Sitting of 2 December 1986

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

  YORK CITY COUNCIL BILL [Lords]
  Order for Second Reading read.
  To be read a Second time upon Thursday.

Oral Answers to Questions
  EDUCATION AND SCIENCE

    Unemployed Persons
    Mrs. Goldingasked the Secretary of State for Education and Science what plans he has to open up educational opportunities to the unemployed.
    The Minister of State, Department of Education and Science (Mrs. Angela Rumbold): The development of educational opportunities for unemployed adults in England and Wales is being encouraged by my Department and the Welsh Office through the Replan programme, which began in 1984.
    Mrs. Golding: Will the Minister say how many of the 3 million unemployed over 18 years old are receiving any form of education?
    Mrs. Rumbold: That is rather a difficult question, but I can certainly undertake to let the hon. Lady have a written reply.
    Mr. Squire: Does my hon. Friend agree that many unemployed people are gaining useful knowledge in our adult education colleges, and will she continue to bear them in mind, because the level of funding that they enjoy is but a tiny fraction of the overall education budget?
    Mrs. Rumbold: I entirely agree with my hon. Friend. Although the funding has not been substantial, it has been effective, and the programme undertaken by the National Institute for Adult and Continuing Education and the Further Education Unit for Unemployed Adults in colleges of further education has been most successful. It has been providing good opportunities for people to learn about leisure and to receive pre-vocational education to equip them for the future.
    Mr. Sheerman: That is a dismal response by the Minster. The potential for educating and training unemployed people is enormous. Could the Minister not talk to the Secretary of State for Employment, Lord Young of Graffham, because it seems that it is possible to
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    have a Government programme that allows training for unemployed people if they come off the dole queue, but very little or no training or education without people's benefits being taken away. We want people to be allowed to have education and training while retaining their benefits. Why can we not have genuine education for unemployed people?
    Mrs. Rumbold: There is genuine education under the Replan scheme. The Restart scheme about which the hon. Gentleman spoke is being carried out with some help from us, but the main opportunities that we provide are taken up under the Replan scheme, which is funded not only through NIACE and the Further Education Unit but through the education support grants which local authorities are helping to fund. They are doing excellent work in providing training and vocational training for the unemployed and are giving them opportunities to use their time in leisure and recreation pursuits while they seek new employment.
    Mr. Brandon-Bravo: In the context of the unemployed, does not the Open University play a good role? Will my hon. Friend pay tribute to the extra funding that has been given to that most excellent avenue of opportunity?
    Mrs. Rumbold: My hon. Friend is right. The Open University has undertaken to provide a special project for the unemployed.

    Higher Education
    Mr. Stan Thorneasked the Secretary of State for Education and Science whether he will make a statement on the levels of pay of non-academic and ancillary staff in higher education.
    Mr. Patchettasked the Secretary of State for Education and Science whether he will make a statement on the levels of pay of non-academic and ancillary staff in higher education.
    Mr. Eadieasked the Secretary of State for Education and Science whether he will make a statement on the levels of pay of non-academic and ancillary staff in higher education.
    Mrs. Rumbold: The Government are not involved in pay negotiations for this group of staff and it is for employers to reach agreement on pay levels which they can afford, having regard to recruitment, retention and motivation.
    Mr. Thorne: That answer tends to suggest that the Government consider that they have no responsibility in this field. That surprises me, and I should like the Minister to tell us what she proposes to do to overcome the problem that universities in particular presently face.
    Mrs. Rumbold: The hon. Gentleman will know that a quantum of money goes to the universities. The pay bill that applies to both academic and non-academic staff must be regarded as one item within the overall resources that are agreed by the Government, and it is for the universities to decide how it is spent.
    Mr. Patchett: Will the Minister accept that over 90 per cent. of manual and clerical workers in universitites are on almost poverty level wages for a full week's work? Is she prepared to reconsider her recent answer on this question and to do something about it?
    Mrs. Rumbold: I have no doubt that a very important contribution is being made by that group of people, but I must reiterate that it is for the universities, within their overall resources, to decide their priorities and to allocate money accordingly.
    Mr. Eadie: Is the Minister trying to tell the House that her Department and the Government escape responsibility for people on very low pay, which is the question that we are discussing? Does the Minister agree that 90 per cent. of those upon whom we are focusing our minds are receiving under £100 a week, and that two-thirds of the clerical staff receive no payment whatsoever for overtime? We are talking about very low pay and the Minister, on behalf of her Government, must accept some responsibility.
    Mrs. Rumbold: It is quite obvious that the Opposition do not understand. The universities obtain a grant from the Government. It is then for the universities to negotiate within the proper forum the kind of pay agreement that they want. Within the totality of the money that is given, it is for the universities to decide their own priorities.
    Mr. Patrick Thompson: As many of the ancillary and non-academic staff in universities are particularly concerned about matters involving the organisation of universities and the organisation of meetings at universities, many of my constituents who do these jobs are very worried about something that is happening today at the University of East Anglia. The Labour club there is being addressed by the hon. Member for Linlithgow (Mr. Dalyell), at a time when the University of East Anglia has asked for the postponement of a meeting that is to be addressed by my hon. Friend the Member for Billericay (Mr. Proctor). Does that not suggest double standards and is this not—[Interruption.]
    Mr. Speaker: Order. I should have thought that that question was miles wide of pay.
    Mrs. Rumbold: I understand that my hon. Friend the Member for Buckingham (Mr. Walden) has written a letter to my hon. Friend the Member for Norwich, North (Mr. Thompson) and that he will be receiving an answer to the point that he has just raised.
    Mr. Andrew F. Bennett: Will the Minister confirm that the Government announced that additional resources were to be made available for the universities? Will she also confirm that there is considerable confusion in the universities because they do not know how much each of them will receive, or how much the Government insist should be earmarked for academic and for non-academic salaries? It would be helpful if the Government would tell the universities the figure for academic salaries, so that the universities can decide whether any money will be available for the very low-paid groups of people who are in non-academic posts in universities. Will the Minister accept that the Opposition are appalled by the very low wages that are paid to some of the non-academic staff in universities?
    Mrs. Rumbold: I register what the hon. Gentleman said about non-academic pay. The answer to his first question is that that matter will be decided at the beginning of next year. It is quite clear that the hon. Gentleman does not understand that the money is allocated to the universities and that it is for the universities to decide their priorities.
    Mr. Bennett: But how much? The hon. Lady has not told the universities how much is available.
    Mrs. Rumbold: They will learn how much money is to be made available for academic pay early next year. It is entirely up to individual universities to decide, with the proper unions, how the money is to be allocated for the restructuring of academic and non-academic staff.

    School Buildings
    Mr. Parkasked the Secretary of State for Education and Science what representations he has received in the past three months on the state of repair of school buildings.
    Mr. Pikeasked the Secretary of State for Education and Science what representations he has received in the past three months on the state of repair of school buildings.
    The Parliamentary Under-Secretary of State for Education and Science (Mr. Bob Dunn): My right hon. Friend has received no major representations on this subject. The repair and maintenance of school buildings is raised from time to time in correspondence from hon. Members and from members of the public.
    Mr. Park: Is the Minister aware that an Audit Commission study in 1985 showed that Coventry education department was underspending, because of financial constraints, by £1 million a year, which is about 100 per cent., and that as a result the schools in Coventry are in urgent need of repair and renewal? What does the Minister propose to do about that?
    Mr. James Lamond: It is nothing to do with the Government.
    Mr. Dunn: Responsibility for the organisation—[Interruption.]
    Mr. Speaker: Order.
    Mr. Dunn: I congratulate Labour Members on their interest in this matter. As they know, the condition of school stock has been arrived at over 20 years of benign, and sometimes malign, neglect. Labour Members have to take their share of the responsibility. I remind the House that the Labour party was in power for 11 out of the past 22 years. When it admits its share of the blame, we shall start to listen to its points.
    Mr. Pike: Will the Minister nevertheless accept that the Conservative party is now in office, and that there is a problem? The Secretary of State recently visited Lancashire and is aware of the problems there, and of the fact that much money is needed to put the schools in good order. What will the Government's response be? Will they help or will they continue to sit aside and let the situation deteriorate?
    Mr. Dunn: On the hon. Gentleman's first question, the Conservative party is in power, and we shall be for the next 20 years at least. Secondly, local education authorities are constantly telling us that one of their priorities is to spend more on the repair and maintenance of education buildings. The planned increase of 18·8 per cent. in cash in 1987–88 over 1986–87 plans provides for them to meet this and other priorities.
    Mr. Lawler: Does the Audit Commission report not show that the problem is not one of cash leaving the

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    Government, but rather where it is going, and that £700 million is being wasted by local authorities on maintaining surplus places? Will my hon. Friend assure us that strong steps will be taken to force local authorities to take speedy action so that areas such as my constituency, where there is a fairly unusual problem of rising rolls, can have money allocated to them so that they can repair buildings?
    Mr. Dunn: An awful lot can result from the good management of our schools, as my hon. Friend said. I cannot comment on allocations that have yet to be announced.
    Mr. Lord: Does my hon. Friend agree that in the problem of the costs of repairing school buildings, as in many other problems, a trouble shared is a trouble halved? Is he aware that in my constituency, in the village of Mendlesham, we have just built a brand new school, funded jointly by the community and the local education authority, which is to be used for both educational and community purposes? Does he not warmly welcome this exciting new project?
    Mr. Dunn: I welcome that partnership, which is such a tremendous, dynamic and go-ahead partnership by the people in this constituency. It shows what sensible, good-natured and responsive people they are.
    Mr. Madden: I was staggered to hear the Minister say that he had not received any major representations about the condition of schools. Does he not recollect being in Bradford recently, when he expressed concern about crumbling schools in that city? Does he not recognise that the ratepayers of Bradford are becoming heartily sick of Education Ministers coming to the city, drinking ratepayers' tea and giving very little in return except expressions of concern?
    Mr. Skinner: Tea and sympathy.
    Mr. Speaker: Order.
    Mr. Dunn: If the hon. Member for Bolsover (Mr. Skinner) had a brain, he would be dangerous. If local education authorities spent less money on anti-sexist, anti-racist, anti-capitalist and anti-police activities they could probably do a lot better in terms of repair and maintenance.
    Mr. Sayeed: As the Audit Commission has clearly shown that local authorities are often inefficient in applying funds to schools, will the Minister issue guidelines to local authorities enouraging an extension of the Cambridgeshire scheme, which permits heads to exercise control over money spent on their schools?
    Mr. Dunn: I am totally enamoured of the Cambridgeshire experiment. It is our intention to ensure that it becomes widespread in the fullness of time.
    Mr. Radice: The Minister must be well aware that the Audit Commission and HMI have warned the Secretary of State about the "crummy" state of our schools. [Interruption.] I was quoting from the former Secretary of State's verdict on our schools. Will the Minister now tell parents what the Government will do about it?
    Mr. Dunn: We have announced a massive increase in expenditure, a figure of 18·8 per cent. Local authorities have it within their gift to embark upon the privatisation of non-teaching services. Therefore, they can save money for expenditure on education where it is needed and where it is desired.

    Teachers (Pay)
    Mr. Hicksasked the Secretary of State for Education and Science what is the latest position regarding the teachers' pay and conditions of service negotiations; and if he will make a statement.
    The Secretary of State for Education and Science (Mr. Kenneth Baker): Over the weekend a National Union of Teachers special conference voted narrowly to accept the proposals in the Advisory Conciliation and Arbitration Service document signed by the local authorities and some teacher unions. The NUT is now balloting its members. Local authorities meet today to discuss the proposals. I remain willing to hold further discussions with the local authorities and any of the teacher unions.
    Mr. Hicks: I support my right hon. Friend's objectives in encouraging responsibility and rewarding the good classroom teacher. However, will he accept that there is a genuine predicament in the case of the good classroom teacher teaching in our excellent smaller schools in villages and market towns? Having achieved the maximum after nine years, they could well find themselves locked in and their chances of subsequent promotion very limited.
    Mr. Baker: One of the major flaws of the ACAS proposals is exactly that. I am sure that it would affect adversely the small primary school. Under the ACAS proposals there would be no promoted posts in about three quarters of primary schools. Therefore, there would be no incentive for teachers to do well unless they sought to become a head or a deputy. However, deputies in the small schools would get only £5 a week more than the main professional grade teachers under the ACAS proposals.
    Mr. Fatchett: Since his statement last week, and in his reply to the earlier question, the Secretary of State has made it clear that he is prepared to meet the employers and the unions, and that he is prepared to be flexible about his own suggested imposed settlement. Will the right hon. Gentleman give some indication of the areas of his settlement that he is prepared to be flexible about?
    Mr. Baker: In the meetings that I have had with Councillor Pearman and the unions so far—another union has asked to see me next week—I have made clear the conditions behind the Government's position, which is that any offer should come within the cost envelope of some £600 million for this year and next year, and must have a sufficient number of incentive posts in it to ensure a good career structure for the young, able and energetic person who wants to become a teacher.
    Mr. Pawsey: Will my right hon. Friend accept that the majority of parents and, I suspect, teachers, will welcome the introduction of legislation that will bring some form of order into the chaos that currently surrounds negotiations on teachers' pay? Will my right hon. Friend further accept that once the legislation is on the statute book it will be warmly welcomed as a means of preventing further disruption in our schools to the disadvantage of our children?
    Mr. Baker: When the definition of the teacher's job—contained in appendix 1 of the ACAS document—is in force, it will be clear what teachers should and should no do. It will be out of order and a breach of contract if

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    they indulge in the sort of disruptive action that has so damaged schools, the education of our children, and the reputation of the teaching profession.
    Mr. Freud: Does the Secretary of State accept that one cannot impose a solution on teachers? Will he reassure the teachers who want to see him that not only his door but his mind will remain open?
    Mr. Baker: I have made that absolutely clear, but I hope that the hon. Gentleman is a spokesman for the Liberal party. Since I have held this post, I have listened to what he has said. I have yet to distinguish any issue concerning education on which the Liberal party's views differ from those of the Labour party. I hope the hon. Gentleman will recognise that, in the career structure of the profession, there must be proper incentive posts and proper rewards. I should have thought that that was one of the elements of Liberal thinking such as we know it.
    Mr. Haselhurst: Does my right hon. Friend sense that he is very close to an agreement which will satisfy the majority of teachers, and certainly the majority of the public? Does he agree that, in the end, the prize will be more glittering if he can achieve a settlement by agreement?
    Mr. Baker: Certainly. That is why I said that my door remains open. What Mr. McAvoy said has made the situation more difficult. Following the NUT conference, Mr. McAvoy, the deputy general secretary, said:
    "There is no likelihood of our agreement being changed as far as the NUT is concerned."
    He added:
    "It was 'sad' other unions felt there was an alternative."
    He then said:
    "There is an alternative—and that is a return to action and disruption".
    I utterly deplore that statement made by a major figure of the NUT.
    Mr. Barnett: Does the right hon. Gentleman realise that, as Secretary of State, perhaps his most important priority is to get the confidence of the teaching profession as a whole? Does he agree that he will do that only if he is prepared to negotiate, listen to what the teachers say and recognise that their view about the way in which salary scales should be organised must be taken seriously if he is to gain their confidence?
    Mr. Baker: The hon. Gentleman must appreciate that, in this matter, there is no collective view of the profession. Two unions did not approve the draft document. Since then, other unions have made it clear to me that they do not agree with an element of the structure. There is no agreed professional view of the position. That problem has been inherent in the trouble for the past two years. There has been very muddled progress over that period, as the unions and the local authority employers have not been able to agree. Alas, that is still the position. That is why we have to introduce a Bill. That is why I have to make the Government's position clear.
    Mr. Greenway: Is my right hon. Friend aware that it is said that some 1 million people are incapable of correctly filling in their applications for British Gas shares? Does this not show that their education was somewhat inadequate? Does it not point to a clear need for a total restructuring of the salaries of professional teachers and of their conditions of service so that this does not occur in future?
    Mr. Baker: There must be other objectives to the education system than a facility to fill in prospectuses. None the less, I agree with my hon. Friend. There is considerable disquiet about the quality of education at all levels in our schools. The dispute is an important opportunity to improve the quality of the teaching profession. We must not forgo that opportunity.
    Mr. Flannery: The Secretary of State, in his first answer, avoided the issue. He did not make it clear what was the issue at the recalled conference of the NUT, at which I was present. The issue was not his offer. The teachers are united in their disagreement with it. The issue was the employers' offer, which, with the union's agreement, still has to be submitted to the right hon. Gentleman. One hundred thousand or so people did not agree with that offer—which is far better than the Secretary of State's offer—and 125,000 did agree with it. The important word in the main question is "negotiations". If the Secretary of State tries to impose his will on all the unions without negotiations, he will unify them, and he will disrupt schools once again.
    Mr. Baker: One must appreciate that the NUT has made it clear that it is not prepared to move at all. It has not moved since Coventry. That is what the deputy general secretary of the NUT said. The hon. Gentleman is a member of the NUT. Does he agree with the sentiment:
    "There is an alternaive—and that is a return to action and disruption"?
    Mr. John Townend: Does my right hon. Friend agree that in the past decade there has been a considerable improvement in the teacher-pupil ratio, without an equivalent improvement in the quality of education? If so, will he resist the demands for more teachers and more free periods and concentrate the available resources on rewarding good teachers who are conscientious and accept responsibility?
    Mr. Baker: I agree with my hon. Friend that there has been an improvement in the pupil-teacher ratio from 18·9:1 to 17·6:1 while we have been in office. I also agree that that has not necessarily been accompanied in all our schools by an improvement in the quality of education. I think that all hon. Members are concerned about that. The whole thrust of the Government's and my proposals is to improve the quality of the teaching profession by having proper incentives and rewards for at least half the profession, whereas the ACAS proposals cover only a third of the profession.
    Mr. Skinner: Does the right hon. Gentleman recall that on 23 September this year he said to a meeting of educationists, "I worry about the present extension of central control. I want more decisions to be taken at the rim of the wheel and fewer at the hub"? If so, why is the right hon. Gentleman poking his nose into the teachers' negotiations?
    Mr. Baker: The hon. Gentleman must realise that only 10 minutes ago my hon. Friend the Minister of State was being pressed to interfere in the wage negotiations in our universities. I stand by exactly what I said. The hon. Gentleman will see, if he studies the Education (No. 2) Act 1986, the very wide, extensive reforms that we are introducing to increase the power of head teachers and governors. That is what I want to do, but the Labour party is opposed to it.
    Mr. Favell: Does my right hon. Friend feel that the time has come to remove the local authorities from the pay equation? After all, the teachers want to negotiate national conditions and the people want national curricula and national standards in our schools.
    Mr. Baker: There is little doubt that there is a move, which I support and will encourage, towards national curricula. As regards the future of determining teachers' pay and conditions, the Teachers' Pay and Conditions Bill, which will have its Second Reading next Monday, will set out our proposals for an interim advisory committee. I am sure that many people will welcome the fact that the Burnham negotiating machinery is coming to its end.
    Mr. Radice: Is the Secretary of State prepared to accept any modification at all to his proposals, or is he merely delaying until he has got his legislation through Parliament so that he can impose a settlement on the teachers and the employers? We are entitled to know the answer.
    Mr. Baker: The answer is that on 30 October I set out the Government's conditions and provided a further £600 million. Since then there has been no move towards the Government's position. Some of the unions are saying to me that they would like to reconsider their position. I am willing to listen.

    Education Act 1981
    Mr. Dormandasked the Secretary of State for Education and Science if he will make a statement on the working of the Education Act 1981.
    Mr. Dunn: My right hon. Friend will shortly be undertaking a review of the provisions of the Education Act 1981 and its associated guidance to local education authorities, health authorities and social services departments in the light of recent research findings. Any possible amendments will be the subject of consultation with interested bodies in the usual way.
    Mr. Dormand: Although the recently published survey, which the Minister has not mentioned, shows that there are many problems associated with the integration of handicapped children into ordinary schools, does he agree that the main difficulty arises from the insufficient provision made by the Government? Is he aware that there is deep and growing concern among parents—I am pleased to have the Minister's assent—at the slow progress in meeting the aims of the 1981 Act? Will he therefore consider constituting a special unit in his Department to monitor and develop progress towards the aims of the Act? Unless something is done about that, the hon. Gentleman will soon be accused of not caring about the provisions of this important legislation.
    Mr. Dunn: I acknowledge the hon. Gentleman's concern. As he knows, a short while ago the Department of Education and Science funded a three and a half year project at the University of London institute of education to study the developments within local authorities following the introduction of the 1981 Act. We are now studying the implications of that project and we shall return to it at some time in future.
    Mr. Haselhurst: Does my hon. Friend accept that, although there have been some early and obvious benefits from the implementation of the Act for handicapped youngsters and their classmates, there are still problems
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    —for example, in small village schools of ancient construction which have difficulties in handling wheelchair cases?
    Mr. Dunn: My hon. Friend is right about that difficulty. We would all like to spend more money on special education, but much good work is being done within existing resources. As he knows, all local education authorities now operate the procedures introduced by the 1981 Act.
    Mr. Andrew F. Bennett: Does the Minister accept that the implementation of the Act has been severely handicapped because no extra resources have been available to adapt buildings, to provide the extra educational psychologists who are needed to make the statements, to train teachers in the mainstream schools, to provide special provision or to provide speech therapists or physiotherapists from the district health authorities? When will the Government provide the money to make the legislation work?
    Mr. Dunn: From the moment that the Act was initiated we always said that financial provision was the responsibility of the local education authorities. I remind the House that the number of children who were the subject of a statement of special educational needs and who were in ordinary schools at January last was 26,423.

    Schools (Reorganisation)
    Mr. Sternasked the Secretary of State for Education and Science if he intends to bring forward any proposals to aid the speedier reorganisation of schools by local authorities; and if he will make a statement.
    Mr. Dunn: My right hon. Friend intends shortly to issue a circular to local education authorities giving guidance on the action needed to reorganise schools in response to falling rolls.
    Mr. Stern: Does my hon. Friend agree that the principal cause of complaints that are heard from time to time about low capitation and poor quality of repairs in schools is the failure of authorities, such as Avon, to reorganise schools, thereby wasting the money that could otherwise be provided to improve standards in schools? Will he allow and encourage authorities to speed up much-needed reorganisation? Will he also take into account the fact that when authorities are contemplating reorganisation, they are often considering a period of three years?
    Mr. Dunn: The point of the circular will be to answer just the points made by my hon. Friend. How, when and why local education authorities reorganise their provision is entirely for them, but they must take account of the children and the needs of the community if they do so.
    Mr. Carter-Jones: Will the Minister consider carefully the way in which the Education Act 1981—the Warnock Act—could be better implemented, with reorganisation, to enable more facilities to be made available?
    Mr. Dunn: I undertake to do just that.
    Mr. Peter Bruinvels: Will my hon. Friend look at the administration of our schools, as many teachers who serve on local education authorities appear to act in a negative way, especially in relation to Leicestershire county council

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    schools? Will he also encourage further single-sex schools to be established, as they are the only real way to allow pupils to develop?
    Mr. Dunn: Our role in the receiving sense is simply to take account of the provision as it stands and how it might be shaped for the future. The maintenance of schools of proven worth and of single-sex schools figures highly among our concerns.
    Mr. Eastham: Does the Minister realise that the Department of Education and Science is pressing for the economic use of schools? It is recognised that in future some of those places will be required as the numbers increase. Therefore, some authorities are applying under section 13 for closures of one form per school to allow a thinning-out to get over the problem temporarily. However, on occasion, the Department is overruling the recommendations, especially in Tory areas, and that is causing an imbalance in other parts of the city.
    Mr. Dunn: The hon. Gentleman seems to be somewhat confused about the provisions of the 1980 Act. Local education authorities can reduce their planned admission levels by up to 19·99 per cent. without recourse to the Department. If they wish to go beyond that, they must have recourse to the Secretary of State. How local authorities respond is entirely a matter for them.
    Mr. Teddy Taylor: Has my hon. Friend studied the recent figures which show that the part of the United Kingdom with the highest success rate in A and O-levels is Northern Ireland, where 25 per cent. of all children go to grammar schools? Consequently, will he resist, or look very carefully at, any proposals from county councils that seek to wind up, abolish or undermine grammar school education in places such as Southend, as it is extremely successful and popular?
    Mr. Dunn: My hon. Friend, as ever, has his constituency interests at heart. However, we take careful account of all the arguments before approving any proposals for closure or amalgamation.

    Student Grants
    Mr. Strawasked the Secretary of State for Education and Science what representations he has received in the past three months on the level of student financial support.
    Dr. M. S. Millerasked the Secretary of State for Education and Science what representations he has received in the past three months on the level of student financial support.
    Mr. Nellistasked the Secretary of State for Education and Science what representations he has received in the past three months on the level of student financial support.
    Mr. Stottasked the Secretary of State for Education and Science what representations he has received in the past three months on the level of student financial support.
    The Parliamentary Under-Secretary of State for Education and Science (Mr. George Walden): Since the beginning of September my right hon. Friend has received about 40 representations on the level of financial support for students. In addition, a number of letters have been
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    received on issues which fall within the scope of the review of student support, including submissions made in response to invitations to submit evidence to the review.
    Mr. Straw: Does the Minister realise that, because of the cuts in the real value of student grants, many students face hardship of a kind that has never been experienced before? If a student loan system was introduced, it would remove access to higher education for many students who come from lower income families. As evidence from other countries clearly suggests that to be the case, why do the Government not abandon that idea altogether?
    Mr. Walden: The hon. Gentleman is wrong to suggest that the grant has been cut by the extent often claimed by the NUS, which is 20 per cent. The real figure is closer to 12 per cent. The hon. Gentleman has selectively used evidence about the effect of loans in other countries. However, I will look at that carefully and fairly, because I do not want anything in my review to damage the chances of access to higher education by those from lower income backgrounds. A loan system need not do that.
    Mr. Nellist: Why have the Government introduced new student grant regulations requiring mature students to have earned £12,000 in the three years prior to going to college? Will that not block access to education by women who have been bringing up families, by the unemployed and by the low-paid? Surely that will block access to the majority of those seeking mature student grants.
    Mr. Walden: Not uncharacteristically, the hon. Gentleman has completely misunderstood the point. The number of mature students has increased by 15 per cent. since 1979, and we are proud of that record. Moreover, the change was introduced partly at the suggestion of the NUS and the local authority associations in order to spread the benefit. The hon. Gentleman clearly misunderstands the whole purpose of the benefit. It is not intended for all students who have reached a certain age, but to compensate those entering higher education for any financial obligations that they have built up.
    Mr. George Gardiner: Will my hon. Friend give due weight to the growing feeling among students in favour of a mixed grant-loan system? They believe that it offers emancipation from the present system of parental contributions.
    Mr. Walden: A fact often overlooked by commentators on this question is that the only people who do not contribute directly to the cost of student support are the main beneficiaries, the students theselves.
    Mr. Marlow: Will my hon. Friend seek to reallocate the available finance for student support so that all students are put on an equal footing, irrespective of whether the parents cough up the full parental contribution.?
    Mr. Walden: In the course of the review on student support we shall take all proposals into account, including those of my hon. Friend.
    Mr. Freud: Accepting the increase in the number of students in higher education, is the Minister genuinely satisfied that, bearing in mind the needs of the nation and the availability of talent, he is doing enough to get students into higher education?
    Mr. Walden: We are doing more than many other previous Governments. The real problem is not student

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    grants, but the quality of education provided in primary schools and upwards. No Government have done more than this one to improve that quality.

  PRIME MINISTER

    Engagements
    Mr. Michael Brownasked the Prime Minister if she will list her official engagements for Tuesday 2 December 1986.
    The Prime Minister (Mrs. Margaret Thatcher): This morning I had meetings with ministerial colleagues and others. In addition to my duties in this House I shall be having further meetings later today. This evening I hope to have an audience of Her Majesty the Queen.
    Mr. Michael Brown: Will my right hon. Friend take time today to consider setting up an official inquiry to consider what precedents there are, if any, for the Leader of Her Majesty's Opposition to intervene in a court case involving Her Majesty's Government by privately contacting the counsel acting against Her Majesty's Government?
    The Prime Minister: My hon. Friend has made his point very effectively. If there are any such precedents for this astonishing action, perhaps the deputy leader of the Opposition will let us know.
    Mr. Hattersley: In her consideration of these matters, especially what is known as public interest, will the Prime Minister tell us how she distinguished between a book written by Mr. Peter Wright and a book based on information supplied by Mr. Peter Wright? Why did the Prime Minister choose to prosecute or attempt to suppress publication in one case, yet allow, indeed encourage, publication in the other?
    The Prime Minister: The right hon. Gentleman is aware that I cannot comment—[Interruption.]—on matters which may arise in the proceedings concerning the Peter Wright case in Australia while those proceedings continue. I also intend to follow the precedent set by previous Prime Ministers and not comment on security matters.
    Mr. Hattersley: I am asking the Prime Minister to answer for past errors. Was it not the Government's decision not to take action against Mr. Chapman Pincher in 1981 that has produced their present humiliation? Is that not the result of the authority of the Attorney-General being usurped by the Prime Minister in order to manipulate the law for party political reasons?
    The Prime Minister: The right hon. Gentleman is attempting to be mischievous. I shall not answer his questions, however hard he tries.
    Mr. Hattersley: Nobody is taken in by the Prime Minister's prevarication on these matters. The House and the country know that the Prime Minister has begun to treat the law as if it were her own property. Hence the Prime Minister's willingness to allow Mr. Wright to sell his secrets to Chapman Pincher, but not to allow him to sell his secrets under his own name.
    The Prime Minister: I repeat, it would be inappropriate for me—[Interruption.]—to comment on matters which may arise in the proceedings concerning the Peter Wright case in Australia while those preceedings continue. I also
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    intend to follow the precedent set by previous Prime Ministers of not commenting on security matters—a precedent to which the right hon. Gentleman adhered when he was in junior office in the Labour Government.
    Mr. Heseltine: Before my right hon. Friend the Prime Minister goes back to her timetable, will she ask the chiefs of staff whether they could let us have an assessment of the Labour party's latest alternative to a nuclear deterrent, and whether it could be published? I understand that its alternative is to build a ditch from the Baltic to the Adriatic and to fill it with explosive slurry to deter Soviet tanks.
    The Prime Minister: My right hon. Friend makes it abundantly clear that we do not need an assessment from the chiefs of staff. The Labour Party's suggestion is crackers.
    Mr. Donald Stewart: Is the Prime Minister aware that, in the light of the present difficulties of the British and American Governments, many people are contrasting the British Government's shady, hole-in-the-corner, sweep-it-under-the-carpet tactics with America, where everything will come out in the wash? When are the people of the United Kingdom to be entrusted with open government?
    The Prime Minister: Speaking as a housewife, I think that the right hon. Gentleman became rather confused about his subject. We are fine. How is the right hon. Gentleman?
    Mr. Hargreavesasked the Prime Minister if she will list her official engagements for Tuesday 2 December.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. Hargreaves: Is my right hon. Friend aware that the more people learn about the defence policies of the Opposition parties the more they support the Government's policy of maintaining full membership of NATO and retaining our own nuclear deterrent? Will my right hon. Friend take note that last Thursday, 24 hours after a party political broadcast on behalf of the SDP, in which it outlined its defence policy, it not only lost a seat on Hyndburn council to the Conservative party, but came bottom of the poll? Does my right hon. Friend agree that the two events are not unconnected?
    The Prime Minister: I congratulate my hon. Friend's constituents and hope that we will have many other similar successes. I am sure that his constituents were entirely right in rejecting the Liberal-SDP defence policy, which is for a deterrent which does not deter.
    Mr. Eastham: Rolls-Royce was nationalised by a previous Conservative Government. If the Prime Minister achieves her own way and the company is privatised, and it fails again, will she renationalise it to save the thousands of jobs that will be lost?
    The Prime Minister: Rolls-Royce is doing very well and winning excellent orders, and many people both inside and outside the company are looking forward to the privatisation and the wider share ownership that will then ensue, which is anathema to the hon. Gentleman.
    Mr. John Townendasked the Prime Minister if she will list her official engagements for Tuesday 2 December.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. Townend: Does my right hon. Friend agree that the spread of AIDS could be greatly reduced if there were a change in public attitudes, especially if indulging in homosexual activities and drug taking could once again become morally and socially unacceptable?
    The Prime Minister: I am sure that attitudes are changing in the light of information about AIDS. I am sure also that the most important thing is to ensure that people have full information about how this terrible disease is spread among men and women. I think that then much of the behaviour that has been going on will be entirely unacceptable for many and varied reasons.
    Dr. Owen: While we may disagree on how best to make a contribution to NATO's nuclear deterrence, is that as nothing in comparison with the advocacy of a non-nuclear defence strategy for NATO? Does the Prime Minister agree that the Australian precedent, whereby Australia has agreed with the United States that New Zealand, in pursuing a non-nuclear defence strategy, can no longer remain a member of the ANZUS treaty organisation, is exactly the attitude that our European partners will take to the idea that any one NATO country can opt out of NATO's nuclear defence strategy?
    The Prime Minister: I agree with the right hon. Gentleman. A nuclear deterrent strategy is a fundamental part of NATO's strategy, and those who do not accept it are very likely to break up the organisation and be unable to remain members.
    Mr. Hickmetasked the Prime Minister if she will list her official engagements for Tuesday 2 December.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. Hickmet: May I assure my right hon. Friend that the questions which have come from the Conservative Benches today have not been planted by Mr. Turnbull?—[Interruption.] What damage does my right hon. Friend think that the abandonment of the bi-partisan approach to security matters has done to British security interests, and what effect does she think that will have in the future on our security interests?
    The Prime Minister: The abandonment of the bi-partisan approach to security matters is totally and utterly fundamental to Britain's security. The Leader of the Opposition has abandoned a fundamental defence policy pursued by his predecessors. He has now abandoned a fundamental security policy pursued by all previous Prime Ministers.
    Mr. Janner: In view of the anxiety which the Prime Minister must have suffered during the past few weeks over the contradictory application and non-application of section 2 of the Official Secrets Act, and in view of her refusal to comment upon that to the House, is she considering amending the Act?
    The Prime Minister: As the hon. and learned Gentleman is aware, we tried to amend the Act in 1980 and brought before the House a Bill for that purpose. It was at that time rejected. We have no present proposals to amend it.
    Mr. Marlowasked the Prime Minister if she will list her official engagements for Tuesday 2 December.
    The Prime Minister: I refer my hon. Friend to the reply that I gave some moments ago.
    Mr. Marlow: Would it be possible for my right hon. Friend to arrange today for a special flight for the Leader of the Opposition so that he can come back to the House tomorrow to answer the real allegations that he has been conniving with defence lawyers in Australia in a case against the Crown on the subject of security?
    The Prime Minister: It is not for me to answer for the Leader of the Opposition and I am jolly glad that I do not have to. It is for him to do that.
    Mr. Tony Banks: Will the Prime Minister find time today to explain to the House why the London fire brigade is having to pay out about £100,000 in order to change the insignia on the buttons, the fire engines and the fire stations because the College of Arms will not let it use the GLC coat of arms? Is that part of the savings from the abolition of the GLC that the Prime Minister promised us?
    The Prime Minister: The savings from the abolition of the GLC, as some our constituents have occasion to know, are enormous, and they are grateful that the GLC has been abolished.
    Mr. Onslow: As the Leader of the Opposition has let himself be set up to ask in the House questions which were to be asked in an Australian court the following day, is my right hon. Friend aware that she will have the full support of Conservative Members if she refuses to have any more truck on matters of national security with someone who has reduced himself to the status of Mr. Turnbull's mouthpiece?
    The Prime Minister: Yes; I agree wholeheartedly with my hon. Friend.
    Mr. Kirkwoodasked the Prime Minister if she will list her official engagements for Tuesday 2 December.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Kirkwood: Will the Prime Minister make arrangements to study the board of inquiry report which will be produced on the military aircraft crash which took place in the Borders in Scotland on Thursday night? Is she aware that such crashes are now occurring on average once every two months? Will she give the House an undertaking that she will make sure that low-flying manoeuvres are restricted to the absolute minimum and that they are carried out with procedures which quarantee the maximum safety for civilian life?
    The Prime Minister: I understand that a pilot lost his life in that crash, and I should like to extend sympathy to the relatives of that pilot. As the hon. Gentleman knows, the cause of the accident, in which an RAF Jaguar crashed, is still under investigation. Safety regulations for military flying over all designated range areas, and more generally, are matters to which the Government attach great importance. They are kept under close and continual review. I will bear in mind what the hon. Gentleman has said.
    Mr. William Shelton: If my right hon. Friend wished to acquaint herself with the course of the trial in Australia directly and speak on the telephone, would she speak to counsel acting for Her Majesty's Government, or would she speak only to counsel acting for Mr. Wright?
    The Prime Minister: I think my hon. Friend can rest assured that I would do neither.
    Mr. Norman Atkinsonasked the Prime Minister if she will list her official engagements for Tuesday 2 December.
    The Prime Minister: I refer the hon. Gentleman to the reply that I gave some moments ago.
    Mr. Atkinson: Does the Prime Minister recall that she has often expressed pride in the fact that she was once governor of Imperial college, and that she is a science graduate in chemistry and an associate and friend of Sir George Porter? Has she seen the remarks that Sir George made yesterday, confirming that the continuing brain drain from Britain in science and engineering is the result of the Government's abandonment of science and engineering? What has she now to say about the deplorable state of our laboratories, the deplorable state
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    of engineering in the absence of some of our key engineers and the deplorable future that faces this country without those scientists and engineers?
    The Prime Minister: I read the comments of Sir George Porter. I must state that total net Government expenditure on research and development is at record levels and that the United Kingdom Government-funded civilian research and development, as a proportion of national output, exceeds the level in Japan and the United States, and that is also true for all United Kingdom expenditure on research and development compared with Germany.
    With regard to the hon. Gentleman's point about a possible brain drain, I refer him to the fact that tax on top people, including top scientists, is very much lower in the United States than it is here, and it is going down in the United States. The position to which he referred would be infinitely worse had we not reduced the top level of tax to 60 per cent.

Rover Group
3.32 pm
The Secretary of State for Trade and Industry and President of the Board of Trade (Mr. Paul Channon): With permission, Mr. Speaker, I should like to make a statement on developments within certain Rover Group businesses.
On 24 July I informed the House that agreement in principle had been reached on the sale of Leyland Bus and of a majority holding in Unipart and I can report in both cases that detailed negotiations are proceeding satisfactorily. In reply to questions on 5 November, I also announced the disposal of majority interests in Jaguar-Rover-Australia and in Istel. The situation on Land Rover remains as I stated last April, that Land Rover will be retained in Rover Group for a possible flotation or trade sale at a later date.
The chairman of Rover Group has also been reviewing the options for Leyland trucks. This review has been taking place against the backdrop of continuing depressed demand, particularly in overseas markets, and severe over-capacity in Europe. Our objective is to achieve a secure future for the production of Leyland trucks, but it must be recognised that any option for the company—whether related to collaboration, merger, sale or, indeed, continuation under present ownership—will involve restructuring.
Talks are progressing with two companies. The first is DAF. Hon. Members will be aware that in October a limited but important collaboration on the marketing of Roadrunner trucks and Sherpa vans was announced. DAF and Rover Group are now in talks about the benefits that could arise from much more fundamental collaboration in the truck and van businesses. The second is Paccar, the parent company of Foden, which is considering the basis on which it might wish to make a bid for Leyland trucks.
Both sets of talks are at an early stage and, for the reasons I have already outlined, Mr. Day has my full support in pursuing them. I thought it right to inform the House at this early stage and, obviously, I shall keep the House in touch with developments. I am sure hon. Members will understand and accept that it would be prejudicial to the interests of those employed in these operations and in their suppliers for me to make any further detailed comment on the discussions at this stage.
Mr. Day's review of the plans for all Rover Group operating companies, including Austin Rover, will form the basis of the 1987 corporate plan which is now under preparation. After I have received it and given it careful consideration, I shall announce the Government's response. In respect of Austin Rover, I should, however, like to take this opportunity to emphasise that I expect Mr. Day's plan to set out a positive course for the continuation of the company as a major producer and leading exporter of cars made in Britain. I stress that the Government's aim is to secure the best possible future for Austin Rover, its suppliers and the motor industry generally in this country.
Mr. John Smith: In essence, the Secretary of State has announced two sets of talks. My first question is: are they alternatives? The first proposition, namely with DAF, appears from the statement to be an extension of existing collaboration which appears to be proceeding satisfactorily and which offers market opportunities for the Rover group. Clearly,
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that is desirable, if it is a true collaboration between equal, independent companies. The second is a takeover attempt by another foreign-owned company for Leyland trucks. Given that General Motors appears to be persisting in its decision to end truck making in the United Kingdom, if this goes ahead it would mean that the only volume producing truck maker left in Britain would cease to be British-owned. Why is the Secretary of State encouraging those talks, which will inevitably lead to extensive rationalisation, job losses and the loss of British ownership and control of a crucial part of our engineering economy?
Since we now have some advance notice of discussions like this, unlike the activities of one of the predecessors of the Secretary of State, now the Chancellor of the Duchy of Lancaster, who sought to sell British Leyland and Austin Rover without informing anyone, will the Secretary of State take the opportunity of having full consultations with the relevant trade unions, to which this statement will be news? [Laughter.] I do not know why the Chancellor of the Duchy of Lancaster should laugh about the notion of consulting the trade unions. It is all too indicative of his attitude to British industry and the people who work in it. Would it not make sense for the Secretary of State to seek at this stage to give the fullest possible information and to allow the fullest possible consultation with the trade unions?
Finally, while I note the Government's apparent conversion to maintaining Austin Rover as a major car producer, will the Secretary of State appeal to the Prime Minister to stop knocking Austin Rover as she did in a recent interview in the Financial Times? When will the Government see Austin Rover as a great opportunity for Britain, not as a problem, as the Prime Minister unfortunately described it?
Mr. Channon: I entirely repudiate what the right hon. and learned Gentleman said about the interview of my right hon. Friend the Prime Minister in the Financial Times. He will know that the Financial Times issued a correction. Indeed, as £2·2 billion of public money has been put into Rover group, it ill becomes him to criticise the Government for not supporting the company.
Obviously, there will be consultation with the trade unions in the normal way through the normal machinery on the future plans of the company. I note what the right hon. and learned Gentleman says about the question of Paccar as opposed to DAF. It is far too soon at this stage to say how the talks will progress or what the final outcome will be, but I note what he says.
Regarding the truck industry in Britain, I must again remind the House that there is 40 per cent. over-capacity in the truck industry in Europe. It is not possible to imagine that this position can continue without change and any hon. Member who advances that seriously is doing no service to those who work in the industry.
Mr. Michael Grylls: Does my right hon. Friend agree that, as the taxpayer owns 98 per cent. of Rover Group, it is in our interests to recognise that the truck division of that group produces some very good products? We should welcome any new collaboration that will strengthen that group, recognise the over-capacity and even, if necessary, visualise a change of ownership. That could well be in the best interests of all the people who work in that part of Rover Group.
Mr. Channon: I entirely agree with my hon. Friend. They are excellent products, and, as I said in my statement, our aim is to try to ensure a secure future for the production of Leyland trucks. As my hon. Friend says, there is now international collaboration in the production of trucks. We have seen that in Iveco and in Enasa. Indeed, we see such collaboration all over the world. I am sure that that will continue to happen and it is unlikely that we will be able to stand aside. I am determined to have the best possible future for the production of Leyland trucks.
Mr. Paddy Ashdown: We accept that international collaboration is one of the options to be pursued. Does the Minister accept that, of the two options before us, the DAF option is preferable? I recognise that the Minister cannot comment on which of the two is preferable, but does he recognise that DAF, with its established network of retailers and a history of collaboration, is preferable? Many people might regard the Paccar deal as a buy-out to kill off some of the competition. Will the Minister give us two assurances? First, will he ensure that Paccar will not buy up in order to kill off competition and secondly, that the work force in Leyland trucks will be appropriately consulted across the board about the options that lie ahead?
Mr. Channon: The hon. Gentleman asked about the work force. I answered a question about that a moment ago. Consultation will take place through the normal machinery. He asked about the merits of the DAF and Paccar bids, but he will not expect me to comment on that at this time, although I take note of what he says. In considering what recommendation to make to me, the Rover Group board will have to consider all the business plans for the two operations in any proposals put forward. I shall have to consider any recommendation and the total business plans will be a factor.
Mr. Steve Norris: Is my right hon. Friend aware that on two counts his statement will be especially welcome in my constituency? First, it will be welcomed because of the continuing good news about the progress of negotiations about Unipart, which I hope will be brought to a speedy conclusion. Secondly, the statement will be especially welcome in view of the irresponsible speculation about the future of Austin Rover, speculation fuelled almost entirely by the Opposition. That has been wholly harmful to the future and present prospects of the company. The Minister's words are a great reassurance to my constituents and to all those people involved in the future of Austin Rover.
Mr. Channon: I am exceedingly grateful to my hon. Friend for his question. I support what he says and I am grateful to him for saying it.
Mr. Terry Davis: Is the Minister aware that, although collaboration with DAF is welcome because it will increase the sales opportunities for Roadrunner Trucks and Sherpa vans in Europe, any further collaboration, particularly in manufacturing, will be carefully examined in the west midlands to ensure that any arrangement made will not lead to fewer jobs, especially at the Common lane factory which is one of the few growth points in manufacturing industry in the west midlands.
Mr. Channon: I note what the hon. Gentleman says and, of course, any proposed solution will have to be
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carefully examined. It would be wrong for me to mislead the House. Whatever solution comes forward will involve restructuring in this industry, because there is 40 per cent. over-capacity in truck manufacture in Europe and there is also over-capacity in the United Kingdom. The House must take that seriously and it would be misleading for me to try to disguise it.
Mr. Robert Atkins: Is my right hon. Friend aware that the foremost aim of my constituents and those of my hon. Friends the Members for Watford (Mr. Garel-Jones) and for Lancashire, West (Mr. Hind) is to secure the long-term future of Leyland trucks, which is centred in my constituency? [HON. MEMBERS: "Reading."] Many people at all levels of the company, including trade union representatives, have pressed me to work for greater collaboration especially in Europe. Does he agree that the work force—[HON. MEMBERS: "Reading."]—whom the Opposition spend their time mocking instead of showing concern about this—have done all that has been asked of them in terms of the product, its marketing and its support. That has resulted in the product taking the largest share of the United Kingdom market.
Finally, is my right hon. Friend aware that two of the biggest problems for Leyland trucks are the need for more outlets in Europe and the United States of America and the need for substantial reinvestment in the new truck range, and that if the discussions provide an answer to those problems they will be welcomed by my constituents at all levels?
Mr. Channon: I am grateful to my hon. Friend. I agree with what he said about the work force and about the work that they have done in recent years at Leyland trucks. I pay tribute to him for his robust defence of their interests on all occasions in this House. Of course more outlets are needed. Investment is also needed, but a profitable company is required to provide that investment. I suspect that greater collaboration is required, whether it takes the form of a merger or something else. A merger is almost certainly or, at the least, very likely to be the answer. I very much agree with my hon. Friend that we should aim at achieving a secure future for the production of Leyland trucks.
Mr. Ron Brown: Is not the problem under-consumption rather than over-production, which in turn is a reflection of the crisis in the capitalist system worldwide? That crisis is made much worse by the fact that the bankers and financiers in the City of London are screwing down many countries in the Third world that would willingly buy British goods, particularly trucks. Is not that the crux of the problem? Surely it has to be admitted that Graham Day, the slick lawyer from Canada, the undertaker of British Shipbuilders, was brought in to destroy the industry rather than to build it up. That is the real issue that is at stake. Let us admit that Mr. Day is a hatchetman for the Conservative Government.
Mr. Channon: That is a rather astonishing accusation. Mr. Day was first employed by the Labour party when it was in government some years ago. I have with me a sheaf of quotations containing glowing tributes to him from all kinds of distinguished people. In particular, the shadow Home Secretary praised Mr. Day at all stages. If the House wants me to do so, I can read out those tributes. The idea that Mr. Day is a hatchetman imported by the Tory

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Government, is preposterous nonsense. As to the hon. Gentleman's suggestion that all the troubles in the Third world have been caused by insufficient lending from the City of London to Third world countries, it is not quite like that. There is over-capacity in the European truck industry, and that is a very serious matter. We have to restructure and to do what we can to provide a secure future for the production of Leyland trucks.
Mrs. Ann Winterton: In the continuing discussions between Leyland trucks, Paccar Foden, which is situated in my constituency, and DAF, will my right hon. Friend ensure that full consideration is given to the retention of the maximum number of jobs in this country, not only in the company itself but, just as important, in the components industry?
Mr. Channon: Yes. I entirely understand my hon. Friend's concern, and in particular her constituency interest. When recommendations are made to me, I shall want to consider very carefully the effects on employment. I shall also want to examine the effects on employment of no change in the present position. My hon. Friend is quite right to make that point, and I shall consider it very carefully.
Mr. Dave Nellist: The Secretary of State said that it would be prejudicial to suppliers and to employees to make any further comment at this stage. Is not the real prejudice to those employees and suppliers who run the risk of losing their jobs through privatisation? That has happened in virtually all Leyland privatisation cases, such as Coventry Climax. Is it not incumbent upon the Secretary of State to give those who work for the Leyland subsidiaries every scrap of information that he can about the negotiations or the machinations that are taking place behind their backs?
Mr. Channon: The hon. Gentleman and I have debated privatisation on a number of occasions, and I rather doubt that we shall reach an agreement. He has quoted Coventry Climax to me, and I quote Jaguar to him. That is a record that the House knows very well. As to the work force, I have already said that the work force will be consulted through the normal machinery. I accept that this will have a major effect on people who are very interested in the future of their company. That is understandable. However, I am in a dilemma. Do I tell the House at an early stage what is going on, or do I try to keep the information from the House? It seemed to me right that I should tell the House at the earliest opportunity, even if that means that I cannot give the details that I know that the House would like to have.
Mr. Richard Page: In view of the over-capacity in the truck market, and recalling earlier this year the merger or combination between Ford Trucks and Iveco, I welcome the news that talks are taking place. As last time, the panic reaction of Opposition parties helped to collapse the talks, I urge my right hon. Friend this time to see the talks through to a conclusion, because the longer he leaves it, the more difficult and painful will be the solution. Cannot a great deal of the delay be laid firmly at the door of the Opposition?
Mr. Channon: I entirely agree with my hon. Friend. He will appreciate that at this stage the talks are between
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Rover Group and the companies concerned, and are not talks in which the Government are involved. Rover Group will come to us with a recommendation, which may be that it does not like the proposal, but we cannot prejudge that at this stage. I shall then have to recommend its proposal to the House, or not. I shall have to take that decision. I agree that there is no point in ducking these decisions. They become not easier, but more difficult.
Mr. Doug Hoyle: Will the Secretary of State take into account the fact that there is a difference between collaboration and takeover? The right hon. Gentleman keeps repeating that there is a 40 per cent. over-capacity in trucks, but what about vans? Is this not a different situation, with Sherpa expanding and employing more people, and being highly profitable? Will the result of these talks with DAF and Paccar be that the admirable workers in Leyland and elsewhere will be thrown out of their jobs?
Mr. Channon: Yes, I agree that there is a difference between collaboration and takeover. I am not ruling out either course this afternoon—both will have to be considered. There may be a proposal for takeover; that is something that the House will in due course have to consider. I entirely agree with the hon. Gentleman on the need to try to preserve jobs, but in an industry where there is 40 per cent. over-capacity—this is the truck industry, and I accept that the van industry is different—difficult decisions will have to be taken. I shall try to provide the best solution to this difficult situation.
Mr. John Mark Taylor: I welcome the Government's willingness to look at the separate parts of an unnatural aggregation differently, and perhaps find different solutions for them. I note that my right hon. Friend holds in prospect for Land Rover in my constituency a trade sale or flotation. Will he accept that the people of Solihull would greatly prefer an option that left the shares of Land Rover in the hands of British subscribers?
Mr. Channon: I know my hon. Friend's views, as he has expressed them on many occasions with considerable force and effect. There is no change in the position of Land Rover from the statement that I made last April. I shall bear my hon. Friend's view in mind. There is no immediate prospect of any change in the situation. I referred to Land Rover in my statement because I thought that it would reassure my hon. Friend. I think that he will find that all is well so far, and I hope that he will keep in touch with me.
Mr. Ian Wrigglesworth: Will the Secretary of State confirm that the collaboration that most hon. Members seem to be welcoming extends to the volume car business, and that the proposals that he will introduce in due course will still contain the element of collaboration with Honda that Rover Group has had so far? Will he say a word about the Unipart changes? Do the new arrangements safeguard the after-sales that affect British Leyland's interests?
Mr. Channon: The hon. Member will remember that I made a statement to the House about Unipart a few months ago. That sale is now proceeding. Detailed negotiations are now going on. I do not wish to go into the full details at this stage, but the situation has not changed since my statement. I think that the hon.

