a grammatical point of view it was too narrow. However, it was the kind of surrogacy about which I was concerned and about which most of the professional workers in this field are deeply concerned. It was for that reason that I defined it so narrowly.
While I am on the subject of grammar, I may add that I greatly agreed with the noble Earl, Lord Halsbury, in his remarks about the use of the English language. As a member of the medical profession, which has perhaps been responsible for introducing some of the new abuses of the English language, the noble Earl might join with me in regretting that, nowadays, medical students do not study Latin as they did in my day.
The Earl of Halsbury: My difficulty in responding to the noble Lord, Lord Coleraine, on the subject of his amendment arises from the fact that the general includes the particular. In the Bill as it stands the provision is of a quite general character. The noble Lord's amendment would restrict that in particular cases.
The Bill is primarily concerned with arrangements and not with medical procedures. There can be many different forms of surrogacy. There can be many kinds of medical procedures. A woman can have an egg extracted, fertilised by her husband's sperm, and reimplanted in her own uterus to obviate some kind of fallopian blockage. Such is perfectly possible. Obviously she would be the genetic mother of the child, notwithstanding all the medical manipulation that had taken place.
One could also have the situation in which the woman arranged for her husband adulterously to render another woman pregnant. That other woman would be the mother of an illegitimate child that might be available for adoption, but she would still be the mother. The working of my Bill is quite general in that respect. It does not specify any particular procedure. From that point of view, I believe that the noble Lord's amendment is not very helpful. I hope that he will either withdraw it or reserve his position until a later stage of the Bill, and perhaps we could discuss the matter between now and then.
Lord Coleraine: I assure the noble Earl that not only shall I be withdrawing the amendment but also that I do not propose to reserve my position to reintroduce the amendment at a later stage. I am aware that the amendment presents certain difficulties. Nonetheless, we have had a useful debate. I was grateful to the noble Lord, Lord Winstanley, for his observations, especially
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in relation to the meaning of the word "surrogacy". We have to face the fact that, in a sense, surrogacy has moved on since last year. Although the Bill is talking about surrogacy in last year's terms, and there are still this year's terms, I am sure that a lot of people outside look upon surrogacy purely as described now by the noble Lord, Lord Winstanley. The other forms of surrogacy are non-issues in the terms of this debate.
My only other comment in relation to the speech of my noble friend Lord Swinfen is that I agree with all he said about the rights of the surrogate as against the commissioning parents. But primarily I was directed to suggesting that, whereas in most cases the bargain will be kept and the commissioning parents will become the true, adopted or genetic parents—or however one puts it—of the baby that is born, there is a good case for considering carefully their position before we shut them out of the law altogether. I beg leave to withdraw my amendment.
Amendment, by leave, withdrawn.
[Amendment No. 4 not moved.]
10.15 p.m.
Clause 2 agreed to.
Clauses 3 and 4 agreed to.
The Deputy Chairman of Committees (Lord Airedale): In the schedules, owing to a misprint, I think I should take the next three amendments in the order of Amendments Nos. 6, 7 and 5. However, I understand that Amendments Nos. 6 and 7 are not being moved.
Schedule 1 [Amendments to the Surrogacy Arrangements Act 1985]:
[Amendments Nos. 6 and 7 not moved.]
Lord Coleraine Lord Coleraine moved Amendment No. 5:
Page 2, line 6, leave out sub-paragraph (1).
The noble Lord said: Paragraph 2(1) of the first schedule to the Bill follows the recommendations of the Warnock Report. I should also say that paragraph 2(1) was in fact Amendment No. 3, spoken to with Amendment No. 4, moved by the noble and learned Lord, Lord Denning, at the Committee stage of the Surrogacy Arrangements Bill last year. On that occasion my noble friend Lord Caithness replied to the noble and learned Lord and in relation to the amendment which is now the paragraph I am seeking to have taken out of the Bill my noble friend said about a surrogate mother that if the amendment were passed,
"she would be denied many kinds of medical treatment, notably treatment to prevent a threatened miscarriage during her pregnancy".—[Official Report, 28/6/85; col. 933.]
I do not need to tell your Lordships of the importance to the mother and child of adequate pre-natal care.
The noble and learned Lord withdrew his amendment at that stage. I do not want to refer tonight to the effects of other subparagraphs in the schedule on this subparagraph, but they seem to make certain private sexual acts matters of criminal offence and there will be many who will see the subparagraph as a most unwelcome intrusion of criminal law into private morality.
The point I seek to make in particular is that paragraph 2(1) discriminates against doctors and fertility clinics that might propose to carry out in vitro fertilisation and embryo implantation, which we have already discussed. What the subparagraph does is effectively outlaw this treatment by the back door. It seems to me that all the other forms of surrogacy can be achieved by do-it-yourself methods. Paragraph 2(1) would appear to have the tendency of driving underground all surrogacy arrangements except those made on a do-it-yourself basis. That is the point made most tellingly by Doctors Greengross and Davies in their expression of dissent to the Warnock Committee Report. I find of particular concern the fact that paragraph 2(1) criminalises the monetary side of surrogacy to such an extent that it will really leave lawful surrogacy possible only within the family.