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Gentleman's concerns are covered, but if not I shall write to him. I am making no statement about collaboration in cars, but dealing merely with collaboration in the truck industry. I do not wish to mislead the House. The answer may well be a merger, and the House must understand that I am saying that there may be mergers or takeovers in the truck industry. We should not rule out that option. I have nothing to say about Rover Group, Honda or anything like that this afternoon. My statement relates to the truck industry.
Several Hon. Members rose——
Mr. Speaker: Order. I have to bear in mind the subsequent business on the Order Paper. It is an Opposition day. I ask hon. Members to put their questions succinctly. I shall allow them to go on for a further five minutes.
Mr. Andrew Faulds: May I congratulate the right hon. Gentleman on his greater awareness of a need to consult the work forces than that shown by his predecessor? May I ask him to disregard the chuckles of his right hon. and ghastly colleague the Chancellor of the Duchy of Lancaster and ensure that those consultations are genuine and meaningful?
Mr. Channon: The hon. Gentleman spoils his case by his epithets. As I have made clear to the House, the employees who may be affected will have the opportunity to express their views on future plans for the company through the normal machinery at the appropriate time.
Mr. Anthony Beaumont-Dark: Does my right hon. Friend accept that many of us are grateful that he has come to the House at an early stage in the many negotiations that are going on? Does he also accept that we are pleased that he confirms his faith in the Austin Rover car group and the Rover Sterling Car, which is doing such good trade? Does he agree that, while Ford Motors is expanding its spares business, it would be unwise for us entirely to sell off Unipart, which is so important to Austin Rover's future? Will he try to ensure that at least 25 per cent. of Unipart stays in Austin Rover hands so that it cannot be blackmailed by other people?
Mr. Channon: I note what my hon. Friend says. I share his view about the merits of the products of Austin Rover. I am looking forward to hearing Mr. Day's plans to set out a positive course for the continuation of the company, which, as I have said to the House, is a major producer and leading exporter of cars made in Britain. As to the sale of Unipart, my hon. Friend will recall that I announced that some months ago. I think that the points about which my hon. Friend is concerned in relation to the Leyland group are fully covered. However, I shall bear in mind what he said.
Mr. Jack Straw: Whenever the Secretary of State comes to the House to make a statement on Leyland, why does he seek to cast the company's prospects in the worst possible light? Does he accept that the 40 per cent. overcapacity in Europe arises principally from the non-tariff barriers which the French and Germans place in the way of exports from this country, and that Leyland trucks division in this country has been top of the sales league? Why did he not mention that? When he speaks of the fact that changes will involve restructuring, will he say how many jobs in Lancashire are likely to be lost by such restructuring?
Mr. Channon: With respect, that is an unfair way of putting it. In fact, it is practically counter-productive. I am not trying to set this in its worst light. I am trying to find the course that is most likely to provide a secure future for the production of Leyland trucks in the circumstances of over-capacity in Europe of 40 per cent. I am trying to be realistic and not mislead the House. I am trying to make the House, if I may, face up to what is a very difficult position and to tell the truth.
As to job losses, I have already explained that, whatever happens, there is bound to be some element of restructuring. I cannot tell the House today what job losses will take place, because negotiations are still going on. I make no comment about that. I have already said that there is 40 per cent. over-capacity and there is bound to be restructuring. It is impossible for anyone to stand at the Dispatch Box and pretend that there is no danger of job losses. Opposition Members would not do that if they were in my position.
Mr. Simon Coombs: Is my right hon. Friend aware of the fact that the right hon. and learned Member for Monklands, East (Mr. Smith) recently visited the Austin Rover body pressing plant at Swindon, without mentioning the fact to either of the two hon. Members who represent that area, and that, while he was there, he joined the local trade union representatives in spreading scare stories which have scared to death my constituents and the constituents of my hon. Friend the Member for Devizes (Mr. Morrison)? Will my right hon. Friend make it clear to the House that the Government have no plans to sell Austin Rover to Honda and no plans for major job losses and closures of plants?
Mr. Channon: I am sure that my hon. Friend's constituents are sufficiently robust to stand up to the blandishments of the right hon. and learned Member for Monklands, East (Mr. Smith) and that they will show their continued good sense by supporting my hon. Friend. As I said at the end of my statement, I expect Mr. Day's plan to set out a positive course for the continuation of the Austin Rover companies, a major producer and leading exporter of British cars. I do not think that I can go any further than that. Frankly anyone who says that we are doing something different is talking nonsense.
Mr. Robin Corbett: The Secretary of State stood at the Dispatch Box and said that he could see no difference between collaboration and merger.
Mr. Channon indicated dissent.
Mr. Corbett: Does he understand that there is all the difference in the world between collaboration and capitulation? Can he name another industrialised country whose Government would contemplate flogging off what is left of Britain's industrial base to foreign ownership?
Mr. Channon: The hon. Gentleman is exaggerating the position. At an early stage, I came to the House of Commons to tell the House about talks that are going on with a number of companies about possible collaboration or merger. The hon. Gentleman's language is greatly exaggerated. I have never tried to disguise the fact that there is a considerable difference between collaboration and merger—of course there is—nor have I sought to disguise that, in the end, there may be a merger, and we

775
will have to consider whether it is a good idea. I am not trying to mislead the House. That is certainly an option in front of us.
I was asked a question about Unipart a moment ago. I remind the House that we are selling a majority shareholding in Unipart, but a minority position will be retained.
Mr. Tom Sackville: Does my right hon. Friend agree that the activities of the right hon. and learned Member for Monklands, East (Mr. Smith) and his friends earlier this year effectively sabotaged the United Kingdom truck industry? Is my right hon. Friend aware that Conservative Members have the highest confidence in him during these and future negotiations to ensure long-term jobs in the industry?
Mr. Channon: I am extremely grateful to my hon. Friend. The attitude of members of the Labour party during all these negotiations has been one of making mischief, stirring up trouble, trying to cause maximum alarm and despondency and trying to create the very situation about which they complain.
Mr. Norman Atkinson: When the Secretary of State talks about collaboration or merger, does he not use code language for takeover? That is what the Secretary of State is talking about. Is he aware that Leyland truck products are engineered to a far higher standard than those of either DAF or Paccar? Why do DAF and Paccar take the dominant initiatives in this matter and talk about the takeover of Leyland rather than Leyland being in business to talk about the takeover of the other two?
Mr. Channon: The hon. Gentleman must understand that Leyland trucks is unfortunately a major loss-making business, not a profit making business. The House should be seriously concerned about that. I do not know why the hon. Gentleman said that I did not mention takeover. I used the words in connection with Paccar, which
"might wish to make a bid for Leyland Trucks."
I used those very words. There may be collaboration, merger or takeover. I do not disguise those facts. We shall have to judge whether that is a good thing. The aim is to try to provide the best secure future that I can for the production of Leyland trucks.
Mr. Phillip Oppenheim: I am sure that all Government Members will support any sensible and necessary collaboration. Is it not true that the jobs of many, if not most, Bedford workers have now been lost or will be lost beyond recall? Is it not true that this is almost entirely the direct result of the ill-informed, petty and jingoistic opposition earlier this year to the Bedford merger, emanating from the Opposition spokesman, who is not above trying to squeeze out any little piece of party political advantage, despite the effects on workers in this country?
Mr. Channon: My hon. Friend has spoken with his usual eloquence and good sense.
Mr. Nicholas Budgen: Will my right hon. Friend encourage management to take all sensible steps to reduce the substantial losses in the
776
truck industry? Will he please avoid public negotiation of the details of these arrangements? The public can never know the true negotiating position of the parties.
Mr. Channon: I entirely agree with my hon. Friend. It would be intolerable to be made to negotiate in public on these details, and I have not the slightest intention of doing so. Fortunately, I am in a position to say that, because I shall not conduct the negotiations. They will be between Rover Group and the parties concerned. They will make some recommendations to the Government, and the Government will then have to decide. I agree entirely with my hon. Friend's first point: everything should be done to try to reduce, and get rid of completely if possible, losses in the truck industry in this country.
Mr. Eric Forth: My right hon. Friend mentioned Istel, a company in my constituency. He will be aware that it is a high technology company, relying on the skills of its existing work force. When considering any proposals for the future of Istel, will the Secretary of State bear that fact in mind? Will he also bear in mind the undesirability of foreign ownership of a company in such a leading edge of technology, with so many skilled people, who must be kept in the company in my constituency?
Mr. Channon: I note what my hon. Friend has said. He will know that Rover Group is taking forward the disposal of a majority interest in Istel. I await its assessment of the various possibilities, but I have not yet received them.
Mr. Tony Favell: Does my right hon. Friend recall that his Department's first thought as to what to do with Westland turned out to be right? Were not his Department's first thoughts as to what to do with Austin Rover also right? Is it not a fact that Austin Rover is still in the most appalling mess? It has an abysmal share of the home market. It has virtually no overseas dealer network. Will my right hon. Friend pick up the telephone and talk to the chairman of Ford UK to see whether he is still interested in bidding?
Mr. Channon: I am grateful to my hon. Friend for his kind remarks about my Department. We certainly would not agree with what he said in the second part of his question. We shall be aiming to secure the continuation of Austin Rover as a major producer and leading exporter of cars made in Britain. I am sure that my hon. Friend desires that as much as anyone does.
Mr. Kenneth Hind: Does my right hon. Friend agree that, whatever party is in power, trucks tend to wear out after the same length of time? Thousands of my constituents who work at British Leyland trucks at Leyland will welcome the collaboration and the extension of wider European markets that my right hon. Friend proposes. Will he reassure those workers that one of the most important things in the Government's mind is to improve their jobs and ensure there will be work for them in that part of Lancashire in the foreseeable future?
Mr. Channon: When we consider these suggestions that the situation should remain unchanged, of course unemployment will be a factor in everybody's mind. I know that my hon. Friend will realise that in a situation of serious over-capacity in the truck industry, neither he nor I would like to mislead anyone employed in that industry into believing that it is not a very difficult situation. In this difficult situation, we are trying to

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achieve the most secure future for the production of Leyland trucks. This will not be easy. I understand and sympathise with what my hon. Friend said.

Private Members' Motions
Mr. Rob Hayward: On a point of order, Mr. Speaker. I apologise to the House and to you, Sir, for saying that I wish to change the topic of which I gave notice immediately after the ballot was drawn on 26 November. With permission, I should like to inform the House that on Friday, 12 December I shall call attention to defence products and exports and move a resolution.
Mr. Speaker: I thank the hon. Gentleman for giving me notice of his point of order. I have satisfied myself that this change is within the intention of a change of practice first made in December 1967. I can therefore accept the notice of change of subject which the hon. Member has given.

Business of the House
4.9 pm
Mr. Gordon Wilson: I wish to raise a point of order, Mr. Speaker, and I regret that I have not been able to give you notice. It relates to the two motions on Scottish affairs which would refer the subject of agriculture and fishing to the Scottish Grand Committee, sitting in Edinburgh. I was unable to give you notice, because there have been no communications whatsoever about the fact that the Scottish Grand Committee was likely to meet within five days or indeed that it would meet in Edinburgh. The subject that has been chosen—fishing and agriculture—is most important. For that reason, I take no objection to the first motion, nor do I intend to use my right to oppose it when it is called in a few moments.
As I understand it, next Monday has been chosen as the day for the Committee meeting in Edinburgh. It is customary for the parties to be given notice of any change from the normal pattern of business but, in this instance, no such notification has been received by my party from the Government or the Opposition.
I hope, Mr. Speaker, that, with your usual courtesy, you will consider upholding the rights of minorities in the House and make sure that the debate—as I have said, I have no objection to it in principle—takes place on a date for which more than five days notice has been given. If it is not within your powers to take such action, I hope that the Leader of the House will consider withdrawing notice of the later motion, which I understand is to be called later this evening.
Mr. Alex Fletcher: Further to the point of order, Mr. Speaker.
Mr. Speaker: Is it on the same subject?
Mr. Fletcher: Yes, Mr. Speaker. Can you think of any reason why Opposition Members who are anxious to transfer Scottish business from the House to Edinburgh are reluctant to transfer themselves to debate that business?
Mr. Speaker: I cannot do anything about that. The hon. Member for Dundee, East (Mr. Wilson) has an option when I put the question on the motion. The best way to deal with this matter would be through the usual channels rather than through the Chair.

Parliamentary Papers (Printing)
4.10 pm
Mr. Richard Hickmet: On a point of order, Mr. Speaker. You will be aware that difficulties have been experienced in obtaining today's Order Paper and Vote, but what were those difficulties? There is some concern among Conservative Members that those difficulties may have arisen because of the very large number of early-day motions tabled in my name criticising the Leader of the Opposition for his collusion with Mr. Turnbull in the Australian case. Will you investigate to ascertain whether those beliefs are unfounded?
Mr. Speaker: I did not have notice of the hon. Member's point of order, but I anticipated that a question might be asked about this matter. I assure the hon. Member that the difficulties at HMSO are nothing to do with his large number of early-day motions. I regret that the Vote bundle was not available in the Vote Office at the usual time today. I understand that this was caused by an industrial dispute at HMSO. The emergency printing service has been brought into operation and I am informed that the papers started to become available at 9.30 this morning.
Mr. Hickmet: I am grateful, Sir.

Court Hearing (Ireland)
4.12 pm
Mr. D. N. Campbell-Savours: On a point of order, Mr. Speaker. You may know that today at 5 minutes past 12 the news bulletins announced that the Government had taken a sound thrashing in the Irish courts on their application for an injunction to prevent the publication of the book "One Girl's War" by Joan Miller—
Mr. Speaker: Order. I do not know what happened—
Mr. Campbell-Savours: It is absolutely genuine.
Mr. Speaker: Order. Allow me to say that I do not know what goes on at 5 minutes past 12 because notice of intention to raise these matters must be given to me before 12 o'clock.
Mr. Campbell-Savours: It is precisely on that matter that I rise to my feet, Mr. Speaker. If the news had been known before 12 o'clock, I should have been able to apply to you to give due notice of my intention to make a Standing Order No. 20 application.
In the light of the decision by the Irish courts, my application would have been made with a view to seeking a statement from the Government on why, having lost in those courts, they should carry on with the proceedings in Australia. In view of the fact that the announcement was made after 12 o'clock, I should like to know whether you accept that I have a right to make that Standing Order No. 20 application tomorrow so that we can hear of the matter then.
Mr. Speaker: The hon. Member knows the rules even better than I do.

BILL PRESENTED
  NORTHERN IRELAND (EMERGENCY PROVISIONS)
  Mr. Secretary King, supported by Mr. Secretary Hurd, Mr. Secretary Younger, and Mr. Nicholas Scott, presented a Bill to amend the Northern Ireland (Emergency Provisions) Act 1978; to confer certain rights on persons detained in police custody in Northern Ireland under or by virtue of Part IV of the Prevention of Terrorism (Temporary Provisions) Act 1984; to regulate the provision of security services there; and for connected purposes: And the same was read the First time; and ordered to be read a Second time tomorrow and to be printed [Bill 11.]

SCOTTISH AFFAIRS
Ordered,
That the matter of Agriculture and Fishing in Scotland, being a matter relating exclusively to Scotland, be referred to the Scottish Grand Committee for its consideration.—[Mr. Lightbown.]

STATUTORY INSTRUMENTS &c.
Mr. Speaker: By leave of the House, I shall put together the questions on the six motions relating to draft statutory instruments.
Ordered,
That the draft Asian Development Bank (Fourth Replenishment of the Asian Development Fund) Order 1987 be referred to a Standing Committee on Statutory Instruments, &c.
That the draft Rehabilitation of Offenders Act 1974 (Exceptions) (Amendment No. 2) Order 1986 be referred to a Standing Committee on Statutory Instruments, &c.
That the Education (Students' Dependants Allowances) (Amendment) Regulations 1986 (S.I., 1986, No. 1325) be referred to a Standing Committee on Statutory Instruments, &c.
That the Education (Mandatory Awards) (Amendment) Regulations 1986 (S.I., 1986, No. 1397) be referred to a Standing Committee on Statutory Instruments, &c.
That the Education (Mandatory Awards) Regulations 1986 (S.I., 1986, No. 1306) be referred to a Standing Committee on Statutory Instruments, &c.
That the Teachers (Colleges of Education) (Scotland) Amendment Regulations 1986 (S.I., 1986, No. 1353) be referred to a Standing Committee on Statutory Instruments, &c.—[Mr. Lightbown]

Orders of the Day
  OPPOSITION DAY
  [2ND ALLOTTED DAY]
  OPPOSITION DAY

    Insider Dealing
    Mr. Speaker: Before I call on the Opposition Front Bench, I must announce to the House that I have selected the amendment in the name of the Prime Minister.
    4.14 pm
    Mr. Robin Cook: I beg to move,
    That this House notes that the low levels of investment in manufacturing industry achieved under Her Majesty's Government have been accompanied by increased speculation in the City over company ownership and excessive rewards for their dealers; records its concern at the evidence of insider dealing in the financial markets and the low clear-up rate in those cases referred to the Department of Trade and Industry; rejects Her Majesty's Government's policy of leaving law and order in the City to self-regulation by the City; and deplores the failure of Her Majesty's Government to secure proper supervision of the City in time for its deregulation.
    It may reassure the House if, at the opening of the debate, I say that the Opposition, in tabling a motion on fraud in the City, were not trading on any inside information that on Monday the Government were about to start a fraud investigation into one of the largest companies in Britain. As a Scottish Member, I am bound to say that for a long time it has appeared to me that Guinness's bid for Distillers was an extremely seedy transaction. As an Edinburgh resident, I am familiar with Guinness's undertaking that it would move the headquarters of the merged company to Edinburgh. The kindest thing that can be said about it is that as yet it has not done so.
    I am aware also of the other undertaking by Guinness that, if its bid went through, it would appoint the governor of the Bank of Scotland as the chairman of the merged company. It did not do so. Having reviewed all the options and alternatives available to him, the chief executive of Guinness came to the impartial conclusion that the best man to be chairman of the company was himself.
    It is possible, in the light of yesterday's developments, that we shall see a further reason why it was felt that the governor of the Bank of Scotland was an inappropriate person to be chairman of the merged company. I shall wish to return to the subject of the Guinness bid, but it is appropriate to kick off the debate with it. The takeover of Distillers was the largest takeover in the City's history.
    Viscount Cranborne: Bar one.
    Mr. Cook: I am happy to agree that it was one of the two largest takeovers. I shall concede that point immediately in a spirit of seeking common agreement and I look forward to seeing the hon. Gentleman with us in the Division Lobby.
    The takeover was the high mark of the City's passion for takeover bids this year. Last year, £6 billion in takeover bids was staked in the City. That in itself was a record, beating all previous years, bar none. In the first 10 months of this year, £30 billion has been staked in takeover bids in the City—five times last year's entire amount.
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    We come to the paradox at the root of the problems of the British economy. The City of London is one of the three major financial markets in the world. That major financial market is set in an economy in which output is stagnant, visible trade has achieved a deficit of heroic proportions and investment in manufacturing industry is declining from its earlier miserable level. One of the wonders of the economy is that the City none the less finds it possible to raise astronomic funds with which to gamble with the ownership of the British industry, in which it shows so little interest in investing.
    I note that the Government amendment states that the City has raised £6 billion for investment in British industry in the past year. I willingly accept that as a matter of fact. I hope that the Minister will accept that it is also a matter of fact that last year in the City there were transactions in shares to the value of £396 billion. Against that enormous turnover, it is asking the House rather much to expect it to be grateful that £6 billion of that £396 billion went into creating new investment, new plant and new machinery. The fact is that the City, in contrast to the industry around it, appears to be going through what can only be described as its champagne period, reflected in champagne salaries for those who deal in shares in the City.
    Last year's accounts for Morgan Grenfell make interesting reading. We discover from them that no fewer than 47 directors of that merchant bank were paid more than £100,000 a year. One hundred thousand pounds a year is a generous reward. It is equivalent to the entire income of five head teachers or four surgeons.
    If the directors of Morgan Grenfell want to claim that their output has the value of five head teachers or four surgeons they would expect those teachers and doctors to say in return that the very least that they could accept for not seeking to emulate the rewards of the Morgan Grenfell directors is a high standard of probity on the part of those receiving them. Alas, Morgan Grenfell hired Mr. Geoffrey Collier and paid him a salary of £300,000. That did not appear to prevent him from seeking to have his bit on the side, which, if successful, would have netted him, in an overnight transaction, as much as the Secretary of State for Education and Science is prepared to pay an unpromoted teacher for a full year's work.
    I shall not mince words. Insider dealing is theft. I hope that hon. Members in all quarters of the House will accept that. It is appropriate to put that on the record as last week Sir Martin Jacomb, the chairman of Barclays de Zoete Wedd, made a rather curious observation. He observed that insider dealing was "a victimless crime". Of course there are victims of insider dealing. If there were no victims, the insider would not make his killing. Try telling Scrimgeour Vickers and Company, the company on which Mr. Collier practised his sting, that it was not a victim.
    It is worth recalling that the money circulating in the City and the wealth in which the City trades every day does not belong to it. The source of the power and the wealth of the City are the pension fund contributions of millions of workers and the insurance premiums of those same millions of ordinary men and women. Ultimately, they are the victims if the bases on which the deals are struck in the City are not honest and above board. I have no doubt that most of those who trade in the City are honest dealers. I accept that most people in the City are even more infuriated than any hon. Member at the revelations of the past three or four weeks.

    785
    However, it is difficult in the face of the evidence to accept that Mr. Collier was an exception. He was an exception solely in that he was brought to book. There is the evidence of share price movements. Acquisitions Monthly conducted an interesting and compelling study of the movement in share prices preceding the announcement of a takeover bid. During the first six months of this year the magazine discovered that in 78 takeover bids the average rise in share price in the three months beforehand—in the three months before anyone else had heard of the takeover bid—was 25 per cent. In some cases the share price rise comfortably outperformed the average. Bush Radio registered an increase of 80 per cent. in its share price three months before a takeover bid for the company was announced. Spencer Clark Metals registered an increase of 60 per cent. There is also the more recent example of the BTR bid for Pilkington Brothers plc. In the six weeks preceding the announcement of the bid for Pilkington Brothers plc the share price rose by 73p. The revealing aspect of the increase is that during that period when BTR announced its bid, rather frostily it also stated that it had suspended buying shares in Pilkington six weeks beforehand. Plainly the increase was not the result of its bid for Pilkington but the result of someone else, somewhere in the City, continuing to buy after BTR had ceased to apply for shares.
    Mr. John Evans: Is my hon. Friend aware that Pilkington Brothers plc is the world's leader in the glass industry and that many thousands of my constituents in St. Helens rely for their livelihoods and their well-being on its continued prosperity? is he aware that the allegations of insider dealing and of people in the City of London making fast bucks out of the work which has been put in by those men and women for generations are causing much anger and hostility in my constituency? Will my hon. Friend make it clear to the Minister that this is a classic case that should be investigated by the Government to establish whether there has been any insider dealing in those shares?
    Mr. Cook: I heartily echo my hon. Friend's conclusion that it is plainly a matter which merits further investigation and we hope that it will be pursued vigorously.
    Of course we accept that, given the salaries that are paid in the City, companies in the City expect to command the best brains in the country. Nevertheless, it would require remarkable purity of soul to believe that the share price increase which I mentioned, and which the hon. Member for St. Helens, North (Mr. Evans) has confirmed, and the other average rises to which I referred earlier, were simply the product of dispassionate analyses of the financial pages. That would require remarkable innocence on our part. Plainly, much of it turned on well-placed information.
    There is also another source of evidence of insider dealing. I am sure that the Minister will recall that I put down a written question on 24 November asking how many cases of insider dealing had been referred to him by the Stock Exchange Council. The reply was "about 100". There is a disappointing degree of imprecision there. We shall not catch the financial jugglers in the City unless we can count up to 100. I am indebted to the Financial Times for revealing yesterday that the full figure is 110. I accept that 110, with a reasonable degree of of extension, is about 100. However, the figure that I find much more arresting
    786
    —if I can be forgiven the term—is the other figure, that out of the 110 only nine were prosecuted. No wonder the Financial Times yesterday referred to the Department of Trade and Industry as the Inspector Clouseau of insider dealing. If we allow the Department of Trade and Industry to count in its statistics not simply prosecutions for insider dealing but all forms of fraud in the City, we are still left grubbing around in single figures.
    Last year there were only five prosecutions for all forms of fraud in the City. Indeed, JMB, the largest scandal to have hit the banking world in the City for a long time, has resulted as yet in not a single prosecution within the City. Yet the Government have hauled 138,918 social security claimants before the courts and prosecuted them for fraud. There was no imprecision there. The total figure has been carefully logged and recorded. Each of those people were prosecuted for a figure that would barely pay for a lunch in the City.
    It is difficult to consider that figure of five and that figure of 138,000 without seeing double standards leaping out from the pages. The Government are not pursuing fraud in the City with the same resources, the same commitment and the same energy as they dedicate to fraud in the social security system. The real City scandal is not that some people in the City grab their chances when they see them but that too many of them during the past six years have been allowed to get away with that.
    It is necessary only to look at the pages of Time and Newsweek International during the past month to see how much more ruthlessly and successfully the sin of insider dealing is being prosecuted on Wall street. The basis of comparison is not unfair. Mr. Boesky, who gave rise to the headlines about Wall street in Time and Newsweek International, was also active in the City of London. He deliberately limited his involvement in the City of London because, as he said in a diverting comment he found the City of London too leaky. Nevertheless, he was active.
    He was especially active in the Guinness bid for Distillers. He built up a large holding in Distillers, which is rumoured to have reached $100 million. He assembled that figure well in advance of the announcement of the bid. At a critical stage in the takeover battle he dumped on the London market—not on Wall street—a large block of shares in Argyll. That had the effect of depressing Argyll shares and therefore depressing the value of its share offer for Distillers. That was especially relevant since the cash offer of Argyll was always better than the cash offer of Guinness.
    Surprisingly, at the same time, Schenley, the United States distributors for Guinness, bought Guinness shares in large quantities on Wall street, thus driving up the price of Guinness, and improving its share offer. Even more surprisingly three months after Guinness was successful in acquiring Distillers, Schenley, no doubt by pure coincidence, was awarded the contract for the distribution of Gordon's Gin which Guinness had acquired from Distillers.
    I do not ask anything quite so crude of the Minister as to reveal to the House the nature of the allegations which led to the current inquiry, but I ask him for an assurance that that investigation will look fully into the circumstances of the bid for Distillers. He must accept that if we now uncover improprieties in the bid by Guinness for Distillers, it will take us back to questioning the prudence of the Monopolies and Mergers Commission in giving the green light to the second bid from Guinness.

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    Before leaving the topic of Guinness, I must ask the Minister to recognise that, if he proposes to leave the markets in their present state of ignorance as to the nature of the allegations, it is intolerable to allow trading to continue in Guinness's shares. Given the ignorance of outsiders about the scope, severity and cost of the allegations, it is impossible to give any meaningful value to the shares. Unless the Minister can tell the House the nature of those allegations, I must urge him to press the Stock Exchange Council to suspend trading in Guinnesses shares.
    Viscount Cranborne: The hon. Gentleman said that the investigation instituted by my right hon. Friend the Secretary of State into the Guinness bid concerned fraud. Does he have any evidence for saying that, or does the investigation have a more general remit?
    Mr. Cook: The appointment of inspectors has been made under a catch-all provision in the Companies Act, as I think the hon. Gentleman knows. In the light of the strong suggestions made in the financial pages and in the American press, I should be extremely surprised if the appointment was not related to developments during the past months in America. I should also be very surprised if the hon. Gentleman was willing to wager with me that there is not an investigation into fraud at the bottom of it all. We await the Minister's reply, but the hon. Gentleman may wish to press the Minister on that point, as the wider world would appreciate some elucidation of the facts.
    It would be unreasonable to expect the Minister to confirm whether investigations into Boesky prompted the current investigation. However, the key to the success of the Boesky investigation into Wall street was the ability of the United States Securities and Exchange commission to press the Swiss bank to divulge the owner of a numbered account. It was the threat of prosecution of the New York branch of the Swiss bank Leu that persuaded it to reveal that the account was held by Dennis Levine, which in turn led to the door of Boesky.
    If the Department is serious about stopping fraud and halting insider dealing, why do we not try to negotiate the same arrangement with Swiss banks as the United States SEC achieved? A fortnight ago, that very question was, according to The London Evening Standard, put to a spokesman from the Department of Trade and Industry, who replied:
    "Maybe we will one day".
    That does not smack of ugency or immediacy. If the Government are serious about cracking down on fraud, we are entitled to expect them to begin by blocking off the ways in which fraudsters maintain their anonymity.
    There is another lesson to be learnt from investigations in the United States. There is the clear evidence of the SEC's success under its new management, in contrast to the SIB, which the Minister proposes, and which will have the status in the City of a private company, limited by guarantee. Law and order in the City will, as it were, be privatised to that company, and sub-contracted to the City. After the events of the past month, the proposal that the regulation of the City can be left to self-regulation by the City appears to be even more inadequate than when
    788
    the Minister mooted it last spring. That is particularly so, since the structure that will give effect to self-regulation will not be set up until halfway through next year.
    Let us put a brave face on it, and accept that, as the structure is not now in being, we at least have a chance to abort the whole unsatisfactory project and to replace that structure with something worth while, which will enable the City to have exactly the same sort of statutory Government policing as is now so successful in relation to Wall street.
    I anticipate that the debate, like our motion, will go beyond the narrow question of fraud in the City. It will inevitably and should, just as our motion does, touch on the relationship between the City and industry. That relationship has become more difficult as the pace of takeovers has quickened, obliging dealers in shares to shorten still further the time scale on which they base their decisions. Decisions to buy or to sell, which are taken on the momentary flicker of the SEAQ screen, stand in stark contrast to industry's need for investment decisions that will remain stable for up to a decade.
    We have the observation of Ernest Harrison of Racal. Last month, he was quoted as saying that he had an infinite number of research and development projects on which he could spend money, but that the effect on his profit and loss account in the short run would be so severe that the investment managers would suspect that the company had hit a particularly sticky patch and perhaps even sell the company out from under him.
    It is a bitter comment on the priorities of the City that a decision to invest for the future could become the basis for a decision to sell in the present. Mr. Collier and his conduct stand as an emblem of the City's conduct in that regard. The object of Mr. Collier's speculation was AE, an advanced engineering firm specialising in advanced engineering components, with a record of high investment in new technology, which was beating off a hostile bid for its ownership.
    Mr. Collier's contribution to the company's dilemma was to gamble with its ownership via speculation that was launched through a tax haven. It is a sorry tale of greed, sort-sightedness and lack of patriotism. It must be set in the context of the Government's monumental failure to halt such actions or even to set up a structure in the City that could detect or catch that form of fraud. Most of all, it must be set in the context of the Conservative party's connivance with the City's priorities in gambling with the ownership of British industry rather than investing in its future. For that reason, we shall vote for the motion tonight.
    4.36 pm
    The Parliamentary Under-Secretary of State for Trade and Industry (Mr. Michael Howard): I beg to move, to leave out from 'House' to the end of the Question and to add instead thereof:
    'congratulates the financial services sector on its contribution to invisible earnings, to growth in employment and on the efficient and effective way it raised £6 billion for industry and commerce in 1985; congratulates Her Majesty's Government and the financial services sector on their prompt and effective action against insider dealing; and reaffirms its support for self-regulation within the statutory framework of the Financial Services Act as the most effective system of regulating the City.'.
    I am grateful to the Opposition for initiating this debate. It gives me, on behalf of the Government, an

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    excellent opportunity to make very clear in words what we have already demonstrated by our actions. No one can be in any doubt that we regard insider dealing as a thoroughly pernicious practice which is damaging to markets and unfair to individuals, and which we are determined to do all in our power to root out. I remind the House that it was a Conservative Government who first introduced legislation to make insider dealing a criminal offence—in the Companies Bill of 1973. That fell with the general election of 1974. It is fair to say that the previous Labour Government also tried and failed. But some indications of the priority which they attached to this issue when in Government can be derived from the fact that, having been elected in 1974, they waited until 1978 before making their attempt. That attempt also failed with a general election. But despite those somewhat inauspicious electoral precedents this Government did not wait long before trying again, and insider dealing became a criminal offence under part V of the Companies Act 1980 on 23 June 1980.
    This criminal offence has not been easy to prove. This is not due to any lack of effort on the part of my Department or any lack of willingness to prosecute where the evidence was available. The basic problem was the difficulty of establishing the evidence needed to meet the high standard of proof required to secure a conviction for a criminal offence. To prove insider dealing it is necessary for the prosecution to prove beyond reasonable doubt that the accused dealt while he was in possession of information which he knew was both unpublished and price sensitive. The difficulty of proving these matters has by no means been limited to this country. These difficulties have been widely recognised in other countries too.
    The hon. Member for Livingston (Mr. Cook) referred in glowing terms to the actions of the SEC in the United States. It is no part of my function to criticise the SEC, but some right hon. and hon. Members may have seen in this morning's edition of The Times an interview with Senator William Proxmire, the new chairman of the Senate Banking Committee. In it, he referred to the SEC's recent record, and said:
    "The SEC, in 1982, fined nobody for violating inside information. The same thing in 1983 and 1984 and 1985. It wasn't until 1986 that they came along with Boesky whom they hit between the eyes."
    Those are not my words; they are Senator Proxmire's. Is it on that basis that the hon. Member for Livingston is urging us to move away from our system towards that of the SEC?
    It is noteworthy that on 6 March 1986, when the then Opposition spokesman, the hon. Member for Dagenham (Mr. Gould)—since promoted in the councils of the Opposition—was discussing the Financial Services Act 1986 in Standing Committee, he said that in looking at the models for a regulatory system he had
    "never thought in terms of the Securities and Exchange Commission".—[Official Report, Standing Committee E, 6 March 1986; c. 520.]
    Perhaps the hon. Member for Livingston should have a word with his hon. Friend the Member for Dagenham, before he jumps to conclusions about the model we should follow.
    Mr. Austin Mitchell: Given the record of a body which is stronger, more effective and more firmly
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    based than the body that has been established in this country to deal with similar situations, how effective does the hon. and learned Gentleman expect our body to be?
    Mr. Howard: The truth is that the SEC is none of those things in relation to the system that we have put into place. During our deliberations in Committee on the Financial Services Bill, the hon. Member for Great Grimsby (Mr. Mitchell) was accustomed to refer, in glowing terms, to the tutorials, as he put it, to which his hon. Friend the Member for Dagenham, then Opposition spokesman, subjected the Committee on these matters. Perhaps the hon. Member for Great Grimsby could suggest to his hon. Friend the Member for Dagenham that the hon. Member for Livingston, the present Opposition spokesman, could have similar tutorials.
    Mr. Gordon Brown: The Minister should take this seriously.
    Mr. Howard: I am taking it seriously.
    Mr. Evans: I understand the point of the need to acquire positive proof before one prosecutes for insider dealing. Is the hon. and learned Gentleman aware of the widespread allegations concerning insider dealing in relation to the BTR bid for Pilkingtons? Will he consider examining this bid and, if necessary, set up an inquiry?
    Mr. Howard: All dealings of that kind which give rise to suspicion are looked at by the stock exchange. If the stock exchange confirms those suspicions it refers the matter to the Department of Trade and Industry. The Department will, in every proper case, not hesitate to make use of the new powers which are available to it and about which I shall tell the House.
    The Financial Services Act contains new powers to investigate insider dealing. These powers can, without exaggeration, be described as draconian. The Secretary of State may appoint inspectors if it appears to him that there are circumstances suggesting that there may have been an insider dealing offence. In other words, the Secretary of State has a wide discretion and he does not have to have a high level of proof before he can act.
    Inspectors may ask any person whom they think may have information relating to an offence to produce any documents in his possession, or to attend before them or otherwise to give them all the assistance which he is reasonably able to give. Inspectors may examine on oath any person who may be able to give them information about an insider dealing offence. If the person does not tell the truth, he commits the offence of perjury. A statement made by a person in response to such examination can be used in evidence against him. Taken in conjunction with the inspector's power to compel persons to assist them, which I will describe shortly, this means that the right to silence, a cardinal principle of our criminal law, has been substantially eliminated for this offence.
    If a person refuses to co-operate, the inspectors may certify that fact to the court, which, after inquiring into the case and satisfying itself that the person did not have a reasonable excuse, may punish him as if he had committed contempt of court. The penalty for contempt is at the discretion of the court and is unlimited. If the person concerned is an authorised investment business and the court so directs, the Secretary of State may also serve a notice cancelling or restricting his authorisation and prohibiting him from entering into certain types of

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    business. Alternatively, the Secretary of State may prohibit other authorised businesses from transacting business on that person's behalf. This will effectively bar that person from our financial markets. Furthermore, it is not a reasonable excuse for a business to say that it did not know the identity of the beneficial owners of shares or that it was subject to banking secrecy laws if, under those laws, it could have obtained the consent of the beneficial owner to be identified. I think few people would disagree that these powers well deserve the description that I applied a few moments ago—they are draconian. Indeed that was the word applied to them by the Opposition spokesman in another place. It is notable that no additional powers were suggested by the Opposition in relation to insider dealing when the Financial Services Bill was before the House. The hon. Member for Livingston—
    Mr. Alex Fletcher: I congratulate my hon. and learned Friend the Minister on the new powers that have been taken to improve investor protection in the United Kingdom and especially the new exchange of information between the regulatory bodies in other countries such as the SEC and his Department. In response to yesterday's decision to appoint inspectors to study the Guinness group, will he assure us that the inspectors will undertake their task on a full-time basis and not simply as just another brief—something which some barristers tend to do—as it is important that they complete their business within months, rather than years. Can my hon. and learned Friend tell the House when he expects to receive their report?
    Mr. Howard: I cannot respond to the last request made by my hon. Friend, but I can certainly tell him that the inspectors into Guinness, to which he referred, are in no doubt whatever about the urgency with which it is desired that they approach this task.
    Mr. Robin Cook: Although I appreciate that the Minister may find it difficult to say when he expects to receive the report, it may help the House if he uses his imagination and gives us some clue to exactly what it is the inspectors are supposed to be investigating. In view of his withering contempt of the activities of the SEC, can he assure us that the current investigation into Guinness was not prompted by information received from the United States?
    Mr. Howard: I have not expressed any contempt for the SEC; I have merely quoted, for the benefit of the House, the words of Senator Proxmire as reported in The Times today. I am surprised that the hon. Member for Livingston expects me to add anything to what was said in yesterday's statement about the investigation into Guinness. Of course I cannot add anything to what was said in that statement and it would be quite wrong and improper for me to do so. On reflection the hon. Gentleman will recognise that it would be quite wrong for him to press me on these matters.
    Mr. Robin Cook: If the Minister intends to rest on yesterday's Delphic statement, which tells us nothing, would he accept the point that I put to him earlier that if he leaves the shareholders and other dealers in ignorance about this financial inquiry it is unrealistic and irresponsible to allow shares in Guinness to continue to be traded?
    Mr. Howard: That is entirely a matter for the Stock Exchange, which has statutory responsibility for those matters.
    Mr. Tim Yeo: First, I apologise for not having been present at the start of the debate. I welcome the greater powers and I share my hon. and learned Friend's description of them as draconian. Would he agree that nevertheless, the acid test is whether prosecutions and, ultimately, convictions follow? It is one thing to have powers but another to bring offenders to book. The best deterrent to insider trading will be a few prison sentences.
    Mr. Howard: I appreciate my hon. Friend's interest in this matter. He was responsible for the amendment which contributed, in large measure, to some of the powers which we have taken. I do not think I can respond to the rest of his observations. I am anxious that the powers which are available are used. I shall have a word about that in due course.
    In different broadcasts today, the hon. Member for Livingston has separately alleged that the Government responded less than adequately during the passage of the Financial Services Bill, as it then was, to concerns expressed about offshore dealing. On the "Today" programme this morning the hon. Gentleman said that the Government had resisted such measures. On the 1 o'clock BBC television news, he said that the Government response was a watered-down version of the Opposition's proposals. This allegation is entirely untrue.
    First, the original amendment on this issue was put forward by my hon. Friend the Member for Suffolk, South and not by the Opposition. Secondly, the Government's response was given an unqualified welcome by the then Opposition spokesman, the hon. Member for Dagenham. He said:
    "This is one of those welcome occasions when it is appropriate to congratulate the Minister on his response to an expression of opinion in Committee… We have here a determined and fair response to the Committee's concern."—[Official Report, 12 June 1986; Vol. 99, c. 525.]
    I hope that the hon. Gentleman will stop making this entirely unfounded allegation. If he will not take the truth from me, I hope that he will take it from his hon. Friend the Member for Dagenham.
    It is true, as my hon. Friend the Member for Suffolk, South said, that any statutory power is only as effective as the use that is made of it. We have already brought into effect the new investigation powers, which were in the Financial Services Bill when we introduced it into the House. This was in order to make them available to investigate a suspected insider dealing case. The Stock Exchange referred to my Department certain information on the evening of Thursday 13 November. The order implementing the investigating powers was laid on 14 November to come into effect the next day, Saturday 15 November. Inspectors were appointed on the same day.
    I shall refer to some recent events in the City which no doubt prompted Opposition Members to initiate the debate. These events have given rise to considerable interest and much comment. The House will not expect me to comment on cases that are under investigation; it would be improper and irresponsible of me to do so. The timing of the report by the inspectors appointed under the Financial Services Act is a matter for them, but I have made it clear to all the inspectors who have recently been appointed that I expect them to address their task with the

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    greatest possible urgency. Earlier this afternoon I made an announcement that criminal proceedings have been commenced against Mr. Geoffrey Collier in respect of certain alleged insider dealing offences.
    The case of an employee of British and Commonwealth, which was reported in the press, is under consideration by the Stock Exchange, which has just completed a preliminary investigation. The results were received yesterday and are being discussed between my Department and the Stock Exchange.
    Nor do I propose to comment on what information may or may not have been exchanged under the memorandum of understanding between the SEC and my Department on the activities of Mr. Boesky or anyone else. The memorandum of understanding which my right hon. Friend the Secretary of State for Trade and Industry signed with the SEC on 23 September requires the Department and the SEC to keep confidential any information provided under it, except for use in the investigation or prosecution for which it was obtained, and also to keep confidential any request for information made under the memorandum. The Stock Exchange has already taken steps to prohibit members from entering into any association, either direct or indirect, with Mr. Boesky and to require members to report any transactions that they carry out for Mr. Boesky or any of his companies.
    I give the House the assurance that, in line with the Government's commitment to vigorous enforcement of the law against insider dealing, my right hon. Friend the Secretary of State for Trade and Industry is always ready to appoint inspectors where there is good reason to do so.
    The Opposition have shown a fundamental misapprehension about regulation in the City. The hon. Member for Livingston argued in a recent article, and again today, if I followed him correctly, that he would scrap the present plans for leaving law and order in the City to self-regulation, and that he would appoint a public agency with powers of prosecution along the lines of the SEC. That is the way that he puts it. I remind the House, and especially the hon. Gentleman, that insider dealing is a criminal offence for which the prosecuting authorities are the Secretary of State and the Director of Public Prosecutions. The Secretary of State is responsible for appointing inspectors to exercise the investigation powers that I have described. Penalties for non-co-operation are imposed by the courts. This is hardly
    "leaving law and order to self-regulation by the City"
    to quote the words of the motion.
    The motion tackles a number of other issues and it is as wide of the mark on these as it is on insider dealing.
    Viscount Cranborne: My hon. and learned Friend has been most eloquent, and satisfactorily so, about the rigour with which the Government will pursue fraud, insider dealing and other transgressions under the auspices of the Stock Exchange. Will he give an undertaking that the Government will be as rigorous in their approach to criminal offences in the Lloyd's insurance market?
    Mr. Howard: I can certainly give that assurance. The difficulty that has arisen in such cases has been explained fully on more than one occasion by my hon. and learned Friend the Solicitor-General. It arises from some of the difficulties in obtaining evidence from abroad, that will be largely removed when the provisions of the Criminal
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    Justice Bill are enacted. Before that stage is arrived at, these matters are being pursued as thoroughly as possible within the present limitations of the law of evidence.
    Finally, I shall deal with some of the other issues that are raised in the motion. It has been suggested that there was some connection between the events to which the hon. Member for Livingston referred and what he has described as the shortfall in investment in industry. That investment rose by 15 per cent. in 1984 to an all-time high, and by a further 7 per cent. in 1985. I do not understand how anyone can argue that shortage of finance for industry is hampering economic growth, and nor would the business community. The latest CBI industrial trends survey found that only 5 per cent. of respondents saw availability of external finance as a limiting factor in their investment plans. Nor do I accept that the Government have downgraded manufacturing industry. Manufacturing is, and will remain, a major contributor to output, wealth and employment. We shall continue to foster a climate in which all wealth creation, including manufacturing, is free to develop and flourish but we do not believe in plundering the nation's pension funds to satisfy the whims of the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) in some of the more fanciful of his plans.
    Mr. Robin Cook: As the Minister does not appear to have brought with him the figures for investment in manufacturing industry, will he confirm that only a fortnight ago his Department revealed that in the last quarter for which figures are available investment in manufacturing industry was 6 per cent. down on the previous quarter of last year?
    Mr. Howard: It is sometimes possible to prove anything with quarter-by-quarter figures. The figures which I have given provide a much more reliable test in comparing what is happening now with what was happening a year ago.
    Mr. Alan Williams: The Minister complains that my hon. Friend the Member for Livingston (Mr. Cook) used the figures for the last quarter in his intervention. It seems that the Minister feels that that is inadequate because the period is too short. Let us take the opposite extreme, which is the full life of the Government. Will the Minister confirm that the figures remain 17 per cent. below the level that they had reached when the Government came to office?
    Mr. Howard: I did not complain. I merely observed that it was possible to do almost anything by taking quarter-by-quarter figures. I shall not confirm the figures which the right hon. Member for Swansea, West (Mr. Williams) has presented to me. He knows as well as I that the economy has taken a little time to recover from the damage which was inflicted upon it by the previous Labour Government. He knows also that it was unrealistic to expect an improvement to be seen immediately after the 1979 general election.
    Having considered the issues raised by the hon. Member for Livingston, I am left in a state of some puzzlement about the Opposition's purpose in holding the debate. Everyone agrees that insider dealing is a pernicious offence. Everyone agrees also that because of the difficulty of proving it, additional powers have been needed to investigate circumstances suggesting that it has occurred. These powers have been provided and are being used.
    No further powers have been identified as being needed which have not been provided. What then is the reason

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    behind the Opposition's motion? Is it a serious concern? Is it a serious attempt to make a constructive solution to the problem? Or is it simply another instance of City-bashing? Is it another example of the Opposition's predilections for attacking at every possible opportunity a sector of our economy which employs over 1 million people, produces 6 per cent. of the total output of the nation and earned £7·6 billion for the balance of payments in 1985? The evidence of the speech of the hon. Member for Livingston suggests strongly that it is the latter, and we shall be scrutinising the remainder of the speeches of Opposition Members in the debate to ascertain whether they enable any other conclusion to be drawn.
    5 pm
    Mr. Brian Sedgemore: I begin on an entirely modest and uncontentious note. Everyone will agree that one of the best pieces written about the big bang in the City is the booklet by my hon. Friend the Member for Bolsover (Mr. Skinner) and myself, entitled "The City: Big Bang 2000". I recommend it to all hon. Members.
    Unfortunately, the name on everybody's lips at the moment is not that of my hon. Friend or myself, but that of Mr. Ivan Boesky. I am bound to say that he is a man of class who should be admired. He wrote a book in which he asks for the plaudits of the crowd because, he proclaims, he is a wizard financial psychologist, a probability theorist, an economic forecaster, and a person with the sublimest intuitive judgment. However, all the time he was a crook and fraudster who was betting on certainties because he had inside information. I could name one or two firms of brokers and merchant banks in Britain who might have been pleased to employ Mr. Boesky.
    Fortunately, the SEC caught Mr. Boesky. If I had to decide, over the whole sphere of fraud, between the machinery that the Government have set up and the operation of the SEC, I would come down marginally on the side of the SEC. More and more people in the City are saying that the self-regulatory process—whether right or not for insider dealing—will not work. They are deeply suspicious of it. The fact that practitioners are suspicious of it should make politicians suspicious of it, too.
    Mr. Tim Smith: Is not the reverse of that statement true? If the practitioners were wholly happy with the new arrangements, there would be some cause for concern.
    Mr. Sedgemore: I accept the hon. Gentleman's gentle debating point. Those issues must be dealt with seriously if we hope to reach a conclusion that will help investors, the public, and perhaps even the good name of the City if it is to earn invisible exports.
    I was a little disappointed by the Minister's speech. I accept that he does not know anything about macroeconomics, and I shall not pursue that. My hon. Friend the Member for Livingston (Mr. Cook) picked him up on one or two points. The Minister appeared blind to the issue of law enforcement and what actually happens between his Department and the Director of Public Prosecutions. I jotted down some of the words that he used. He referred to "vigorous enforcement" and used the word "determination". He implied that there was a resolute political will to
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    resolve those points. Perhaps he should say that to Peter Cameron-Webb or to Peter Dixon, who are in sunnier climes than Britain at present and who are laughing at the attempts of the law enforcement officers to bring them to justice here.
    The Minister should also consider the wider aspects. In a parliamentary reply the Attorney-General told me that Lloyd's had submitted the names of 35 people to the DPP on its standard of proof "beyond reasonable doubt", which is the same standard as is used in a criminal court. In fact, only one person has been convicted, and there have been only a couple of prosecutions. In other words, 34 people, having been proven guilty "beyond reasonable doubt" by Lloyd's, have got off. Most of them have not even been charged or arrested, let alone prosecuted or brought to trial. That does not seem to be resolute political will or "vigorous enforcement", nor does it justify the Minister's use of the word "determination".
    If the Minister wishes to consider insider dealing, he should explain the figures which my hon. Friend the Member for Livingston gave to the House about the 110 reported cases, from which there have been nine prosecutions and, I believe, only one or two convictions. I am advised that, in fact, there were six.
    It is only a few months since Sir Nicholas Goodison, the chairman of the stock exchange, was critical of the DPP about other issues. However, he was also critical of the Department of Trade and Industry's prosecution policy on those cases. I recently discussed that with one of my friends who defended some people charged with City frauds. They were acquitted. I was surprised about that, because the evidence seemed overwhelming. I asked him how he managed it—I should point out that he also prosecutes City fraudsters—and he replied that it was because of the quality of the prosecution, which treated it as a sort of shoplifting case. I have observed some of the people who prosecute on behalf of the Department of Trade and Industry. I suggest to the Minister that his Department should use its best people. If they are not good enough, it should employ better people and pay them higher salaries to carry out what I agree are difficult prosecutions. It is difficult to pin down people because of the nature of the evidence with which one has to deal.
    The change in the regulations for financial institutions—the willingness of the City now to allow mergers between banks, merchant banks, brokers, jobbers and moneymakers—makes insider dealing in the City much more likely and certain, as do the amounts of money involved in takeover bids which now run not into hundreds of millions of pounds, but billions of pounds. I understand that in 25 per cent. of recent takeovers, the price of the shares increased on the day before the takeover was announced, and in 60 per cent. of cases the price increased in the previous six months. That suggests—it is not conclusive proof—that more insider dealing has occurred than has come to light, and certainly more than is being prosecuted.
    All hon. Members know that the so-called Chinese walls, which are supposed to protect people under the new structure that has emerged in the City, create major problems. For example, if a customer of Barclays bank wants securities work undertaken, it is likely that he will go to the brokers de Zoete and Bevan and to the jobbers Webb Durlacher Mordaunt and Company. If a bank manager at Barclays has dinner with a company director who wants to borrow money, and if the bank manager gets

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    price sensitive information from the company director, who does the bank manager tell? In theory, he should tell only those who are interested in the money. In a respectable institution such as Barclays perhaps that will happen. However, the problem is that a number of other people at Barclays—for example, the salesman, the fund manager, the corporate financier and the market maker—could have a financial interest in discovering the price sensitive information from the bank manager. It is almost impossible to hold the line between the bank manager and the other four who have a financial interest.
    Even if that line is held in a firm such as Barclays through the compliance director or compliance officer, how can that sort of price sensitive information be held if a company is in financial difficulties or is facing bankruptcy? If that is to be a bigger feature of the big bang in the City—I suspect that it will be—it will be almost impossible to hold those invisible walls in the City.
    I agree with my hon. Friend the Member for Livingston that most people in the City are not involved in financial scandal or fraud. However, because of the ethos and the rewards, which are now so large, too many people who were hitherto thought respectable are involved. We knew that when the British Telecom applications came out, many people were involved in illegal activities, but none of the big fish was prosecuted and only a few of the minnows were picked out.
    I discovered that the Societé Generale Merchant Bank, a French company, put in forged share certificates. A lawyer from the main nationalised bank, Societé Generale, telephoned the merchant bank and told it, whereupon an elaborate cover-up operation was arranged and people were forced to sell off those shares at a loss. The fact that that can happen with a reputable foreign bank in Britain was deeply disturbing.
    The Westland affair has been bled dry, but the last point yet to come out about that relates to the purchase of shares, the double prices that were in operation and why some people were purchasing shares behind the scenes but not using them when it came to the critical vote. I and a number of my friends in the City would like to know the precise nature of the activities of Scrimgeour Vickers which has come into prominence recently over the Westland affair. I shall not make any allegations, but the Minister may be able to help us on that.
    I served on the Committee which considered the Financial Services Bill. The Minister commented, a trifle unkindly, that none of us put forward amendments to that Bill. However, he knows that I have made two suggestions, which I believe are responsible and sensible, to deal with the problem of insider dealing. I have put them forward by way of parliamentary questions. His answers have been fairly hesitant. If that means that he is prepared to think about them, we shall all be grateful. Those two proposals must be taken in tandem because, although they will not solve the problem of insider dealing, they will go some way to help with what is happening.
    My first suggestion to the Minister is that we should prohibit own-account dealing by those who work for firms of stockbrokers, merchant bankers and major financial institutions. Such people would be able to deal on behalf of their clients, but not at the same time deal on behalf of themselves. In one go that would remove an enormous conflict of interest.
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    In his reply the Minister told me, quite rightly, that some firms operate such restrictions and prohibit own-account dealing. But why do we not ensure that the SIB makes sure that that happens with all firms? I have spoken about this to Conservative Members who work in the City and some have said that they have put that proposal forward in their own firms, but the basic response is, "You have made your money out of own-account dealing. We want to make our money out of own-account dealing." But surely the salaries that people earn in the firms of stockbrokers and merchant banks are sufficient to enable them to live reasonably without going into own-account dealing.
    If that proposal were instituted in conjunction with my second proposal, which is that we should register the beneficial ownership of all shares, that would help enormously. We know that people get round insider dealing by using nominee shareholders and trusts, so we do not know the ultimate beneficial owner, and sometimes by using their families. Some people would still cheat, but much insider dealing would be prevented if the beneficial owner of all shares had to be registered, whether the beneficial owner was in Britain or abroad, or was a foreign registered company in Lichtenstein or somewhere like that.
    Mr. Anthony Nelson: I have a good deal of sympathy with what the hon. Gentleman is saying, and he knows that we debated this in Committee on the Financial Services Bill. But one still has to ask: how shall we get foreign banks and nominee companies to disclose the beneficial ownership?
    Mr. Sedgemore: It would be illegal for anyone to buy or sell stocks or shares in Britain unless they first declared the beneficial owner. That may stop some people buying and selling stocks and shares, but one could make that a precondition of the purchase or sale. I accept that, in the terms in which the hon. Gentleman phrases his question, more international co-operation is needed than exists in the financial world today. One of the lessons on the wider sphere is that there will have to be greater co-operation, even among capitalist Governments, let alone Socialist Governments, if we are to get to grips with many of those problems.
    I hope that the Minister will say why he is not prepared to enforce by law, or to encourage the SIB to enforce, the prohibition of own-account dealing and the registration of the beneficial ownership of shares.
    Those are the only two points that I want to make. They would be helpful and they would go some way to solving the problem. If the Minister were prepared to accept such proposals, perhaps we would believe that he was determined to enforce the law, that he really was vigilant and that he did have the resolute political will to do something about it. We shall await his reply.
    5.14 pm
    Mr. Tim Smith: The hon. Member for Hackney, South and Shoreditch (Mr. Sedgemore) has made two constructive proposals at which we should look. It is not unreasonable to consider excluding own-account dealing for people who work in the City. If I understand him rightly, he is saying that if they have savings which they wish to invest, they must do it through trustees—through an arm's-length arrangement. The present

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    arrangement is that most employees are required to do their own-account dealing through the firms for which they work. That was certainly the case with Mr. Collier and Morgan Grenfell Securities, and that why he was dismissed. I sympathise with the hon. Gentleman's suggestion. We should consider it seriously.
    I agree with much of the theory of the hon. Gentleman's proposals about nominee shareholdings. We need to know the beneficial ownership of shares. It is already possible for companies to demand information from their shareholders on beneficial ownership and in some circumstances it is possible for them to ensure that the rights are removed from the shares—the voting rights, dividend rights, and so on. Therefore, to some extent it is up to companies to take a firmer line. It is wrong that people should be able to hide behind nominee shareholders and avoid prosecution for insider trading.
    It is a matter for considerable regret that the hon. Member for Livingston (Mr. Cook) has replaced the hon. Member for Dagenham (Mr. Gould) who spoke on these matters previously. He had few constructive proposals to put forward and, indeed, seemed to be in some ignorance about the Financial Services Act which has only recently passed through the House.
    Insider trading is an evil that needs to be stamped out. There are those who would argue that insider trading is somehow no more than a facet of the operation of the perfect market and that it is entirely appropriate that the price of a stock should respond at the earliest opportunity to the latest information available.
    That argument is wholly misconceived. Of course it is right that the price of a stock should reflect the latest information, but that information should be made available simultaneously to all actual and potential stockholders. It is wrong that one stockholder should be able to make a disproportionate profit out of information exclusively available to him.
    There are those too who say that insider trading is somehow unimportant because it is a victimless crime. The hon. Gentleman referred to that. There is something in that. A number of small investors in McDonald Wheeler lost substantial sums of money. It is difficult to argue that small investors lose money as a result of insider trading, but they are denied the opportunity to profit in the way that the insider does. By the time they become aware of a potential bid opportunity, the price will already have moved up substantially. In that sense, they are victims. Indeed, we are all victims. Everyone other than the insider is a victim of his abuse.
    Mr. Robin Cook: The hon. Gentleman may be aware that Scrimgeour Vickers, in its deal with Mr. Collier, sold short, and subsequently found that it had to register a clear cash loss on the deal. To that extent it regards itself as a victim.
    Mr. Smith: It certainly did and it was especially aggrieved as a result of that. I accept that it was a victim. Perhaps the only point that Sir Martin Jacomb was trying to make was that the private investor was not directly damaged. However, I do not accept the description of this as a victimless crime. We are all victims of the crime.
    Insider trading has been recognised as an abuse for some time. The stock exchange, to its credit, demanded legislation to make it a criminal offence 15 years ago. In
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    late 1973 the then Secretary of State for Trade and Industry, my right hon. Friend the Member for Worcester (Mr. Walker), introduced a Companies Bill which sought to do precisely that. It was given a Second Reading on 17 January 1974, but, as we have already heard, it was lost with the advent of a general election the following month.
    What did the incoming Labour Government do about that? They did absolutely nothing. Their sole contribution to the reform of company law in more than five years was the Companies Act 1976, a puny piece of legislation. For all their protestations of scandal and abuse in the City, they took no action to counter insider trading. How has the Labour party the nerve to criticise today, when all the legislation has been introduced by successive Governments?
    It was not until the Companies Act 1980, the insider trading provisions of which are now incorporated in the Company Securities (Insider Dealing) Act 1985, that this matter was dealt with in legislation. We all know that the record of prosecutions since then has not been good. I believe that there are two reasons for that.
    First, I am not satisfied that the Department of Trade and Industry has adequate resources for investigating the cases that are passed to it by the stock exchange. Perhaps my hon. Friend would prescribe the resources that are available to him. Does he have either the quantity or the quality of people to undertake these complex investigations?
    Secondly, until very recently the Department had insufficient powers of investigation. That has been remedied by section 117 of the Financial Services Act 1986 which enables the Secretary of State to appoint inspectors and then goes on to empower the inspectors to require the production of documents and the attendance of persons and to examine on oath. It is true that during the Committee stage of the Financial Services Act 1986, the only proposals to reinforce those provisions came from my hon. Friend the Member for Suffolk, South (Mr. Yeo) who was concerned about the deals that are organised offshore and overseas. Those were the only provisions put forward; no proposals were presented by the Opposition to strengthen the powers. The fact is that the powers are draconian by any standards, and if they are used, they should be very effective.
    More recently, my right hon. Friend the Secretary of State moved with considerable speed to deal with the first case of alleged insider trading to come to light following the enactment of the Financial Services Bill. Mr. Collier was fired by Morgan Grenfell Securities on 10 November. By 17 November, section 117 of the Financial Services Act 1986 had been implemented and inspectors had been appointed.
    An example must now be made, although not necessarily of Mr. Collier and certainly not of the minnow employed by British and Commonwealth who aspired to make £800 from his insider trading. The exemplary sentence should be meted out to as big a fish as possible and that sentence should be a prison sentence—a fine will not do. A clear message must be sent to those in the City who would abuse their privileged positions, that society will not tolerate their behaviour. A statutory commission is not the answer. The question of a body to deal with these matters is really almost irrelevant. It is not the body but the available powers which is the important point.

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    The existence of the Securities and Exchange Commission has not prevented Mr. Boesky and possibly others from insider trading that makes Mr. Collier's alleged offence look like pilfering from the petty cash box. Indeed, it may be that our present arrangements are already too formal and inflexible and involve too high a burden of proof. For that reason, we may need to consider the introduction of civil penalties with a lower burden of proof. As a further deterrent, we should consider an extension of the disgorgement provisions, such that all the assets of a convicted insider trader are assumed to be the proceeds of his trading, unless he can prove otherwise.
    I hope that the Government will resist demands for a statutory commission and instead review the resources and powers available to combat insider trading. It is in the City's interest as much as anyone else's that that evil should be stamped out.
    5.23 pm
    Mr. Doug Hoyle: There is an amazing difference in the view taken by the Minister and the view generally taken by the Government in relation to criminal offences. It appears that, as usual, the Government have one law for the rich and another for the poor.
    We should not mince words in this matter: we are talking about immaculately dressed spivs who are engaging in criminal activities. The Minister referred to the vigorous action that is being taken, although he did not deny the truth of the figures that were put to him. I hope that we shall receive some explanation as to how, since 1980, there have been 300 cases of insider dealing of which 110 were referred to the Department of Trade and Industry, yet in only six cases have there been guilty verdicts, involving only nine people. That is the sum total. That does not appear to be very vigorous action; rather, it is lethargic.
    Several explanations have been made by Tory Members as to what ought to be done—whether there should be better professional expertise or whether more help should be given. However, it is certainly true that the really big fish who are fraudulent in our society are getting away with it. It is simply not good enough to claim that suddenly bringing in legislation will deal with the problem if it is given the chance. In response to the Minister's claims about the Labour Government, I can tell him that this Conservative Government have created a casino society which makes it far easier for people to carry out these dealings.
    When we begin to consider the position, we find that people in City institutions are setting up offshore companies. These are the really big fish who are getting away with it. What are the Government doing about that? It is not good enough to allow these people to set up companies in Liberia and the Caribbean. It appears as if crime does pay. These people believe that if they are going to commit a crime, they might as well commit a big one. They will not commit a small one because they believe that there will be a hand at their backs which may fall on their shoulder and they will be put away for it. I agree with Conservative Members who say that there is a real need for one of the big sharks to be caught and put away. These sharks are allowed to swim merrily in the sea and to gain from their criminal activities. The Minister is far too complacent about that.
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    There was a case not long ago involving an offshore company in Liberia that had never dealt on the stock exchange before. However, in its first dealing, it bought £60,000 of shares that were part of a takeover bid. That is the magnitude of what is happening. They have no fear that they will not get away with it. They operate the set-up and know that they will not be prosecuted. The figures show that that is what is happening.
    Of course, these companies are encouraged to do that because the Government are not prepared to take much action over mergers and takeovers. In 1985, £9 billion of deals were completed. This is another way of getting a fast buck. Some 75 per cent. of the suspected cases of insider dealing have involved the purchase of shares shortly to be subject to a takeover bid. If the statistics revealed that such crimes were committed elsewhere in society, there would be an outcry from the Conservative Benches for more action. We would then hear the Minister say that the Government would do something. However, despite the vigour which the Government are acting now, it appears that most of the people will get away with their ill-gotten gains and many more such dealings will take place.
    What is happening in relation to Guinness? The Minister made an announcement yesterday about that, but he told us nothing at all. My hon. Friend the Member for Livingston (Mr. Cook) was right to ask whether anything would have happened if the Boesky file had not been passed to the DTI from the United States Securities and Exchange Commission. We are entitled to an explanation as to whether it is because of that that the inspectors have gone into Guinness. We ought to know what is happening It is not good enough that we should be left to speculate. If we examine the Boesky connection and the connection between Collier and Morgan Grenfell, we are bound to draw conclusions.
    The Minister and many others have spoken about Ivan Boesky. The Investors Chronicle of 21 November states that Mr. Boesky has been barred from participating in the United States securities industry. It continues:
    "This does not prevent him from investing privately or acting as a professional overseas, unless specifically barred. London Stock Exchange members have so far only been instructed to consult the Exchange before dealing on Boesky's behalf."
    Can the Minister say whether that is true? Is Boesky to be barred from dealing in the United States, but allowed to get away with such activities in the United Kingdom? If so, that is not good enough.
    The Government talk about people's capitalism and privatisation bids. People are making a killing and getting away with it. The British Telecom flotation certainly benefited greedy operators. I understood, as did many others, that investors were allowed only one application and a maximum of 800 shares, but close to 7,000 of the 2·3 million applicants were multiple applicants and got away with it. One or two of the minor fish were caught, but big names in the City were involved and nothing has been done about them.
    The matter does not stop there. Already 6,000 cases of multiple dealing have come to light in the flotation of the Trustee Savings bank. At the end of the day such people will make a killing. Soon there will be the flotation of British Gas. Will there be more multiple applications? How many fraudulent Sids will there be? Will they again get away with it? That is happening all the time.

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    The Minister talks about what the Government have done, but we know that they have been reluctant to act and have been shoved into action. We know that the measures that have been taken are half-baked and weak, and will not have much effect. So long as we allow a voluntary system of self-regulation, we shall not do much about the problem. That is the truth of the matter. Tory Members may say, "Even with all the powers that were given to the Securities and Exchange Commission in the United States, look what has occurred there." But look what is happening here, where hardly any powers have been taken.
    It is clear from the Minister's remarks that he is not prepared to do much and that the measures will not stop the avarice in the City, those who are out for a quick buck and those who are making the real profits. That is not good enough. Moreover, the salaries of those people are vast. They should be condemned. They should be above suspicion and should not engage in such dealings. They are tarnishing the name of the City of London. They may be a minority, but if nothing is done, they will be a growing minority.
    The number of cases of insider trading that have been reported by the stock exchange is disappointing. The stock exchange is extremely disappointed and believes that in many cases there was sufficient evidence to bring a prosecution. But nothing much is happening. Given the Minister's attitude and complacency I suspect that even after today's debate nothing much will happen in future.
    I shall give an undertaking from these Benches—I am sure that it has been given many times from the Front Bench—that, when the Labour Government come to power, the City will not get away with the rich pickings that it has been allowed to get away with under the present Government.
    5.34 pm
    Mr. Anthony Nelson: The hon. Member for Warrington, North (Mr. Hoyle), who often speaks on these matters, may be no friend of the City, but he is consistent in his views about the iniquitous practices there, especially illegal ones such as we are discussing today. I have a good deal of sympathy with some of his sentiments, but not with all his solutions.
    Insider dealing is undoubtedly rife and more lucrative than ever before. That is clear from the figures in recent years which show the considerable extent to which the price of stocks has risen in the short and medium term before bids have been formally launched. Insider dealing is more lucrative because the market, which trades at considerably higher levels than previously, involves much larger sums and the opportunities for misusing privileged information are much greater.
    I disagree with the hon. Member for Hackney, South and Shoreditch (Mr. Sedgemore) that the real problem is the fragility of Chinese walls. There will undoubtedly be great difficulty in ensuring confidentiality and arm's-length operations of subsidiary companies or divisions within financial concerns. The real problem is not that such information may be misused, as it undoubtedly is now, has been in the past and will be in future. The problem is to prevent its misuse, not only by legislation, but by ensuring that people cannot use it, however they obtain it.
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    It is impractical to suggest that there is a reasonable hope of preventing people from obtaining information, considering the size, flexibility and freedom of the new financial markets. Many people will obtain information about the contents of a prospectus and the terms of a bid. Everybody from the corporate finance executive to the printer responsible for publishing the information will be privy to the information. What is necessary is not to outlaw such practices and make them, rightly, criminal offences, but to prevent opportunities arising for people to misuse that knowledge. Many hon. Members on both sides of the House have directed their attention to that problem today.
    I should like to add some comments and suggestions to those which have already been registered in relation to possible solutions. The hon. Member for Hackney, South and Shoreditch made two proposals which he thought would prevent some insider dealing offences. Indeed, his view is shared both inside and outside the House. His first proposal sought to prevent in-house dealing and to ensure that those who work for financial concerns and are privy to information are prevented from misusing that information by contract, presumably with the company that employs them.
    That is a good idea, and some companies already impose that stricture on their employees, but it is unworkable because it is already a criminal offence to engage in insider dealing. If an employee abuses the law by engaging in insider dealing, why should he not also abuse the contractual restriction placed on him to use that information? That will not stop the type of person who is determined to break the law.
    I have sympathy with the hon. Gentleman's second proposition in principle, but less sympathy with it in practice. It is to ensure by registration that all beneficial ownership of shares will be made more public and more accurate. In an intervention, I inquired how that would be possible for dealings on international markets, where orders are placed by companies abroad. Even if there were bilateral agreements with countries and banks about the disclosure of beneficial ownership, unfortunately there will always be trading opportunities with offshore concerns and locations, to which people will direct their money and through which they will establish nominee companies and make substantial criminal profits. One substantive move could be made through international co-operation significantly to improve the prevention and detection of this crime. I shall say something about that later. The extent to which full disclosure of beneficial ownership will deter people from engaging in that is limited.
    I should like to make some proposals. My first is a reiteration of what I said in Standing Committee during the course of the Financial Services Bill. There is a case for the Securities and Investment Board having the ability to investigate suspected cases of insider dealing. The hon. Member for Livingston (Mr. Cook), in speaking about the powers of the SIB and its status as a private sector body rather than a statutory body, seemed to be under the misapprehension that in some way, even if it were given statutory identity, it would be able to resolve this problem. He may not be aware, but I am sure other hon. Members will be, that, even if the SIB were to be made a full statutory body, it has no powers. Indeed, it is expressly prohibited from having any powers to investigate insider dealing.

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    In Standing Committee I moved an amendment to give the SIB powers to investigate suspected cases of insider dealing. At that time, and largely at present, cases were initially investigated by the stock exchange. When it has a suspicion, it refers it to the Department of Trade and Industry, which decides whether or not to carry out further investigations or to bring a prosecution. The SIB is ostensibly responsible for the regulation and supervision of the investment markets but it has no legal right, in effect it is expressly forbidden, to investigate and prosecute in a case of insider dealing.
    If there are more cases of this kind, my hon. and learned Friend the Minister will have to look at this matter again. It cannot be right to disallow the body responsible for overall regulation and supervision of the investment markets from investigating insider dealing. When I put that to my hon. and learned Friend during the course of the Bill, he said, with a large measure of justification, that the powers granted under the Companies Act 1980 and extended by this legislation have been substantially enhanced. In his words, their nature is draconian and there is no need to extend the right of investigation or prosecution to any body other than the Department of Trade and Industry.
    Because these powers of investigation and the burden of proof and the other arguments to which my hon. and learned Friend addressed himself earlier are so draconian and distinct from prosecution and investigation in other criminal areas, he argues that it would be improper to extend those powers to a private sector body or, I suspect, to a public sector body if the SIB were to be made something akin to the Securities and Exchange Commission. I begged to differ with my hon. and learned Friend and that was why I pressed my amendment to a Division. It received a degree of support from all sides of the Committee. It is a legitimate matter to raise again if there is continuing dissatisfaction about the investigation and prosecution of people involved in insider dealing.
    I sense that we all hope that the SIB will be responsible on a day-to-day basis for monitoring what the stock exchange council and lots of other self-regulatory organisations are doing. In turn, they will be in day-to-day touch with all the trading activities of the member firms. How can it he right to stop that supervisory body, when it gets a whiff of some criminal activity and suspects insider dealing or when its monitoring through the SROs of daily trade gives rise to suspicion, from either investigating or even drawing that matter to the attention of the Department of Trade and Industry? As a responsible body, it may well do the latter in any case, but we should look at the matter again.
    Secondly, the hon. Member for Livingston said that there was a case for a bilateral agreement with the Swiss Government. He may have said the Swiss Government but he should have said the Swiss Federal Bankers Association. Such an agreement would allow disclosure of beneficial ownership or other details of account dealings. That agreement is similar to that which the Swiss have concluded with the SEC in the United States and it is a good idea. I supported that proposal during consideration of the Financial Services Bill.
    Many hon. Members may know that the agreement which currently prevails between the SEC and the Swiss Federal Bankers Association provides that where investigations are being made into a suspected criminal offence in the United States, the assets of a person in a
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    Swiss bank can be frozen and information about the orders placed by a person, where they involve trading on American stock markets, can and will be disclosed—subject to certain safeguards—by the Swiss banks.
    This is an important measure, because the agreement meant that, before anyone used a Swiss bank or a financial concern for nominee or trading accounts involving American stocks and shares, he had to sign a contractual form agreeing to the disclosure of such information as a condition of opening an account. It may be difficult and long-term to conclude such an agreement with the Swiss authorities, but it should be a starting point and a model for the sort of bilateral and international agreements which ought to prevail if we are to circumvent some of the offshore media being used by people to obtain rich pickings through insider dealing.
    In the end, high standards of probity in this as in other matters will be observed only by the people concerned, but one hopes that, through a combination of legislation, supervision and penalties, one will see higher standards than have been prevalent in recent times. Undoubtedly, insider dealing is an insidious criminal offence because it takes money at the expense of the majority of shareholders. As many hon. Members have said, it brings the City into further disrepute of the kind created by certain other recent activities.
    It is not in the interests of any of us to kill the goose that lays the golden eggs, not only for the many people who work in that sector but for British industry at large. The alacrity with which my hon. and learned Friend moved in the wake of recent events to change the law and the measures that he ably introduced during the passage of the Bill, and his response today, have demonstrated, if it was necessary, that the Government are determined to take action where necessary and are not prepared to lie back and oversee and suffer some of the bad practices that have been evident in recent months.
    5.47 pm
    Mr. Charles Kennedy: My contribution will be brief. I support many of the sentiments expressed by the hon. Member for Chichester (Mr. Nelson). He seemed to strike the right sort of balance in looking at this problem. As hon. Members said earlier, it is fitting that this debate should be held today, given the recent developments in Guinness and the decision by the Department of Trade and Industry to send in inspectors.
    I should be grateful to the Minister if he could tell us when he responds to the debate what further thinking, if any, has taken place at the Department on what the Guinness bid revealed about the inadequacies of undertakings given at the time of big competitive bids in the past year or two. Those undertakings were subsequently broken or dropped in the aftermath of the successful bid.
    I am thinking in particular of the fairly strong talking to by the Secretary of State for Scotland to Mr. Ernest Saunders concerning his commitments to maintain an important Scottish profile as part of a restructured Guinness and to move its headquarters to Edinburgh. The Government ought to investigate promises that are so lightly broken and that leave the Government, and political opinion, with egg on their face. We shall await with great interest the outcome of the investigation. Many people will be watching closely to see what the investigation uncovers.

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    Reference has been made to the City's image. I agree with the thrust of the argument of the hon. Member for Chichester (Mr. Nelson). It is important to draw attention to the massive resources that the City commands: to the number of people who are employed there and to the finance and capital that the City makes available for investment in British industry. I do not have a pathological mistrust of the City. However, because of its importance, the House is right to debate the issue and to try to stamp out some of the recent practices that have come to the fore in both New York and London.
    As for the Boesky case, it is worth letting the man and what he represents speak for themselves. When he was addressing a group of business students in 1985 he said:
    "Greed is all right, by the way. I want you to know that. You can be greedy and still feel good about yourself."
    That is a revealing insight into the type of mentality and into the type of morality that people of that kind have brought to international finance. Anybody like that who operates in the City of London should be weeded out in just as tough and hard a way as took place in the United States. Recently I was interested to read that the gentleman concerned, subsequent to his exposure, said:
    "If my mistakes launch a process of re-examination of the rules and practices of our market place, then perhaps some good will result."
    That suggests a degree of humility which his 1985 statement lacked.
    Insider dealings have again put self-regulation on trial. I sympathise with the point that was made by the hon. Member for Hackney, South and Shoreditch (Mr. Sedgemore) about the insufficient guarantees on regulatory controls that already exist. His point was well put in an article by Andrew Phillips, a City solicitor. The article, written a year ago, was entitled:
    "Wanted: A sanitary squad for the Square Mile."
    Speaking about the reforms he said:
    "In their place the Bank of England expects the new all-function colossi—increasingly foreign-owned—to erect invisible, or 'Chinese', walls of internal self-discipline. For a community which prides itself on hard-headed realism, such wishful thinking must be without precedent. Straight dealing is being sacrificed to competition; the national interest to capital gain."
    Much of the thrust of that article has been reinforced and strengthened by recent events.
    What can now be done to try to clean up some of the practices that have been uncovered? As for tightening up the definitions, in a takeover the bidder defines his own insiders. If a leak then occurs and is not traced, all the insiders are collectively liable. However, the problems connected with this kind of scheme are quite immense. How could such a definition be put into practice? How wide would the net be cast? It may lead to over-reaction; it may provide far too big a solution to what is, nevertheless, a significant problem.
    The suggestion has also been made recently that ill-gotten gains should be retrieved, as happens now to the ill-gotten gains of fraudsters and of those who traffic in drugs. It is an attractive option that the Government ought to examine.
    Hon. Members on both sides of the House have said that insider dealing must be shown clearly to be fraud and that it should be treated as fraud. Parliament must make its contribution by making it absolutely clear that it
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    deplores insider dealing. As for treating it as straightforward theft, I agree that spectacular prosecutions and gaol sentences would have the effect of concentrating the minds of those who are involved in such practices, or who might feel tempted to become involved in such practices.
    I welcome the recent developments and the efforts of the Government and the Department of Trade and Industry to introduce more draconian powers. Nevertheless, a considerable sense of unease is beginning to surface in Great Britain about what is being regarded more and more as the casino-like morality of the City of London, and it is being compared with other injustices elsewhere in the country. The Government ought to act by making it abundantly clear tonight that they intend to act decisively. If they act decisively, they will do not only themselves but all of us a favour, not least the City of London.
    5.57 pm
    Mr. Dennis Skinner: This debate is about capitalism. It is about the very nature of the beast—greed and materialism. We cannot avoid an examination of the cause of all these problems.
    I do not believe for a moment that the Minister, who is connected with Lloyd's, will manage to avoid all the pitfalls into which previous Ministers have fallen. They tried to deal with the City by introducing banking Bills and companies Acts to get rid of the City crooks who are at work in their gambling dens trying to make as much money as they possibly can. Of course, they are carrying out the Prime Minister's principles, because she has called for an entrepreneurial society.
    The Prime Minister says that she wants an entrepreneurial society in which everybody stands on their own two feet. That means, literally, standing on somebody else's neck. It also means that one has to get rich quick. That is one of the reasons why the Government are involved in a massive campaign to sell off British Gas. That is part of this Government's entrepreneurial ideas. The television advertisements about Sid, which cost £20 million, are really about insider dealing. They proclaim, "Where is Sid? Tell him." The Minister is trying to eradicate insider dealing, yet nearly every public hoarding in the country carries an advertisement about insider dealing that relates to Sid and British Gas.
    Mr. Hoyle: Is my hon. Friend sure, from the way that the Minister has behaved, that he is not Sid?
    Mr. Skinner: He could be, although many people might qualify to be Sid, in the avaricious, materialistic sense, in front of the hon. and learned Gentleman, because he is not a Cabinet Minister.
    Mr. Hoyle: He is aiming for it.
    Mr. Skinner: Yes, he is.
    Nine Cabinet Ministers deal in shares, according to the information, which is new since the war. It is well-known that the Prime Minister was dealing in shares during the pit strike, and made several thousand pounds profit in a company that had a coal mining subsidiary in Australia. Some insider dealing went on there. She was causing a coal strike and the subsidiary was making money by sending coal to Britain, which was short of coal. The Prime Minister was making money out of shares, and that was insider dealing on a grand scale.
    Mr. William Cash: The hon. Gentleman made a number of serious accusations, one of which was directed to my hon. and learned Friend the Under-Secretary of State, with respect to his position on insider dealing. Will the hon. Gentleman accept that the moment the opportunity arose under the Financial Services Act—I had the good fortune to serve on the Committee on the Bill—my hon. and learned Friend immediately took action not only on the Collier case but on the most recent one, Guinness? The hon. Gentleman is known to be interested in cricket. I ask him to play fair.
    Mr. Skinner: Before I come to that, I must deal with the Secretary of State for the Environment. When he was Secretary of State for Transport he had shares in Jaguar. The Government decided to privatise Jaguar. This is well known, as I have said outside, so it is not in dispute. As a Minister with shares in that company, he privatised it with the help of his Tory friends on the Back Benches, 200 of whom happen to be directors of companies and one in eight of whom is a member of Lloyd's—that gambling den in the city. He got them to walk through the Lobby to support the privatisation of Jaguar and made £4,000 profit. That is insider dealing.
    In answer to the question put by the hon. Member for Stafford (Mr. Cash), I ask the Minister when he is going to feel the collar of the Secretary of State for the Environment and say to him, "What about that money you made? You had advance information that the Government were going to privatise Jaguar, but you got shares on the sly." That was revealed only after it was discovered that the Prime Minister had shares.
    It is a scandal that a Tory Government with nine Cabinet Ministers making money out of shares should have the cheek to come along and say that they are doing a great job and are controlling insider dealing. I will never believe that, and I know that my hon. Friends will not either. Some 138,000 people have been done by the Government through the DHSS, but only five have been done in the City. There has been one famous case while the Government have been in power. Peter Cameron-Webb and Peter Dixon did the stock exchange for £39 million.
    Mr. Cash: It was Lloyd's.
    Mr. Skinner: It was Lloyd's. The hon. Gentleman is right. I thought I would see whether he was awake. I caught him. He would not be much good at insider dealing, because he is too slow.
    Peter Cameron-Webb and Peter Dixon got £39 million, and now they are in America. They have got big palatial places, and swimming pools to go with them, but nobody comes from the fraud squad and says, "Hello there, Mr. Peter Cameron-Webb, you have just done the City of London for £39 million. There are people in Britain called the electorate who are very concerned about double standards that operate when 138,000 people have been done by the DHSS for minor offences and little old women have been done for taking a tin of salmon out of Marks and Spencers." What kind of society is this? Nobody has been across to the United States to see these men.
    Why is not somebody going from the fraud squad? The Government reckon that they have invested in the police. That is one of the mighty claims that they have made during the past seven years. They say that they have given the police more power and money and there are more of them, but one cannot be found to go across to the United
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    States to do his duty so that the British electorate know that the Government are prepared to deal with them as they deal with those who have to live below the poverty line.
    The truth is that the Government have no intention of doing anything with those in the City because most of them come out of the same belly of the establishment as Conservative Members. More than 200 of them are directors in companies, many of them in insurance companies and banks. Where does one expect their allegiance to be? Of course they are in support of self-regulation. They do not want the Government to intervene and introduce laws that will make these people toe the line. They are in business to make money for those companies and to line their pockets and provide cash to the tune of £10 million or £20 million to finance the Tory party's election campaign. That is what they are in business for.
    Mr. Hoyle: My hon. Friend has rightly said that many Conservative Back Benchers have directorships. Should they not declare their interests when they speak? Not one of them has done so yet.
    Mr. Skinner: Last week, in the debate about Hangers, the artificial limb factory where 300 people have been sacked by a Tory company, allied to a South African company that will be trying to take over Pilkingtons—the case to which my hon. Friend referred—I heard a Tory Member of Parliament declare his interest.
    Mr. Hoyle: You did not.
    Mr. Skinner: Yes, I did. It is not a normal practice, although more than 200 have directorships or consultancy positions. This one declared an interest. When I asked how much he made out of it, he replied, "Only £5,000."
    The right hon. Member for Hertsmere (Mr. Parkinson) has not been out of government for more than four years, yet he has 10 directorships already, and 4·5 million people do not have jobs at all. The right hon. Gentleman is moonlighting on a grand scale. That should tell the story. He has those jobs to act as an insider dealer. Any textbook on politics will justify the arguments about Tory Members needing business interests by saying that it is necessary so that they can pass on information about what is going on in the House of Commons and in Parliament generally to their businesses. That is insider dealing.
    Despite all that, Conservative Members are talking as though they will eliminate such practices. They might be able to make some mild amelioration on the way. The hon. Member for Chichester (Mr. Nelson) more or less said that. He made a few offers, but he was not completely confident about it. Until one eliminates the beast itself—the gambling den, the stock exchange, and the rest of it—one cannot get rid of insider dealing. However, it is our job to expose it as often as we can and to show where it is possible to change it.
    The hon. Member for Stafford (Mr. Cash), who was dropping asleep, has gone. He has probably got a headache because he has been thinking too fast. He asked, "Why will you not be fair to my right hon. and hon. Friends? They are having a debate about the issue; they have responded." Why have the Government done something about Guinness? The answer stares us in the face. It is because this debate is taking place. What is more, there is a little bit of a fracas in Australia. They want to get the headlines and eliminate the unseemly business that

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    is taking place in the law courts with Mr. Peter Wright. In fact, Peter Wright is an insider dealer. Several years ago he gave information to Chapman Pincher to write the book. The Government are now spending lots of money, twisting Robert Armstrong's arm and buffeting the Attorney-General from pillar to post because an insider dealer is now blurting out the truth that he blurted out several years ago when he made about £30,000. The whole thing is nonsense.
    I am worried about insider dealing, the casino economy and double standards in Britain. Yesterday I met another of our casualties who has been savagely treated by the law courts acting on behalf of the Government. I refer to Fred Jones. He is not an insider dealer. He is an 84-year-old pensioner. He is on the other side of the tracks. He has probably never been to the City of London. All he wanted was a free television licence, such as those held by many pensioners in Britain who live in warden accommodation, homes for the disabled, and so on. He has launched a campaign for a free television licence. What happened? Under the so-called British law that is fair to all people in this land, Fred Jones did not have sanctuary. He did not have the opportunity to get away and ask a lawyer and a chartered accountant to talk it through for him. No, he finished up in gaol. The man is sound, he is still campaigning and the Government still have a problem with him.
    When the Minister talks almost contemptibly about the way in which the law is fair, he should remember the Fred Joneses of this world. There is no self-regulation for Fred Jones. He was not able to say, "I have a group of people who will listen to my case and then perhaps make a recommendation to the Government that they should not take the matter to court." Oh, no, not for him. He has not got the ring fence of the Securities and Investment Board around him. Fred Jones bumps into the law head-on because he has not paid his £58. Today the Minister tried to apologise because the Government have managed to get only five people into the net from amongst all the crooks in the City.
    A man in my constituency got notice to quit because he owed five weeks' rent. The estate agents, A. E. Holders of Mansfield, took him to court. I told the estate agents I was going to mention this. Mr. Bruin does not have a penny piece. There is no self-regulation for Mr. Bruin. He goes before the court on 16 December. The estate agents will try to take possesson of his home. Even if he gets away with it and his rent and arrears are paid, the law will almost certainly say, "We will not give you notice to quit, but we will put the court costs on your rent book." That could be about £100 or more. That is self-regulation, is it not?
    It is interesting that during this Parliament and the one before there was no self-regulation for trade unions. We had Bill after Bill from Ministers, including the chairman of the Tory party. They said, "We have to stop this business of self-regulation for trade unions. We have to control them and make sure that they have a ballot for everything they do." That applies except when they want to stop them striking. They are not keen on ballots then, because they want them to get back to work as quickly as possible. They said there should be ballots for strikes, executives and general secretaries. Woe betide there being one little branch of the trade union which has not complied
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    with the law. All hell is let loose. There are questions in the House, and nine times out of ten they have to have another ballot. There is no self-regulation for trade unions.
    The Government have the cheek to talk about no having double standards. Of course there are double standards. The reason why money has been made in the City in recent years to a greater extent than before is quite simple: the interest rates have been in double figures for every year that the Government have been in office. If one is in the City one cannot afford not to make money out of somebody else's money.
    Why put money into a small engineering factory or into the Grantham cafe? The cafe has gone bankrupt. There are 150,000 bankruptcies in the industrial economy while the casino economy is blazing away in the City. We had an entrepreneur in Grantham who said, "I'll follow the Prime Minister. She has asked us to be entrepreneurs. I'll change the little shop where she used to live, where she used to put an extra penny on the bacon and butter when she served behind the counter." There used to be a post office inside. That was never talked about because it was part of the public sector. That was kept in the dark. That entrepreneur turned the shop into a cafe, in line with the entrepreneurial society. What happened? It is now one of the 150,000 bankruptcy casualties in Britain. I wonder whether that entrepreneur would have liked a bit of self-regulation before he went bankrupt. I wonder whether he yearned for the moment when he could have operated, as they do on the stock exchange, and gone to somebody and said, "Will you look into my case to see whether it is possible to stop it going to the Government and stop me having to file for company liquidation?" That is Thatcher's Britain. That is the society we are living in today.
    Nobody should imagine that we have heard the last of the credit card and casino economy. In 1986, £27 billion is owed on credit cards. Seventy per cent. of the residual income of the average family in Britain, all of us, is owed in debts before the pay packet is opened. It was 45 per cent. in 1979. It has now gone up to 70 per cent. and over and it is still growing.
    Tory Members talk about insider trading and self-regulation. There is a bigger problem around the corner. It has all come about because they have concentrated on allowing the City to make money out of the high interest rates, while the industrial economy has gone to the dogs. Have they cared as throughout the length and breadth of Britain engineering factories have closed down because of lack of investment and pits have been closed because of the Government's policies? Banks have been saved. They have saved banks, such as Johnson Matthey, which had no money and no reserves. I have to mention that because they want to hear it in the Galleries.
    JMB was an uneconomic unit of production, but the Government saved it. In fact, the Chancellor of the Exchequer rang the Prime Minister on 30 September 1984 and said, "JMB has got no reserves." The Prime Minister said, "You know what to do when it has no reserves; you shut it." The Chancellor said, "It is not a pit; it's a bank." The Prime Minister then said, "Save it." Of course, it is part of the casino economy. The Chancellor said, "What shall I save it with?" The Prime Minister said, "Save it with £100 million of taxpayers' money." Just think what we could have done with that money in the shipyards on the Tyne and elsewhere, in the coalfields and in the engineering and steel industries.