At the Second Reading of this Bill, the right reverend Prelate the Bishop of Ripon said that he did not want to claim that the Church of England had a consensus which extended to the total banning of surrogacy. At col. 576 he said:
"even within the church there are those who believe that it may be right and proper that a woman should offer in loving service the use of her womb to someone who is close to her … I hope that whatever is put into law will leave a space for that kind of loving service that I have mentioned".
On the other hand, in the same debate, at col. 579, my noble friend Lord Swinfen referred to the problems which may arise when a woman's mother acts as surrogate for her unfortunate daughter, and vice versa. I must say that I myself believe that there are really many more problems than there are elements of desirability in this form of loving service, however well meaning it may be.
In conclusion, I submit that the total criminalisation of monetary consideration in all surrogacy arrangements seems to be a recipe for a botched surrogacy, which will result in the worst of all possible worlds. I beg to move.
The Lord Bishop of Birmingham: I was not present when the right reverend Prelate the Bishop of Ripon spoke at the Second Reading of this Bill. It could well be that when he was talking about loving service he was not talking about in vitro fertilisation, or arrangements which require the services of doctors, nurses, solicitors or the like, but was simply thinking of private matters of surrogacy by natural procreation. I do not know.
I myself think that it is very undesirable to legalise non-profit-making organisations in this connection, because organisations create their own dynamic and their own momentum. People make their living out of them, even if they are not profit-making; and whether the people making their living are doctors, nurses, administrators, solicitors or whatever, those who work for such organisations have a vested interest in promoting their growth. They may even advertise their functions. There is reason to think that this is the case with certain non-profit-making organisations concerned with abortion or with the distribution of contraceptives to teenage girls.
We do not want non-profit-making organisations spreading what I think is a false gospel of surrogacy. Therefore, if the clause, to which the noble Lord takes
182
exception, prevents this happening, I hope that it will please your Lordships.
Lord Denning: I should like to say that I hope we shall retain provisions which render commercial surrogacy illegal. The Warnock Committee considered this matter very closely. The report, at paragraph 8.18 on page 46, says—and I think I had better read the whole of the paragraph:
"We have considered whether the criminal law should have any part to play in the control of surrogacy and have concluded that it should. We recognise that there is a serious risk of commercial exploitation of surrogacy and that this would be difficult to prevent without the assistance of the criminal law. We have considered whether a limited, non-profit making surrogacy service, subject to licensing and inspection, could have any useful part to play but the majority agreed that the existence of such a service would in itself encourage the growth of surrogacy. We recommend that legislation be introduced to render criminal the creation or the operation in the United Kingdom of agencies whose purposes include the recruitment of women for surrogate pregnancy or making arrangements for individuals or couples who wish to utilise the services of a carrying mother; such legislation should be wide enough to include both profit and non-profit making organisations. We further recommend that the legislation be sufficiently wide to render criminally liable the actions of professionals and others who knowingly assist in the establishment of a surrogate pregnancy".
That is the conclusion of the Warnock report. In a way, that is what we were trying, and are trying, to do in the Bill. I hope that the Committee will approve of this method.
The Earl of Halsbury: I am grateful to my noble and learned friend for taking the Committee through that passage of the Warnock report. It saves my having to do so. The point was taken in the Committee stage of the Bill last year that those recommendations of the Warnock Committee are drawn rather too widely and that as they stand, they would place a penalty on seeking advice as to what was or was not medically possible on the one hand or what was or was not legal on the other. For this reason, the words "establishment of a pregnancy" are used in my amendment to restrict the wrongful activities to what establishes a pregnancy as opposed to advice given about it.
The seeking of advice as to what is possible and what is legal does not establish anything, let alone a pregnancy, with the possible exception of answers to questions. The choice of those words as used in my Bill will effectively place an embargo on the progress, as I have warned previously, of vested interests and precedents growing up until the Government Bill, promised and awaited, but as yet undated, takes the whole subject under review, in which case it has always been my understanding that the Government will repeal their own Act and this Bill, if it reaches the statute book, as part of the wider legislation that they will introduce.
Lord Coleraine: I am glad that the noble Earl has taken this opportunbity to explain his reasons for introducing this amendment to the 1985 Act. I shall read carefully what he has said and consider my position at the next stage. In the meantime, I beg leave to withdraw the amendment.
Amendment, by leave, withdrawn.
[Amendments Nos. 6 and 7 not moved.]
The Earl of Halsbury The Earl of Halsbury moved Amendment No. 8:
Page 2, line 17, leave out sub-paragraph (3) and insert—
("(3) In subsection (3) of that section—