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    It is all double standards. Here we are today talking about self-regulation. We are talking about self-regulation for Tory Members and people in the City. Imagine what would happen if a bloke in a betting shop got done for insider trading. A betting shop is much the same as the stock exchange—that posh gambling den. Just imagine somebody coming along and saying, "Well, I do not think you should prosecute old Jack. He only backed five winners after they had all come in." Insider dealing. I rest my case.
    6.19 pm
    Sir Brandon Rhys Williams: I would not attempt to speak with the brilliance and grasp demonstrated by the hon. Member for Bolsover (Mr. Skinner), partly because I have never worked in the City and I have not had sufficient opportunity to observe what goes on there. The hon. Gentleman evidently has had that Opportunity, and it has inspired his speech.
    May I first declare my interests. I own no shares in any public company, I am not a director of any public company, I am not a member of Lloyds, I take no retainers, I am not a paid consultant, I am not a member of a trade union and I am not seeking office in the Government.
    Many of my constituents in Kensington earn their livings in occupations which, directly or indirectly, contribute to the success of the City. The vast majority of them do not earn six-figure incomes or, many of them, even five-figure incomes. I am speaking of men as well as women, who go into the City each day to make their contributions. They are certainly not gamblers. They pay their taxes like everyone else. We need to bear in mind the fact that the City is a large institution in this country and an enormous contributor to the success of the British economy.
    My voters do not welcome the suggestion that the City is a crookedly operated casino or a haven for corner cutters and irresponsible adventurers. No doubt some such people exist in the City, just as they exist in political circles—it is unavoidable. We have to bear in mind that all types of people are attracted to the work of the City, and sometimes things will go wrong.
    The British economy needs the City to be successful, just as the City needs a flourishing British economy if it is to continue as one of the world's greatest financial centres. The City has not abandoned the traditions which made it a world financial centre, but shadows are over it at the present time. That is a matter of concern to all hon. Members. The City has the appearance of Versailles some 200 years ago, when it still had time to avert a disastrous clash with public opinion. It was a brilliant, powerful and glittering centre—like the City is now—a centre of ideas and influence. The leaders in Versailles did not recognise the danger they were in. If they did, they did not exert themselves to correct the drift from responsible public opinion while they still had time.
    There is a danger that not enough people in the city today are prepared to speak out plainly for the old standards. I hope that the leaders of the City's institutions will recognise the urgent need to insist on the highest standards of conduct in small and large transactions. The principal responsibility for maintaining standards lies within the square mile, not in Whitehall or Westminster.
    Politicians are unlikely to have the relevant experience to justify taking power to interfere in the management of
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    markets or the control of investment policy. The same is likely to apply to their permanent officials as well. The Government should not rely only on the Financial Services Act 1986. The Financial Services Act represented a tremendous endeavour by the Department to put a new structure of conduct into place in statutory form. We all have to pay tribute to the Minister, in particular, for his hard work in bringing that Act to its successful conclusion. But there are measures now which the Government, and only the Government, can take, to produce a more responsible and more fruitful climate in the disposal and control of capital assets.
    I shall briefly list a series of points and make some recommendations for the Ministers to consider. Over 100 cases of suspected insider trading have been referred to the Department, only a handful of which have resulted in prosecutions since the 1980 Act came into force. When the stock exchange was solely responsible for its own discipline, a number of cases of insider trading that were detected probably never came to light before the general public. The stock exchange had a more successful record in maintaining the highest standards than the Department has so far achieved since it was granted power to intervene.
    The recent tremendous pressure towards the corporate restructuring of British industry has provided spectacular opportunities for quick capital gains. Perhaps that was inevitable. It does not mean that the reorganisation of industry, which has taken place in recent years and is still continuing, is necessarily wrong.
    For some 14 years, I served in ICI. Everybody in that company—certainly when I served in it—knew the importance of the measure which took place in 1926, when a great capitalist and adventurer, Harry McGowan, had the foresight to realise that the British chemical industry had to be totally restructured if it was to survive. Had it not been for Harry McGowan's foresight in creating the merger of the major British chemical companies in 1926, we would not have an industry today with anything like the importance it has.
    There is a serious need for much closer liaison and better understanding between large investors and the senior management of British industry. The CBI is perfectly right to call for it. The Government should look for measures that would encourage closer liaison and understanding between the DTI in particular, the City and the senior management of British industry. Such liaison and understanding are possible without partial disclosure of confidential information.
    There is also an urgent need to lengthen the time span of investment discretion. The Government must accept some responsibility in this matter. It is not outside the Government's ability to influence the events that investors have to take into account when they make long-term decisions about the disposal and organisation of capital assets. Changes in taxation policy could be made which would encourage the revival of fixed interest and preference shares as a source of corporate finance. For too long we have been living in the age of the equity. It has brought an element of doubt, just as it has brought an element of discretion, into the way that dividend policies are likely to operate. Now that conditions for the long-term expectations of the value of the currency have been restored, we should try to revive the fixed interest and preference share sectors of the market which played an important part in the financing of British industry before the war.

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    I have spoken about this matter before, but I do not seem to have made any progress with Treasury officials. They consider suggestions about reform of company taxation, and matters such as that, simply from the viewpoint of protecting the revenue. They do not realise that revenue would increase enormously if the health of the British economy could be improved. It is vital that we seek to lengthen the time span of investment discretion and create a climate in which there is less doubt about company policy in the payment of dividends from year to year. It is unhealthy speculation and pressure on boards to change their dividend policies in response to very short-term market forces which cause a great deal of the anxiety and uncertainty in boardrooms, and resultant timidity in splashing out and making big investment decisions.
    I have referred before to something that I regard as the historic compromise. It is happening on its own and is beginning to take shape. This is the historic compromise under which, increasingly, shareholders will give up their right to an equity dividend and workers will give up the right to strike. This is a coming together of the two sides of industry. It is inevitable, and it is happening, whether or not the Government encourage it.
    There is a need for much greater transparency and predictability in financial decision-making; this is also a matter for Treasury policy.
    We shall have to move quickly towards establishing a more stable relationship between exchange rates, especially those of sterling and other Common Market currencies. As I have said before, I entirely support my right hon. Friend the Prime Minister in her resistance to announcing that we have joined the exchange rate mechanism of the European monetary system. However, we should make our target—and we should be taking positive steps now to achieve it—the creation of a currency union within the Common Market. There is no reason why that should be regarded as a long-term objective. There are measures which we could take at once that would encourage the markets in the expectation that the major currencies of the Common Market will be brought closer together and will stay closely together in future years. There is nothing that would help British industry more in planning long-term investment decisions and the responsible structure of corporate finance than the feeling that this country's future in the Common Market can be placed on a long-term and predictable basis.
    The Department of Trade and Industry should be less preoccupied with immediate instances of crime and fraud, however scandalous they are and however high the headlines in the daily press. The Department should consider the way in which company law operates in regard to the responsibility of the supervisory elements in our financial, industrial and business institutions. It should consider the conditions in which management is able to become slack without even being aware of its shortcomings, in which shareholders are powerless to intervene when they begin to feel anxious about management's efficiency and in which auditors are uncertain of their duties and loyalties. The tone of business may become so slack and lacking in supervisory discretion that opportunities arise for people to begin with small frauds or minor cheating decisions and go on to major frauds, many of which are not discovered.
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    I learned when talking informally some time ago to officers of the fraud squad that in all too many cases, when fraud is suspected or even proved, the auditors are already aware of what is happening but do not think that it is their responsibility or that it is in the interest of their firm to do anything about it. The auditing profession is not certain to whom it is responsible. Are auditors responsible to the shareholders, as was originally conceived, over the directors' heads or are they responsible to the directors, so that they are obliged to connive with the directors in policies that are dubious or even contrary to law? Auditing firms face a difficult decision. Junior officials in those firms may notice highly dubious activities which, for personal or policy reasons, they think it would be better to say nothing about; so instead they simply close the lines of investigation which would bring discipline to bear on those who are breaking the rules.
    Top management should not conduct its business without accurate, up-to-date information provided on a professional basis. When I was involved in consultancy, I knew of all too many companies in which some senior people were aware of critical information about the company's future, marketing prospects, and so on but others, who should have had that information, were not. All too often, non-executive directors would go to the board to express their anxieties but would find themselves floored by the arguments of the full-time directors simply because they had not been provided with the data to enable them to press their point. A small change in the rules governing the circulation of data in companies is needed to ensure that confidential data go to those who should have it but not to those who can use it wrongly, have no need of it and may be offered temptation by it.
    One cannot tell British management in the City, in industry or in business that it must be honest and that laws will be passed to force people to be honest. Human nature is such that some people will always be willing to break the rules. We cannot pass laws that tell people that they must be efficient. To do so would be futile. But I implore my right hon. and hon. Friends to realise that we can create statutory routines that make it normal practice in the vast majority of companies for all concerned to act in such a way that opportunities to commit fraud do not arise.
    Of course mistakes will be made; but British company law used to be held up as an example to the world of the way in which private enterprise should be regulated. I do not think now that anyone would look to British company law, in its present state—even if he had the patience to read our vast and wordy statutes—for a model of how private enterprise should conduct itself. The original model, which I suppose was a Gladstonian one, was an exceedingly well-conceived balance between the powers of shareholders, the responsibilities of the auditors—when the audit was made statutory near the end of the 19th century—the duties of management and the rights of workers and others.
    Those aspects can be put right, but the flood of company legislation in recent years has not brought into focus the necessity for simple statutory routines that strengthen the hands of the non-executive directors and especially the supervisory role of the auditors. That aim does not require a tremendous upheaval in procedure. It is simply a matter of bringing up to date procedures which were put in place in our company law 50 or 100 years ago and which are now falling into disuse or are simply neglected.

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    I shall cite one example which gives us an insight into the way in which the Securities and Exchange Commission works in the United States. Because there is a separate company law in every state, it is not possible for the SEC to introduce changes in the law that will result in changes in the way in which companies manage their affairs. In recent years, the practice has been for the SEC to bring pressure to bear on the stock exchanges in the United States to alter their listing agreements so that companies could not have their shares quoted unless they operated certain routines which the SEC thought necessary for the good conduct of business. The New York stock exchange in particular was, I believe, the first to introduce the rule that the shares of a company could not be quoted unless the company established an audit committee. Of course, that was a controversial development, but it was not all that difficult to introduce it in the context of American company practice. In the United States, the majority of companies are primarily run by non-executive directors, and the executive heads on the boards tend not to be in an overwhelming position, unlike their counterparts in the majority of British companies.
    The liaison which that rule brings about between the auditors and the company directors has been put on a formal basis. In Britain, almost invariably, experts on company practice—and on the future of the auditing profession in particular—will say that it would be an excellent idea if the practice of appointing audit committees were adopted in this country. Some limited steps have been taken in that direction but, unless there is a statutory push to bring it about, or unless the stock exchange in London decides to make it one of its listing conditions, another 10 years will go by and the auditors will still not be in a position to exercise the appropriate degree of supervision over company management.
    I have introduced a companies Bill in every Session since 1969. In recent years, I have regularly made recommendations as to the way in which we could strengthen the hands of the auditors and of the non-executive directors, improve the circulation of data, and so on. Since 1974, because of the intervention of the Department of Trade and Industry, I have not been able even to get my Bill considered by a Standing Committee. The Department's policy of blocking discussion in Parliament of my proposals can now be seen to have been a mistake. I hope that this year, when I again introduce such a Bill, the Department will not intervene to prevent the House from taking by Bill into Committee.
    6.40 pm
    Mr. Alan Williams: There should have been a Division when my hon. Friend the Member for Bolsover (Mr. Skinner) finished his speech, since after that, all that was left to those of us who remained was to contribute to a state of creative anti-climax. I congratulate my hon. Friend on a speech of, if I may say so, unusual comprehensiveness. It should be the answer to anyone who doubts the elasticity of the rules of procedure of the House.
    The Minister sceptically asked why we wanted this debate now. Since he does not seem to trust our motives, I shall refer to the Financial Times. It said:
    "There have never been so many opportunities to make illegal profits in the United Kingdom stock market by using inside information about a company's financial performance or its takeover strategy.
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    And it has never been easier for the directors of a company, its merchant bankers, lawyers or accountants, to get away with it."
    That is why we are having this debate. We are talking about crime on a massive and unprecedented scale in this country; crime on such a scale that it makes the great train robbers look like back-street pickpockets. We are dealing with greed and avarice on an unprecedented scale, far beyond the comprehension of most of us.
    We are also talking about sums of money that are beyond the comprehension of most of us. Yet in a way, that gives the lie to the pretensions of so much of the Conservative party's strategy. The Conservative party said that tax cuts motivated people. We are talking about the people who have been the beneficiaries of £3 billion a year of tax cuts. The Government gave those tax cuts to people on top incomes. We are talking about a group of people who, in many cases, have seen more than a doubling of their salaries within the past 12 months. To them, everything has come. Despite all of that, they still cannot keep snouts out of troughs. That is the shabby truth of the position that we are investigating.
    There is nothing glittering about that aspect of the City. I am sure, as hon. Members on both sides have said, that the City feels no pride in those activities. We are talking about the quick buck morality. Let there be no doubt that this Government have contributed to that philosophy. It is innate in their thinking, in their concept of privatisation and in their concept of pop capitalism.
    On the one hand the Prime Minister stands at the Dispatch Box and berates workers for a 5 per cent. a year pay rise, and on the other hand she eulogises about the success of the launch of British Telecom with a 100 per cent. capital gain for those who happened to win a place in the lottery. That is the sort of ambiguity and ambivalence, the undermining of social and moral values, to which the basic political tenets of the Conservative party have contributed. The lesson that is getting through to many young people who cannot even find a job—the lesson of the British Gas launch, the British Telecom launch, the TSB launch—is that it is easier to work the system than to work a machine. In their motion the Government eulogise the actions of the City; a City which has exported about as much capital from Britain as the Government have received in revenue from the North sea during the entire time that they have been in office.
    The Government praise the City for its work in support of industry. The Minister got into some slight difficulty earlier because of a basic conflict between the aspirations of the City and the needs of industry. The Minister shakes his head, but he must be about the only person in Britain who does not understand that conflict. The City is motivated by a quick rate of return. Industry desperately needs long-term investment in plant and machinery, and in research and development. Yet firm after firm says that it must be careful about its investment and research and development programmes, because if it puts too much into those areas and too much into the seed corn of their industries, they line themselves up for takeover by the City. The Minister got into a slight predicament over investment made in industry during his time in office, which has been a time of unprecedented boom in the City's activities. He wanted to dismiss the protestation that investment had fallen during the last quarter. The Minister said, "Oh no, you must not take just a quarter into account. You must look at progress in the City and

    819
    industry over a much longer time scale." But when we tried to examine progress over the entire lifespan of the Government, the Minister did not want that examined either. He is a singularly difficult man to please, much as we try.
    During the past few years, especially the last two years, the City's role has been predominantly predatory and parasitic. It has incited, with the support of the Government, the merger mania that has led to the enormous, illicit profitability of insider dealing. The figure of £30,000 million has been given for this year alone, which is five times higher than last year. That is why we are having this debate now. Opportunities to make killings exist on an unprecedented scale. It is clear that there is little or no industrial logic in so many of the mergers that are taking place. They are related far more to a quick financial kill than to any industrial logic or any attempt to structure our manufacturing industry more efficiently. The Government, with their friends in the City, have created a paradise for insiders. That is why it is interesting to note the statistical evidence that between 75 and 80 per cent. of all suspected insider deals have occurred in the context of takeover bids. They have all occurred during the build-up to the takeover.
    My hon. Friend the Member for Livingston (Mr. Cook) referred to Acquisitions Monthly and the evidence that it gave of a 25 per cent. average share rise in the three months prior to the takeover of a company. As my hon. Friend said, the figure is as high as 80 per cent. That is why the opportunity is so massive for those who have inside information. The editor of that magazine—
    Mr. Tim Smithrose—
    Mr. Williams: I shall not give way, as I am limited on time.
    The editor of the monthly magazine is quoted in The Guardian as saying that financial deals are now worth hundreds of millions of pounds. We are not talking about small sums of money. The sums about which we have been hearing recently in one or two cases are derisory by comparion with what has really been going on.
    We have heard about the virtues of self-regulation. If it is so virtuous, one is bound to wonder whey we are having any investigation so late into the activities of Guinness in relation to Bells or Distillers. The ultimate in complacency is a statement made to The Guardian in June last year:
    "We all work in a price-sensitive world and are well trained to keep our traps shut."
    That was a quotation from a City spokesman who works in Morgan Grenfell, the company whose activities are attracting attention at present.
    The Minister cannot pretend that those are occasional lapses or occasional indiscretions. The structures that exist to conceal and support those activities, such as the offshore companies, are evidence of the way in which the position has been conspired at over the years. It is only the minnows who are caught. We have heard that 110 cases have been referred by the Stock Exchange Council to the Department of Trade and Industry. Of those, nine led to prosecutions and six to convictions.
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    As the stock exchange said, five of them were "small fry". The big men in those deals are already well protected and covered. It is the naive and the novices who tend to be caught.
    The Government have contributed to the peculiar new morality of people's capitalism by the way in which they have dealt with privatisation. As has been pointed out, thousands of multiple applications were made during the BT launch. Shortly after that launch, Kleinwort Benson warned that action for fraud would be taken against those making multiple applications. Where are those prosecutions? There are 7,000 multiple applications on record, not counting those that were not found. Where are those threatened prosecutions, and who has been prosecuted over the 6,000 such deals in relation to the Trustee Savings Bank?
    The Minister said that the Government regarded insider dealing as being pernicious to markets. He then described it as a pernicious offence. No hon. Member would deny that it damages the City's standing; nor would the City deny it. But having passed a law in June 1980 for which the Minister claims credit, the Government sat back for the next six years and ignored their own law. They then feign surprise when others follow their example. Small wonder that the financial page of The Guardian said that the Department of Trade and Industry was
    "a bit like a black hole when it comes to dealing with insider trading cases. Dozen of cases go in, but nothing comes out."
    Our indictment of the Government is that the present situation is clearly the direct consequence of years of their own indolence and indifference.
    6.51 pm
    Mr. Howard: The right hon. Member for Swansea, West (Mr. Williams) and several other hon. Members suggested that certain developments in the City might increase the incidence of insider dealing. That may be so, but two factors may work substantially to decrease the incidence of insider dealing.
    The first is the amount of information that is becoming available, along with the new technology in the market place, which will shed even more light on suspicious movements in share prices and suspicious patterns in share dealings and make it easier for the regulatory authorities to identify and detect insider dealing.
    The second is that powers have now been in effect for two weeks or so which, it was admitted during the passage of the Financial Services Bill, are draconian and sweeping. They should enable us, as never before, to detect, investigate and punish instances of that offence when and where they occur.
    One remarkable feature of the debate is that neither of the Opposition Front Bench spokesmen suggested an additional power that should be added to the battery of powers available to us in order to deal with this mischief. However, Back Benchers have made suggestions, and I shall use the few remaining minutes to deal with some of them.
    The first hon. Member to make any constructive suggestion was the hon. Member for Hackney, South and Shoreditch (Mr. Sedgemore). He made two suggestions. I pay tribute to him, incidentally, because he recognised the difficulties involved in pinning down, with sufficient evidence, what is needed to establish the criminal burden of proof in such matters. That is a difficulty, and that is why we have taken these additional powers.

    821
    The first suggestion of the hon. Member for Hackney, South and Shoreditch was that own-account dealing should be banned by those involved in the City. The second suggestion was that further steps should be taken to try to identify the beneficial ownership of certain shares and investment companies.
    The first suggestion deserves to be treated seriously. However, I agree with my hon. Friend the Member for Chichester (Mr. Nelson) that it would not work. We do not need more rules, because we have the criminal law and the power to bring people to book. If people are prepared to break the criminal law, nothing would be achieved by introducing more rules that would not have the force of the criminal law in an attempt to bring them to book.
    The hon. Member for Hackney, South and Shoreditch referred to identifying the beneficial ownership of certain shares and investment companies. A good deal can be done, and we have already taken additional powers in response to the amendment moved in Committee by my hon. Friend the Member for Suffolk, South (Mr. Yeo). They will go a long way towards enabling us to track down those who have the beneficial ownership of shares and are responsible for dealings.
    My hon. Friend the Member for Beaconsfield (Mr. Smith) asked a question about resources. They should not be a constraint in the investigation of such cases. On 10 January 1986 the then Secretary of State announced a substantial increase in the amount of resources devoted by the Department to countering fraud. Indeed, 195 new posts are being created over a two-year period in those parts of the Department dealing with investigation and prosecution work. The extra staff will be available, if required, to assist with insider dealing investigations under the Financial Services Act 1986. In addition, we now have the power, recently used, to appoint external inspectors with wide-ranging powers to investigate insider dealings.
    My right hon. Friend the Member for Beaconsfield also mooted the possibility of introducing a civil offence of insider dealing. I doubt whether that would substantially increase the efficacy of the powers available to us. I believe that the criminal nature of the offence now on the statute book and the possibility of imprisonment as a punishment for it represents the greatest possible deterrent. I do not believe that anyone would want to contemplate imprisonment without the satisfaction of the criminal burden of proof.
    As I have said, we have gone a long way towards modifying the normal standards of the criminal law and substantially eliminating the right of silence in order to do all that we can to increase the prospect of effective enforcement of the criminal law.
    My hon. Friend the Member for Chichester made two points. The first point was argued at considerable length in Committee on the Financial Services Bill. He asked for the powers to be capable of transfer to the SIB. He did not persuade me of the importance of necessity of that step during the passage of that Bill, and I fear that he has not persuaded me tonight. These draconian powers need to be exercised by an authority that is directly accountable to the House. That is why it is important that they should be retained by the Secretary of State.
    However, I agree with my hon. Friend the Member for Chichester about the importance of international co-operation. This is a most important matter. Although we have made a useful start, I freely recognise that more needs to be done. Information is the key to progress. That is why
    822
    the sharing of information is at the heart of the memorandum of understanding that my right hon. Friend the Secretary of State recently signed with the SEC and the Commodities Futures Trading Commission in the United States. We hope to build on that start in international co-operation.
    To that end, we shall hold a conference next week in this country which will be attended by the regulators of most of the important countries in the world which have big financial centres. We shall be seeking to make substantial progress with them in extending international co-operation. Insider dealing will be high on the agenda at that conference. I am delighted to say that the Swiss have accepted an invitation to attend the conference. We shall be putting our concerns to them and seeking to obtain their co-operation in dealing with abuses and taking effective action.
    As I have said, both sides of the House agree that insider dealing is harmful and unfair and ought to be stamped out. The Opposition have been careful not to claim that they could eradicate it completely. No system of regulation could prevent fraud completely, but there can be no doubt whatever that the Government have acted to take the powers which are necessary to deal effectively with this mischief. Those powers have been put into effect. It is on that basis that I ask the House to support the amendment and to reject the Opposition motion.
    Question put, That the original words stand part of the Question:—
    The House divided: Ayes 177, Noes 261.

    Division No. 15]

    [7 pm

    AYES

    Abse, Leo

    Crowther, Stan

    Adams, Allen (Paisley N)

    Cunliffe, Lawrence

    Alton, David

    Cunningham, Dr John

    Anderson, Donald

    Davies, Rt Hon Denzil (L'lli)

    Ashley, Rt Hon Jack

    Davies, Ronald (Caerphilly)

    Atkinson, N. (Tottenham)

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

    Banks, Tony (Newham NW)

    Deakins, Eric

    Barnett, Guy

    Dewar, Donald

    Barron, Kevin

    Dixon, Donald

    Beckett, Mrs Margaret

    Dobson, Frank

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

    Dormand, Jack

    Bermingham, Gerald

    Duffy, A. E. P.

    Bidwell, Sydney

    Dunwoody, Hon Mrs G.

    Blair, Anthony

    Eadie, Alex

    Boothroyd, Miss Betty

    Eastham, Ken

    Boyes, Roland

    Evans, John (St. Helens N)

    Bray, Dr Jeremy

    Faulds, Andrew

    Brown, Gordon (D'f'mline E)

    Field, Frank (Birkenhead)

    Brown, Hugh D. (Provan)

    Fields, T. (L'pool Broad Gn)

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

    Flannery, Martin

    Brown, Ron (E'burgh, Leith)

    Foot, Rt Hon Michael

    Buchan, Norman

    Forrester, John

    Caborn, Richard

    Foster, Derek

    Callaghan, Jim (Heyw'd & M)

    Foulkes, George

    Campbell, Ian

    Fraser, J. (Norwood)

    Carlile, Alexander (Montg'y)

    Freud, Clement

    Carter-Jones, Lewis

    Godman, Dr Norman

    Cartwright, John

    Golding, Mrs Llin

    Clark, Dr David (S Shields)

    Gould, Bryan

    Clarke, Thomas

    Gourlay, Harry

    Clay, Robert

    Hamilton, James (M'well N)

    Clwyd, Mrs Ann

    Hamilton, W. W. (Fife Central)

    Cocks, Rt Hon M. (Bristol S)

    Harrison, Rt Hon Walter

    Cohen, Harry

    Hattersley, Rt Hon Roy

    Conlan, Bernard

    Healey, Rt Hon Denis

    Cook, Frank (Stockton North)

    Heffer, Eric S.

    Cook, Robin F. (Livingston)

    Hogg, N. (C'nauld & Kilsyth)

    Corbett, Robin

    Home Robertson, John

    Corbyn, Jeremy

    Howarth, George (Knowsley, N)

    Craigen, J. M.

    Howells, Geraint

    823

    Hoyle, Douglas

    Pike, Peter

    Hughes, Dr Mark (Durham)

    Powell, Raymond (Ogmore)

    Hughes, Roy (Newport East)

    Prescott, John

    Hughes, Sean (Knowsley S)

    Radice, Giles

    Janner, Hon Greville

    Randall, Stuart

    Jenkins, Rt Hon Roy (Hillh'd)

    Raynsford, Nick

    John, Brynmor

    Redmond, Martin

    Jones, Barry (Alyn & Deeside)

    Rees, Rt Hon M. (Leeds S)

    Kaufman, Rt Hon Gerald

    Richardson, Ms Jo

    Kennedy, Charles

    Roberts, Allan (Bootle)

    Kirkwood, Archy

    Robertson, George

    Lambie, David

    Rogers, Allan

    Lamond, James

    Rooker, J. W.

    Leighton, Ronald

    Ross, Ernest (Dundee W)

    Lewis, Ron (Carlisle)

    Rowlands, Ted

    Lewis, Terence (Worsley)

    Sedgemore, Brian

    Litherland, Robert

    Sheerman, Barry

    Livsey, Richard

    Sheldon, Rt Hon R.

    Lofthouse, Geoffrey

    Shore, Rt Hon Peter

    Loyden, Edward

    Short, Ms Clare (Ladywood)

    McCartney, Hugh

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

    McDonald, Dr Oonagh

    Silkin, Rt Hon J.

    McKay, Allen (Penistone)

    Skinner, Dennis

    McKelvey, William

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

    MacKenzie, Rt Hon Gregor

    Smith, Cyril (Rochdale)

    McNamara, Kevin

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

    McTaggart, Robert

    Spearing, Nigel

    Madden, Max

    Stott, Roger

    Mallon, Seamus

    Strang, Gavin

    Marek, Dr John

    Straw, Jack

    Marshall, David (Shettleston)

    Thomas, Dafydd (Merioneth)

    Martin, Michael

    Thomas, Dr R. (Carmarthen)

    Maxton, John

    Thompson, J. (Wansbeck)

    Maynard, Miss Joan

    Thorne, Stan (Preston)

    Meacher, Michael

    Tinn, James

    Michie, William

    Torney, Tom

    Mikardo, Ian

    Wainwright, R.

    Millan, Rt Hon Bruce

    Wardell, Gareth (Gower)

    Mitchell, Austin (G't Grimsby)

    Wareing, Robert

    Morris, Rt Hon A. (W'shawe)

    Weetch, Ken

    Morris, Rt Hon J. (Aberavon)

    White, James

    Nellist, David

    Wigley, Dafydd

    Oakes, Rt Hon Gordon

    Williams, Rt Hon A.

    O'Brien, William

    Winnick, David

    O'Neill, Martin

    Wrigglesworth, Ian

    Orme, Rt Hon Stanley

    Young, David (Bolton SE)

    Park, George

    Patchett, Terry

    Tellers for the Ayes:

    Pavitt, Laurie

    Mr. Mark Fisher and

    Pendry, Tom

    Mr. Derek Fatchett.

    Penhaligon, David

    NOES

    Adley, Robert

    Bright, Graham

    Aitken, Jonathan

    Brinton, Tim

    Alexander, Richard

    Brittan, Rt Hon Leon

    Alison, Rt Hon Michael

    Brown, M. (Brigg & Cl'thpes)

    Ancram, Michael

    Browne, John

    Ashby, David

    Bruinvels, Peter

    Aspinwall, Jack

    Buchanan-Smith, Rt Hon A.

    Atkins, Robert (South Ribble)

    Budgen, Nick

    Atkinson, David (B'm'th E)

    Bulmer, Esmond

    Baker, Nicholas (Dorset N)

    Butler, Rt Hon Sir Adam

    Baldry, Tony

    Butterfill, John

    Banks, Robert (Harrogate)

    Carlisle, John (Luton N)

    Batiste, Spencer

    Carlisle, Kenneth (Lincoln)

    Beaumont-Dark, Anthony

    Carttiss, Michael

    Bendall, Vivian

    Cash, William

    Benyon, William

    Chalker, Mrs Lynda

    Best, Keith

    Chapman, Sydney

    Bevan, David Gilroy

    Chope, Christopher

    Biffen, Rt Hon John

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

    Biggs-Davison, Sir John

    Clark, Sir W. (Croydon S)

    Bonsor, Sir Nicholas

    Clarke, Rt Hon K. (Rushcliffe)

    Boscawen, Hon Robert

    Cockeram, Eric

    Bottomley, Peter

    Colvin, Michael

    Bottomley, Mrs Virginia

    Conway, Derek

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

    Coombs, Simon

    Boyson, Dr Rhodes

    Cope, John

    Brandon-Bravo, Martin

    Cormack, Patrick

    824

    Couchman, James

    McCurley, Mrs Anna

    Cranborne, Viscount

    Macfarlane, Neil

    Critchley, Julian

    MacGregor, Rt Hon John

    Crouch, David

    MacKay, Andrew (Berkshire)

    Currie, Mrs Edwina

    MacKay, John (Argyll & Bute)

    Dickens, Geoffrey

    Maclean, David John

    Dicks, Terry

    McLoughlin, Patrick

    Dorrell, Stephen

    McNair-Wilson, M. (N'bury)

    Douglas-Hamilton, Lord J.

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

    Dover, Den

    McQuarrie, Albert

    du Cann, Rt Hon Sir Edward

    Madel, David

    Durant, Tony

    Major, John

    Dykes, Hugh

    Malins, Humfrey

    Edwards, Rt Hon N. (P'broke)

    Malone, Gerald

    Eggar, Tim

    Maples, John

    Emery, Sir Peter

    Mather, Carol

    Evennett, David

    Maude, Hon Francis

    Farr, Sir John

    Mawhinney, Dr Brian

    Favell, Anthony

    Maxwell-Hyslop, Robin

    Fletcher, Alexander

    Mayhew, Sir Patrick

    Fookes, Miss Janet

    Meyer, Sir Anthony

    Forman, Nigel

    Miller, Hal (B'grove)

    Forsyth, Michael (Stirling)

    Mills, Sir Peter (West Devon)

    Forth, Eric

    Miscampbell, Norman

    Fowler, Rt Hon Norman

    Mitchell, David (Hants NW)

    Fox, Sir Marcus

    Montgomery, Sir Fergus

    Franks, Cecil

    Morrison, Hon C. (Devizes)

    Fraser, Peter (Angus East)

    Morrison, Hon P. (Chester)

    Gale, Roger

    Moynihan, Hon C.

    Garel-Jones, Tristan

    Mudd, David

    Glyn, Dr Alan

    Neale, Gerrard

    Goodhart, Sir Philip

    Nelson, Anthony

    Goodlad, Alastair

    Neubert, Michael

    Gow, Ian

    Nicholls, Patrick

    Gower, Sir Raymond

    Onslow, Cranley

    Greenway, Harry

    Oppenheim, Phillip

    Gregory, Conal

    Oppenheim, Rt Hon Mrs S.

    Grylls, Michael

    Ottaway, Richard

    Gummer, Rt Hon John S

    Page, Richard (Herts SW)

    Hamilton, Neil (Tatton)

    Parkinson, Rt Hon Cecil

    Harris, David

    Patten, Christopher (Bath)

    Haselhurst, Alan

    Patten, J. (Oxf W & Abgdn)

    Hawksley, Warren

    Pawsey, James

    Hayhoe, Rt Hon Barney

    Peacock, Mrs Elizabeth

    Hayward, Robert

    Percival, Rt Hon Sir Ian

    Heath, Rt Hon Edward

    Pollock, Alexander

    Heathcoat-Amory, David

    Porter, Barry

    Heddle, John

    Portillo, Michael

    Henderson, Barry

    Powell, William (Corby)

    Heseltine, Rt Hon Michael

    Powley, John

    Hickmet, Richard

    Price, Sir David

    Hicks, Robert

    Proctor, K. Harvey

    Higgins, Rt Hon Terence L.

    Raffan, Keith

    Hind, Kenneth

    Raison, Rt Hon Timothy

    Hirst, Michael

    Rathbone, Tim

    Holland, Sir Philip (Gedling)

    Renton, Tim

    Hordern, Sir Peter

    Rhodes James, Robert

    Howard, Michael

    Rhys Williams, Sir Brandon

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

    Ridley, Rt Hon Nicholas

    Howell, Rt Hon D. (G'ldford)

    Ridsdale, Sir Julian

    Hunt, David (Wirral W)

    Rifkind, Rt Hon Malcolm

    Hunter, Andrew

    Rippon, Rt Hon Geoffrey

    Irving, Charles

    Roberts, Wyn (Conwy)

    Jenkin, Rt Hon Patrick

    Robinson, Mark (N'port W)

    Johnson Smith, Sir Geoffrey

    Roe, Mrs Marion

    Knight, Greg (Derby N)

    Rossi, Sir Hugh

    Knowles, Michael

    Rost, Peter

    Lang, Ian

    Rowe, Andrew

    Latham, Michael

    Sackville, Hon Thomas

    Lawler, Geoffrey

    Sainsbury, Hon Timothy

    Lawrence, Ivan

    St. John-Stevas, Rt Hon N.

    Lee, John (Pendle)

    Sayeed, Jonathan

    Lennox-Boyd, Hon Mark

    Shaw, Giles (Pudsey)

    Lewis, Sir Kenneth (Stamf'd)

    Shaw, Sir Michael (Scarb')

    Lilley, Peter

    Shelton, William (Streatham)

    Lloyd, Sir Ian (Havant)

    Shepherd, Colin (Hereford)

    Lord, Michael

    Shepherd, Richard (Aldridge)

    Luce, Rt Hon Richard

    Shersby, Michael

    Lyell, Nicholas

    Silvester, Fred

    McCrindle, Robert

    Sims, Roger

    825

    Skeet, Sir Trevor

    van Straubenzee, Sir W.

    Smith, Tim (Beaconsfield)

    Vaughan, Sir Gerard

    Soames, Hon Nicholas

    Waddington, David

    Speller, Tony

    Wakeham, Rt Hon John

    Squire, Robin

    Walden, George

    Stanbrook, Ivor

    Wall, Sir Patrick

    Stanley, Rt Hon John

    Waller, Gary

    Stern, Michael

    Wardle, C. (Bexhill)

    Stevens, Lewis (Nuneaton)

    Warren, Kenneth

    Stewart, Allan (Eastwood)

    Watson, John

    Stewart, Andrew (Sherwood)

    Watts, John

    Stewart, Ian (Hertf'dshire N)

    Wells, Bowen (Hertford)

    Stradling Thomas, Sir John

    Wells, Sir John (Maidstone)

    Sumberg, David

    Wheeler, John

    Tapsell, Sir Peter

    Whitfield, John

    Taylor, John (Solihull)

    Whitney, Raymond

    Taylor, Teddy (S'end E)

    Wiggin, Jerry

    Temple-Morris, Peter

    Winterton, Mrs Ann

    Thompson, Donald (Calder V)

    Wood, Timothy

    Thornton, Malcolm

    Young, Sir George (Acton)

    Thurnham, Peter

    Younger, Rt Hon George

    Townend, John (Bridlington)

    Townsend, Cyril D. (B'heath)

    Tellers for the Noes:

    Tracey, Richard

    Mr. Peter Lloyd and

    Trippier, David

    Mr. David Lightbown.

    Trotter, Neville

    Question accordingly negatived.
    Question, That the proposed words be there added, put forthwith pursuant to Standing Order No. 30 (Question on amendments) and agreed to.
    MR. DEPUTY SPEAKER forthwith declared the main Question, as amended, to be agreed to.
    Resolved,
    That this House congratulates the financial services sector on its contribution to invisible earnings, to growth in employment and on the efficient and effective way it raised £6 billion for industry and commerce in 1985; congratulates Her Majesty's Government and the financial services sector on their prompt and effective action against insider dealing; and reaffirms its support for self-regulation within the statutory framework of the Financial Services Act as the most effective system of regulating the City.

  Fuel Poverty
  7.14 pm
  Mr. Michael Meacher: I beg to move,
  That this House, noting the huge increase in deaths from hypothermia and cold related conditions that occurred last winter, and noting the extreme restrictiveness and arbitrariness of the Government's proposed cold weather payments scheme which is likely to offer only miniscule aid to only one in eight pensioners only once in five years, calls on the Government to guarantee all poor pensioners a £5 a week winter premium throughout the winter months, while at the same time protecting all households with persons at risk from fuel disconnection and instituting a major programme of home insulation which will both create jobs and conserve energy.
  Mr. Deputy Speaker (Mr. Harold Walker): I inform the House that the amendment standing in the names of the Prime Minister and others has been selected by Mr. Speaker.
  Mr. Meacher: This is the third time in three years that we have had this debate, and it is extremely regrettable that it is necessary yet again. It is necessary because the Government have it within their power at this time of year to prevent the needless deaths of many elderly people from hypothermia and cold-related conditions. Yet in the past two winters the Government have manifestly and tragically failed to exercise that power.
  This debate is intended as a warning to the Government that the roll call of preventable deaths must never be allowed to happen again, and that means that the Government's latest cold weather payments scheme must be changed drastically while there is still time.
  In the first three months of 1984, nearly 400 people died from hypothermia, according to the official figures. The Government introduced for the next winter exceptionally severe weather payments, which were triggered by temperature readings at a number of weather stations. The scheme was a fiasco. In the first three months of 1985, 630 died from hypothermia. The Government changed the system to allow discretion to adjudication officers locally to determine exceptionally severe weather. That, too, was a fiasco. In the first three months of 1986, 578 died of hypothermia. Three weeks into the bitterly cold spell at the start of this year, fewer than half of the 450 local DHSS offices considered that the weather was exceptionally severe.
  Mr. Richard Hickmet: I am aware of the hon. Gentleman's concern, but is he aware of the statement by Lord Marshall, the chairman of the Central Electricity Generating Board, that if we phase out nuclear power the price of electricity will rise between 15 and 20 per cent. and that during the very periods of which the hon. Gentleman is talking Lord Marshall could not guarantee continuity of supply? Does the hon. Gentleman favour phasing out nuclear power? If so, what does he think that that will do for hypothermia among the elderly?
  Mr. Meacher: That was an unwise intervention. First, the Government have not ordered one new power station, either nuclear or coal-fired, in the past seven years. Secondly, anyone who regards Lord Marshall as an independent witness to the relative costs of electricity as between nuclear and coal-fired power stations is risking a great deal of his intellectual reputation.
  The figures that I have quoted greatly understate the ravages of a bitterly cold winter. Many extra deaths occur

  827
  because of cold-related respiratory conditions such as bronchial pneumonia or circulatory conditions, such as heart attacks or strokes, as well as through hypothermia. In Britain there are about 50,000 extra deaths in the autumn and winter compared with the number of deaths in the previous six months.
  Mr. Andrew MacKay: I wonder whether the hon. Gentleman is aware of the winter which produced the highest number of excess deaths? That winter was 1978–79, when he was a DHSS Minister. Perhaps he will explain that.
  Meacher: I do not have the figures in front of me, but every year for the past decade—I am not making a party political point, and the hon. Gentleman is unwise to enter into that—there have been between 40,000 and 60,000 excess deaths in the autumn and winter compared with the number in the spring and summer. It makes little difference which Government are in office.
  There need be nothing inevitable about more deaths occurring in the autumn and winter. In Canada and Sweden the winters are longer than ours and much more severe, yet there are almost no variations in infant mortality or old-age mortality between the summer and winter months. If that can be achieved in those countries, why can it not be achieved here?
  Hundreds of pensioners will die this winter because the steps that the Government are taking to prevent that happening are pathetically inadequate. Indeed, they are almost derisory. Under the Government's new scheme, severe weather payments will be made only when the temperature falls below minus 1·5 deg C over seven days from Monday to Sunday, as if the weather were neatly packaged into convenient batches that nicely coincided with DHSS office hours. If that formula had been in operation last winter, which was the coldest for 40 years, no less than half the country would have been excluded. In February, when an estimated 7,000 elderly people died from the cold, the average temperature was minus 0·9 deg C. Even that bitterly cold month would not have triggered the minus 1·5 deg C threshold. Only three out of 14 weather stations in Scotland would have triggered the benefit.
  Large areas of Wales, the south-west and the north-east of England would have got nothing. Pensioners in Greater London, Glasgow, Sheffield and other major cities would have been entitled to the extra payment for only one week, even though in the shambles of last winter's scheme, the severe weather payments were declared for three weeks or more in those areas. In other words, although the payments made last winter were, by all accounts, paltry, inefficient, arbitrary and delayed, it is likely that even fewer households will be eligible to claim them this winter.
  The Minister for Social Security (Mr. John Major): Although the 0·9 per cent. figure quoted by the hon. Gentleman is an interesting one, I fear that he is mistaken. The figure of minus 0·9 deg C has been widely misunderstood, and it is clear that the hon. Gentleman has misunderstood it as well. [Interruption.] If the right hon. Member for Salford, East (Mr. Orme) will listen, I shall correct his hon. Friend's fault. That figure is an average one and was recorded at several weather stations in central England only. It is not the average for the whole country.
  828
  As the hon. Member for Oldham, West is well aware, the essence of the exceptionally severe weather payments scheme is to direct special help to special areas at times of special cold.
  Mr. Meacher: Given the clarification that the Minister has provided, how many of the 64 areas that are covered by the present scheme would have triggered the benefit? Even bearing his point in mind, is it not the case that fewer than half of those areas would have triggered the benefit?
  There are other major drawbacks to the Government's scheme. Severe weather will still be declared regionally and that will still give rise to anomalies and misunderstandings between districts. The categories of persons eligible have been sharply cut. Previously everyone claiming supplementary benefit, who qualified for a single payment, would have been eligible for an exceptionally severe weather payment. Under the present scheme only households with someone under two years of age, or over 65, or with a person who is chronically sick and disabled will qualify for help. Nobody with more than £500 in the bank will be eligible. Therefore, the great majority of poor pensioners on supplementary benefit will not be eligible.
  Perhaps the most significant point is that the scheme is still not automatic in any way. It still puts the onus on the claimants to make the claims, and that will undoubtedly reduce even further the low take-up that the Government expect among pensioners.
  Mr. David Winnick: Does my hon. Friend agree that the £500 limit is extremely mean-minded and undermines successive Governments' pleas for saving? What does £500 now amount to? We should bear in mind that many elderly people—perfectly understandably—save up for their funeral costs. They find pride and dignity in being able to be buried without having to ask their relatives to help them financially. Why should the Government penalise those people?
  Mr. Meacher: My hon. Friend has made an important point. It may surprise Conservative Members to know that the limit might discourage elderly people from saving for their own funerals. I do not know whether that was intended, but it will be the effect. It is extremely mean to make the limit as low as £500, when it is possible for somebody to have £3,000 in the bank and still get supplementary benefit. The limit of £500 is only one sixth of that total.
  By any standard, it is a pathetic little scheme, hedged around with so many petty constraints as to make the aid provided minuscule. Even on the Government's own assumptions, only about one in every eight pensioners is likely to be able to claim payment once every five years. If a few do manage to break through the bureaucratic thicket, their reward will be precisely £5, which is about enough to heat one room for a couple of days.
  There is a foreign proverb that says "The mountains are in labour and they bring forth a mouse", and that just about sums up the scheme.
  Mr. Patrick Nicholls: Will the hon. Gentleman give way?
  Mr. Meacher: No, I shall not because I wish to make further progress.
  The absurd inadequacies of the proposals result from the Government having the wrong objective at the outset. The Government never asked the relevant questions,

  829
  which are how we can vanquish hypothermia, and what level of extra heating payments, plus home insulation, is necessary to do that.
  The Government started from a completely different premise. They made the crucial political decision that the payment will be limited to places of "exceptionally" severe weather. That is their word. The Government continued by making the administrative assumption that exceptionally severe weather should mean that claims are made only about once every five years. In paragraph 23 of their consultative paper, the Government say:
  "The purpose is to set up a system which on the basis of historical data would imply that help over a significant part of the country overall would be expected to be given about once in five years over a longer period of years."
  In other words, help will not be given according to what is needed, but only to claimants who happen to fit the mean and niggardly political and financial constraints that were laid down centrally.
  Paragraph 24 makes clear that: it was in order to secure that claims can only be made once in every five years that the trigger point was fixed at minus 1·5 deg C. That was not an accident; it was done deliberately and it was designed to ensure that only a tiny number of pensioners received payment, that they did so only infrequently, and that if and when they got the payment, it would be minute.
  Mr. Hickmet rose—
  Mr. Nicholls rose—
  Mr. Meacher: No, I shall not give way. I have already given way to the hon. Member for Teignbridge.
  I am, of course, perfectly well aware of the Government's reply to my case. Exceptionally severe weather payments are not the primary weapon in the battle against hypothermia. The Government say that that role is played by the supplementary benefit scale rates, including a fuel element, plus the weekly heating addition. We have heard that defence many times, and it is deeply flawed on two grounds.
  First, whatever claims Ministers make about the scale rates and heating additions, more people, and not fewer, died of hypothermia in the past two winters than for a decade. Therefore, the scale rates and heating additions were inadequate to keep people warm, and there is no way that the piffling little extra of exceptionally severe weather payments could be regarded as compensating for that fundamental inadequacy.
  Secondly, the heating additions and other heating payments have been cut by the Government in many cases, and I hope that the Minister will have the grace to admit that. Under the available scale margin rule, pensioners, long-term disabled people and single parents have had their weekly heating addition cut by £52 per year by the Government. Moreover, in August 1985 the Government abolished central heating additions for all new claimants—a benefit worth £228 a year at current rates.
  Mr. Nicholls: Will the hon. Gentleman give way on the specific point of abolition?
  Mr. Meacher: No, I should make progress because I have several points still to make.
  There is still worse to come. Under the Fowler Social Security Act, when income support is introduced in 1988 additional help with heating costs will be abolished by the Government. We put down an amendment in Committee which would have introduced heating premiums for
  830
  accommodation that is difficult to heat and for expensive heating systems on estates. But the Government voted it down. Therefore, it does not lie with the Government, when confronted with the derisory nature of the exceptionally severe weather scheme, to fall back on the heating addition. Their record on that, too, is pretty culpable.
  Keeping warm is not only a matter of being able to pay for enough fuel; it is also about retaining heat in well insulated buildings. Again, the Government's record has been—
  Mr. Hickmet: What did the hon. Gentleman's party do?
  Mr. Meacher: We did not do what I am just about to describe.
  Mr. Nicholls rose—
  Mr. Meacher: The Government's record on that front, too, has been abysmal as well as short-sighted. Resources being invested in better insulation and in heating measures have declined by 50 per cent. since 1979. In other words, in answer to the hon. Member for Glanford and Scunthorpe (Mr. Hickmet), what we provided for those purposes was 50 per cent. higher than it is now. Those on benefit can obtain grants, but they are for draught-proofing only.
  Mr. John PowleyWill the hon. Gentleman give way?
  Mr. Meacher: No, I shall not give way because I want to make progress.
  Now the Government are proposing to end those grants when the Fowler Social Security Act is implemented in 1986 and the social fund introduced. Any assistance will then be subject to the discretion of the local offices and the state of a cash-limited budget for the social fund.
  Such parsimony over insulation and draught-proofing is surely counter-productive, and anyone should be able to see that. It is a false economy if ever there was one. Labour Members believe that increased investment in insulation—that is what we achieved in the 1970s—and energy efficiency, would not only bring greater comfort and reduce fuel poverty, it would also provide for much better management of the taxpayers' resources—something that Conservative Members are often so concerned about.
  Therefore, I hope that the Government will reconsider their reprehensible decision to end single payments for draught-proofing materials and hot water tank projects, and not allow the commendable work of neighbourhood energy action, which has draught-proofed the homes of nearly 250,000 pensioners and others, and provided work for over 5,000 people on the community programme, to grind to a halt.
  Only a major insulation programme can end the disgrace whereby year after year Government policy condemns elderly people to live at temperatures prohibited by law for younger and fitter workers. The Department of Health and Social Security, in one of its leaflets, which I note was later withdrawn—presumably because of embarrassment—stated that a living room temperature of 70 deg F is necessary to keep people warm in winter. Yet repeated surveys have found that nine out of 10 old people have living room temperatures at or below 68 deg and more than half were below 60·8 deg, which is the minimum temperature specified in the Offices, Shops and Railway

  831
  Premises Act 1963. If that is intolerable for young people, it is scandalous that it is permitted with impunity for old people in Britain.
  For all those reasons the Labour party believes that a two-part programme is now urgently needed to resolve the problem. First, we believe that the only way to ensure guaranteed help with heating is by providing extra payments on a regular automatic basis each week throughout the winter months. Therefore, we propose a £5 a week extra winter premium throughout the winter for all pensioners on supplementary benefit, plus another million who, while not on supplementary benefit, are little better off.
  Mr. Gordon Wilson: I am grateful to the hon. Gentleman for giving way. The Labour party's proposed scheme of £5 per week does not take into account two main factors. One is that the further north one goes, the longer and harsher the winters are, and the second is that it costs perhaps 20 per cent. more to heat a house in Glasgow than in Bristol. Does the hon. Gentleman not think it unfair that those who live further north should be given the same as those who live in the warmer south?
  Mr. Meacher: I take the hon. Gentleman's point, but an extra £5 a week, payable over 12 or 13 weeks, is a considerable extra sum of money which will meet the problem, even for those in the north, let alone for those in the south. It was not designed for those in the south and to penalise those in the north. It will be adequate right across the country.
  Mr. Frank Field: Will my hon. Friend give way?
  Mr. Meacher: I shall give way for the last time.
  Mr. Field: I am grateful to my hon. Friend for giving way. I hope that Conservative Members heard my hon. Friend say that this is the last time that he will give way.
  What my hon. Friend has just said is of crucial importance to Labour Members because we hope, after the next election, to be on the Government Benches. Is my hon. Friend's pledge of the £5 increase on a par with the increase that we have given to the rate of national insurance pensions?
  Mr. Meacher: Yes. There is no question but that that is a commitment and it stands alongside the £5 and £8 by which we shall increase the pension, together with the change in the upratings to restore the link with earnings which the Government have taken away and thereby deprived single pensioners of approximately £8 a week and married pensioners of £12 a week. All of those are firm commitments. If the Government wish to know where the extra money will come from, I suggest that they could preempt us by using some of the extra £4·5 billion that they will somehow no doubt be able to find this year for pre-electoral tax bribes.
  We also believe that payments must be combined with a major programme to improve home insulation and to increase energy efficiency. There are few instances where the social and economic benefits of job creation, energy conservation and pensioners' health and comfort are so readily fully and brought together. It would massively reduce the ill health generated by damp cold conditions
  832
  and the nation's housing stock could be greatly improved. Therefore, we call upon the Government in our motion to adopt the programme for the battle against hypothermia and the scourge of preventable death in old age. If the Government will not do it, the next Labour Government will.
  7.38 pm
  The Minister for Social Security (Mr. John Major): I beg to move, to leave out from "House" to the end of the Question and to add instead thereof:
  "welcomes the considerable improvement under this Government in support with heating costs for vulnerable groups through the supplementary benefit scale rates, the weekly heating additions and the simpler and better targeted arrangements for help during periods of exceptionally cold weather; supports the comprehensive action taken to improve energy efficiency in the home; and applauds the beneficial effect of low inflation on the costs of fuel, which is of immense benefit to all consumers but most especially those on low incomes."
  The hon. Member for Oldham, West (Mr. Meacher) has just demonstrated most graphically that fuel policy is an emotive matter. He has demonstrated equally graphically that he has not lost the knack of making expensive speeches. I shall come to the costings of his latest promises this evening in a few moments.
  The hon. Gentleman has also made it clear that this is a particularly important area and that it is difficult for it to be the subject of rational debate. It is, by its nature, the sort of subject that can be misunderstood, misinterpreted and even twisted into a grotesque parody of what the Government have done. It would be easy for the debate to fall into such exchanges, but in a few moments I propose to deal at length with some of the important underlying aspects on which the hon. Gentleman touched in the course of his remarks.
  First—and unusually, because this is not my favoured reading—I should like to refer to a statement issued by the hon. Member for Oldham, West on 18 September, in which he trailed his winter premium of £5 a week. He said:
  "We will also establish a winter premium of £5 a week for the months between mid December and March for pensioners on low incomes to help cover winter fuel bills and"—listen to this—
  "prevent any repetition of the 16,000 extra deaths from hypothermia that scarred this country last winter."
  Mr. Meacher: Quite right.
  Mr. Major: The hon. Gentleman says, "Quite right." He said that there were 16,000 extra deaths from hypothermia, yet just a few minutes ago he said that there were only 400 or 500. The hon. Gentleman is inept with his figures. On 18 September he said that there were 16,000 extra deaths, but he said something quite different a few moments ago.
  Mr. Meacher: I did not say anything different. Perhaps the Minister would care to listen to me. I made it perfectly clear that the deaths from cold in winter are not just those where hypothermia is primarily mentioned on the death certificate, but where broncho-pneumonia, heart attacks and strokes, precipitated by the bitterly cold conditions, also led to death. Those deaths add up to 16,000 a year.
  Mr. Major: As a matter of fact, they do not. I am very curious about the statement made by the hon. Gentleman on 18 September in which he said that there were 16,000 extra deaths from hypothermia. The hon. Gentleman has

  833
  now concluded that what he said on 18 September was utterly wrong. I am grateful that he has put that clearly on the record. The 16,000 extra deaths as a result of hypothermia is nonsense, and the hon. Gentleman knows that.
  Mr. Geoffrey Lofthouse: Stop playing about with figures.
  Mr. Major: The hon. Gentleman has asked me to stop playing about. He clearly does not like facts. That is the trouble with the Labour party. It is very fond of hyperbole, but, by golly, it does not like facts, and that shows.
  The hon. Member for Oldham, West referred rather more accurately to the true figures of deaths related either primarily or as a secondary condition to hypothermia. He said that the position had become materially worse. In 1984–85 there were 638 deaths in which hypothermia was mentioned by the doctor in some form or other on the death certificate. Last year there were 634—slightly less. The average is 543. As my hon. Friend the Member for Berkshire, East (Mr. MacKay) said earlier in his telling intervention, the highest figure in the past 10 years was in 1978–79 when there were 725 deaths. I am not inclined to listen to too many lectures from the hon. Member for Oldham, West.
  The hon. Member for Oldham, West spent some time debating not the broad measure of this extraordinarily ill-drafted motion, but the details of the exceptionally cold weather regime. I do not object to that because that is an important point. However, I would like to quote what the hon. Gentleman said on 25 February 1986. Addressing his remarks to my hon. Friend the then Minister for Social Security, he said:
  "Will he…send out a circular to all DHSS offices to ensure that all the very elderly and the severely disabled on supplementary benefit get an immediate extra cash grant of at least £5 a week for heating while the severe cold spell lasts?"—[Official Report, 25 February 1986; Vol. 92, c. 799.]
  That was the proposition. That is what we have done in the regulations, and now the hon. Gentleman is wriggling and changing his view.
  The hon. Member for Oldham, West also spoke about the £500 single payment capital limit, and he called that unreasonable. However, the hon. Gentleman has a very selective memory. It was equally the case, when he was a Minister in the DHSS, that single payments were not paid to people with sufficient capital. In those days, of course, the capital was not £500, but £300, and before that, while the hon. Gentleman was a Minister, it was £200. I am therefore not inclined to accept lectures from the hon. Gentleman about that.
  Mr. Meacher: Will the Minister give way?
  Mr. Major: In just a minute.
  The hon. Gentleman also said that we are stopping help with heating costs. He knows, because he sat through all—or nearly all—the proceedings on the Social Security Act 1986, that the income support scheme will sweep up all that money and direct it. He knows that it is not disappearing back to the Treasury, despite all that he said earlier. If the hon. Gentleman wishes to intervene, he may now do so.
  Mr. Meacher: The Minister has made three false statements. The social fund will not sweep up all the money.
  Mr. Major: I did not refer to the social fund.
  Mr. Meacher: I thought that the Minister did mention the social fund. That will be cash limited.
  With regard to the Labour party's record, I must make a crucial point that influences the issue about heating. Under the Labour Government, the pension increased by 20 per cent. in real terms. That is far more than all the increases in heating addition brought about by this Government.
  Mr. Major: I fear that the hon. Gentleman has missed the point upon which he seems especially defensive. He also missed out the pensions fiddle of 1976 and the years in which the Labour Government did not pay the Christmas bonus. The hon. Gentleman's memory appears to be amazingly selective.
  Many observers of such debates over the past year or so might well assume—and they would have assumed this, too, from what the hon. Member for Oldham, West has said—that exceptionally severe weather payments represent the most important help available to meet fuel costs. The hon. Gentleman knows that that is not so, and I conceded that. An observer may feel that supplementary benefit rates had fallen so much in value as to present beneficiaries with a stark choice between food and heat. However, the hon. Member for Oldham, West also knows that that is not so.
  An observer might also feel, after hearing the hon. Gentleman, that the extra help through heating additions had also been reduced. That is not so. The observer might feel that fuel prices were soaring out of control, as they did when the Labour party was in government, yet that is not so now. The truth is that help with fuel and advice on keeping warm economically is running at record levels.
  This evening the hon. Member for Oldham, West resurrected from his speech on 18 September his proposals for a winter premium for pensioners. Before I consider that in depth—
  Mr. Hickmet: My hon. Friend will have heard the response made by the hon. Member for Oldham, West (Mr. Meacher) to the question of phasing out nuclear power and what that would do to the continuity and cost of supply of electricity. Will my hon. Friend direct his attention to the position if Mr. Arthur Scargill had succeeded in his attempts in 1984 and 1985, and tell us what that would have done to electricity prices? At the same time, will my hon. Friend consider the level and the amount by which electricity prices have risen in the past 18 months or two years under this Government?
  Mr. Major: I hesitate to speculate on the subject of Arthur Scargill, not least as he seems substantially to have disappeared from a position of great influence in the public eye—and long may he remain without such influence. I rather suspect that that view is shared more warmly on the Opposition Benches, for understandable reasons, than on the Conservative Benches.
  My hon. Friend is correct to make the assertion that fuel prices these days are near stable, whereas they were anything but near stable during the period of the Labour Administration. I suspect that my hon. Friend the Under-Secretary of State for Energy may touch on that point when he replies.
  The hon. Member for Oldham, West raised a worrying issue about which I share his concern. He referred to the excess number of winter deaths that have perplexed successive Governments for years. Contained within that

  835
  issue is the question of hypothermia. In order to define excess winter mortality over five-year periods, I must explain that the percentage increase in the number of deaths in the January to March quarter is set against the number of deaths in the July to September quarter. That figure has fallen from 68·2 per cent. in 1951 to 1955 to 29·3 per cent. over the past five years. That has been a steady decline, with the exception of a slight increase from 28·2 per cent. in 1971 to 1975 to 33·6 per cent. between 1976 to 1980. The hon. Gentleman will recall that well because he was a Minister for part of the period covered by the figures.
  The real problem, then as now—I agree with the hon. Gentleman about this—is not hypothermia, but the additional deaths from all causes, particularly heart disease, strokes and chest infections, which tend to occur in winter. It is a long-standing problem that our excess winter mortality rate is higher than that in other countries with severe winters, such as the United States of America and Sweden. Governments of both parties have faced that problem for 30 years, and the position seems to be improving. We all welcome that.
  Within that problem lies the vexed, but smaller, problem of hypothermia. It is now generally recognised, certainly by experts, that the number of deaths where hypothermia is recorded on the death certificate, whether as the main cause of death or otherwise—generally it is otherwise—is not in any way an accurate indication of the extent of deaths associated with winter weather. I should point out that in recent years there has been no trend either upwards or downwards in the number of deaths where hypothermia was mentioned on the death certificate. I gave the figures when I intervened a few moments ago.
  There are important issues at stake, and this evening I do not intend simply to bandy statistics across the Dispatch Box. I intend to address the underlying public health problem. It is not as easy as the hon. Gentleman implied to find the root cause of the problem and how it can best be tackled. Several matters are self-evident. Obviously, it is important that elderly people should be able to heat their homes properly, and shortly I shall remind the House of the steps that the Government have taken to enable them to do so. But there is certainly a good deal more to it than that.
  Some hon. Members may have observed a recent interesting article in the British Medical Journal by Professor Keatinge from the London hospital. He is a distinguished and acknowledged international expert on cold-related diseases. He unearthed a curious conundrum: he found that the mortality rate among a sample of elderly people living in centrally heated warden-controlled accommodation rose in winter by a percentage similar to that among the general population. That is curious and in sharp contrast to the underlying theme of the hon. Gentleman's attack on the Government.
  On the basis of what we know at present, no one can be sure—neither the hon. Gentleman, me, nor even Profesor Keatinge—why excess winter mortality is more prevalent in the United Kingdom than in other countries. Nor can we be entirely sure why the position has been improving recently. It seems that a number of factors may be involved. I am absolutely clear that we need to do further work to reach a better understanding of what I
  836
  acknowledge is a serious and complex issue. My right hon. Friend the Secretary of State is actively considering how that can best be carried forward, and we hope to be able to say someting more about that shortly.
  Mr. Frank Field: The Minister compared the deaths of those in warden-controlled accommodation with those outside. In my constituency one gains access to such accommodation only if one is severely ill. In that case, would one not expect the death rate to be higher there than among the normal population? Does he agree that that may be the balancing factor rather than the fact that one person may have more heat and another less?
  Mr. Major: There are a variety of explanations. It is not invariably or necessarily the circumstances that the hon. Gentleman describes that determine admission to warden-controlled accommodation. In my constituency there are premises where that would not be the case. I sought not to make a specific point, but to illustrate the perplexities sorrounding this difficult problem.
  The scale of assistance to vulnerable groups, which is available through the social security system, is central to our debate. There have been significant improvements, but, before I turn to them, I must stress the most important point. The primary help for claimants with their heating costs, now and under the Labour Government, is through their regular weekly benefit and specific heating additions. Since 1978, the value of the scale rates has risen by 6 per cent.
  There have also been significant improvements in the value of heating additions. We have consolidated and extended automatic entitlement to heating additions to the most vulnerable groups. Families on supplementary benefit with children under five are guaranteed a heating addition of £2·20 a week. Pensioner householders aged 65 or over are now guaranteed the same addition, as are all sick and disabled householders on the long-term supplementary benefit rate. Pensioners over 85 get a higher rate of £5·55 a week, and that higher rate is also paid automatically to those receiving attendance allowance and mobility allowance.
  The hon. Member for Oldham, West will know that the number of recipients of those disability benefits has increased significantly under this Government. As that general rise has occurred, so, as a direct consequence, has support for heating for those on low incomes. None of those improvements rated a proper mention in the hon. Gentleman's catalogue of misery, although every one is important and germane. One is bound to ask whether the hon. Gentleman was misinformed or was seeking to misinform.
  Mr. Winnick: Will the Minister give a guarantee to the House that all those receiving heating addition from the supplementary benefit system will not lose out when supplementary benefit is replaced by the new system of income support?
  Mr. Major: The hon. Gentleman knows the pledges that we have given on transitional protection, that we have not yet determined the rate for the income support scheme and that we will not do so until next year's uprating. Therefore, he deliberately asked a question which he knows cannot be answered now. The hon. Gentleman cannot ignore the fact that on the latest available information over 2,750,000 supplementary benefit householders now receive a heating addition of some sort.

  837
  More important—the hon. Member for Oldham, West may care to listen to this—some 90 per cent. of all pensioners benefited, compared with 71 per cent. in 1978. That is a significant improvement in recent years. Moreover, the value of those additions in 1984–85 was £400 million—a vast increase on anything available under the Labour Government, even when one discounts inflation. Against that background the hon. Gentleman's charges against the Government are ludicrous. They simply do not stand up to a moment's examination. He spoke at length about new arrangements for single payments in periods of exceptionally cold weather, wholly ignoring that they substantially meet what he specifically asked my right hon. Friend for last year.
  I shall start with a proposition that neither the hon. Member for Oldham. West, nor the hon. Member for Dunfermline, East (Mr. Brown), who is poised on springs at this very moment, will dispute for a second. Over the years the various systems for making payments have been contentious and unsuccessful. There is no dispute across the House about that. That is why we have tried to introduce a system which makes sense, judged by three criteria.
  First, there must be clear rules for help. For that reason we propose an objective test of absolute coldness as the basic qualifying rule. I agree with the view expressed, particularly by hon. Members who represent Scottish constituencies, that nobody wants to return to a system which relies on local subjective judgments. I hoped to hear the hon. Member for Oldham, West welcome that, but I hoped in vain.
  Secondly, there must be certainty and speed of response. Claimants must know quickly when a period of exceptionally cold weather has been declared and for how much they will qualify. This new system should achieve that. In addition, we have provided for flat-rate payments rather than for the production of a fuel bill some time later. That should be speedier and simpler, and I would have been grateful if the hon. Gentleman had welcomed it.
  Thirdly, we have concentrated help on the groups of people—the elderly, the sick, the disabled and the very young—on whom most of the concern about risks during periods of bad weather have centred. It is precisely because of our concerns about those vulnerable groups in exceptionally cold weather that we have restricted the broad entitlement and sharpened the availability to those most in need, who are likely to receive more than they would have done under the previous arrangements.
  Let me remind the Government's critics of the final conclusion of the Social Security Advisory Committee—my right hon. Friend's independent advisers. The committee gave general support to the main elements of the proposals, and said:
  "The proposals submitted to us represent a significant improvement on the previous schemes for exceptionally severe weather payments, in terms of simplicity, comprehensibility and certainty of payment."
  Mr. Wilson: Does the Minister agree that the vulnerable groups about which he has spoken need to buy heat when the temperature declines? Under his new scheme they will not be aware whether they qualify until seven days have elapsed. His proposed scheme is marginally better than the old one, which discriminates against cold areas like Scotland, but does he not agree that the scheme is so fundamentally flawed as to be useless?
  Mr. Major: I do not accept that. It is true that one must wait for seven days, but the hon. Gentleman will recall that previously one had to wait until a bill was received. Then it had to be determined whether it was materially higher than in the previous year and documents had to be produced to prove that. The money was paid substantially later. The new scheme is a material improvement.
  Mr. Frank Field: I am sure that there is widespread support for the view that such a scheme is crucial, that people know when they are eligible and that the money should be paid quickly rather than oblige people to wait months for the bill. People also want to know how many will benefit and by how much. Has the Minister estimated for the Treasury or for any other Government Department the numbers of people who will gain? Will there be more or fewer beneficiaries than under the present scheme, and will those who are eligible gain more or less than they are currently paid?
  Mr. Major: If fewer people are eligible, each person will receive more and we expect the cost to be broadly the same at it was last year.
  Mr. Frank Field rose—
  Mr. Major: I shall not give way again. The hon. Member for Oldham, West is fulminating about this being a three-hour debate and I have spent most of my time giving way to his hon. Friends. We released with the documentation a breakdown of what the position would have been last year under this scheme. I think I shall now take the hon. Gentleman's near silent fulminations to heart and move on. We do not yet have final figures, but the amount is about £15 million, which is eight times higher than it was four years ago.
  Mr. Gordon Brown rose—
  Mr. Major: The hon. Member for Oldham, West is muttering about this being a three-hour debate. I have some sympathy with him about that, and for that reason I will not give way again. If he is dissatisfied, the hon. Member for Dunfermline, East can take the matter up with his hon. Friend.
  In the context of these proposals, the hon. Gentleman might bear in mind that the Social Security Advisory Committee supported an absolute standard of coldness, recognised the reasonableness of the Government's approach, supported the principle of a fixed seven-day period, recognised that the system of linking local offices with meteorological office data is a clear improvement on previous methods, and welcomed the introduction of a system of standard payments. It is a shame that the hon. Member for Oldham, West neglected to mention all of those points in his speech. The Social Security Advisory Committee cannot be considered an uncritical supporter of the Government.
  The hon. Member for Oldham, West set out proposals for a winter premium—
  Mr. Gordon Brown: Will the Minister give way?
  Mr. Major: I have told the hon. Gentleman why I will not give way. He can take up the point with his hon. Friend the Member for Oldham, West.
  Mr. Brown rose—
  Mr. Deputy Speaker (Mr. Harold Walker): Order. The Minister has said that he will not give way.
  Mr. Major: The winter premium scheme outlined by the hon. Member for Oldham, West is expensive. We do not have full details, but it looks as though it would cost about £150 million or more, depending on precise assumptions about how the scheme would work. The hon. Gentleman was somewhat coy about the priority for these proposals. As I understand the matter, it was not part of the Opposition's original list of absolute priorities in their September statements. But things appear to have changed. In statements to Neighbourhood Energy Action and at a recent conference on welfare rights activities, the hon. Gentleman seemed to be making clear that this was an absolute priority. I hope that he will now clarify that. Is it an absolute pledge? If it is, it is another ring on the cash register of the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley). Perhaps it is a pious hope, in which case it is deeply cynical. Perhaps the hon. Gentleman or his right hon. Friend will make it clear.
  It is apparently to be a system purely for pensioners on supplementary benefit and widows and pensioners "living on the margins of poverty". No mention is made of the needs of disabled people or families with children. Are they to be forgotten in the hon. Gentleman's brand new world? Has the hon. Gentleman considered how his scheme would be operated? He is effectively asking for a further uprating each winter for pensioners and a substantial extra burden on hard-pressed local DHSS office staff or an additional cost for extra staff to administer it. Moreover, he does that at the same time as he chairs press conferences of the departmental trade unions complaining about staff pressures. It is curious that he should take both those views at the same time.
  Under the present benefit system, which the hon. Gentleman seems to want to retain, the effect would be that large numbers of pensioners would be moved on and off benefit and housing benefit supplement just for winter. That is a certain recipe for total confusion and the hon. Gentleman should know that.
  The feature of our reforms which has been most welcomed is the proposal that assessment of housing costs and living expenses should be based on a common test of need. Is the hon. Gentleman abandoning that principle that he previously supported? If not, the logic of his proposal is that each winter local authorities should increase housing benefit or accommodate the value of the winter premium. The hon. Gentleman is in danger of re-creating the problem that led to the creation of housing benefit supplement.
  There is a further bizarre aspect that has an odd and unwelcome effect for pensioners. Let me illustrate—[Interruption.] The hon. Gentleman may be wholly wrong about that. The current rate for a single pensioner is £37·90. Let us take a charitable assumption, that inflation under a Labour Government would be only 5 per cent. If benefits were uprated by that amount, the pension would be increased to £39·80 at the April uprating. But if the pensioner had been receiving a winter premium of £5 which was withdrawn at the same time, the effect would be that benefit would actually go down by £3·10 at the time of the uprating. I would not wish to be the Secretary of State who tried to explain to a gathering of pensioners why, when benefits were increased, their girocheques should be less. Fortunately for the hon. Gentleman, he will never be required to do so, although I know that he has some experience of pensioners shouting at him.
  840
  There is much else relevant to this debate that deserves more attention than time permits, including perhaps the hon. Member for Dumfermline, East. I utterly reject the Opposition charges against the Government's record, but I do share with them a concern about excess winter mortality and the need to keep elderly people warm.
  We have set in hand a range of measures to promote energy efficiency. There has been a major expansion in community insulation projects that has insulated and draught-proofed over 200,000 homes of pensioners, the disabled and others on low incomes. The costs of that have been borne by the Government through the Departments of Energy, Environment, Employment and Social Security.
  Above all, there has been a substantial improvement in supplementary benefit rates, in heating additions and in the targeting of cold weather payments. We have an impressive record over recent years, far better than any previous Labour Government achieved, and we need no lectures from the Opposition about how to care for the elderly. When my hon. Friends vote on this amendment, they will clearly show the hon. Member for Oldham, West what they think of his motion.
  8.8 pm
  Mr. Archy Kirkwood: The speeches from both Front Benches reinforce my view that it is extremely difficult to conduct debates about excess winter mortality and the perplexing difficulties of the statistics about hypothermia. I accept that there are problems in exactly equating excess winter mortality, about which the Minister spoke, directly with poverty, although there are some important links. There is a public health aspect to the problem related to hypothermia and it requires sober and long-term reflection.
  As the basis for my speech, I should like to look not just at the number of deaths which, of course, are important and must be attended to, but at the far more widespread problem of people who do not die because they cannot heat their homes adequately, but nevertheless suffer severe restrictions in their living standards. Some of them have to stay in bed for long periods during the day simply because they cannot heat their homes. That is a much more rational target for the Government, because there are real problems involved in curing the cause of hypothermia.
  On the severe weather payments to which the Opposition's motion refers, I understand the Government's reason for introducing the new scheme and the changes that will be involved. I welcomed some of the changes, and I said so at the time. However, the hon. Member for Oldham, West (Mr. Meacher) was right to say that the scheme is too restrictive. The Minister said that the scheme will cost about £15 million.
  I may recommend my right hon. and hon. Friends to support the Opposition's motion, but if I do that at the end of the debate it will be not because of the costs that the Opposition's scheme involves but rather because I believe that they have made very pertinent criticisms of the present Government policies, one of which relates directly to the new proposals for severe weather payments. The Government's scheme is too restrictive. I invite the Minister to consider extending the seven-day qualifying period and making it a rolling period so that the scheme is more flexible. That would not break the bank. It would lead to increased cost, but that cost would be manageable.

  841
  It would not be within the unmanageable realms of the Opposition's proposal for a flat rate payment of £5 to poor pensioners throughout the winter months.
  The Minister should also reconsider the absolute temperature limit that has been fixed at minus 1·5 deg C. That is a very low temperature. I am a Scot and I am used to cold temperatures, but that is far too low. The Government should push it up slightly. It may not be too late for the Minister to do so. Perhaps the Minister will be able to assure the House that he will look at the way the scheme operates this year and that, if we are able to satisfy him that it is too restrictive when the results eventually become clear, he will reconsider it.
  The Opposition motion also refers to fuel disconnection. I am very concerned about the operation of some of the voluntary codes of practice relating to fuel disconnection. The Government would do themselves no harm at all if they carried out a fundamental review of how these regimes are working. They have been in existence for some time, and in some places I understand that they are working reasonably well. However, there is a legitimate cause for concern about the working of this voluntary scheme in many parts of the country.
  The Opposition's motion also refers to the need for home insulation. That is of fundamental importance to the long-term resolution of fuel poverty. Capital expenditure as well as revenue expenditure items must be taken into account when considering what should be done about home insulation. The Department of Energy has to be brought into the equation. The Department of the Environment is also involved. The Government have still not got their collective act together. There are difficulties over persuading departmental groups to work closely together in parallel and in sympathy with one another. New heating systems, new building standards, the fabric of buildings and insulation standards are the responsibility of the Department of the Environment. Fuel price policy and other related matters are the responsibility of the Department of Energy. Benefit levels are dealt with by the Department of Health and Social Security. However, there seems to be no proper co-ordination between the Departments. Co-ordination may be difficult to achieve, but the Government would reap considerable benefit if they applied more effort in that direction.
  Some of the pilot projects that have been initiated by the fuel poverty campaign have produced real benefits. They have resulted in increased standards of insulation and in houses being built that can be heated at a cost that can be afforded. I could not afford, even on my relatively vast parliamentary salary, to heat some local authority and private houses in my constituency. These tenants and owners are actually heating fresh air. It goes straight up the lum, as they say north of the Border, and through doors and window frames that are not draught-proofed. Too many houses in my constituency—the Select Committee on Scottish Affairs looked into the matter in some depth—suffer terribly from damp. If I, as a parent, had to send a child of mine to bed in a damp mouldy bedroom, I should feel angry and that I was not doing my duty as a parent if I did not demand action to be taken. In the long term, it must make sense for the Government to increase capital investment in the infrastructure and fabric of our homes.
  The Minister is too self-congratulatory. I have accused the Secretary of State on many occasions of beating his chest, and the Minister for Social Security is almost getting
  842
  into that same league. I hope that his promotion does not go to his head and lead him to emulate the worst habits of his chief.
  Supplementary benefit rates have increased by 6 per cent. in real terms. However, I invite the Minister to consider the equivalent increases in energy costs, particularly the cost of types of energy used by those in the low income groups. I refer to hydrocarbon fuels such as paraffin and coal. If he compares those two rates of increase, I do not believe that he will come down on the right side of the cost advantage equation. A far higher proportion of the income of the low income groups is spent on the cost of heating their homes. The Minister did not refer to that fact, but the Government ignore it at their peril.
  I understand what the Government have done about heating additions and about better targeting, but the Minister did not refer to the cuts in November 1984 when the available scale margin changes were applied to heating additions. That reduced the lower rate of heating additions from £2·10 to £1·10.
  Many of my constituents were hopping mad when these changes were made. Cuts were again made by not increasing the heating additions in July 1986, by as much as they should have been. Furthermore the Minister did not refer in his speech, although the hon. Member for Oldham, West mentioned it, to the cuts in the central heating scheme that have been made recently. The Government do not have a great deal to crow about.
  Leaving aside statistics, the anecdotal evidence is that the low wage earning groups and claimants on supplementary benefit are having far more difficulty and are struggling far more to meet their fuel bills than they were two or three years ago.
  The Government's case rests heavily on achieving a low rate of inflation. That is obviously to be welcomed and it is extremely helpful, although I wonder whether that is the direct result of the Government's policies or whether the fall in inflation would have occurred to some extent in any case.
  I am worried about what will happen after 1988. The Minister aids that all these heating costs would be included in the new income support scheme. I am less confident than he is about that, but it is an academic argument. We shall not have to wait long for the new rates, but I await them with trepidation. I do not see how the Minister, using the Green Paper indicative figures, will be able to set rates of income support necessary to cover those costs. The statement he made was an important statement, and he may find that it is thrown back at him in later years. Apart from the problem of income support, which replaces and includes heating additions and other supplementary benefit rates, the Minister has yet to announce the alternative system that is to replace the draught-proofing grants that are available as single payments at the moment. Some of us are also apprehensive and await with trepidation the details of that scheme.
  There are very real worries about fuel poverty, and the Government must not be complacent—I warn the Minister against that. On balance, I am in a difficult position, being between the devil and the deep blue sea. If I recommend my hon. Friends to vote for the official Opposition's motion, it will not be on the basis of the costs that are thereby implied, but simply because the Government have not done enough.
  8.20 pm
  Mr. Andrew MacKay: I do not wish to follow too far the arguments of the hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) except to say that he made a characteristically woolly speech, presumably concocted on the back of a cigarette packet during the afternoon. It was interesting that he did not reach any conclusions, except vaguely to say that he might be supporting the official Opposition motion. He wants to have his cake and eat it, as always happens with the Liberal party. He wants to support the Opposition motion, but he does not like its financial implications. He cannot have it both ways. He has to make a hard decision. However, as his party is most unlikely ever to be in office, he will never have to make these hard decisions.
  It is a sad day for the House when Her Majesty's Opposition, as part of their Supply day, prey on the fear of the elderly, and quite unreasonably have made this issue extremely political, notwithstanding that, when I intervened in his speech, the hon. Member for Oldham, West (Mr. Meacher) said that he did not wish to talk party politics, but then did so. Those of our constituents who will read this debate tomorrow will feel that they have been ill served by the Labour party, which is causing so much concern and discontent when the facts it uses do not add up.
  I followed the Minister's speech carefully. I noted that, during the term of the Government, supplementary benefit has risen in real terms by over 6 per cent. I see that heating additions have been extended by 159 per cent. at a time when fuel prices have gone up by only 117 per cent. Our electorate must think that is a good record. I noted that we have introduced and fine-tuned a severe weather allowance, something that never happened under the last Government. Some of us, unlike the hon. Member for Oldham, West, can remember that Government. He seems to have forgotten much of the time that he was a Minister, and has no recollection of the severe winters and the lack of action on this front. It makes his argument all the less powerful that so little happened when his party was last in power.
  The number of people who are eligible for supplementary benefit has increased. Over 90 per cent. of pensioners are now eligible, as 70 per cent. in 1978 when the hon. Member for Oldham, West was a Minister. The excess winter mortality rate has fallen every year since 1979, as my hon. Friend the Minister pointed out, with one notable exception. This was the point that I made earlier, when the hon. Member for Oldham, West ducked out and said that he could not remember the figures. Let me remind him of them.
  The winter of 1978–79 saw a higher level of excess mortality than any winter in recent years. The Labour party was in government and the hon. Member for Oldham, West was a member of that government. I remember sitting on the Opposition Benches during the winter of discontent and I remember full well that in my constituency cancer patients were being sent home to die because of industrial action by the National Union of Public Employees and the Confederation of Health Service Employees, supported, aided, and abetted by the Labour party.
  If it is thought that the pensioners or the other sick and needy will have any benefit under any future Labour Government, one has only to refer back to that winter
  844
  when people died and suffered because of the industrial action by the people who are the paymasters of the Labour Party. The people of this country will be reminded about this in the election campaign, when it comes. They will clearly recall, what happened in that winter, and why the Labour party was kicked out. Memories of what happened will stop the Labour party returning to office.
  My hon. Friend the Minister referred to the latest research, and to Professor Keating. I listened with interest to an interview in the "Today" programme yesterday morning when Professor Keating went even further. He said that he found that more people died of cold-related illnesses in centrally heated, warden-controlled accommodation than by themselves. These deaths resulted not just from hypothermia but from other cold-related illnesses such as strokes and heart attacks; here I agree with the hon. Member for Oldham, West.
  Initially, I was amazed by Professor Keating's assertion, but he explained that when people are warm and comfortable they are more likely to go out and walk in the cold, and more likely to dress more modestly and suffer more. The problem is more complicated than it at first seems. With due respect to the hon. Member for Oldham, West, I feel more inclined to believe the evidence of an expert such as Professor Keating, from the London hospital, than somebody who is trying to get cheap political capital out of elderly people dying.
  The Labour proposals are worth looking at closely. The hon. Member for Oldham, West, as the Opposition official spokesman on health and social security, said on 18 September this year:
  "We will also establish a winter premium of £5 a week for the months between mid-December and March for pensioners on low incomes."
  When will that be implemented if a Labour Government are returned to power? That is an interesting question. The hon. Member for Oldham, West was mugged after making that statement, just as he was after making his comment about tax relief on mortgages, because other people on the Labour Front Bench have to watch carefully what the hon. Gentleman says and then correct him from time to time. It gives us great pleasure whenever the hon. Member for Oldham, West makes a policy statement. We were delighted when he was re-elected to the shadow Cabinet, because there is plenty of mileage in his comments and policy statements, as they never add up financially.
  After being mugged, presumably by the right hon. Member for Birmingham, Sparkbrook (Mr. Hattersley) the hon. Gentleman wrote an article in The Guardian on 24 October. On this occasion he said:
  "All other social programmes, apart from my £3·5 billion package, are therefore implicitly conditional on such a time as and when resources become available."
  That is called a wriggle. One makes the promise, gains the publicity, hopes to gain the votes and then quietly, in a little-read newspaper such as The Guardian, gets off the hook again. The hon. Member for Oldham, West was told to get off the hook by the right hon. Member for Sparkbrook, who was concerned because my right hon. Friend the Chief Secretary, in many telling interventions in the House and elsewhere, drove a coach and horses through the financial policies of the Opposition.
  They have fallen into the same trap as the late Hugh Gaitskell fell into in the run-up to the 1959 election. They have totally failed to cost their programme. We are going to cost it for them again and again. Between now and the next general election we will draw the attention of our

  845
  consitituents to just how their programme does not add up financially. Those constituents know about good housekeeping and they know about promises that cannot be kept. It will do the Opposition grave damage.
  The cost of the programme will be £150 million. We have no idea where the money is coming from, and I am certain that the right hon. Member for Sparkbrook has no idea how he will raise the money.
  There is also the problem of the order books, which have been referred to by my hon. Friend the Minister. Presumably, they will have to be revised upwards in December and then they will have to be revised downwards at the end of March. That seems immensely complicated. It will be costly and will require a lot of extra work by the staff at the Department of Health and Social Security. When I speak to the excellent DHSS staff in my constituency and see the good job they are doing at the Bracknell office and the Slough office, which is just over my constituency border, I know that they will not be pleased by the extra burden. It is putting an unnecessary responsibility on them. It will be costly and, let us be honest, it will be quite unworkable.
  We have the problem of pensioners. They will be very confused when their benefit goes up and then goes down again at the time that the annual increase in benefits will be taking place. Any policy that makes benefits more rather than less confusing for the elderly in the community has very little merit. I wonder whether the hon. Member for Oldham, West has bothered to think that out. I suspect that he has not, because this debate is all about emotion and gaining votes. It is not about looking after the people he professes to care about and who he believes are in so much difficulty.
  How does one cover the 1 million pensioners who are not on supplementary benefit? As my hon. Friend the Minister said, will the Opposition assist the disabled, who suffer just as much in the cold? Will they assist young families on low incomes? They have not been mentioned. Presumably that would be on top of the £150 million. In my book, young families on low incomes are just as important as the elderly, and so are the disabled.
  There is an issue that I think the right hon. Member for Salford, East (Mr. Orme) will want to deal with when he winds up the debate as the shadow energy spokesman. I am a little confused because I think that the Opposition Front Bench spokesmen are a little confused. I believe that the Labour Party has a non-nuclear energy policy. If it has, it will dramatically increase fuel costs and increase electricity costs. The people who will suffer the most are the very people being referred to by the motion.
  Mr. Keith Best: Is my hon. Friend aware that the Labour candidate in my constituency has said that he does not believe that there should be a replacement to the Magnox B Wylfa power station—
  Mr. Deputy Speaker: Order. A number of right hon. and hon. Members are waiting to take part in the debate. I hope that hon. Members will stick to the motion on the Order Paper.
  Mr. Mackay: I note your point, Mr. Deputy Speaker. I will not pursue that line but, with your permission, I shall refer to the non-nuclear policy of the Labour party, which directly affects heating in old people's accommodation and elsewhere. I ask the right hon. Member for Salford, East, who is not in his place at the moment, to tell us how much
  846
  extra that will cost and how it is taken into account in the figures that have been mentioned by the hon. Member for Oldham, West.
  I would like to know whether the right hon. Member for Salford, East has consulted the hon. Member for Copeland (Dr. Cunningham), as he seems to have one policy on nuclear energy while the rest of the Labour party has another policy. Before we reach any final conclusions, we will want to know where the Labour party stands. That is yet another extra cost that has not been properly worked out.
  I believe that the conclusion we have to come to must be that the debate was initiated out of political malice and for political gain at the expense of those least able to protect themselves in the community. Nothing positive has been offered. It is doubtful whether the Labour party could produce the goods it is offering. It has not properly costed its programme and I believe that it will rue the day that it made those policy statements and introduced this important subject on a Supply day in such a partisan manner.
  8.37 pm
  Mr. William O'Brien: I do not intend to follow the remarks of the hon. Member for Berkshire, East (Mr. MacKay) because I believe that he spoke about anything but fuel poverty. This debate—an important debate—is about fuel poverty. Even the Minister had little to offer the people who are suffering because of fuel poverty. We have had discussions on nuclear power and the comments of the Minister, but there was little from the Government as to how they will alleviate fuel poverty.
  The motion hits at the heart of what is happening in the country. If Conservative Members believe that there is no problem, I suggest that they should start to take note of what is happening throughout the country, especially in constituencies in the north. I shall read from a local newspaper, the Ossett Observer, dated 21 November. It cannot be classed as a Labour party publication. The headline is:
  "Thousands die of cold in winter."
  The article says:
  "More than 500 people die from hypothermia each year, according to official government figures. As many as 100 times that number die from cold-related diseases such as pneumonia, influenza and chronic bronchitis. Many more elderly people suffer the discomfort and misery of being unable to keep warm."
  The newspaper quotes the Health Education Council, which says:
  "many of the difficulties arise from a low income".
  Because of low incomes many older people over-economise on fuel.
  The massive increase in fuel prices and general increases in standing charges have hit pensioners most severely. The comment was made that the lower paid have to pay more out of their income for heating than people on higher incomes. Many of the pensioners will be waiting for this coming winter with trepidation. It has been estimated that nearly 750,000 elderly people are at risk from hypothermia. Thousands of elderly people will die from cold this winter if it is as severe as last winter. Thousands more elderly people will die in exceptionally harsh weather, and even greater numbers will suffer unduly from the cold. In the first half of 1985, hypothermia killed nearly 20 per cent. more pensioners than it did in the whole of 1984. Among people over 80 years of age, the death toll