(a) in paragraph (a) leave out the word "or" in the second place where it occurs, and insert the words "or in respect of any other act performed by him in relation to the surrogacy arrangement, or";

(b) in paragraph (b) at end insert the words "or in respect of any other act performed by him in relation to the surrogacy arrangement"; and

(c) leave out the words from "In this subsection" to the end.")

The noble Earl said: With the leave of the Committee, I should like, in moving this amendment, to speak also to Amendment No 9 standing in my name. The Committee will remember that during Second Reading the point was raised that the present Act can be, and it was suggested is being, evaded by placing a contract, for example, to write the surrogate mother's memoirs on what it feels like to be a surrogate mother, and so on, related to her experience. I promised to look into the matter and was advised to table these amendments to close the door to evasion. The operative words are:
"any other act performed by him in relation to the surrogacy arrangement".
They occur four times altogether, twice in each amendment. If I consider the first occurrence in Amendment No. 8 as typical, the remainder are consequential and merely respect the need for uniformity. The part of the amendment marked (c) merely reintroduces the deletion already made by leaving out sub-paragraph (3) at the head of the amendment. I am advised that the use of the words "performed in relation to" etc. narrows the field sufficiently to avoid undesirable side effects. I beg to move.
Lord Denning: I support the amendment. It deals with such matters as writing memoirs, which is a form of payment.
Baroness Trumpington: I am grateful to the noble Earl, Lord Halsbury, for the opportunity that he has given us to debate this tightening up of the provision in Section 2(3) and 2(4) of the 1985 Act. It is clearly right that the aim of that Act to prohibit the operation of commercioal surrogacy agencies in this country should not be frustrated by obvious loopholes. If that ever proved to be the case, I am sure that the Government would want to look closely at the need for amending legislation. Meantime, we shall note the views expressed by the noble Earl, and by the noble and learned Lord, Lord Denning on this amendment very carefully when we come to consider the need for legislation to deal with the issues in the Warnock report.
On Question, amendment agreed to.
10.30 p.m.
The Earl of Halsbury The Earl of Halsbury moved Amendment No. 9:
Page 2, line 18, at end insert—
("( ) In subsection (4) of that section—

(a) after the words "in respect of the act" wherever they occur insert the words "or in respect of any other act performed by him in relation to the surrogacy arrangement"; and

(b) after the words "in respect of it" insert the words "or in respect of any other act performed by him in relation to the surrogacy arrangement".")

The noble Earl said: I have already spoken to this. I beg to move.
On Question, amendment agreed to.
Lord Swinfen Lord Swinfen moved Amendment No. 10:
Page 2, line 35, at end insert—
(". In section 4 of that Act (offences) in paragraph (a) in subsection (1) leave out the words "level 5 on the standard scale" and insert ("£20,000".")
The noble Lord said: It may be for the convenience of the Committee if I also speak to my Amendments Nos. 11 and 12 while moving Amendment No. 10. I moved similar amendments to Amendments Nos. 10 and 11 on 28th June 1985 when the Surrogacy Arrangements Bill was in Committee. Despite having support from all those who spoke I withdrew my amendments to ensure the safe passage of that Bill through both Houses.
The reports that there have been in various newspapers indicate that a fine of level 5, which I am assured is only £2,000, for commercial arrangements is ridiculously low. There have been various figures bandied about, some in this country, some in the United States. Working on the principle that often what happens in the United States today happens in the United Kingdom tomorrow, the highest figure that has been reported from the United States was, I believe, some 80,000 dollars. At today's rate of exchange that works out at somewhere in the region of £54,000 or £55,000 for commercial arrangements. A fine of £2,000 on that is petty cash and can be swallowed up in the expenses.
As the Committee can see from the amendment, my proposal is to change from level 5 to a figure of £20,000. As I pointed out last year, we already have provisions on summary jurisdiction for a fine of up to £10,0000 under the Local Government (Miscellaneous Provisions) Act 1982, Schedule 3, paragraph 22. The Video Recordings Act 1984 on summary conviction provides for a fine not exceeding £20,000. In addition to that, under the Customs and Excise Management Act 1979 a summary penalty can be fixed of three times the value of the goods. I have been in court when magistrates have had the power to fine on goods of some £16,000 in value. Three times that, if my arithmetic is correct, is some £48,000. I am not suggesting that we go anywhere near that.
My Amendment No. 11, to increase the imprisonment penalty from three months to six months, brings the penalty in line with Section 50 of the Adoption Act 1958 which was shown by my noble friend Lord Caithness last year as being the kind of principle on which the Government were working at that time.
Amendment No. 12 takes account of suggestions by my noble friend Lord Brentford who pointed out that if there was no provision in the Bill for variation of the fine in the years ahead, and by some mischance inflation proceeded at a high rate, £20,000 would soon be chicken feed. My noble friend Lord Caithness, when answering my amendment last time, said that if the penalties were insufficient to deter, the Attorney-General may obtain a High Court injunction to restrain people involved in commercial surrogacy and that a breach of such an injunction is a contempt of