  847
  rose by 30 per cent. These deaths were tragic and preventable. I fear for old people this winter, and I am sure that many of my hon. Friends do also.
  Reduced heating additions and the chaotic system introduced last year for paying heating bills in exceptionally severe weather contributed to enormous hardship for elderly people. The hon. Member for Berkshire, East and the Minister referred to what is happening at present and what they are doing to help people who suffer hardship and need heating allowances. I shall quote from a letter, dated 12 November, that I received from the DHSS in response to a question I asked about a matter facing a constituent in her 80s. The letter states:
  "Whilst living at… Wood Lane, Rothwell, Mrs. F was entitled to a heating addition at the higher rate because of a combination of ill-health and damp accommodation.
  Following her move to her present address, on 19 April 1986, Mrs. F's heating addition was reduced to the lower rate because, although she still satisfied the health criteria concerning heating conditions, her new accommodation was said not to be damp."
  This is the sting in the tail:
  "The reduction in Mrs. F's heating addition resulted in her level of supplementary benefit being insufficient to enable the Department to pay her water charges direct to the local authority. In view of this the water charges were added to her supplementary benefit and she was advised that from 14 April 1986 she was responsible for paying these charges…to the local authority."
  In other words, this person is suffering in more than one way. She is an elderly, ill lady in her late eighties. This is the treatment she is receiving in 1986 under the Tory Government.
  I call upon the Government to develop a comprehensive energy strategy aimed at encouraging more extensive insulation and improving fuel efficiency of heating appliances, and, at the same time, dealing with financial assistance to poorer consumers to reflect the real priority of fuel costs in household expenditure. I made the point earlier that people on lower incomes need more protection. More attention should be given to preventing that old lady from living in damp, draughty conditions.
  From my constituency work, I am aware of the problems that high fuel prices and the threat of disconnection cause to low income families and pensioners. I want to see the following matters given serious concern, particularly when old people and children are involved. One of the previous speakers referred to the cutting off of services. In cases involving children and elderly people, consideration should be given to the abolition of the gas and electricity boards' rights to disconnect supplies for customers who get into debt. The right to cut off services, without reference to organisations or bodies who have these people's interests at heart, should be abolished. There must be an adequate income for everyone's fuel needs, particularly those who rely on state benefits, as was outlined by my hon. Friend the Member for Oldham, West (Mr. Meacher). There should be more efficient use of fuel by encouraging better insulation and less wasteful appliances and heating systems. I have outlined the direction that we ought to take in matters of that kind.
  Members of the Labour party believe that fuel supply is a major issue, affecting millions of people. The number of people who cannot afford to pay for the heat and light
  848
  that they need is growing. This is outlined in many of the statements that we receive from Government Departments. Fuel is one of the basic, common commodities, such as food or housing, to which all of us have a right.
  In the main, fuel poverty is caused by bad housing, expensive and inefficient heating systems and poor insulation, as well as high fuel prices and inadequate pensions and benefits. We have to take these matters seriously if we are to make any improvement in the conditions and living standards of elderly people in particular and poor families in general. This country urgently needs a policy for warmth, beginning with a massive conservation programme, led by insulation in council housing, the expansion of grants for private sector housing and industry incentives to save energy.
  The Government have ignored the links between conservation and fuel poverty, although it is profoundly obvious that the efficient use of fuel in the long run will lead to lower fuel bills. It has been shown that 6 per cent. of fuel can be saved through energy conservation schemes, and slightly more can be saved in newly built properties, yet energy conservation has always had a low priority for the Government. That is why I welcome the establishment of the Energy Efficiency Office. Unfortunately, the publicity distributed by that office has no back-up. Grants for insulation and local authority initiatives have been undermined by the Government's public expenditure cuts.
  Mr. Andrew MacKay: That is nonsense.
  Mr. O'Brien: It is not nonsense. It has been demonstrated by the problems that local authorities are having in carrying out installations and draught-proofing properties because of the reduction in the HIP programme.
  A more serious matter is causing extreme hardship for mineworkers and widows of former mineworkers. Many people in my constituency in particular, and throughout the Yorkshire region in general, are retired members of the mining fraternity and their widows, who are suffering fuel poverty. The application by British Coal of a callous and iniquitous agreement is denying fuel benefits to those widows and retired miners, many of them in their late 70s and 80s, and is putting them into the fuel poverty trap and at the mercy of the DHSS.
  With the introduction of the British Coal agreement in 1983, fuel poverty has been caused to people who have given all their working lives to the coal industry. In their early years, those people worked in the pits to ensure that there would be no lack of warmth in their years of retirement. There is now fuel poverty in mining communities because of this immoral and rotten 1983 fuel agreement. Many retired miners are chronically sick and need help. It is poor reward for their hard work.
  The Department of Energy has been pushing up the price of gas and electricity to provide more money for the Exchequer. This is nothing more than a form of taxation of those who can least affort it. I am calling for a freeze on, or even a cut in, fuel prices to help those suffering fuel poverty. If there is to be a genuine approach to the problem, there must be a standstill in fuel prices.
  Now the Government have embarked on the privatisation of the British Gas Corportion. This holds out no hope that consumers will have the benefit of cheaper fuel. The price formula proposed by the Government will

  849
  not ensure that prices are kept down. There has been no assurance that standing charges will not increase by more than the rate of inflation. I am prepared to listen to Government Members who say that there will not be an increase in gas charges following privatisation—Sid says that this is the last day to buy shares—above the rate of inflation. I feel sure that no Government Member can give that assurance. The people who suffer fuel poverty have little to which to look forward following gas privatisation.
  For the 3 million gas consumers on the lowest incomes, standing charges represent 30 per cent. of their expenditure on gas. There are constant lobbies by people who represent the aged, widows and weaker groups and urges that standing charges be abolished. That would be a step in the right direction to help the people in the poverty trap.
  Rather than tax everyone with fuel prices, we need the positive investment of resources in energy efficiency measures for low income households. That is what the Labour party is committed to and what the next Labour Government will implement. I believe that the Labour motion offers extensive hope to the people suffering fuel poverty. It encourages the elderly, widows, the chronically sick and the disabled to believe that there is hope. Those who accept the Government amendment will not alleviate the poverty that people are suffering and fulfill the need for more warmth and help in their homes. I ask the House to support the Labour motion and give hope to the people who are suffering in the poverty trap.
  8.53 pm
  Mr. Lewis Stevens: The hon. Member for Normanton (Mr. O'Brien) made points that were completely antagonistic to the basis of the Government's approach to elderly people and to those who suffer from the problems caused by fuel prices. He said that the Government had nothing to offer, as though there had been no help with grants and heating additions. He went on to say that the general idea was to keep fuel prices down, and that is true. Fuel prices have increased by about 118 per cent. while heating additions have increased by 159 per cent.
  The hon. Member for Normanton mentioned standing charges. British Gas has reduced them by £1 a quarter. He went on about fuel price increases. In the past few years, electricity price increases have been lower than the rate of inflation. Because of the oil price drop, after the announcement of electricity price increases, those prices actually dropped. Prices have not been increasing at a fantastic rate. They have been kept under control. The hon. Gentleman complained about insulation and the progress in making more efficient heaters, as though the Department of Energy had done nothing. In the past few years, the Department introduced the Monergy programmes.
  Mr. Winnick: The hon. Gentleman seemed to say that fuel prices have not gone through the roof but have, more or less, kept pace with inflation. That is not quite the position. In the seven years of the Tory Government, the increase in gas prices has been 135 per cent. and the increase in the retail prices index has been 80 per cent.
  Mr. Stevens: The hon. Gentleman has made that point. This is the third successive year in which gas prices have increased by less than the inflation rate. In real terms, domestic gas costs less than it did in 1970.
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  Some of the elderly face difficulties in keeping warm. My hon. Friend the Minister explained the difficulties and said that it is not just a correlation between the temperatures in which they live and the higher death rates during winter. I think that hon. Members on both sides of the House accept that it is a complex problem. Unfortunately, there are elderly people who do not realise the temperatures at which they should keep their homes, even when they have the facility to do so. Elderly people need to be told through advertising how important it is to keep their rooms at reasonable temperatures. The hon. Member for Oldham, West (Mr. Meacher) referred to people living in temperatures of less than 60·8 deg F. Some old people do not realise the importance of keeping themselves properly warm.
  Mr. Lofthouse: Does the hon. Gentleman realise that many old people recognise that they need heat but are frightened to put their heaters on because they cannot afford to do so? They know full well that standing charges are often much higher than the charges for the gas that they have used. Is there not a case for abolishing standing charges?
  Mr. Stevens: As the hon. Gentleman knows, that case has been made often, and early-day motions have been tabled on the subject. I was thinking about a particular group of people who do not recognise the importance of heating.
  The important point has been made that some elderly people go out ill-equipped into inclement conditions. Education, especially with the help of social workers, is important. Draught exclusion has been a great help to many people. In my area the DHSS has easily been convinced of the need for it. It has carried out draught exclusion comparatively easily and quickly. Many old people probably do not realise that those on supplementary benefit can receive help in order to get such jobs done. They need to know more about such things. Although television advertises the importance of insulation, many elderly people still do not take advantage of what is available.
  It was again said that the Tories do not really bother and that we disagree with the Labour party, but we care. The Government have extended heating additions to age groups and to people who were not eligible under the previous Labour Government. It is remarkable that all 65-year-olds on supplementary benefit are now eligible for heating additions. We have extended the provision to many disabled people and to people on supplementary benefit with children under five. That is a definite improvement and a help to those on low incomes.
  The Government have done much. We have pointed the new system of allowances for extreme weather conditions in the right direction. It is targeted on the areas and groups of people most in need. That is where the help should go. It is right that Scotland and the north, which are much colder, should benefit rather than areas in the south where the climate is milder. Even if another Government introduced some other arrangements—we hope that it will be a long time before we have to worry about that—the emphasis should still be put on those areas which have the coldest weather and where the inhabitants need a higher heating addition.
  Mr. Ernie Ross: The hon. Gentleman said that the allowances should be targeted on areas of

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  need. He suggested that if the scheme was introduced, people in Scotland might be helped. Does he realise that if the scheme had been operated last year, only three out of the 14 areas in Scotland would have received any benefit. My area would have received no benefit whatsoever, yet some of my constituents in Dundee have paid for an entire month.
  Mr. Stevens: It is right to go not for the flat rate system which has been advocated, but for one based on differentials. This subject is treated far too emotionally by the Opposition. Within the old social security system there were moves to give help. Help has also been given under the new social security system. The hon. Member for Oldham, West (Mr. Meacher) has dismissed, as he did in Committee, the suggestion that the heating allowances would be assimilated into the income support scheme so that it was paid automatically to those on supplementary benefit. Because it was not shown separately, it was assumed that it would not exist, but surely that is a much simpler and more sensible system to introduce than one that has many "ifs" and "buts" and additions about qualifying under certain conditions.
  It is to the Government's credit that, during this Parliament and the previous one, they took action on energy efficiency and widened the scope of the heating additions. They introduced a scheme which gave much greater help to the elderly, and consequently the elderly are confident that measures have been taken to improve their lot.
  9.3 pm
  Mr. Robert Litherland: My hon. Friend the Member for Oldham, West (Mr. Meacher) informed the House that last year was the severest winter for 40 years. That, combined with the miserly pension increase approved by the Government, against a background of a rising number of deaths from hypothermia among the elderly, led to a demand for an additional heating allowance of £5 a week. We and the pensioners' associations say that that payment should be automatic.
  It was said that the Government had sole responsibility for pricing gas and electricity. They price those fuels beyond the means of the most vulnerable people, those on benefits. How can Ministers justify accumulated profits of £635 million from electricity and £651 million from the gas industry? As has been pointed out, those profits are a hidden tax. The White Paper on public expenditure reveals that in the three years to 1987–88 British Gas will pay the Treasury £2·9 billion in gas levy and corporation tax. The financial targets set for the electricity boards require them, in the next year, to pay £386 million net to the Treasury. Therefore, the poorest once again must bear the burden. As I have said, it is a hidden tax.
  The cost of heating and lighting a home has increased at an incredible rate. Yet those industries can show huge profits and the Government, with their policies, urge competitiveness and push up the cost of fuel. The money, however, is not used to the benefit of those most in need. In a letter to me, the Prime Minister wrote:
  "We are already giving considerable help to pensioners through the supplementary benefit scheme… You have referred to the elderly using more fuel last winter due to the very cold weather. Help towards these extra costs was in fact
  852
  available to supplementary benefit claimants during that cold spell, and payments were made throughout Great Britain with the sole exception of Lerwick, Shetland."
  How can a Prime Minister be so complacent when so many people died of cold-related illnesses last year? In her reply to my question on this subject during Prime Minister's Question Time, when I requested that the £5 should be given automatically, her first word to me was an emphatic no.
  Despite the mounting evidence that the poor cannot pay to heat their homes, despite the inescapable evidence of the rise in the number of deaths during the winter, and despite coroners' reports of accidental death due to hypothermia, which I have never accepted because those deaths are the responsibility of the state as they could have been prevented——
  Mr. Terry Dicks: Rubbish!
  Mr. Litherland: I hope that no one in the hon. Gentleman's family has to suffer.
  Despite all that, the Government will throw only a few miserly crumbs, which will evidently appease the consciences of the Prime Minister, the Government and their cohorts on the Back Benches. They can enjoy Christmas and feel cleansed as they attend religious services, secure in their minds that pensioners are well looked after and that perhaps not so many will die this year, and comforted by the fact that it will not be members of their families that could suffer the indignity of freezing to death like the lady in Blackpool last year. She was so cold when they found her that they could not even take her body temperature. The Conservatives can shout, "Rubbish."
  Those Conservative Members are comforted by the knowledge that none of their families will suffer the humiliation of their electricity supplies being disconnected. Indeed, 125,000 households had their electricity supplies disconnected, according to the most recently available figures for a 12-month period. A survey of those who had been disconnected discovered that 90 per cent. of those households fell within the definition of hardship.
  I have received correspondence from, among others, the Pensioners and Trade Unions Association, which says that there is nationwide indignation because of the number of deaths among the elderly last winter. The consequent pressures exerted by the churches, by social and political figures and by campaigning pressure groups has forced the Government to move—not a lot, but at least they have moved.
  However, the announcement by the DHSS of the proposed heating allowance of £5 per week for those on supplementary benefit is so hedged with conditions that many of those in need will not receive allowances. Pensioner organisations are convinced that, in many cases, by the time benefit is received it is too late to avoid hypothermia. Waiting for the temperature to drop an average 1·5 deg C below freezing before paying out heating allowance is an insult to the intelligence of anyone who is aware of the problems affecting elderly people during the winter period.
  There are a great number of elderly people in my constituency. In 1984, figures showed that there were 82,700 pensioners in the city of Manchester—18 per cent. of the population. Not all elderly people are poor—I recognise that—but clearly many are on very low incomes. By December 1984, 23,800 were receiving

  853
  supplementary benefit and a further 23,400 were receiving standard housing benefit. That represented 57 per cent. of Manchester's pensioner population. When one takes into account the non-take-up, it is likely that over 80 per cent. of the city's pensioners are receiving or are entitled to receive means-tested welfare benefit. That is higher than the national average. National statistics suggest that the most vulnerable group of elderly people is that living alone. A survey in 1983 showed that 54 per cent. of that group were primarily dependent on state benefit.
  We recognise that it is not just the elderly who suffer—that is recognised in the debate. I receive many letters from constituents who cannot afford heating costs and who have reverted to other kinds of heating such as paraffin stoves. Such stoves are used to heat accommodation or to dry out washing, and they cause condensation which in turn causes ill health; they also cause the fabric of the accommodation to deteriorate. All that is costly.
  For my sins, I sat on Manchester city council and on the fire brigade committee. In that time, I saw photographs of fires in homes which had used paraffin stoves. They showed the charred remains of the bodies of children whose chest cages had been burnt open by fire and intense heat. The only item which remained in the charred rooms, in perfect condition, was the paraffin stove which had caused the disaster. Despite all this, the Prime Minister says no.
  Tonight we have bandied statistics about. We have discussed percentages and numbers, but these are not mere figures, these are people. How can we expect understanding from a Prime Minister whose heart is permanently below freezing point? We have appealed to Conservative Members to come into the Lobby with us tonight but, I am afraid, once again like sheep, they will follow the leader.
  9.12 pm
  Mr. Derek Conway: I have no doubt that the hon. Member for Manchester, Central (Mr Litherland) spoke with compassion and sincerity, but, sadly, the hon. Gentleman pushed himself into a corner which is far from reality. Many of the words addressed to my right hon. Friend the Prime Minister could equally have been addressed with the same amount of compassion and sincerity to his right hon. Friend the Member for Cardiff, South and Penarth (Mr. Callaghan) when he presided over the last Labour Government. To quote individual cases, as the hon. Member for Manchester, Central did, is unjust to the debate. Although those tragic cases cause great sadness to the families concerned, there is no doubt that such tragedies occur under Governments of all political persuasions. Therefore, to try to use them as a political stick with which to beat the Government is beneath the hon. Gentleman.
  In Shrewsbury, elderly constituents who have come to me suffering hardship and fuel poverty have found the local DHSS offices superbly helpful. I hope that my hon. Friend the Minister will take note of the fact that the offices are extremely helpful—often under difficult conditions—and the vast majority of the general public, despite the occasional headlines in the cheaper papers, believe they do a first-rate job. I agree with that. It is sad that the debate, which could have made a constructive contribution towards helping the elderly and conserving energy, has deteriorated into pork-barrel politics. I suppose that that was inevitable.
  Mr. Stanley Orme: Why?
  Mr. Conway: If the right hon. Gentleman had been in his place throughout the debate, he would know why. Instead, he has chosen to slip into the Chamber towards the end of the debate and chip in from a sedentary position, which is beneath him.
  The debate started on a bad note, and that was the position from the moment that the motion was placed on the Order Paper. Things went from bad to worse because we were faced with an inaccurate motion. The hon. Member for Oldham, West (Mr. Meacher), who moved it, was shown to have "facts" which were completely wrong.
  My hon. Friend the Minister for Social Security made it clear that the trend in excess winter deaths has been downward. From 1961 to 1965, winter deaths were 52·3 per cent. In 1966, they had been reduced to 39·6 per cent. There was a further reduction between 1971 and 1975 to 28·2 per cent. Between 1976 and 1980 they jumped to 33·6 per cent. As the hon. Member for Oldham, West has been reminded again and again tonight—we shall not let him forget it because he was a DHSS Minister at the time—the highest number of winter deaths occurred in 1978–79. That peak was not reached when a "wicked Tory Government" were in power. That cannot be said by any stretch of the Opposition's imagination. Instead, that happened under a Labour Government.
  The hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) has represented the alliance in the Chamber for part of the debate. He has been the only alliance Member present, and often the Chamber has been empty from an alliance point of view, which demonstrates its great concern for the elderly and for fuel poverty. It is a fact that the alliance supported the Labour Government who were responsible for the appalling record to which I have referred. We have heard this evening—this was after he had used a great deal of cotton wool—that he will join the Opposition in voting against the Government when the Division takes place.
  It seems that alliance and Labour Members cannot separate themselves. In Shropshire we call supporters of the alliance Laberals. The Labour and Liberal parties are indistinguishable in their actions and the Liberals have a shameful record in supporting Socialism in the Chamber. It is sad that they intend to do so this evening. As I have said, the trend in winter deaths is downwards, and that cannot be denied.
  It is a fact that the 1·7 per cent. increase in the price of gas from 1 May was the first increase for 15 months, and it was well below the rate of inflation. Many hon. Members on both sides of the House feel that the standing charge has outlived its time, but it should be remembered that it was reduced by £1. We know that electricity prices have been increased by 4·7 per cent., but that increase followed three years when the total increase of 6 per cent. was well below the general rate of inflation. That has had a serious effect on pensioners, to their betterment.
  When we think about standing charges we experience an initial gut reaction. We feel that they are unfair and should be abolished. I think that that is the initial reaction of most of us, but we must consider the knock-on effects. It is so easy to say, as Liberal and Labour Members have said this evening, "Abolish this, do that and do the other," but every now and again, as the right hon. Member for

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  Birmingham, Sparkbrook (Mr. Hattersley) is proving to members of the shadow Cabinet, it is necessary to consider the financial effects for the nation.
  If we abolish standing charges, unit charges will unquestionably be forced up because the money has to be raised from somewhere, and the estimated cost of abolition is £550 millon a year. Where will that sum come from? Will it come from the magical pocket of the Leader of the Opposition, no doubt to be paid in dollars?
  For pensioners, the knock-on effect on unit charges will be an extra £300 million per annum. The pensioners should not be fooled into thinking that the Opposition offer them great glory to come. Behind their easy words in the Chamber tonight lie serious knock-on effects for their unit charge payments.
  I hope that we shall hear from my hon. Friend the Minister something about the progress that has been made in energy conservation. A considerable effort has been made to ease the life of pensioners, especially in this regard. The Department of Energy has made available project start-up grants to help voluntary insulation programmes. The record of progress on that score is worth trumpeting in the Chamber and throughout the country.
  The Department of Energy is a major source of finance for the neighbourhood energy action programme, which is successful in my constituency, as it is, no doubt, in other constituencies. I hope that we shall hear more from my hon. Friend the Minister about the Department of the Environment's home insulation scheme. I appreciate, of course, that he will not be speaking for that Department this evening. There are home insulation grants of up to 90 per cent. for loft insulation, and these are effective in helping pensioners retain the value of their heat expenditure. The considerable growth in the full cost of draught-proofing materials through the DHSS single payment scheme is important. There has been an 80 per cent. increase this year alone.
  There have been many crocodile tears and, sadly, false words tonight about the Government's true record. But the fact remains, as the electorate will have pointed out to them time and time again, that £11 billion more has been spent on benefits by this Administration, not out of their money or the Prime Minister's money, but out of taxpayers' money. There are higher rates now than ever before, and that cannot be and has not been challenged by the Opposition Front Bench. That money is not all going on unemployment, which is the easy claim in the newspapers. Only £4 billion of that £11 billion is directed towards the increase in unemployment, while £1·75 billion goes to pensioners and £1·5 billion to benefits for the long-term sick and disabled. There is a £4 billion—6 per cent—increase across the board.
  The Opposition's motion tonight, supported by the Liberal and Social Democratic parties—they have not been in the Chamber, but no doubt they will turn up in the Lobbies—is too easy and glib a promise. The £5 a week benefit referred to in the motion would cost £150 million a year.
  Some of my hon. Friends have asked whether the right hon. Member for Sparkbrook has been advised of that. His colleagues in the shadow Cabinet promise more with every hour that passes. As his name is on the Order Paper,
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  no doubt he will be looking forward to accounting for that extra expenditure when my right hon. Friend the Chief Secretary challenges him about it.
  Apart from the purely financial effects, the proposal will mean pension book chaos. The pension will be going up one month and coming down two or three months later. In addition, there will be the annual increase, which is now due in April. Pensioners will be backwards and forwards with their pension books and will not know where they are. Tremendous chaos will ensue. The pressure on our DHSS offices will be considerable, and that will hinder them even more from looking out for the special cases.
  The hon. Member for Roxburgh and Berwickshire made a moving speech in support of the Labour party's policy of a payment of £5 per week, and then went on to talk about the problems of young children in a cold environment. However, the Labour party's policy, which he and his colleagues will support tonight, makes no mention of that. It does not say that it will do anything at all for the under-fives who are presently supported by the Government's policy, nor, indeed for the disabled.
  What we do know is that, as a result of the Labour party's spendthrift policies, inflation will undoubtedly return and we can look forward to the sort of fuel conservation that is practised by Mr. Arthur Scargill and his cohorts as they stockpile.
  Undoubtedly, the Labour party's motion is one of pork barrel politics: think of a figure, double it and hope that the electorate will be stupid enough to accept it. But they will not be, and we know that only to well. They will look at the figures—as all the surveys now show that they are doing—and the promises being made to them with doubting eyes. Instead, they will look to the Government's record, which stands scrutiny. They will look to the record of previous Labour and Liberal Governments which stands for shame. I hope that the amendment will be carried tonight.
  9.22 pm
  Mr. Gordon Wilson: The hon. Member for Shrewsbury and Atcham (Mr. Conway) and the Government are deceiving themselves if they think that fuel poverty and fuel allowances will be ignored by the electorate. It took last winter, with the strange inversion of temperature that caused the severe weather allowance to be triggered off in the south initially, but not in the north, to direct a lot of attention to the issue of climate and how it impacts upon fuel poverty.
  During the debate there has been little reference to the impact which climate can have on people. Earlier, I said that Scotland has a longer winter, a harsher climate and lower temperatures than elsewhere. Therefore, in practical terms, the cost of heating a house will be 30 per cent. more in Aberdeen than in Bristol. It is hardly surprising that 25 per cent. of hypothermia deaths in the United Kingdom are to be found in Scotland. The Government have been criminally complacent in the way in which they have approached the issue.
  The hon. Member for Roxburgh and Berwickshire (Mr. Kirkwood) was correct to direct attention not just to those who, unfortunately and sadly, die because of the inadequate level of heating allowances, but to the hundreds of thousands of elderly who are affected by discomfort caused by being unable to heat their houses.

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  I have had experience of discussions with Ministers in which they took the very sophisticated argument that because the family income surveys did not show increased expenditure on heating, there was no need to supply money for heating. The fact is that many elderly people are scared burn fuel during the winter months because they do not believe they can afford to do so. As a result, they live in conditions of extreme discomfort and there are cold related illnesses and, unfortunately, deaths.
  There has been much hypocrisy from the Labour party during the debate. The hon. Member for Oldham, West (Mr. Meacher) was a Minister for Social Security and admitted, after leaving office, that he bitterly regretted having suppressed information about the effect of hypothermia. My former colleague Mrs. Margaret Bain was very active on that score then.
  In my research on this matter I came across articles that are horribly reminiscent and show just how little improvement has occurred. An article in The Times on 6 February 1976 stated:
  "A state of war in the Government has been declared this week by the voluntary agencies campaigning for a cohesive policy to stop the mounting toll of deaths from hypothermia among elderly people and the prospect of young babies being irreparably damaged by the cold."
  The Department of Health and Social Security under a Labour Administration decided around 1977 that the minimum recommended room temperature for old people of 70 deg F should be discontinued and thereafter the DHSS would make no recommendation. We have to judge the Labour party's proposals for a £5 a week winter premium against that background. That is better by far than the Government's proposals.
  I made the point to the hon. Member for Oldham, West that that form of flat rate payment is discriminatory in its approach. It means that those who live in the south, who require less heating for their homes and who have more money left for food and clothing, will receive the extra premium. I do not object to that. However, no extra sum will go to those who live in the colder parts of the United Kingdom who also have to sustain longer winters. The period from mid-December until March does not cover the Scottish winter which runs from November until the end of April. That must be corrected. Should the Labour party be in power after the next election, the Labour Government will have to revise that scheme as it would cause a tremendous amount of dissatisfaction in Scotland.
  The new severe weather allowances introduced by the Government amount to no more than a con trick. It is particularly depressing that an elderly person can be refused any payment even during severe weather, because he as £500 or more in a bank account. The Minister must accept that £500 is very close to the cost these days of an ordinary funeral. The elderly have a great respect in these matters. They do not wish to die and be buried in a pauper's grave. They would therefore prefer to go without heating so that their savings will be available when they die.
  There is also a problem in relation to the unemployed who are struggling to keep their families warm. As I understand it, under the new arrangements, children over the age of two pass the cut-off point and the fuel allowances will not be available to a family who would otherwise qualify if the child was under two years of age. That is very harsh.
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  I cannot accept as a pretext or excuse for delay the much delivered quotation of Professor Keatinge that people in sheltered housing and warm conditions have a similar rate of death to those who live outside that accommodation. Research could take ages. Why is it that Scandinavians, Americans and Canadians who have adequately insulated houses and a high fuel allowance do not die prematurely during the winter months as we do? Why do the Government not make available money now and an adequate programme to insulate houses to a proper degree of warmth?
  Both the Government and the Opposition have failed to take account of two factors that arose in the 1970s—the poor quality of housing erected in the 1960s which was inadequately insulated—concrete shells—and the savage increase in fuel costs. The Government's proposals are entirely useless. They may be slightly better in theory than the previous severe weather allowances which gave more comfort to the south than to Scotland, but when the figures are totalled, less money will be available to people living in Scotland for heating allowances this year than last year. That is the acid test and by that standard the Government have failed.
  9.30 pm
  Mr. Stanley Orme: The debate is taking place at a most appropriate time as it is the end of Energy Efficiency Year and shortly after the week of action on cold homes. I shall deal with the responsibility of the Department of Energy, which overlaps into that of the Department of the Environment.
  The Government have ignored all the evidence from last winter. As has been stated, during the first three months of 1986 there were 578 hypothermia-related deaths in Great Britain. International comparisons show that the British people suffer more in cold weather than people in other countries with similar or colder weather conditions. Both sides of the House should examine that and what can be done about it. Yet the Secretary of State for Energy appears to believe that there is no such thing as fuel poverty. He prefers to believe that it is the same as clothes or food poverty as that would absolve him from taking any initiative to deal with it.
  Fuel poverty is more complex and covers a range of issues. Certainly it is about a lack of income, but it is also about poor housing conditions, inappropiate heating systems and a lack of insulation or draught proofing. Evidence shows that the elderly and low-income households live in poor housing conditions, often lacking the basic amenities, and in the coldest homes. Such families are also less likely to have central heating systems and adequate insulation in their lofts or cavity walls.
  Mr. Powley: I accept entirely the right hon. Gentleman's point about the importance of loft insulation. Is he aware that, despite the Government's allocation of sums to local authorities for home insulation schemes, in each of the past five years local authorities have underspent considerably, sometimes by as much as one third of the sum allocated? Does he agree that they should make greater efforts to use all the resources available? Obviously, we would all like more, but local authorities do not even use 100 per cent. of the resources available.
  Mr. Orme: I take the hon Gentleman's point and I shall deal with it. The Government are responsible for ensuring that these resouces are available; I shall say something further about that.
  I represent an inner city. In part of my constituency the people are extremely poor and there is high unemployment. People who come to see me and who have, for example, underfloor heating or some form of central heating or who have to pay for electricity through a meter, tell me that they do not use heat because they cannot afford to use it. Consequently, they suffer from the cold and tell me about going to bed early during the winter because of the cold. Surely, in an energy-rich nation like ours, resources which are so essential should be available.
  On Monday morning there was a doctor on the "Today" programme on BBC Radio 4—if I dare to mention that in this House. He said that perhaps it would be cheaper for the Government to allow some of the people suffering form cold to go to Spain during the winter because that would relieve the problem of hypothermia. He made the point that our housing was deplorable. For instance, there are no figures for hypothermia in Iceland, Norway or Finland or in any part of Scandinavia. People there do not die from cold, because their homes are properly insulated. The Government should turn their attention to that, because it is a priority matter.
  The need for improvement to our housing stock is becoming increasingly urgent. The forecast expenditure by local authorities—I am coming to the point made by the hon. Member for Norwich, South (Mr. Powley)—for 1985–86 on heating and insulation improvements was just £193. That is a far cry from the estimated £4 billion that is needed. If a priority programme for home insulation was created and made a national campaign by the Government, not only would it insulate homes but it would create needed jobs. I have seen such schemes in Newcastle upon Tyne. One estimate shows that 50,000 jobs could be created by that type of expenditure. Surely expenditure of that sort would be much better than money spent on tax relief, which is what the Government are considering for the future.
  All these problems lead to fuel disconnections. Difficulty in paying for fuel and the accumulation of debt are major problems, especially for low income families with children. A study of families on supplementary benefit concluded that paying for fuel is the greatest problem they face. The hon. Member for Newcastle upon Tyne, Central (Mr. Merchant) took a week living on unemployment benefit to accept that this is the case for millions of families. He made a point about the cost of fuel, even with that very short experience.
  In the year to 31 March 1986, there were 138,000 disconnections of either gas or electricity. Increasingly, families are unable to afford to have their supplies of heat and light reconnected. Some 23,000 households are without fuel for over three months. In our present society, that is a disgrace.
  The Government have made no concerted attempt to tackle these problems. Their policies are marked by a lack of co-ordination. The gas and electricity authorities have made huge profits. Last year, the gas levy was over £600 million, without profits, and very high profits have just been made by the electricity authority. John Edmonds, the general secretary of the General, Municipal, Boilermakers and Allied Trade Union referred the other day to the privatisation of British Gas and said that it would be far
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  better if the price of gas were reduced by 10 per cent. for those who need such a reduction. I underline that comment.
  This year, 1986, is Energy Efficiency Year. We have been bombarded with glossy advertisements that exhort us to conserve energy. Those who are most in need of help should have their homes insulated and draught-proofed. They should also have new heating systems. These measures would enable them to have energy-efficient homes. However, they have not benefited from the Government's programme. The Department of Energy exhorts us to insulate our homes, but the Department of the Environment reduces the amount of money in the reserve fund available for this programme. That happened right at the beginning of Energy Efficiency Year. The local authorities in Glasgow, Edinburgh and Stirling, some of the coldest places in Britain, have run out of money for home insulation grants. They are able to claim additional funds, but they have not been told that they can do so. I ask the Minister to answer that point.
  Mr. Powley: Will the right hon. Gentleman give way?
  Mr. Orme: No. There are only five minutes left to me, and I have some important matters to put before the House.
  It is a shame that the Government have not delivered the resources to back up their advertising campaign. Not only the Department of the Environment overlooks the work of the Department of Energy; so does the Department of Health and Social Security. The Department of Energy has produced a breakdown of those areas in Britain that are colder than others. For example, it considers that the Pennines are averagely cold and that the north-east of Scotland is 20 per cent. colder.
  The Minister used a most interesting phrase: "absolute coldness". What does that mean? The Department of Health and Social Security does not seem to be aware of it. It has a completely different basis for severe weather payments, which makes it far less likely that it would have to pay out. The solution to these problems is outlined in the Opposition's motion and it has been dealt with by my hon. Friend the Member for Oldham, West (Mr. Meacher) and by other right hon. and hon. Friends.
  There should be a statutory code of practice relating to disconnections. The Government know that the Opposition referred to disconnections in Committee on the Gas Bill. We understand that the final decision over disconnections rests with the authority, but before disconnections take place, statutory authority should be obtained. While it is being obtained, other means should be found to assist those who have difficulty in paying their bills.
  Mr. Eric Cockeram: Will the right hon. Gentleman give way?
  Mr. Orme: No. The Labour party is committed to the introduction of such a code and it will do so at the earliest opportunity.
  As for the neighbourhood energy action campaign, I pay tribute to Newcastle upon Tyne, Glasgow and Hull, which have led this campaign. They are all Labour authorities. It should be noted as such. Such a programme, if we were to develop it on a national scale, would create warm homes and many thousands of jobs.
  Our motion shows the House and the Government the central issues facing thousands of people this winter. The

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  Government could assist, by implementing our motion, which is modest in its proposals, but if they are not prepared to implement it, they should explain why. We believe that it could be done now, and the Government should be tackling these problems. We shall return to this issue time and again.
  9.45 pm
  The Parliamentary Under-Secretary of State for Energy (Mr. Alastair Goodlad): I must confess to having read with disbelief the Opposition's motion for the evening's debate. The Government are criticised for the alleged inadequacy of the system of exceptionally severe weather payments, yet the motion completely ignores the Government's excellent record in providing help through the social security system. The motion seeks safeguards to protect pensioners from disconnection, but entirely ignores the code of practice which already provides pensioners with general protection against disconnection and with specific protection from 1 October to 31 March each year. The motion calls for a major programme of home insulation, but overlooks the fact that there is already a major programme that utterly dwarfs anything that existed when the Labour party was in power.
  The hon. Members for Roxburgh and Berwickshire (Mr. Kirkwood) and for Manchester, Central (Mr. Litherland) and the right hon. Member for Salford, East (Mr. Orme) mentioned disconnections. These remain steady at just over 0·5 per cent. of average domestic electricity credit consumers and just under 0·25 per cent. for gas consumers.
  Both industries operate a code of practice, monitored by their respective consumer councils, to safeguard from disconnection genuine cases of hardship. The industries make the maximum effort to handle constructively any failure to pay bills and its consequences. Both industries operate schemes to enable consumers to pay off debt or to avoid getting into debt, such as budget payments, installation of prepayment meters, which can be calibrated to recover part debt, and saving stamps.
  The code of practice has already been reviewed and revised twice by the industries to keep it up to date and to take account of changed circumstances. In addition, its operation is monitored by the gas and electricity consumer councils.
  The Policy Studies Institute, When it reviewed the code in 1981, thought that many of those disconnected had been in arrears for some time during which they could and should have obtained help under the code. The review concluded that the statistics show substantial patience displayed by the industries, especially the gas industry, in the face of persistent non-payment by their debtors. The statistics also show that there are very few elderly households among debtors, and even fewer among those who suffer disconnection. Only 1 per cent. of the disconnections studied were in pensioner households.
  The hon. Member for Oldham, West (Mr. Meacher) mentioned, albeit with an understandable measure of diffidence, the subject of energy efficiency in the home, as did the hon. Member for Normanton (Mr. O'Brien) and the right hon. Member for Salford, East. The right hon. Gentleman is not always diffident, I grant him that. I have no hesitation in saying that the Government have done vastly more to promote energy efficiency in the home—in other words, to tackle at source the problems that we are discussing—than the Labour party ever did.
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  Let me remind the House what we have done, which has made a massive difference to the lives of a large number of people. We have encouraged loft insulation through the homes insulation scheme and improved the help that the scheme gives to low-income households. [Interruption.] There is nothing particularly funny about low-income households. We have supported neighbourhood energy action and the voluntary sector insulation projects.
  Mr. Allen McKay: Can the Minister give an assurance that the schemes which are undertaken by community projects for the elderly and people on social security benefits will continue as they are now, even when the Social Security Act 1986 comes into effect?
  Mr. Goodlad: I shall come to those important points in a moment.
  The Energy Efficiency Office has developed a comprehensive range of publications to provide the domestic householder with objective advice, much of it relevant to low income households. Energy Efficiency Year, and the associated Monergy campaign, represent the biggest campaign ever aimed at improving the energy efficiency of the domestic sector, including low-income households.
  The Government are again reviewing the thermal insulation standards in the building regulations to ensure that new homes are built to better standards. The Government are also working with the British Standards Institution to encourage the voluntary adoption of higher standards.
  The Government have provided 2·5 million grants under the homes insulation scheme to encourage householders to carry out two of the measures—loft insulation and hot water cylinder insulation—that are most cost-effective even without a grant. In view of the subject of this evening's debate I should remind the House that it was this Government which, in 1980, extended the homes insulation scheme to provide enhanced grants at the 90 per cent. level for the elderly on low incomes and which, the following year, extended the 90 per cent. grant to the disabled on low incomes.
  Both those groups also benefited from the Government's decision in 1984 to extend the scheme to provide "topping up" grants for those with less than 30 mm of existing insulation. In the six years since 90 per cent. grant was introduced, over 420,000 households on low incomes have been helped, either through a grant for initial insulation or through one for topping up their existing insulation. That, I would suggest, is an achievement of which the Government are justifiably proud.
  One of the most remarkable success stories of the past few years is the growth of the voluntary sector insulation projects. I know that the whole House will want to congratulate David Green and Robert Davies, who set up the first project in Durham as long ago as 1975. But the sad fact is that, by 1980, the total number of such projects, despite the attention of the Opposition, was less than half a dozen. In 1981 the Department of Energy stepped in with its programme of active support of those projects. The projects provide a low cost or free basic insulation service to low income households, and they are able to do that because they bring together several types of Government finance.

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  The Department of Energy has provided seedcorn and project grants to enable voluntary organisations to plan projects, and to buy a van, tools and initial stock of materials to start up work. It is also the major source of finance for neighbourhood energy action, the national co-ordinating body.
  Mr. Allen McKay: Will the hon. Gentleman answer my question?
  Mr. Goodlad: I shall answer it in a moment.
  The labour costs are met through the Manpower Services Commission's community programme for the long-term unemployed. [Interruption.] Hon. Members may not like hearing this, but they are going to hear it.
  Materials costs are met through the Department of the Environment's homes insulation scheme, which provides grants of up to 90 per cent. for loft insulation, and through DHSS single payments, which pay the full cost of draught-proofing materials for qualifying claimants on supplementary benefit.
  Since 1981 the expansion of those projects has been dramatic. From five then, the number increased to 60 at the end of 1983 when the Energy Efficiency Office was set up. The number of projects then doubled in 1984 from 100 to 200, and in 1986 there has been an 80 per cent. increase to nearly 340. A further 200 projects are at the planning stage. They already employ over 5,500 people, and they have treated over 230,000 homes—about 100,000 in 1986 alone. That means that well over 250,000 people on low incomes—many of them pensioners or disabled—have been made warmer and more comfortable by the work of the projects. That is, I would suggest, an excellent example of the Government and the voluntary sector working together. It is also an excellent example of several Departments working together towards a common objective. The total cost to public funds of the various kinds of Government funding for these projects is, in fact, about £30 million annually.
  The Energy Efficiency Office produces and distributes a wealth of material on the basic measures that all householders should take, in their own interests, to reduce their energy bills or to live more comfortably. New publications in Energy Efficiency Year include the Monergy guides on cutting home energy costs, the Monergy fact files on the seven basic measures, and Monergy news for general interest articles. These publications are in addition to the high profile television and press advertising campaign. On the future of the voluntary sector insulation projects, I am glad that hon. Gentlemen value so highly the schemes brought in by the Government which they did not bring in themselves.
  Following the social security reforms in 1988, my right hon. Friend the then Minister for Social Security assured the House in February that he would wish to be assured that there were adequate alternative arrangements to enable the work on these projects to continue. Gas prices after privatisation have been mentioned. As the House knows, these will be strictly controlled by a formula which will protect the customer. The formula will discipline the company to achieve savings in the onshore costs under its control and will ensure that customers share in the benefit.
  As has already been mentioned, gas standing charges were reduced by £1·00 this year. Following privatisation, British Gas will be required, under the terms of the
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  authorisation, not to increase standing charges by more than the rate of inflation. This is not an assurance; this is a requirement.
  Standing charges are the fairest way of recovering those fixed costs to which every consumer gives rise—meter readings, accounting and billing, and emergency services. For these reasons, standing charges are favoured by the industry's consumer councils and have been recommended by the Council of the European Communities for general adoption. To abolish them would cost for each industry £500 million. The lost revenue would have to be recovered through higher unit rates, penalising those who need more warmth, such as the very old, the young, the sick and the disabled.
  Successive Governments have concluded that concessionary tariffs, including the abolition of standing charges, would not be a sensible way of helping those in need. In 1976, when announcing the then Government's response to a review of the scope for helping poor consumers by way of concessionary tariffs, fuel allowance, reduction or abolition of standing charges, the right hon. Member for Chesterfield (Mr. Benn), the then Secretary of State for Energy, said:
  "The Government have concluded that none of these possibilities offers a satisfactory way of helping poor consumers with their fuel bills."
  Opposition Members had what I regard as the effrontery to raise the matter of energy prices. Of course, energy prices are a commercial measure for the nationalised industries. Rates of return in the nationalised industries as a whole are low by private sector standards. The prices are not above levels which can be justified by economic criteria. It is not true, therefore, to regard such prices as a means of indirect taxation.
  Domestic gas prices were increased by only 1·7 per cent. overall from last May—the first increase for 15 months. Domestic electricity prices increased last April by around 4·7 per cent., after three years in which the total increase was only 6 per cent. This was followed in July by a reduction of about 3·5 per cent. on the unit rate for those on a typical domestic tariff. Last month, a further reduction of about 1·2 per cent. was introduced.
  This means that since the last election domestic gas and electricity prices have fallen in real terms—gas by 7 per cent. and electricity by 10 per cent. In cash terms, since the last election, the price of gas has increased by about 3 per cent. a year. Under the last Labour Government, it increased by about four times as fast. Similarly, the increase in electricity prices has been about 2 per cent. a year. Under Labour, it rose 11 times as fast, or as much in six months as in the last three and a half years.
  In the short term, the best way in which to help low-income households with their fuel bills is through the social security system. The Government pay£140 million more in real terms in heating additions to low-income households than our predecessors did in 1978–79—
  Mr. Lawrence Cunliffe rose in his place and claimed to move, That the Question be now put.
  Question, That the Question be now put, put and agreed to.
  Question put accordingly, That the original words stand part the Question:—
  The House divided: Ayes 189. Noes 258.