185
court with a penalty of imprisonment of up to two years and an unlimited fine.
Although many people will be aware of the Surrogacy Arrangements Act and no knowledge of the law is not an excuse, there are not very many people who are aware that when someone goes on disregarding the law, the Attorney-General gets an injunction. It is my belief that the penalties set out in the various Acts of Parliament should themselves act as a deterrent, and I do not think that the penalties in the Surrogacy Arrangements Act 1985, as they now stand, are sufficiently large to act as deterrents. I beg to move Amendment No. 10.
Lord Denning: I should like to support this amendment for the reasons which my noble friend Lord Swinfen has given. When large sums of money pass to the surrogacy organisations, it is important that criminal law should be strong enough to fix a proper penalty and if need be, imprisonment. As to the other suggestion about the Attorney-General, the courts are very chary about interfering by way of injunction to enforce a criminal law when penalties are already provided by this statute. It is not at all right to rely on the Attorney-General and the procedure of an injunction, which does not appear in the statute. The primary way of dealing with these is the criminal law by fine or imprisonment. Therefore, I support entirely what my noble friend says.
The Earl of Halsbury: This takes me a little out of my depth. The noble Lord, Lord Swinfen, must fight his corner on this. I should be happy to adopt his three amendments, provided that the Government do not warn us against any undesirable side effects that they may have. In that case, the noble Lord will doubtless seek time to consider what they have to say.
Baroness Trumpington: I do not think that the arguments have changed since the last round when my noble friend Lord Caithness spoke, but I must retreat to my neutral corner.
Lord Swinfen: I think that I covered in my opening remarks the comments made by my noble friend Lord Caithness last time, and, therefore, I beg to move Amendment No. 10.
On Question, amendment agreed to.
Lord Swinfen Lord Swinfen moved Amendment No. 11:
Page 2, line 35, at end insert—
(". In section 4 of that Act (offences) in paragraph (a) in subsection (1) leave out "3" and insert "6".").
The noble Lord said: I have already spoken to this amendment. I beg to move.
10.39 p.m.
On Question, Whether the said amendment (No. 11) shall be agreed to?
Their Lordships divided: Contents, 13; Not-Contents, 14.

DIVISION NO. 2

CONTENTS

Boyd-Carpenter, L.

Hacking, L.

Buckmaster, V.

Halsbury, E. [Teller.]

Butterworth, L.

Mowbray and Stourton, L.

Coleraine, L.

Sidmouth, V.

Cork and Orrery, E.

Swinfen, L. [Teller.]

Denning, L.

Vaux of Harrowden, L.

Eldon, E.

NOT-CONTENTS

Airedale, L.

Morris, L.

Craigavon, V.

Parry, L.

Dean of Beswick, L.

Ross of Marnock, L.

Galpern, L.

Stoddart of Swindon, L. [Teller.]

Grantchester, L.

Hylton-Foster, B.

Whaddon, L.

Kagan, L.

Winstanley, L.

McNair, L. [Teller.]

10.48 p.m.
The Deputy Chairman of Committees (Baroness White): As it appears that fewer than 30 Lords have voted, in accordance with Standing Order No. 55 I declare the Question not decided and, pursuant to the Standing Order, the House will now resume.
House resumed.

London Underground (Goodge Street) Bill [H.L.]
Committed to a Select Committee.
Harrogate Bogs Field etc. Bill [H.L.]
Reported from the Unopposed Bill Committee with amendments.

Isle of Wight Bill
Brought from the Commons; read a first time, and referred to the Examiners.
House adjourned at eleven minutes before eleven o'clock.

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