  Division No. 16]

  [10 pm

  AYES

  Abse, Leo

  Harrison, Rt Hon Walter

  Adams, Allen (Paisley N)

  Hattersley, Rt Hon Roy

  Alton, David

  Healey, Rt Hon Denis

  Anderson, Donald

  Heffer, Eric S.

  Ashley, Rt Hon Jack

  Hogg, N. (C'nauld & Kilsyth)

  Atkinson, N. (Tottenham)

  Holland, Stuart (Vauxhall)

  Banks, Tony (Newham NW)

  Home Robertson, John

  Barnett, Guy

  Howarth, George (Knowsley, N)

  Barron, Kevin

  Hoyle, Douglas

  Beckett, Mrs Margaret

  Hughes, Robert (Aberdeen N)

  Beith, A. J.

  Hughes, Roy (Newport East)

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

  Hughes, Simon (Southwark)

  Bermingham, Gerald

  Janner, Hon Greville

  Bidwell, Sydney

  Jenkins, Rt Hon Roy (Hillh'd)

  Blair, Anthony

  John, Brynmor

  Boothroyd, Miss Betty

  Jones, Barry (Alyn & Deeside)

  Boyes, Roland

  Kaufman, Rt Hon Gerald

  Bray, Dr Jeremy

  Kennedy, Charles

  Brown, Gordon (D'f'mline E)

  Kirkwood, Archy

  Brown, Hugh D. (Provan)

  Lambie, David

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

  Lamond, James

  Brown, Ron (E'burgh, Leith)

  Leighton, Ronald

  Bruce, Malcolm

  Lewis, Ron (Carlisle)

  Buchan, Norman

  Lewis, Terence (Worsley)

  Caborn, Richard

  Litherland, Robert

  Callaghan, Jim (Heyw'd & M)

  Livsey, Richard

  Campbell, Ian

  Lofthouse, Geoffrey

  Campbell-Savours, Dale

  Loyden, Edward

  Carlile, Alexander (Montg'y)

  McCartney, Hugh

  Carter-Jones, Lewis

  McDonald, Dr Oonagh

  Cartwright, John

  McKelvey, William

  Clark, Dr David (S Shields)

  MacKenzie, Rt Hon Gregor

  Clarke, Thomas

  Maclennan, Robert

  Clay, Robert

  McNamara, Kevin

  Clwyd, Mrs Ann

  McTaggart, Robert

  Cocks, Rt Hon M. (Bristol S)

  Madden, Max

  Cohen, Harry

  Marek, Dr John

  Conlan, Bernard

  Marshall, David (Shettleston)

  Cook, Frank (Stockton North)

  Martin, Michael

  Cook, Robin F. (Livingston)

  Maxton, John

  Corbett, Robin

  Maynard, Miss Joan

  Corbyn, Jeremy

  Meacher, Michael

  Craigen, J. M.

  Meadowcroft, Michael

  Crowther, Stan

  Michie, William

  Cunliffe, Lawrence

  Mikardo, Ian

  Cunningham, Dr John

  Millan, Rt Hon Bruce

  Dalyell, Tam

  Mitchell, Austin (G't Grimsby)

  Davies, Rt Hon Denzil (L'lli)

  Morris, Rt Hon A. (W'shawe)

  Davies, Ronald (Caerphilly)

  Morris, Rt Hon J. (Aberavon)

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

  Nellist, David

  Deakins, Eric

  Oakes, Rt Hon Gordon

  Dewar, Donald

  O'Brien, William

  Dixon, Donald

  O'Neill, Martin

  Dobson, Frank

  Orme, Rt Hon Stanley

  Dormand, Jack

  Park, George

  Duffy, A. E. P.

  Patchett, Terry

  Dunwoody, Hon Mrs G.

  Pavitt, Laurie

  Eadie, Alex

  Pendry, Tom

  Eastham, Ken

  Penhaligon, David

  Evans, John (St. Helens N)

  Pike, Peter

  Fatchett, Derek

  Powell, Raymond (Ogmore)

  Faulds, Andrew

  Prescott, John

  Field, Frank (Birkenhead)

  Radice, Giles

  Fields, T. (L'pool Broad Gn)

  Randall, Stuart

  Fisher, Mark

  Raynsford, Nick

  Flannery, Martin

  Redmond, Martin

  Foot, Rt Hon Michael

  Rees, Rt Hon M. (Leeds S)

  Forrester, John

  Richardson, Ms Jo

  Foster, Derek

  Roberts, Allan (Bootle)

  Foulkes, George

  Robertson, George

  Fraser, J. (Norwood)

  Robinson, G. (Coventry NW)

  Freud, Clement

  Rogers, Allan

  Godman, Dr Norman

  Rooker, J. W.

  Golding, Mrs Llin

  Ross, Ernest (Dundee W)

  Gould, Bryan

  Ross, Stephen (Isle of Wight)

  Gourlay, Harry

  Rowlands, Ted

  Hamilton, James (M'well N)

  Sedgemore, Brian

  Hamilton, W. W. (Fife Central)

  Sheerman, Barry

  866

  Sheldon, Rt Hon R.

  Tinn, James

  Shore, Rt Hon Peter

  Torney, Tom

  Short, Ms Clare (Ladywood)

  Wainwright, R.

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

  Wallace, James

  Silkin, Rt Hon J.

  Wardell, Gareth (Gower)

  Skinner, Dennis

  Wareing, Robert

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

  Weetch, Ken

  Smith, Cyril (Rochdale)

  White, James

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

  Wigley, Dafydd

  Spearing, Nigel

  Williams, Rt Hon A.

  Steel, Rt Hon David

  Wilson, Gordon

  Stewart, Rt Hon D. (W Isles)

  Winnick, David

  Stott, Roger

  Wrigglesworth, Ian

  Strang, Gavin

  Young, David (Bolton SE)

  Straw, Jack

  Thomas, Dafydd (Merioneth)

  Tellers for the Ayes:

  Thomas, Dr R. (Carmarthen)

  Mr. Allen McKay and

  Thompson, J. (Wansbeck)

  Mr. Sean Hughes.

  Thorne, Stan (Preston)

  NOES

  Adley, Robert

  Couchman, James

  Aitken, Jonathan

  Cranborne, Viscount

  Alexander, Richard

  Critchley, Julian

  Alison, Rt Hon Michael

  Crouch, David

  Ancram, Michael

  Currie, Mrs Edwina

  Arnold, Tom

  Dickens, Geoffrey

  Ashby, David

  Dicks, Terry

  Atkins, Robert (South Ribble)

  Dorrell, Stephen

  Atkinson, David (B'm'th E)

  Douglas-Hamilton, Lord J.

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

  Dover, Den

  Baker, Nicholas (Dorset N)

  du Cann, Rt Hon Sir Edward

  Baldry, Tony

  Dunn, Robert

  Banks, Robert (Harrogate)

  Dykes, Hugh

  Batiste, Spencer

  Edwards, Rt Hon N. (P'broke)

  Beaumont-Dark, Anthony

  Eggar, Tim

  Bendall, Vivian

  Evennett, David

  Benyon, William

  Farr, Sir John

  Best, Keith

  Favell, Anthony

  Bevan, David Gilroy

  Fookes, Miss Janet

  Biffen, Rt Hon John

  Forman, Nigel

  Biggs-Davison, Sir John

  Forsyth, Michael (Stirling)

  Blaker, Rt Hon Sir Peter

  Forth, Eric

  Body, Sir Richard

  Fowler, Rt Hon Norman

  Bonsor, Sir Nicholas

  Fox, Sir Marcus

  Boscawen, Hon Robert

  Franks, Cecil

  Bottomley, Peter

  Fraser, Peter (Angus East)

  Bottomley, Mrs Virginia

  Gale, Roger

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

  Garel-Jones, Tristan

  Boyson, Dr Rhodes

  Gilmour, Rt Hon Sir Ian

  Brandon-Bravo, Martin

  Glyn, Dr Alan

  Bright, Graham

  Goodhart, Sir Philip

  Brinton, Tim

  Goodlad, Alastair

  Brittan, Rt Hon Leon

  Gow, Ian

  Brown, M. (Brigg & Cl'thpes)

  Gower, Sir Raymond

  Bruinvels, Peter

  Greenway, Harry

  Buchanan-Smith, Rt Hon A.

  Grylls, Michael

  Buck, Sir Antony

  Hamilton, Hon A. (Epsom)

  Budgen, Nick

  Hamilton, Neil (Tatton)

  Bulmer, Esmond

  Harris, David

  Burt, Alistair

  Hawksley, Warren

  Butler, Rt Hon Sir Adam

  Hayhoe, Rt Hon Barney

  Butterfill, John

  Hayward, Robert

  Carlisle, John (Luton N)

  Heathcoat-Amory, David

  Carlisle, Kenneth (Lincoln)

  Heddle, John

  Carttiss, Michael

  Heseltine, Rt Hon Michael

  Cash, William

  Hickmet, Richard

  Chalker, Mrs Lynda

  Hicks, Robert

  Chapman, Sydney

  Higgins, Rt Hon Terence L.

  Chope, Christopher

  Hind, Kenneth

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

  Hirst, Michael

  Clark, Dr Michael (Rochford)

  Holland, Sir Philip (Gedling)

  Clark, Sir W. (Croydon S)

  Hordern, Sir Peter

  Clarke, Rt Hon K. (Rushcliffe)

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

  Cockeram, Eric

  Howell, Rt Hon D. (G'ldford)

  Colvin, Michael

  Hunt, David (Wirral W)

  Conway, Derek

  Jackson, Robert

  Coombs, Simon

  Jenkin, Rt Hon Patrick

  Cope, John

  Johnson Smith, Sir Geoffrey

  Cormack, Patrick

  Knight, Greg (Derby N)

  867

  Knox, David

  Onslow, Cranley

  Lawler, Geoffrey

  Oppenheim, Phillip

  Lawrence, Ivan

  Oppenheim, Rt Hon Mrs S.

  Lee, John (Pendle)

  Ottaway, Richard

  Lewis, Sir Kenneth (Stamf'd)

  Page, Richard (Herts SW)

  Lightbown, David

  Patten, Christopher (Bath)

  Lilley, Peter

  Patten, J. (Oxf W & Abgdn)

  Lloyd, Sir Ian (Havant)

  Pawsey, James

  Lloyd, Peter (Fareham)

  Peacock, Mrs Elizabeth

  Lord, Michael

  Percival, Rt Hon Sir Ian

  Luce, Rt Hon Richard

  Porter, Barry

  Lyell, Nicholas

  Portillo, Michael

  McCrindle, Robert

  Powell, William (Corby)

  McCurley, Mrs Anna

  Powley, John

  Macfarlane, Neil

  Price, Sir David

  MacGregor, Rt Hon John

  Proctor, K. Harvey

  MacKay, Andrew (Berkshire)

  Raffan, Keith

  MacKay, John (Argyll & Bute)

  Raison, Rt Hon Timothy

  Maclean, David John

  Rathbone, Tim

  McLoughlin, Patrick

  Renton, Tim

  McNair-Wilson, M. (N'bury)

  Rhodes James, Robert

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

  Rhys Williams, Sir Brandon

  McQuarrie, Albert

  Ridsdale, Sir Julian

  Major, John

  Rippon, Rt Hon Geoffrey

  Malins, Humfrey

  Roberts, Wyn (Conwy)

  Malone, Gerald

  Roe, Mrs Marion

  Maples, John

  Rossi, Sir Hugh

  Mather, Carol

  Rost, Peter

  Maude, Hon Francis

  Rowe, Andrew

  Mawhinney, Dr Brian

  Sackville, Hon Thomas

  Maxwell-Hyslop, Robin

  Sainsbury, Hon Timothy

  Mayhew, Sir Patrick

  St. John-Stevas, Rt Hon N.

  Meyer, Sir Anthony

  Sayeed, Jonathan

  Mills, Sir Peter (West Devon)

  Shaw, Giles (Pudsey)

  Miscampbell, Norman

  Shaw, Sir Michael (Scarb')

  Mitchell, David (Hants NW)

  Shelton, William (Streatham)

  Montgomery, Sir Fergus

  Shepherd, Colin (Hereford)

  Morrison, Hon C. (Devizes)

  Shepherd, Richard (Aldridge)

  Morrison, Hon P. (Chester)

  Shersby, Michael

  Moynihan, Hon C.

  Silvester, Fred

  Mudd, David

  Sims, Roger

  Neale, Gerrard

  Skeet, Sir Trevor

  Nelson, Anthony

  Smith, Tim (Beaconsfield)

  Neubert, Michael

  Soames, Hon Nicholas

  Nicholls, Patrick

  Speller, Tony

  Norris, Steven

  Spencer, Derek

  868

  Spicer, Jim (Dorset W)

  Waddington, David

  Squire, Robin

  Wakeham, Rt Hon John

  Stanley, Rt Hon John

  Walden, George

  Steen, Anthony

  Wall, Sir Patrick

  Stern, Michael

  Waller, Gary

  Stevens, Lewis (Nuneaton)

  Wardle, C. (Bexhill)

  Stewart, Allan (Eastwood)

  Warren, Kenneth

  Stewart, Andrew (Sherwood)

  Watson, John

  Stewart, Ian (Hertf'dshire N)

  Watts, John

  Stradling Thomas, Sir John

  Wells, Bowen (Hertford)

  Sumberg, David

  Wells, Sir John (Maidstone)

  Taylor, John (Solihull)

  Wheeler, John

  Taylor, Teddy (S'end E)

  Whitfield, John

  Tebbit, Rt Hon Norman

  Whitney, Raymond

  Temple-Morris, Peter

  Wiggin, Jerry

  Thompson, Donald (Calder V)

  Winterton, Mrs Ann

  Thompson, Patrick (N'ich N)

  Wolfson, Mark

  Thornton, Malcolm

  Wood, Timothy

  Thurnham, Peter

  Woodcock, Michael

  Townend, John (Bridlington)

  Yeo, Tim

  Townsend, Cyril D. (B'heath)

  Young, Sir George (Acton)

  Tracey, Richard

  Younger, Rt Hon George

  Trippier, David

  Trotter, Neville

  Tellers for the Noes:

  Twinn, Dr Ian

  Mr. Tony Durant and

  van Straubenzee, Sir W.

  Mr. Mark Lennox-Boyd.

  Question accordingly negatived.
  Question, That the proposed words be there added, put forthwith pursuant to Standing Order No. 30 (Questions on amendments), and agreed to.
  MR. SPEAKER forthwith declared the main Question, as amended, to be agreed to.
  Resolved,
  That this House welcomes the considerable improvement under this Government in support with heating costs for vulnerable groups through the supplementary benefit scale rates, the weekly heating additions and the simpler and better targeted arrangements for help during periods of exceptionally cold weather; supports the comprehensive action taken to improve energy efficiency in the home; and applauds the beneficial effect of low inflation on the costs of fuel, which is of immense benefit to all consumers but most especially those on low incomes.

  Multi-fibre Arrangement
  Mr. Speaker: I must announce to the House that I have selected the amendment standing in the name of the Leader of the Opposition.
  Mr. Richard Wainwright: On a point of order, Mr. Speaker. The Minister was good enough to deposit in the Library on 24 November full details of the bilateral agreements referred to in the Government's motion. As I have a keen interest in the matter, I spent some time ploughing through the documents. However, at an early stage I met the obstacle that the vital document, called, "Quantitative Limits Negotiated In Bilateral Agreements Under the GATT MFA" is entirely in French. For the past few days I have been struggling with expressions such as bouclés du genre éponge, les bas à varices, salopettes à bretelles, soutiens-gorge et bustiers—
  Mr. Speaker: Order. I do not understand that either, but what is the point?
  Mr. Wainwright: I submit that this fact made it almost impossible for me to prepare adequately for this debate. I must add that after the strenuous representations made by the admirable library to the Minister's office, only today, just after noon, an English translation arrived but it was too late for most of us.
  Mr. Speaker: I understand the hon. Gentleman's point but I have no authority over such papers as they are matters for the Government. I am sure the hon. Gentleman will be able to raise this matter in the debate.
  The Minister for Trade (Mr. Alan Clark): I find myself in a very uncomfortable position. I learned of this alien document only at 7 o'clock this evening. On inquiry I learned that, as the Scrutiny Committee required ratification of this Community document before 8 December to enable us to participate in the textile committee's proceedings and to vote, it was thought courteous to hon. Members who might wish to make inquiries in the Library if at least a document were deposited there.
  I can only say that I share the distaste, if not the indignation, of the hon. Member for Colne Valley (Mr. Wainwright). I apologise profusely to him and to the House for this oversight.
  Mr. Bowen Wells: Further to that point of order, Mr. Speaker. Is it possible for the Minister to let us know before we start the debate what he is proposing to agree in the bilateral arrangements under the multi-fibre arrangement?
  Mr. Speaker: I cannot do that, but I will now call the Minister to tell us.
  10.16 pm
  The Minister for Trade (Mr. Alan Clark): I beg to move,
  That this House takes note of European Community Document No. 9809/86 on renewal of the Arrangement regarding international trade in textiles (MFA), and of the Community's bilateral textiles agreements and of the Department of Trade and Industry's unnumbered explanatory memorandum of 24th November 1986 on the provisional application of bilateral agreements on trade in textile products between the European Community and certain third
  870
  countries; and welcomes the Government's achievement in the conclusion of a new Protocol extending the Multi-Fibre Arrangement for a further five-year period and the satisfactory negotiation of 26 new bilateral agreements under the arrangement.
  The motion before the House deals with the outcome of negotiations to renew the multi-fibre arrangement and the associated bilateral agreements. We debated the subject in May 1985, when the negotiations were still at a formative stage. My right hon. Friend the Secretary of State outlined the Government's approach. In February 1986, just before the Community agreed its negotiating mandate, we debated the matter again. I took careful account of the points made by hon. Members and I have throughout kept in close and detailed touch with industry and other interested parties.
  The House can now view the outcome of the negotiations against the United Kingdom's objectives. The process of negotiation involved discussion first within the Community, then within the General Agreement on Tariffs and Trade, and, finally, at a bilateral level with our supplier countries. In my view, the results of the negotiations largely meet United Kingdom needs and should be welcomed.
  The House will know that there is a strong weight of pressure in favour of liberalising the trade regime for textiles. This comes from the developing countries whose exports are restricted by the MFA, and from exporters to those countries who believe that their access is limited thereby. There is also pressure from consumers who are affected by the higher prices that can result. In addition, the Third world lobby cogently argues that the developing countries should be allowed special and preferential access to Orgnaisation for Economic Co-operation and Development markets in general and the United Kingdom in particular.
  I am sure that hon. Members will also recall the assessments that have been made of the high costs of such a regime on the economy as a whole. There is a school of economists who claim that protection for one sector has costs for others. I fear that in the light of these considerations the new arrangement that has been negotiated, and which I shall describe, may not go as far as those advocates would wish.
  I shall begin with the new protocol renewing the multi-fibre arrangement which was concluded on 1 August. A copy is in the Library of the House. I apologise for the fact that the accompanying documents are not in English.
  A feature of the new protocol is that it extends the arrangement for five years. This is a longer period than in previous renewals, and I know that the industry welcomes this. The protocol provides for special treatment for the least developed countries and I am sure that this attitude will be widely welcomed on both sides of the House. The United Kingdom had pressed for this. In addition, the protocol also states that all participants should contribute towards liberalisation of trade. This is a clear signal that we expect others to reduce their trade barriers to our exports. There is a provision that there should be no cuts from previous quota levels. Here it should be borne in mind that there were pressures in the United States in particular for such cuts.
  A further new element of the protocol, which was included as a response to problems experienced particularly by the United States, is that restrictions may now be introduced on products of certain new fibres, such

  871
  as ramie sweaters, where these are directly competitive with traditional MFA products, and are threatening market disruption. In most other respects the protocol essentially renews the arrangement for a further period with little change.
  The bilateral agreements—within the terms of the protocol—were negotiated between May and November, and all our MFA low-cost suppliers have now initialled agreements. The detailed quota levels have been placed in the Library. The terms are in accordance with the mandate agreed by Community Ministers last March and also meet the United Kingdom objectives that I last described in the House in February.
  The new agreements will provide continued effective protection for the sensitive sectors of the United Kingdom textile and clothing industry, while providing some elements of liberalisation. For the non-dominant suppliers in particular, access levels and growth rates have been increased. For the dominant suppliers, which supply over half of MFA imports, growth rates remain low. On the eight most sensitive products, growth rates for dominant countries are in some cases as low as 0·1 per cent., and almost all are less than 1 per cent.
  Mr. Jack Straw: Could the Minister give some idea of overall growth rate so far as it will affect the United Kingdom market?
  Mr. Clark: The hon. Gentleman will know that the total that we are discussing within which growth rates are taking place is only 8 per cent. of overall consumption. I do not think that is it comprehensible within that 8 per cent. to give an average overall figure. If the hon. Gentleman pays attention to what I am saying, he will find that the sectoral figures will emerge in the course of the debate. I repeat that all such figures have to be seen in the context of an overall band of only 8 per cent. of consumption.
  To see what effect these changes will have on the market as a whole, one has to take into account the fact that almost 60 per cent. of consumption in value terms is supplied by domestic industry. Of total imports, 20 per cent. come from MFA suppliers, and that is only 8 per cent. of consumption. Of these, the majority are supplied by the dominant countries, whose growth rates remain low. The additional increases in access are therefore very marginal in terms of total United Kingdom consumption. Within this framework, the Community was mindful of the degree of openness of the supplier country's own market.
  Special treatment was provided in line with the protocol for the least developed countries; the agreement with Bangladesh contains no quota restrictions. Approximately one quarter of the existing quotas, either for the Community as a whole or for certain member states, which had been consistently under-utilised, were not renewed. But in any case, if the need arose, it would be possible to introduce restraints, provided that imports rose above certain specified levels and were threatening market disruption.
  A degree of liberalisation has been provided for children's clothes: in the case of the quotas on certain products, suppliers can bring in a specified proportion in the form of children's clothes at a special rate—for
  872
  example, Singapore can send five children's garments for every three units of quota up to a limit of 5 per cent. of the total quotas on T-shirts and trousers.
  The Community's approach was regarded as positive and constructive by the developing countries, as it provided a movement towards a more liberal regime. At the same time, we have kept tight controls where they are most needed by our industry. The industry had reservations but it gave the Protocol a cautious welcome and I believe that when it has studied the detailed content of the bilaterals it will decide that these too, given the mandate, are satisfactory from its standpoint. We have of course kept in close and detailed touch with the industry throughout. I have had a number of meetings with the unions and I hope that the House will feel able to recognise that we have negotiated effective protection for the most sensitive sectors.
  Mr. Bowen Wells: I am grateful to my hon. Friend for giving way. He seems to be suggesting that the industry does not know what he is proposing in the bilateral arrangements, or, at least, has not had a chance to reply to his proposals on the bilateral arrangements. Is that detail known to the industry and if so, is its reaction to what he is proposing positive or negative?
  Mr. Clark: There have been consultations with the industry at every stage.
  Mr. Wells: Yes, but does the industry know the bilateral arrangements?
  Mr. Clark: Yes, of course it does. My hon. Friend may be able to develop his thoughts if he catches your eye, Mr. Deputy Speaker. He will then be able to cite what authority he has for his arguments.
  As regards the longer term, the Community has stated that the final aim is the return of textiles to GATT rules. However, I must assure the House that no commitment has been given that all special restrictions on textile and clothing trade will come to an end in 1991. The Community has made it clear that that is a matter that will have to be negotiated in the GATT round.
  Of course, in that round all the major derogations and exemptions from the basic rules of the GATT will be on the table for negotiation—in particular, the exemption from GATT disciplines enjoyed by some of the highly advanced developing countries which are among the major MFA suppliers. I should mention that, while those countries maintain barriers which restrict a wide range of the United Kingdom's goods and services, not least among them are barriers which restrict imports of textile and clothing products and it is our aim to bring those to an end.
  The result of the MFA negotiations represents a good example of the European Community in negotiating as a bloc. It fully meets the interests of the United Kingdom, taken as a balance of consumers and producers, and I invite the House to endorse the motion in the name of my right hon. Friend the Prime Minister.
  10.28 pm
  Mr. Robin Cook: I beg to move, to leave out from "countries" to the end of the Question and to add instead thereof:
  "but regrets the failure to negotiate within the Arrangement a new article on social development and working conditions or to secure reciprocal access to the markets of the supplying

  873
  countries, and records its concern at the continuing absence of an industrial strategy to reverse the high level of job losses and closures in the British textile industry."
  The Minister said that the industry had given a cautious welcome to the protocol and the 26 associated bilateral arrangements. It would be fair to say that the abiding emotion of the industry is one of relief that it has a continuation of the MFA in any form. It is fair to say—I appreciate that this goes back beyond the Minister's time—that at one point at the turn of the year the industry was in some doubt whether the Government were in favour of a continuation of the MFA.
  Tonight we see a situation full of paradoxes. The Government, who have been most dogmatic in their statements of rhetorical support for free trade, are represented at the Dispatch Box by a Minister who is one of the most formidable opponents of free trade and who is particularly eloquent when he addresses the House in the vernacular rather than any alien tongue.
  The Minister, in the name of a Government who are committed to free trade, is recommending a model of planned trade which regulates the trade between Governments and imports to and exports from their respective countries. I must state straight away that, in principle, that form of collective bargaining is congenial to the Opposition, and we hope that the Government can be persuaded to extend that interventionist approach right across the trade balance that threatens to become severely imbalanced.
  It is not possible for us to share the Minister's satisfaction with the state in which the protocol leaves the industry. The textile industry is a clear example of the damage caused to our manufacturing base by the policies pursued by this Administration in their earliest phase. Between 1979 and 1982, output fell by 25 per cent., investment halved and 750,000 jobs were lost—one in three of all the jobs that existed in 1979. That dramatic retreat on the part of the industry demonstrates that an exchange rate policy would be of far greater significance and importance to the industry than anything that can be secured through the MFA or similar trade negotiations.
  It is true that since 1982 the industry has shown substantial recovery—entirely through its own efforts—but none of the indicators are back anywhere near the 1979 level. Profits may have rallied, but jobs continue to dribble away. In the first half of this year, 4,000 jobs were lost within the industry. Only last week, Pringle placed half of its work force on short-time working. I understand that this week Lyle and Scott has followed that lead. Those companies are operating at the upper end of the market. I understand that the pressure that is affecting them is the sharp drop in the numbers of American tourists visiting Britain during the summer and their failure to purchase high quality textiles. Pringle and Lyle and Scott are the latest casualties of the raid on Libya that the Prime Minister found it inconceivable to prevent.
  Mr. Stephen Dorrell: Cheap.
  Mr. Cook: No. The loss of Pringle's sales is attributable to the decrease in the numbers of American tourists coming to Britain. If the hon. Member for Loughborough (Mr. Dorrell) would like to attribute that decline to any factor other than President Reagan's attempt to make the world safer from terrorism, I would be interested to hear from him.
  Mr. Dorrell: I would attribute it to Gaddafi's activities.
  Mr. Cook: On the contrary, Mr. Gaddafi has not been particularly active in retaliation. I understood that that was why the American tourists were staying away.
  There are no grounds for complacency in the light of the recent export-import figures. Imports have risen in eight of the last nine months and exports have gone down in five of those nine months. That presents a sombre and challenging background against which we must judge MFA 4.
  I start with a point of agreement. I welcome the fact that MFA 4 removes the poorest countries from the quota restrictions—most notably Bangladesh. I note that Bangladesh is still within the scope of the grimly named "basket extractor systems"—a term for which I in no way blame the Minister. I hope that will not trigger off a repetition, as we witnessed last year, of quotas being invoked against Bangladesh.
  It is necessary to recognise that there is something anomalous about Bangladesh receiving special treatment because of its poverty, whereas India and Pakistan, in the same sub-continent with standards of living not much above those in Bangladesh, are capped by quotas. I appreciate that there were severe problems in negotiating the bilateral arrangement with India because, understandably, India sought a large rise in quotas. However, if we are serious about using the MFA to help the poorest at the expense of the more successful nations of the Third world, such an increase must be conceded to the other countries in the Indian sub-continent, preferably at the expense of the dominant countries.
  That leads me to the area of the debate where we would cast a slightly jaundiced eye over the protocol that the Minister has recommended to the House. The trade pressure from the MFA countries comes from not the poorest countries, but the dominant countries.
  Mr. Dorrell: From Europe.
  Mr. Cook: The hon. Gentleman is absolutely correct. Imports from European countries have been increasing at double the rate of imports from MFA countries. I would welcome a robust approach from the hon. Gentleman towards imports from Europe.
  The greatest pressure on the textile market in Britain comes from the four dominant countries in the MFA. They account for half the quotas and imports from the MFA in jerseys, shirts and trousers. I accept that the protocol is a fairly faithful replication of the mandate. However, the Minister will be aware that in relation to the dominant countries, the industry feels that the quota increases are too liberal—with a small, not a capital, "1". Any multi-fibre arrangement negotiated with the Liberal party would undoubtedly have oscillating quotas, depending on who was speaking on its behalf.
  Last time the House debated the matter the hon. Member for Yeovil (Mr. Ashdown) spoke on behalf of the alliance and prompted a speech from the hon. Member for Rochdale (Mr. Smith), who I presume was speaking in his Back Bench capacity, in which he said that it was a pity his party had not chosen someone to speak for it who knew something about textiles. I understand that today we are to be treated to a speech from the hon. Member for Colne Valley (Mr. Wainwright). Clearly, the dispute in the previous debate will be resolved by ensuring that neither party to it takes part today. We look forward to the hon. Gentleman's speech to find out whether tonight the

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  Liberal party is in favour of or against the MFA and whether it favours the MFA being extended or choked off at the end of the five years.
  Mr. Cyril Smith: So do I.
  Mr. Cook: We share the hon. Gentleman's suspense.
  We regard the quotas of the dominant countries as too liberal. Tory Members will be aware that the industry stated that any increases in quotas should be confined to growth and consumption in the United Kingdom market—about 1 per cent. per annum. The quotas in the bilateral arrangements provide for increases two, three or four times the growth in the domestic market. I appreciate that that represents a relatively marginal increase in their slice of the domestic market. Nevertheless, arithmetically, the conclusion is inescapable. It means that domestic producers have to accept a steady reduction of their market share within the United Kingdom and the Common Market. [Interruption.] As the hon. Member for Loughborough will be aware, the whole point of the quotas is to cap the competitive edge which these countries have because of their lower costs. That is why we describe them as the low-cost countries contained within the MFA. The industry is certainly making rapid progress towards greater competitiveness and it has increased productivity by 40 per cent. since 1980. Nevertheless, those increases in quotas are likely to be taken up and will represent a diminishing share of the industry's domestic market.
  It is not simply a matter of quotas. There is great anxiety in the industry about the loosening of the restrictions on the supplying nations which keep them to the quotas. The extent to which the quotas are malleable is demonstrated by the remarkable surge in imports from the MFA dominants earlier this year. In the first eight months of this year imports to the Community from Taiwan increased by 42 per cent., from South Korea by 38 per cent. and from Hong Kong by 34 per cent. Those increases took place within the regime of the previous MFA.
  The new arrangement provides new exceptions to the quotas which contain the capacity for even greater surges of imports. There is particular anxiety about the interstate transfers for which there is provision in the bilaterals and which could result in a 16 per cent. increase in certain quotas over five years. The Minister must accept that the industry will expect him to maintain a close watch on certain developments and a willingness to intervene should it turn out that interstate transfers are being abused and becoming a means of circumventing quota restrictions.
  I now come to the other side of the coin. If we accept that it was inevitable, and even desirable, that during negotiations there would be an increase in quotas, it would have been reasonable for us to expect something in return from the supplying countries for those increases in quota. Despite the Minister's brave words, the protocol shows that we have got nothing in return.
  The most obvious thing we might have hoped to get in return was that the supplying nations would prise open a slice of their textile market as we opened the door to our domestic textile market. Instead, protectionism among the 26 members of the MFA is stark. There are one or two honourable exceptions, because Hong Kong and
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  Singapore operate open markets. The extent to which we can supply textile exports to those countries demonstrates what can be done in an open trading situation.
  Hong Kong and Singapore export per head of population £9·50 worth of textiles to Britain. Per head of population they import £7 worth of textiles from Britain. That is an imbalance in their favour, but it is a perfectly reasonable one. However, if we look at South Korea, Taiwan and the other members of the dominant four, and include Brazil, we find that those countries export textiles to Britain at the rate of £4·80 per head of their population. In return, they import from Britain textiles to the value of 6p per head. It is impossible to defend that balance as being a result of the differential trade advantages of the two nations. Patently, above all else, that differential represents protectionism. The tariffs with which they surround themselves are astronomical. Brazil has a textile tariff which exceeds 100 per cent. Such a tariff is there not to regulate but to prohibit trade.
  The Minister took pride in presenting to the House 26 bilateral agreements which, on the whole, provide for greater access to the British market. I understand that only one of the bilaterals provides for greater access to the market of the supplying country. That is South Korea, which has agreed to reduce its tariffs, but has in the meantime introduced, as a balancing act, deposits on textiles coming into the country.
  So far, the points I have made are common to both management and work force. It is fair to say that my next point is pressed more by the unions than by management, but it is also endorsed by the World Development Movement, whose support for the multi-fibre arrangement cannot always be taken for granted. Both the unions and the World Development Movement agree on the need for a social clause in the MFA. Only last Friday the European trade union committee on textiles at its meeting in Luxembourg carried a resolution calling for an article on social development in the MFA which would oblige supplying nations to observe International Labour Organisation standards on working conditions. We find that request entirely reasonable.
  If we accept that those countries should have a growing share of our market, we have a reasonable entitlement to ask that they ensure that that growth is passed on to their work force. In the past year, while MFA 4 has been under negotiation, the people of Britain were deeply moved by press reports about child labour in the textile factories in Thailand. It would be entirely wrong if we were knowingly to sanction that type of employment practice by deliberately setting a quota for imports of products from those factories.
  Sadly, this area represents another missed opportunity. I am advised by the European trade union committee on textiles that in two weeks of negotiations in Geneva by the 26 bilaterals, exactly 30 minutes was devoted to a perfunctory attempt to get the supplying nations to accept a social clause. I regret that there is no social clause in the protocol. I hope that we will see an extension of MFA 4 into MFA 5, and that when the negotiations start again greater priority will be attached to the social clause than we have seen this time round.
  I echo the words of the Minister, that the textile industry is a major industry. It remains important, despite the assault that it had to withstand because of the policies of this Government in their earlier years in office. It is important in terms of jobs, because it has more employees

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  than the vehicle, aerospace and shipbuilding industries added together. The jobs are located in regions that have been particularly susceptible to the recent recession, and those jobs are especially important in the fight against unemployment.
  The textile industry is important to the economy. Its output is greater than the output of the high technology and telecommunications industries added together. It is the third largest sector of manufacturing industry. It is outstripped by only two other sectors. It is a great and significant industry.
  MFA 4 offers a breathing space to the industry. I am confident that the industry will use that breathing space to follow through the progress that it has made in the last three years. The industry would be helped in that task if the Government were now to follow up their intervention in overseas trade by intervention at home. It would help the industry to plan an industrial strategy for this sector, with, as its objective, dare I suggest, a return to the target figures—not the employment figures—of 1979. I suspect that that broader task which still awaits us during the next five years will have to await the Government that comes into office after the next general election.
  10.45 pm
  Mr. Gary Waller: After the speech of the hon. Member for Livingston (Mr. Cook) it is difficult to know exactly where he stands on MFA 4. I believe unequivocally that this is an arrangement with which the textile industry can live. It provides a much better deal than at one time seemed possible. My hon. Friend the Minister for Trade deserves our thanks and congratulations for standing up for the interests of the United Kingdom during the complicated negotiations in Geneva.
  Our textile industry does not demand permanent protection. The lifting of some quotas as part of the agreement has been accepted without fuss. The objective must, above all, be fair trade. If possible, it should be free trade, but it must be fair trade. We cannot open our markets fully while other countries are still prepared to use all the means that are available to them to protect their home markets. I think, for example, of South Korea. It gave every indication this summer of liberalisation, but when it came to the point it found new ways of preventing our exporters from gaining access to their customers. If high tariffs and quotas need to be relaxed, some countries are quite prepared to utilise restrictive licensing and distribution systems, as well as import deposits and bans, as a recent report of the National Economic Development Office clearly showed.
  In the multi-fibre arrangement we recognised that account should be taken, when fixing quotas, of the needs of the very poor countries—Bangladesh has already been mentioned—in building up their domestic industries. It was also right that we should give due credit to those countries—for example, Hong Kong—whose markets are genuinely open to our goods. I am afraid that it is often the fast-developing countries like Taiwan and Brazil, which have significant populations and money to spend on British high quality goods, that discriminate blatantly against us. Tariffs of up to 100 per cent. are not just unfair, they destroy jobs in places like the West Riding and in other areas where such jobs are at a premium.
  Over the years the multi-fibre arrangement has not restricted change. Indeed, MFA 3 permitted an annual growth rate in imports of up to 6 per cent.—nearly four
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  times the growth rate of clothing sales during the period to which it applied. It is not in our interest to hold back international free trade. Indeed, this country depends upon it for its prosperity. However, we must not allow ourselves to be kidded that the situation that we should like to see already exists. Despite the fact that President Reagan held firm against a surge of protectionism in the United States, there remains the possibility of new measures in the future, with all the dangers that these present—that goods could be diverted towards our markets.
  The new MFA will last for five years. That in itself will provide stability, which can only be good. We should use that time to try to persuade those with less open markets than our own to engage in play fair. At the end of the day, we must be prepared to be tough with countries like Korea. At the end of the day, too, we cannot give a commitment, as the west Yorkshire end of the Liberal party would like us to do, that MFA 4 represents the end of the road for these arrangements. To do so would invite our competitors to string out their excuses for the delays in becoming more open to our goods, up to the point where they would no longer need to make any excuses. One should not play one's cards when there is no need to do so, and when others are keeping theirs close to their chest.
  In the mean time, it is a pity that some people are so wedded to the idea of gloom and doom in the textile industry that they react to almost any news with condemnation. Mr. Alex Smith, chairman of the TUC textile committee, was wrong to react so bleakly to the signing of the agreement. The people to whom I talk in the textile industry tend not be optimists at the best of times, but their realistic assessment was that what was signed in Geneva was acceptable, bearing in mind that many people wanted to see an end to such arrangements.
  The textile industry has pulled itself up by its bootstraps, by its own efforts. Let us admit that some of the criticisms that were made a few years ago of our marketing and fashion skills were justified, but now our goods do not just have a good reputation in quality terms, they are much more fashionable and can compete with the best from Italy and other countries.
  If one visits textile departments such as those at Huddersfield polytechnic, one comes across enthusiastic people who can transmit that enthusiasm to the young people considering a career in the industry. It is their future about which we should be concerned, and the new MFA will help to ensure that the textile industry is still around and able to offer a career in years to come.
  10.51 pm
  Mr. Richard Wainwright: As to the documents that were provided in the Library for the debate, I accept the apologies that the Minister was good enough to give freely. He is aware, as I am, that it would not have required superhuman labour to put an English translation in the Library in the latter part of last week.
  The hon. Member for Livingston (Mr. Cook), who opened for the Labour segment of the Opposition, seemed positively jealous of the amount of talent in the international trade in textiles that the Liberal party is able to deploy. The fact that on previous occasions such colleagues as my hon. Friend the Member for Yeovil (Mr. Ashdown) has led for us does not mean that every time we debate these matters he is sent in to bat number one. As

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  it is now rather more than 20 years since I was elected for the traditional textile and Socialist seat of Colne Valley, I do not feel particularly modest, although always nervous, in addressing the House.
  As the House knows, the concept and system of the MFA was devised first to provide some traditional shelter, and every MFA document down the years has stressed the temporary nature of the system for our important and varied textile industry, so that it could re-equip, regroup and adjust itself to contemporary world conditions. It also aimed, to quote the 1974 MFA, which was typical, to
  "achieve the expansion of trade, the reduction of barriers to such trade, and the progressive liberalisation of world trade in textile products".
  I am glad to acknowledge freely that MFA 4, which the alliance has always recognised was necessary and timely, and on which we have had admirable tuition always from my hon. Friend from across the Pennines, the Member for Rochdale (Mr. Smith), embodies to a substantial, if not a perfect, extent, the concept of liberalisation of world trade in textiles. It is more relaxed in any of its provisions than its predecessors, and we in the alliance welcome this.
  Mr. Max Madden: Will the hon. Gentleman confirm that a policy document was launched by the Liberal party on 30 July entitled
  "Liberals launch strategy for Textile and Clothing Industry"?
  I believe that the report was launched by the hon. Member for Yeovil (Mr. Ashdown) and that it urges that the next multi-fibre arrangement renewal be the last and states:
  "The British textile and clothing industries deserve better".
  Would the hon. Gentleman confirm that that remains Liberal party policy or is he enunciating a new policy on behalf of the alliance tonight?
  Mr. Wainwright: I shall come to that. I have never been accused in the House of holding back Liberal policy. Indeed, I am proud to proclaim it. It is odd that the hon. Member for Bradford, West (Mr. Madden) should leap in so quickly to try to pinch my peroration from me. I shall come to the admirable document which was promulgated by my hon. Friend the Member for Yeovil in the name of our party. We are especially glad not only that the Government have had the wisdom to commission an admirable, scholarly and impartial analysis of the position of the textile trade from Professor Silberston of Imperial college, but that they have paid great heed to his findings in their attitude to the MFA through the European Community. I shall remind the House of a key passage in Professor Silberston's admirable report:
  "Taking all considerations into account, the benefits to the economy as a whole of relaxing the MFA would appear to outweigh the costs. Once the necessary adjustments have been made, the economy as a whole should benefit, although considerable problems would certainly arise for the textile and clothing industries."
  Because the "Government have failed to provide for the inevitable problems of some parts of the textile, and to a lesser extent the clothing, industries, we cannot join in the smug self-satisfaction of the Government motion. Professor Silberston was frank and correct in claiming that the economy overall would benefit from what we now have as a relaxed MFA but there will be some serious problems for some parts of the textile and clothing industry. The Government should have taken that on board as well.
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  There are some more welcome parts of the new MFA. We thoroughly approve of the exemption from any quota limit whatever, of such poor countries as Bangladesh, Guatemala, Uruguay, Haiti, Mexico and Colombia. It is certainly a step forward to have such an impressive list of countries which are now to be allowed to send their exports to the Community and other parts of the western world without any hindrance. We hope that one result of that will be to check the notable decline of the developing countries' share of imports of textiles into this country. As hon. Members will know, that has fallen in recent years from 34·5 per cent. of our United Kingdom imports of textile and clothing in 1976 to a mere 27·5 per cent. in 1984. That is not much of a tribute to liberalisation of expansion of international textile trade and not much contribution to getting the appalling weight of debt off the shoulders of the extremely poor and deprived countries.
  I would like to welcome the disappearance on new year's day, as a result of MFA 4 and the bilaterals accompanying it, of an iniquitous restriction which the Government placed on the import of shirts from Bangladesh—of all poverty-strickeen and heavily unemployed countries—as recently as July 1985. To have got rid of that is to have got rid of a serious blot on Britain's reputation as a good neighbour in world trade.
  In contradistinction to the Labour amendment, I point out with satisfaction that those suppliers with notably open home markets—I refer to such countries as Hong Kong and Singapore—have had their virtue rewarded in the MFA by being permitted higher growth rates than those of closed economies such as South Korea, Taiwan, and so on. These countries suffer under MFA 4 as a result of their narrow, selfish and protectionist policies, so they should suffer as a result. I am surprised that the Labour amendment implies that that is not happening.
  With some regret, I now refer to the amendment from the Labour segment of the Opposition. I find it intolerable that countries that are burdened down with debt to Western moneylenders—countries that in the last 12 months, have sent more money back to the West than it has lent them, countries whose blood we and other rich countries are sucking—should be lectured in the Labour amendment about the necessity for them to establish social development and good working conditions. Of course they should. We all want good working conditions throughout the world. It is not the place of moneylenders, who are contributing to the depths of depression of these countries, to tell them how to organise their social frameworks or their working conditions.
  Mr. Stuart Holland rose—
  Mr. Wainwright: I shall not give way. I have given way generously, and it took an enormously long time. I hope the hon. Gentleman will catch the eye of the Chair.
  Mr. Cyril Smith: Will my hon. Friend give way for a second?
  Mr. Wainwright: To my hon. Friend, of course.
  Mr. Smith: I ask my hon. Friend to advance a theory about why Labour Members will not press their amendment to a vote tonight. Is it because they do not agree with it, or because of the point my hon. Friend has just made, or because only six of them are attending the debate?
  Mr. Wainwright: My hon. Friend is as percipient as always. I am grateful to him for assisting my argument. There is an element of moan and groan in the Labour amendment. Why do not hon. Gentlemen listen to the increasingly robust attitude of some of the more go-ahead textile producers in this country? For example, Viyella proudly proclaims and makes no secret of the fact that it is willing to take on any country in providing value for money in the form of the textiles that it produces so well. Only last week, I was glad to hear the great firm of Dawson International, which is not by any means wholly occupied in the quality end of the trade—it has some very run-of-the-mill cloth producers in its group—say that it, too, was prepared to take on any of the low-cost producers and out-perform them in their line of goods. That kind of robust attitude will stand up to the depressing influence of the Government's economic policies.
  The situation would be much more bearable for some of our textile companies if the Government were to expand the economy and bring down their record rates of real interest, which are the enemy of companies that invest in modern textile plants, except for those companies with cash mountains. Of course things would be better if the Government were more robust in their anti-dumping policies. We in the alliance parties have still not given up hope of the Minister. He has a more robust attitude against dumping than his predecessors did. We still want to see the fruits of his labour. I make no secret of the fact in concluding—
  Mr. Robin Cook: The hon. Gentleman seemed to be about to conclude. Before he finishes his remarks, I press him on the question that was put to him earlier. It appears that he takes the view that the British textile industry is moving to a position in which it can take on all comers. Before the hon. Gentleman lapses into French so that we cannot follow the latest twists in Liberal party policy, will he make it clear whether the Liberal party would favour an extension of the MFA when MFA 4 expires?
  Mr. Wainwright: I am immensely flattered by the zest with which Labour Members pursue Liberal policy. How wise they are to pay such close attention to it. The very next line in my notes contains the warning about which my hon. Friend the Member for Yeovil has often spoken. The industry should be given a fair warning and reasonable time to prepare. The alliance believes that MFA 4 should have been explicitly announced as the last one. After all, it is lasting for five years, a year longer than the previous one. We have no quarrel with that, but we believe that, in the interests of ordinary trade planning, it is necessary that the industry should be given a warning.
  I am astonished at the recklessness of the hon. Member for Keighley (Mr. Waller), who seemed to think that there was no need to sound a warning to the industry, that the Government could reserve their position and, if they decided to have no MFA in 1991, that the industry could take it on the chin. We do not believe that. We believe that the industry should be given time to plan. I remind the House that by 1991 the industry will have had 17 years of well-deserved shelter from the full blast of world competition. That is surely enough, and it has proved to be enough, for the robust and enterprising companies to become prepared to play their part fully in the open market.
  I must admit that I represent an area in which the wool textile industry has been receiving purely nominal benefit
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  in recent years from the MFA. It is now so fully occupied that I have received virtually no representations from my constituency about the new MFA either way. I acknowledge that that is something of a privilege. The alliance is well aware that sections of the textile trade will find adjustment much more difficult. We are glad that they now have five full years in which to prepare to take their place as the self-reliant industries that I am sure they wish to be.
  11.7 pm
  Sir John Farr: I do not want to follow too closely the remarks of the hon. Member for Colne Valley (Mr. Wainwright), because his statements cannot stand up to close scrutiny. How can one even contemplate doing away with the MFA or saying beforehand, as the alliance apparently does, that this will be the last one, when world competitors would send to this country goods made by child labour? Until there is competition on equal ground, as the hon. Member for Livingston (Mr. Cook) said, with an arrangement incorporating a social clause specifying the conditions under which these goods are to be made—at least imposing a minimum standard—no British firm, however modern its technology and machinery, will be able to compete. Britain needs to be protected by a strong multi-fibre arrangement for as far ahead as we can imagine.
  This is a critical industry. It is very localised. I think that in the east midlands 20 per cent. of the 500,000 or so people in the textile and clothing industry are working. During my recent visits, especially in Leicester, I have been continually asked by management and people on the shop floor to stress whenever I get the chance the need for some form of regulation brought about by the MFA if the industry is to continue. We do not want it obliterated by cheap imports. It has modernised tremendously, at great cost, and often, regrettably, using very superior and expensive Italian and German machines—these days, unfortunately, British machines are rarely used. Even so, a firm in Leicester recently had to shut down five or six of its most modern Italian machines, costing more than £150,000 each, because they could not be operated economically. For the time being, they have been put in mothballs.
  The industry is very important to the east midlands. Production and output in textiles and clothing has improved steadily, but is still well below the level of the late 1970s. In 1979, the output indicator was 117·9 but today it is only 104. Although some ground has been made up since the depression in the intervening eight years, there is still no certainty that the present position will be maintained without constant and regular monitoring of our competitors' imports. That is why I particularly welcome this MFA.
  However, I would have welcomed a social clause, as that would have been a sensible step. In the period leading up to the termination of this MFA and the next regime—for orderly world marketing there will have to be some form of regime for the foreseeable future—I hope that the Government will prepare to take big steps towards encouraging supplier countries to enter into some sort of social clause relating to the conditions of their employees.
  I had thought that my hon. Friend the Minister would mention BRITE, or basic research into industrial technology for Europe. That is of critical importance to our textile and clothing industry. Basically, BRITE is

  883
  funded by no less than £392 million of EEC money, covering the same period to the end of, I believe, 1991 as MFA 4 covers. That huge sum of money is available for research into all the modern applications that are so necessary if our industry is to stay abreast of events.
  My hon. Friend the Minister, who is so diligent in these matters, will be familiar with BRITE. I hope that he will give an assurance that British companies get their share of that money. There has already been co-operation between a French firm and three Portuguese companies, which are spending a lot of that money on putting robots into the production line for Portuguese textiles. Other firms are combining. There is an application with robotic connections involving two firms in Belgium. They are working hard on trying to modernise their production techniques. A lot of money is also available for specific schemes in relation to introducing modern computer technology and improving existing computer technology in the production of textiles and clothing.
  I hope, therefore, that in welcoming MFA 4, my hon. Friend the Minister will comment on BRITE. It is vital to the nation that we should get our share of the European money available.
  11.15 pm
  Mr. Max Madden: First, I declare my interest as a member of the Transport and General Workers Union, which represents many textile workers. This brief debate takes place against a backdrop of massive job losses in the textile and clothing industry during the Government's lifetime. There have been widespread closures and major reorganisation. If that is appreciated, it helps to dispel the allegations that are made by many that the multi-fibre arrangement is unduly protectionist. It puts into perspective the hesitant calls that have been made by some sections of the alliance that the MFA should cease at the end of this agreement.
  I join the hon. Member for Harborough (Sir. J. Farr), who expressed regret that there is no social clause within the arrangement. It is my information that the debate on a social clause took all of 30 minutes in the recent discussions. That is regrettable, because there is mounting concern, certainly within the trade unions which represent textile and clothing workers, that there should be a concerted effort to try to improve the wages and conditions of those who work in the textile industry in the developing and least developed countries.
  A document was published by the TUC in 1985 entitled "A Fair Balance in textile and clothing trade", a passage of which reads:
  "in some instances the benefits of industrialisation are not passed on to the workers in textiles and clothing. This judgment is supported by the appallingly low wages earned by workers in many supplier countries…there is increasing evidence that the supplier countries are competing amongst themselves to attract foreign investment by suppressing pay. The widespread appearance of free trade zones in these countries over the last five to ten years, in which companies receive considerable tax concessions from host countries and in which workers are frequently denied employment rights laid down in ILO Conventions on Minimum Labour Standards, is a worrying phenomenon"
  Indeed it is. We in the Labour party are extremely anxious to ensure that in future we receive in the United Kingdom
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  an increasing share of textiles that are produced by the least well-off countries. That is a central part of our policy towards the textile industry.
  Mr. Stuart Holland: Does my hon. Friend not agree that the official Liberal spokesman on these matters, the hon. Member for Colne Valley (Mr. Wainwright), in claiming that the Labour party wishes to reduce imports from the heavily indebted countries, referred to Singapore and Hong Kong, which are not third world countries with heavy debts? It is precisely by planning a shift in import trade towards the least developed countries that the objectives of which my hon. Friend is talking can be fulfilled, and not by the out-dated Manchester laissez-faire approach.
  Mr. Madden: That is right. The more that we debate the difficulties of the industry, the more we come to see that most difficulties cannot be overcome by leaving the industry to the mercies of the free market. We must look increasingly towards the advantages and merits of planning. That is what the debate is all about and that is—
  Mr. Wainwright: I am grateful to the hon. Gentleman for giving way. A mere glance at the record in the Official Report, when it is published, will showed that I never cited Singapore or Hong Kong as countries burdened by debt. That was not part of my argument. I was referring to countries such as Bangladesh and Guatemala.
  Mr. Stuart Holland: I am glad to get a retraction from the hon. Gentleman.
  Mr. Wainwright: I was correcting the hon. Gentleman.
  Mr. Deputy Speaker (Sir Paul Dean): Order. The hon. Member for Bradford, West (Mr. Madden) has the floor.
  Mr. Madden: Thank you, Mr. Deputy Speaker. I am sorry to intervene in the debate between my hon. Friend the Member for Vauxhall (Mr. Holland) and the hon. Member for Colne Valley (Mr. Wainwright).
  Mr. Robin Cook: Will my hon. Friend give way?
  Mr. Madden: No. I must work towards a conclusion.
  I understand that the Governments of America and Sweden permit official observers from the trade unions representing textile and clothing workers to be present at negotiations. It would be a welcome advance if the British Government, in future negotiations that are of central interest to those who rely on these industries for their livelihoods, were to permit their trade unions to attend the talks as official observers.
  What is the Government's policy towards the textile and clothing industry? We are so often treated to dollops of bland complacency served up by Ministers as an excuse for a coherent policy. In the closing minutes that are available, will the Minister tell us the Government's policy towards that important industry? It remains a major employer and exporter and a vital industrial activity within some of the most hard-pressed areas of Britain.
  If low pay guarantees jobs and job security, my area and many others where the textile industry has been operating for many years, paying below the average, should have below-average unemployment. The reverse, of course, is the truth. West Yorkshire and Bradford have unemployment that is way above the average. That exposes the myth, peddled by the Chancellor of the Duchy of Lancaster and others, that low pay creates jobs and job

  885
  security. We have only to look at the prevalence of low pay within the British textile and clothing industries to dispel that notion completely.
  What is the Minister doing to assist the British textile and clothing industry to take full advantage, for instance, of resources that are available from the EEC? What is he doing for those areas of Britain which are looking at ways of securing help from the EEC to expand their textile and clothing activities?
  What is the Minister doing to improve training? I recently talked to the management of a firm in Bradford which is proposing to move from Bradford to Doncaster because it claimed that it cannot recruit the skilled machinists in Bradford. That is astonishing.
  I have talked within the past few days to another textile employer in Leicester who also complained that he cannot secure skilled workers in his firm. What are the Government doing to ensure that adequate training takes place to enable such firms to find the skilled work force that they require to expand in areas which are suffering from appallingly high rates of unemployment?
  What is being done further to improve design? References have rightly been made tonight to the improving design capability of the British textile and clothing industry. But we all know that further advance must be made. What are the Government doing to enable local authorities to open design shops where our products can be shown not only to the British market but to those who seek to sell abroad?
  Finally, I again ask the Minister to tell us what co-operation there is between the Department of Trade and Industry, the Department of Employment and other Departments which are charged with regional assistance and development, combating unemployment and trying to help industrialists and manufacturers not only to stay in business but to expand? What co-ordinated policy-making is taking place and what assistance is being given on the ground?
  The industry, because of its importance, is anxious to obtain information on the Government's objectives. There is grave concern about the GATT rules and rumours circulating within the industry that the British textile and clothing industry will be sacrificed for concessions for financial services and agriculture.
  Mr. Alan Clark: Not true.
  Mr. Madden: The industry is demanding clear and precise information about the Government's objectives for the British textile and clothing industry. They are looking for coherent and co-ordinated policies and for positive assistance. It is prepared to help itself, but it wants to be able to do that within a framework where the Government are taking a lead and are giving leadership.
  The British textile industry has suffered much in the past and looks forward with some guarded optimism to the future. It is looking to the Minister, his Department and the Government to give it clear information. The closing stages of the debate will give the Minister an opportunity to give us some idea of the future of the British textile and clothing industry.
  11.25 pm
  Mr. Geoff Lawler: I do not know the textile industry managers, directors or workers to whom the hon. Member for Bradford, West (Mr. Madden) has
  886
  been speaking. They are certainly not those to whom I have been speaking, who tell me that they want the Government off their backs and are proud of the fact that in recent years they have proved they can manage their own affairs.
  Mr. Martin M. Brandon-Bravo: Is it not a fact that the Opposition want the return of training levies, when they are the last thing the textile trade wants? Most companies know how to do in-house and group training.
  Mr. Lawler: My hon. Friend is right. The last thing the trade wants is a further financial imposition when companies are participating fully, for example, in the YTS and other schemes to great effect and have developed close links with colleges and schools to ensure that the shortage of skilled labour in the industry is overcome.
  The industry cannot be accused of shielding behind the MFA to protect its inefficiencies. What was once an industry synonymous with empty mills, large-scale redundancies and perhaps not perfect designs, slow deliveries and less than speedy initiatives in developing export markets is now an industry that is synonymous with developing the use of new technology, production and training techniques and, above all, successfully breaking into new markets and achieving record export earnings last year.
  It cannot be said that the MFA curtails exports, for the reverse has been the case. Under the MFA, imports have grown by 16·5 per cent. in a market that has increased by only 2·5 per cent. Investment in the British industry last year increased by 12 per cent., output was increased and productivity achieved a 40 per cent. increase, whereas the rest of manufacturing industry averaged only 28 per cent. It is wrong to describe it as a sunset industry. It is not only surviving, but leading the way in a manner which other sectors of British industry would do well to follow.
  But restricting the industry's growth is a denial to it of access to many foreign markets. The new protocol will be most welcome if it leads to markets being opened up. There are too many countries where the British textile industry cannot get a look-in. I applaud the moves in the protocol to reward countries that open their doors to our industry by allowing them more generous access to our market. However, I hope that that move will not be diluted by rewarding countries that do not deserve such a reward.
  We have allowed South Korea a 3·4 per cent. increase in its quota for sweaters. That means that in 1987 that country will be allowed 3·4 per cent. increase on 11,500,000 sweaters, which will be an awful lot more sweaters coming into this country. South Korea will be allowed a 2 per cent. increase in its wool cloth quota. In other words, its industry will be allowed to export 155 tonnes of the material to Britain.
  In response, South Korea has made promises to liberalise its market to British textile goods from 1 July. The industry in Britain is still holding its breath, waiting for the issue of those licences. The one concession for our industry announced so far by South Korea means that 24,000 sq m of wool cloth will be allowed into that country in the six months July to December of this year. That compares with a massive 600,000 sq m of wool cloth that will come into Britain from South Korea next year as a result of the recently negotiated bilateral agreement. Our cloth exports to South Korea will be subject to a 60 per

  887
  cent. tariff, while cloth entering Britain will be subject to a 13 per cent. tariff. There is nothing in prospect for the British industry from the agreement with South Korea, at least until 1 January 1988. I hope that the Commission, with backing from the Government, will consider threatening—and, if necessary, carrying out those threats—the renegotiation of bilateral agreements if the other countries do not honour the promises that they have made.
  The same applies to Brazil. There is an EC quota of 13,000 wool tops. The total production in Brazil is only 14,000 wool tops, yet our access to Brazil is effectively closed. If anything got in, it would be subject to a tariff of 105 per cent. Yet we allowed Brazil a 19·5 per cent. increase in its exports to Britain. There is inequality, and it must be remedied if British industry is to have a fair chance.
  Even modest increases in allowing access to our overseas markets could mean a significant difference to the prospects of the British industry. If Korea allowed an average of £1 a head more for domestic consumption of British textile goods, if the same was allowed in Taiwan, and if in Brazil only 50p per head was allowed, it would mean a massive 4,500 jobs in Britain. That is a measure of how much the industry could benefit from the genuine liberalisation of world trade.
  Perhaps the greatest danger round the corner is the newly elected Democratic majority in the United States Senate. That majority was elected on a platform of protectionism, which would not only cause great damage to British industry but would set off a new, escalating trend of protectionism throughout the developed world. If that happens—I sincerely hope that it does not—the Commission must be ready to respond and to renegotiate bilateral agreements if our partners in those agreements increase their protectionist measures.
  The wool textile industry still employs about 14,000 people in Bradford. It can compete on price, quality, delivery and design. I hope that the new multi-fibre arrangement will be used positively and constructively by the Government, through the Commission, to ensure that the long-term objective, with which none of us would disagree, of liberalising trade is achieved through bilateral agreements. But, if necessary, they must be renegotiated to bring pressure on the parties to honour their promises and to allow British textiles into those markets. The industry will expand, if only it is given the chance.
  11.33 pm
  Mr. James Lamond: I welcome the Minister's success in obtaining this MFA 4. I do so with some reservations, but I recognise his difficulties. The employers in the industry will give the arrangement a fairly warm welcome, but the Minister will wish to examine closely the small print in the arrangement, which in this case relates to the bilateral agreements. They may already have had the opportunity to consider the arrangement, but they will have to study it closely and see how it works in practice before they finally decide to accept it.
  I wish to comment on the speech of the hon. Member for Colne Valley (Mr. Wainwright). I almost said my hon. Friend the Member for Colne Valley, because he was a neighbour of mine for many years until the boundary
  888
  commissioners, unkindly, separated us by moving us both. He accused the Labour party of telling moneylenders that they should accept a social clause. He said that it was wrong for us to expect moneylenders to do that and that we were wrong to lecture them. But he lectured them, because he spoke about the need to help developing and recently wealthy countries.
  It is easy for those who are comfortably off and have comfortable jobs to demand further sacrifices, not from the employers but from the workers. Those workers are low paid and have difficulty in finding alternative employment because this important industry is localised, as my hon. Friend the Member for Livingston (Mr. Cook) said.
  In my constituency, the only employer of any importance until recently was connected with the textile industry. Those employed in that industry who lost their jobs found it difficult to find alternative employment.
  We cannot rely on the modest improvement in the industry's economic position over the last few years. I attended a press conference at Maple mill, Oldham, in January when Courtaulds announced a substantial investment programme of £4·5 million for some of the mills in the Oldham area. I welcomed that, because it meant that at least there would be a continuation of some employment in the industry. But at the end of that investment programme, fewer jobs will exist. The workers will not receive help from the modest improvement in output. Modernisation which leads to improvement also results in fewer jobs. I support the call by my hon. Friend the Member for Bradford, West (Mr. Madden) for the Government to examine that aspect of the agreement.
  If we are to liberalise trading—I do not disagree with that, because it is the proper course—we must consider the consequences for those workers who rely on textiles for their employment. The Government must consider how they can encourage new employment in the areas which are losing out.
  If we are to sustain the industry we must consider the two things which advantage those who export to Britain. One advantage has been dealt with already—the protection which some countries give their industry. The other advantage is the lower wages and poor conditions which apply to workers in some other countries. A social clause is necessary. I hope that the Minister will bear that in mind, even though he has been unsuccessful so far.
  Mr. Peter Pike: My hon. Friend mentions two matters. Will he accept that a third matter is important? I refer to labelling. This is important to the textile industry because names similar to English names are often used. If the country of origin does not feature on labels, further problems will be caused.
  Mr. Lamond: I completely agree. I once had the good fortune to come up in the draw for private Members' Bills and I tried to introduce a Bill about that matter because of its importance. Of course, my Bill was lost.
  The Minister should not think that the protocol will wipe the slate clean, and that now that he has an MFA 4, he can go back to sleep over the matter of textiles. The problem will still exist and many more problems may develop as the bilateral agreements become clear. I welcome the Minister's success. He has held his job for somewhat longer than some of his predecessors, but he should not rest on his laurels. We will be back to see him about the matter in the light of developments.
  11.40 pm
  Mr. Alan Clark: With the leave of the House, I should like to reply. I do not know how to interpret the reference by the hon. Member for Oldham, Central and Royton (Mr. Lamond) to the length of time that I have spent in this job. I shall not pursue that point now.
  This has been a useful and constructive debate. I listened carefully to the points that were raised and I am sorry that I do not have longer to answer all of them. In common with the hon. Member for Oldham, Central and Royton, I feel that the subject will remain with us and perhaps we shall have the opportunity to discuss it at greater length on another occasion.
  The hon. Member for Livingston (Mr. Cook) raised the question of reciprocation, a point taken up by many other hon. Members. The element of reciprocation at present has been essentially passive. We have been liberalising in the direction of those countries that allow better access to our imports, and we have been trying to restrict the level of liberalisation of those countries that have resisted them. Of course, a far more positive and active level of reciprocation is what I hope will be achieved, and that is what we shall insist on in the GATT negotiations where we would seek positive reduction at every level of tarrif barriers against our imports. The House will note that this agreement lasts for five years and that should bring it substantially over the period of the GATT negotiations so that our team in the GATT is not faced with the prospect of the arrangement falling off the edge half way through them. It will have cover throughout and in that context I hope that we shall be able to negotiate a significant level of reciprocation.
  The level of support that the Government give to the textile industry is a matter that I should like to dwell upon, but I shall have to omit the details. The support is
  890
  extensive and I am satisfied that it covers aspects of design, fashion colleges and universities. I should like to consider the point made by hon. Members from both sides of the House.
  I am aware of the concern that has been expressed under the broad heading of the so-called social clause. The clause would mean the sanction of further restrictions on trade if social and working conditions were not improved. That begs many questions: to what standard would they be improved? How would it be enforced and monitored? It can be argued that social and working conditions are more likely to be improved by allowing a country to sell its goods than by preventing it from doing that. However, I must state that I have noted the concern that has been expressed. I do not reject that possibility out of hand. Anxiety has—
  It being one and a half hours after the commencement of proceedings on the Motion, MR. DEPUTY SPEAKER put the Question, pursuant to Standing Order No. 14 (Exempted Business).
  Question, That the amendment be made, put and negatived.
  Main question put and agreed to.
  Resolved,
  That this House takes note of European Community Document No. 9809/86 on renewal of the Arrangement regarding international trade in textiles (MFA), and of the Community's bilateral textile agreements and of the Department of Trade and Industry's unnumbered Explanatory Memorandum of 24th November 1986 on the provisional application of bilateral agreements on trade in textile products between the European Community and certain third countries; and welcomes the Government's achievement in the conclusion of a new Protocol extending the Multi-Fibre Arrangement for a further five-year period and the satisfactory negotiation of 26 new bilateral agreements under the Arrangement.

  House of Commons Disqualification Act 1975
  Motion made, and Question proposed,
  That Schedule 1 to the House of Commons Disqualification Act 1975 be amended as follows:

  House of Commons Disqualification Act 1975

    PART I OF SCHEDULE I
    1. The following entry shall be omitted—
    'Umpire or a Deputy Umpire appointed for the purposes of section 9 of the Reserve Forces(Safeguard of Employment) Act 1985.'.

    PART II OF SCHEDULE I
    2. The following entries shall be omitted:—
    'The Advisory Board for the Research Councils.
    The British Film Fund Agency.
    The Forestry Commission.
    The Gas Consumers' Council.
    The Livestock Marketing Commission for Northern Ireland.
    A Medical Board or Pneumoconiosis Medical Board constituted for the purposes of Part III of the Social Security Act 1975 or Part III of the Social Security (Northern Ireland) Act 1975, including any panel constituted for the purposes of any such Board.
    The Mental Health Review Tribunal for Northern Ireland.
    The National Consumer Council.
    The National Enterprise Board.
    The National Film Finance Corporation.
    The National Research Development Corporation.
    The Northern Ireland Fishery Harbour Authority.
    The Staff Commission established under section 7 of the Greater London Council (General Powers) Act 1979.'.

    PART III OF SCHEDULE I

      Additional entries
      3. There shall be inserted at the appropriate places:—
      'Adjudicating medical practitioner or specially qualified adjudicating medical practitioner appointed under or by virtue of Part III of the Social Security Act 1975 or Part III of the Social Security (Northern Ireland) Act 1975.
      Chairman of the Advisory Board for the Research Councils.
      Chairman of the Agricultural and Food Research Council.
      Chairman of the British Library Board.
      Chairman of the Economic and Social Research Council.
      Chairman of other full-time member of the Forestry Commission.
      Chairman of the Gas Consumers' Council.
      Chairman or Deputy Chairman of the General Consumer Council for Northern Ireland.
      Chairman or Deputy Chairman, in receipt of remuneration, of the Historic Buildings and Monuments Commission for England.
      Chairman of the Letchworth Garden City Corporation.
      Chairman of the Livestock Marketing Commission for Northern Ireland.
      Chairman of the London and Metropolitan Government staff Commission.
      Chairman of the Mental Health Commission for Northern Ireland.
      Chairman or Deputy Chairman of the National Consumer Council.
      Chairman of the National Enterprise Board.
      Chairman of the National Research Development Corporation.
      Chairman of the Natural Environment Research Council.
      Chairman of the Science and Engineering Research Council.
      Director of Royal Ordnance p.l.c.
      Managing director of the National Research Development Corporation.
      892
      Member of a panel of persons appointed under Schedule 5 to the Rent (Northern Ireland) Order 1978 to act as chairmen and other members of rent assessment committees.'.

      Entries omitted
      4. The following entries shall be omitted:—
      'Paid Chairman of an Area Transport Users Consultative Committee established under section 56 of the Transport Act 1962.
      Chairman of the Dental Committee of the Northern Ireland Central Services Agency for the Health and Social Services.
      Chairman of the Domestic Coal Consumer Council.
      Director of Britoil p.l.c. nominated by a Minister of the Crown or government department.
      Director of Cable and Wireless Public Limited Company nominated by a Minister of the Crown or government department.
      Director of the Cereals Committee Limited appointed by a Minister of the Crown or government department.
      Director of any company in receipt of financial assistance under section 5 of the Films Act 1985, being a director appointed by a Minister of the Crown or government department.
      Director of the successor company within the meaning of Part V of the Telecommunications Act 1984, being a director nominated or appointed by a Minister of the Crown or by a person acting on behalf of the Crown.
      Industrial Assurance Commissioner or Deputy Industrial Assurance Commissioner appointed under the Industrial Assurance (Northern Ireland) Order 1979.
      Any member of the British Library Board in receipt of remuneration.
      Any member, in receipt of remuneration, of the Historic Buildings and Monuments Commission for England.
      Member of the Board of the Royal Ordnance Factories.'.

      Other amendments
      5. (1) In the entry beginning 'Boundary Commissioner or Assistant Boundary Commissioner', for 'Assistant Boundary Commissioner' there shall be substituted 'Assistant Commissioner'.
      (2) In the entry 'Chairman of the Police Authority for Northern Ireland', after 'Chairman' there shall be inserted 'or Vice-Chairman'.
      (3) For the entry beginning 'Chairman of any of the Post Users' Councils' there shall be substituted—
      'Chairman of the Post Office Users' National Council.'.
      (4) in the entry 'Chairman of the Prescription Pricing Agency', for 'Agency' there shall be substituted 'Authority'.
      (5) In the entry 'Director of British Telecommunications plc appointed by a Minister of the Crown or government department', after 'plc' there shall be inserted 'nominated or'.
      (6) In the entry 'Member appointed by a Minister of the Crown of the Agricultural Wages Board for England and Wales or of an agricultural wages committee established under the Agricultural Wages Act 1948, or chairman of such a committee' the words from 'or of an agricultural wages committee' onwards shall be omitted.—[Mr. Luce.]
      11.44 pm
      Mr. Alan Williams: It is typical that such a controversial measure should be moved at this time of night without any explanation. I should like to ask the Minister a probing question. Why is the uprating in relation to income levels linked on this occasion to earnings rather than to the cost of living? Is that the normal practice, or is it an innovation? If the latter, what is the justification?
      11.45 pm
      The Minister of State, Privy Council Office (Mr. Richard Luce): I appreciate that question. As the right hon. Gentleman knows, when the Act was adopted in 1957 we started with a level of £500. That has been adjusted

      893
      from time to time. The broad indicator has been the adjustment in line with the earnings index. Therefore, I thought it right that since the last sum was set at £4,000 in 1983 we should take into account the earnings index in that time scale. I have acted consistently with previous Governments' policies and followed that particular indicator.
      Question put and agreed to.

  European Assembly (Elections)
  11.46 pm
  The Parliamentary Under-Secretary of State for the Home Department (Mr. Douglas Hogg): I beg to move,
  That the draft European Assembly Elections Regulations 1986, which were laid before this House on 18th November, be approved.
  The regulations are needed to take account of the changes in electoral law made by the Representation of the People Act 1985. They represent a further step in the process of following up all the consequences of the 1985 Act. The House may recall that some provisions in that Act, notably the increase in the deposit and the extension of the franchise to overseas electors, are already in place.
  The present regulations introduce several changes, but I shall mention only three substantive changes. The first deals with absent voting. Schedule 1 to the regulations lists provisions in the 1983 and 1985 Acts which are to apply to Assembly elections with any necessary modifications. The new provisions on absent voting at parliamentary elections introduced by the 1985 Act will also apply to Assembly elections.
  The second deals with deposits. Schedule 1 also has the effect of increasing the deposit at Assembly elections to £750. The House will remember that in 1979 the deposit at Assembly elections was fixed at £600. Schedule 2 applies provisions in the Representation of the People regulations and the corresponding regulations for Scotland.
  The third major change deals with combined elections. Schedule 3 makes detailed provision, similar to that for parliamentary elections, for the conduct of any Assembly election, the poll at which is combined with a parliamentary or local government election.
  Subject to the regulations being approved by Parliament, our intention is to make them by the middle of the month. The provision on absent voting would then come into force on 1 January 1987, which is the same time as they come into force for parliamentary elections. These will deal with elections held on or after 16 February 1987. The provisions on the combination of elections will come into force for any election, notice of which is published on or after 16 February 1987, again as for parliamentary elections. The increase in the deposit will apply at any election, notice of which is published on or after the fourteenth day after the regulations are made.
  These are fairly complex regulations, and I have explained only the three major changes. I commend them to the House.
  11.48 pm
  Mr. Robin Corbett: The House has previously endorsed the principle of consistency of electoral arrangements for Parliament and the European assembly elections. These regulations, which the Minister with such commendable lucidity and brevity has outlined, achieve that. The Minister explained the modest purpose of the regulations, which are complex, and the Opposition do not intend to divide the House on them.
  The regulations honour and reflect what we did in the Representation of the People Act 1985 about absent voters, proxy votes, the deposit and combined elections. On the basis of consistency, I invite the House to endorse the regulations.
  11.49 pm
  Mr. David Alton: We do not under-estimate the importance of these regulations, because they will give effect to the third round of elections to the European assembly. They contain three key points to which I should like to refer hon. Members. The first is rule 17 which says that there will be no change in the electoral system.
  The second is on page 38 of the regulations and in describing the ballot paper it says that there will be a chance to, "vote for one candidate only." That excludes an opportunity for a regional list or for any other form of proportional representation. [HON. MEMBERS: "Shame."] Page 49 of the explanatory memorandum which goes with the regulations says quite clearly:
  "Such elections are conducted in accordance with the simple majority system of elections."
  It will come as no surprise to hon. Members to know that the Liberals and the Social Democrats are opposed to the House agreeing to the terms of the regulations and we hope that the Government will agree to withdraw them and give them further consideration. Hope springs eternal, and the reason why we have to keep on pressing the Government on these matters is that it is quite clear that they would like to carry on with the cosy arrangement that has existed for far too long for European and Westminster elections.
  We do not like the way in which the regulations were brought before the House last week. In an almost surreptitious way, the Government tried to slip the regulations through to a Standing Committee. The last time we discussed these regulations was in January 1984 when they were, quite properly, debated in the House and not sent off to a quiet corner of the building where in a Standing Committee a small cosy group of people could just push them through without any ado.
  Curious as it was, that time hon. Members from all parts of the House rose in unison to block the motion and to stop the regulations from being sent to a Standing Committee. It is significant that leading members of the Government party as well as people from outside the House joined together to ensure that there would be a debate today.
  The history of these regulations goes back to the first round of the European elections, at the time of the Lib-Lab pact. The Labour Government of the day put forward two options. The first was for England, Scotland and Wales and the second was for Northern Ireland. The option for Northern Ireland was for a system of proportional representation. Presumably, that was because, when people take to the bullet and the bomb, the way to ensure that minority views are adequately heard is for the Government to introduce a fair electoral system. That seems an extraordinary way to go about things, but in this part of Britain, because we conduct our affairs in a more democratic way and without the violence that, sadly, characterises Northern Ireland, we are excluded from having the option that Parliament deemed appropriate for Northern Ireland.
  In 1977, we decided to carry on with the first-past-the-post system in European elections. Labour Members had a free vote, but members of the then Labour Government were urged to support proportional representation. Conservative Members also had a free vote. It is interesting to look back at the figures in the Official Report
  896
  for the vote at the end of that debate, because 224 hon. Members voted for the regional list option, one of the two options before the House. That figure included 147 Labour Members and 61 Conservative Members.
  Among the Conservative Members who supported us that night in 1977 were the present Secretary of State for Energy, a former Prime Minister, the right hon. Member for Old Bexley and Sidcup (Mr Heath), the present Secretary of State for Education, the Minister of State, Foreign and Commonwealth Office, the present Solicitor-General, the Minister of State, Northern Ireland Office, the Secretary of State for Defence and the Secretary of State for Scotland. We look forward to seeing them all in the Lobby with us tonight supporting us again. We know that they are always consistent in their support in such matters.
  At that time, the present Home Secretary said from the Front Bench that the first-past-the-post system had to be used in the first round of elections, but he then said that we should move to proportional representation when we had become used to European elections. During that debate in 1977 he said:
  "I say this as one who actually favours electoral reform in this Kingdom and who has spoken and voted for it accordingly."—[Official Report, 13 December 1977; Vol. 941, c. 318.]
  The delight of our party when we learnt of his appointment can be imagined.
  Mr. Deputy Speaker (Sir Paul Dean): Order. I apologise for interrupting the hon. Member, but there are fairly narrow regulations. They are concerned with the rules and practices governing the administration of elections. It is not in order to go into the merits of first-past-the-post or proportional representation. I am sure that the hon. Member will relate his remarks to the regulations.
  Mr. Alton: I shall indeed, Mr. Deputy Speaker, but on advice from the Clerks, whom we consulted on the matter, because there are references to the kind of electoral system that will be used——
  Mr. Deputy Speaker: Order. I am sure that, on reflection, the hon. Member will not in any way wish to involve the Clerks. I have made, I hope politely and kindly, a suggestion as to what is and what is not in order, and I am sure that the hon. Member will take note of that point.
  Mr. Alton: Yes, I shall, and I am grateful for your help, Mr. Deputy Speaker. I shall carefully refer to the regulations and to the explanatory note that accompanies them. Rule 17 on page 19 refers to the method of election. According to the regulations that are before the House tonight, the modifications list no change whatsoever. Our objection on these Benches is that there is to be no change. The way in which the Assembly elections will take place is set out on page 38. The colour of the ballot papers is specified. It says that people will be able to vote for one candidate only. That is another of our objections to the way in which the elections will be conducted.
  On page 49 we find the following paragraph:
  "These Regulations provide for the conduct of the election of representatives to the European Assembly in England, Wales and Scotland. Such elections are conducted in accordance with the simple majority system of elections."
  You will understand, Mr. Deputy Speaker, that that is deeply repugnant to those hon. Members who sit on these Benches.

  897
  We were pleased, therefore, when the present Home Secretary was appointed. We wrote to him and he replied in these terms:
  "Thank you for your letter of 3 September and for your kind words about my appointment as Home Secretary. My views on the principle of electoral reform have never been a secret, but they are of course personal, and not shared by the Government as a whole or by a majority in the House of Commons. I obviously therefore cannot give you the undertaking for which you ask."
  Delighted as we were by his appointment, it seems that the Home Secretary would be more of a friend to the cause of electoral reform if he returned to the Back Benches.
  We want the regulations to be rejected, first, for reasons of elementary justice. During the 1979 European elections, the Liberal party polled 13·1 per cent. of the vote. In 1984, the alliance polled 19·5 per cent. of the vote. That gained us no seats whatsoever in the European Assembly. It cannot be right that when so many people in 1979—
  Mr. Deputy Speaker: I am sorry to interrupt the hon. Gentleman again, but he must realise, as must the whole House, that I have to observe the rules of the House. These are very narrow regulations. I have to tell the hon. Gentleman once more that, although I know that he feels strongly about the method of election, he is not in order on the regulations that we are debating now.
  Mr. Alton: I refer you, Mr. Deputy Speaker, to column 1153 of Hansard of 26 January 1984 when we had a debate on these regulations. My hon. Friend the Member for Berwick-upon-Tweed (Mr. Beith) was able to put forward the kind of arguments that I am putting before the House tonight.
  Mr. Deputy Speaker: We are not debating that matter. We are debating fairly narrow regulations, and I must ask the hon. Gentleman to accept the ruling that I have now given to him twice.
  Mr. Cyril Smith: On a point of order, Mr. Deputy Speaker. If an instrument is before the House that says that there shall be no change, are we not entitled to pray in support of our case reasons why, in our view, there should be a change?
  Mr. Deputy Speaker: Not in this particular case, because it is quite outwith the regulations that we are debating.
  Mr. Robin Squire: Further to that point of order, Mr. Deputy Speaker. I think that the Chair will recognise that I rarely raise points of order. I have read the document that we are debating, and I have also seen the words that specifically state the way in which the elections should be conducted. As we know, within the Chamber, hon. Members have a wide variety of views on the matter. I say this without wishing to upset the Chair's judgment, but I should have thought that it would be difficult for a speech to be out of order that included some reference to what is in the regulations.
  Mr. Deputy Speaker: A marginal reference is not out of order, but what I had to say to the hon. Member for Liverpool, Mossley Hill (Mr. Alton) was that I understood that he would seek, at an appropriate moment, to speak about different methods of election. This is not within the regulations that we are debating, and it is my job to ensure that the debate is conducted within the rules. I am sure that the hon. Member for Mossley Hill will respond to my request.
  Mr. Alton: I will indeed, Sir.
  Mr. Cyril Smith: Further to that point of order, Mr. Deputy Speaker.
  Mr. Deputy Speaker: Order. The hon. Member for Mossley Hill has already said that he will respond to my request, so he should proceed.
  Mr. Cyril Smith: Further to that point of order, Mr. Deputy Speaker. If regulations before the House say that there shall be only one name on the ballot paper, is that not setting out the form that the elections should take, and, if that is what the regulations say, are we not entitled to argue that that is wrong and to argue why it is wrong?
  Mr. Deputy Speaker: The hon. Gentleman is certainly entitled to argue that, but not on this occasion.
  Mr. Tim Rathbone: Further to the point of order, Mr. Deputy Speaker. Without in any way challenging what you said, Sir, I would like to draw your attention to the first paragraph of the explanatory note on page 49, which I shall read out for the benefit of those hon. Members who do not happen to have the regulations in front of them, or have not yet turned to page 49:
  "These Regulations provide for the conduct of the election of representatives to the European Assembly in England and Wales and Scotland. Such elections are conducted in accordance with a simple majority system of elections."
  Surely, if that is in the explanatory note, it has been put there to explain matters to those hon. Members who are taking part in the debate. Therefore, is it not within the rights of every hon. Member to argue against that, as the hon. Member for Liverpool, Mossley Hill (Mr. Alton) has just been doing, as he does not believe in the system of simple majority elections? That must be within the terms of the draft European Assembly Elections Regulations 1986, which we are discussing. Is it not reasonable for hon. Members on both sides of the House to apply their minds and their arguments to the system of elections which may not be in accord with the simple majority system because they do not believe that that is the correct way to do it?
  Mr. Deputy Speaker: I have already said that a passing reference would be in order, but these regulations deal with the rules and practices governing the administration of the elections. They do not deal with the method of election. A passing reference to the method of election would be in order, but it would not be in order to have a long debate on the merits of the first-past-the-post system or proportional representation. The hon. Member for Mossley Hill has already accepted my ruling on that matter, and I am sure that he does not intend to pursue it any further.
  Mr. Alton: I intend to pursue the points that I have raised that are in the regulations, as you have directed, Mr. Deputy Speaker.
  On page 38, there is a proforma ballot paper which will be used if the regulations are passed. By the same token, if the House decides to reject these regulations, we would have to go away and devise some other way of doing things. My point about the ballot paper as it appears in the regulations is that it lead to the disfranchisement of large numbers of people. A total of 2·5 million people were disfranchised at the previous European election and 1·6 million people were disfranchised at the election before that. If the ballot paper in the regulations is accepted, it will be a monstrous piece of villainy and a blatant injustice

  899
  and millions of our citizens will be cheated of their democratic rights. Surely that would be totally unacceptable.
  Mr. William Cash: Would the hon. Gentleman accept that the mere fact that they have not managed to accumulate the necessary number of votes to win an election does not mean that people are disfranchised, but simply that they have lost an election?
  Mr. Alton: It is obvious that the hon. Gentleman does not care a great deal about justice. If he subscribes to the adage of Edmund Burke that there should be no taxation without representation, I am sure that he will agree that the millions of alliance voters who are completely without representation in the European Assembly should be entitled to have large amounts of tax given back to them.
  The next point about the regulations concerns the treaty of Rome. Article 138 of the treaty says quite clearly;
  "The Assembly shall draw up proposals for elections by direct universal suffrage in accordance with a uniform procedure in all member states. The Council shall, acting unanimously, lay down the approriate provisions which it shall recommend to members states."
  The treaty of Rome makes it clear how we should proceed in organising our European elections. The ballot paper before us in the regulations and the qualification on page 19 of the explanatory memorandum that there will be no change made in the modifications to the elections, make it clear that we will not comply with the treaty of Rome. The Assembly will never be able to act unanimously because the British Government refuse to accept any fair voting system. The ballot paper we are going to approve tonight will distort the entire make-up of our delegation in the European Asembly.
  Mr. John Butterfill: Can the hon. Gentleman tell me whether the Council has come forward with any such proposal that the British Government have refused to accept or, if it not true, that no such unanimous proposal has emerged to date?
  Mr. Deputy Speaker: I hope that the hon. Member for Mossley Hill will resist the temptation to widen the debate. I have already said more than once that we must stick to the regulations, which are fairly narrow.
  Mr. Alton: I do not wish to be drawn down a road which you will rule against, Mr. Deputy Speaker. The Political Affairs Committee has recently recommended the regional list system for the next round. In the March 1982 vote, about eight Conservative Members of the European Parliament voted for the regional list system. Therefore, the system has great support in Europe and in many quarters of the House.
  My next point is that the ballot paper in the regulations does not provide for more than one candidate. That will mean that we will be back to the massive Euro-seats we have used in the past two elections, which are on the simple first-past-the-post system. In a debate in 1977, the right hon. Member for Morley and Leeds, South (Mr. Rees) recommended the regional list system:
  "We are talking not about 635 constituencies, but about 81 constituencies. There is no doubt that with 81 constituencies for Europe, if we go through the normal method of election, the slightest swing will result in the parties in this country being under represented in the councils of Europe. We are talking about an Assembly that does not spawn a Government, a body which is advisory and
  900
  supervisory. The list system is appropriate for Europe. A different type of representative will be created, perhaps with a regional interest that is not in competition with the House of Commons."—[Official Report, 13 December 1977; Vol. 941, c. 416.]
  We have failed in the regulations to incorporate the thinking of the then Home Secretary into the way we go about our affairs. I regret that. Our failure to provide a fair electoral system will make us the laughing stock of Europe. It demonstrates that there is no spirit of fairness or justice in this place and that we are not committed, to the concept of a far-reaching European Community where there is harmonisation of many of the things that we should ensure are harmonised. A common voting system for the European Assembly would be one step in that direction.
  A common voting system would at least mean that people throughout the European Community vote in the same way. It would be a signal from the House that we intend to ensure that people's votes, regardless of where they live or where they come from, will count equally. In the regulations, we carry on the nonsense that we have one system for Northern Ireland, yet a different system for England, Scotland and Wales. That cannot be right. Therefore, I invite the House to reject these regulations.
  12.10 am
  Mr. Robin Squire: I did not intend to speak in this debate, but, in a sense, I have been spurred on by one or two of the observations made by some of my hon. Friends. It is important in a short speech—I assure you, Mr. Deputy Speaker, in view of your earlier strictures, that it will be a short speech—to put on record the fact that many Conservatives in the country and a number of Conservatives in the House equally regret that the system is as it is set out in the regulations.
  Mr. Keith Best: As one who stood with me to ensure that these regulations should be debated tonight, rather than be referred to the Joint Committee on Statutory Instruments, will my hon. Friend agree that, had it not been for the presence of Conservative Back Benchers who believe in electoral reform these matters would not now be debated?
  Hon. Members: That is right.
  Mr. Squire: At least some hon. Members have already given the answer to my hon. Friend. I need add no more. My hon. Friend is right.
  I regret that it has been made clear that we are the only western European country that still defends an out-dated and out-moded system. I do not wish to refer to the arguments, Mr. Deputy Speaker. I am aware of your earlier comments. It is clear that, on the central question that one should address to any electoral system, it fails. Quite simply, it produces a result that does not reflect the votes cast. I urge all hon. Members to ponder that point. It applies on many other levels that are not covered by the regulations, but it holds true in this respect. The sooner we recognise that we are losing some friends in European Governments who are otherwise supportive of us, because of our obstinacy, the sooner we may grudgingly and belatedly be dragged into a realistic, modern system.
  Mr. Deputy Speaker: Order. The hon. Member has suggested that he is out of order. Of course he is. I hope that he will either resume his seat or address his remarks to the narrow regulations.
  Mr. Squire: I am happy to say that much of the regulations are such that I would not question them. I have made clear the point of my objection. It applies to matters already covered by one or two other hon. Members. It is important to put on record that there is also objection on the Government side.
  12.14 am
  Mr. Keith Best: I ask the House to look briefly at schedule 3, which refers to the modification of Assembly elections rules. Paragraph (2)(e) of the regulations was referred to by the hon. Member for Liverpool, Mossley Hill (Mr. Alton). It states that the ballot paper
  "shall be of a different colour from that of any ballot papers used at an election the poll for which is taken together with the poll for the Assembly election."
  This encompasses a situation in which European Parliament elections take place at the same time as domestic elections. My concern is that the regulations specify that the ballot paper for the European Parliament elections will be a different colour from the ballot paper for the domestic election.
  Any elector may infer that, because the colour is different, the system of election might be different. Some people may consider that the different colour demonstrates whether the elections are fair or unfair. Many Conservative Members consider that electoral reform is necessary. We can no longer be the odd man out in Europe. Conservative Members believe that electoral reform will be inevitable. We favour that approach because we believe that it will safeguard this country from the tyranny of domination by one part or the other.
  12.15 am
  Mr. Tim Rathbone: Some minor points have not been touched on so far. One is the fact that the Labour Benches are completely denuded, except for the presence of the distinguished hon. Member for Birmingham, Erdington (Mr. Corbett), who is resting his feet on the Table. The lack of attendance is a condemnation of the Labour party's lack of interest in Europe generally—
  Mr. Alex Carlile: In democracy.
  Mr. Rathbone:—and in democracy specifically.
  There has been much discussion about the pros and cons of electoral systems for this House and for local government and assemblies, but those pros and cons tend to centre on the creation, or lack of creation, of strong government. That question does not arise in respect of elections to the general Assembly. We are not talking about a choice of Government; we are talking quintessentially about the representation of all parts of national interest and nation political belief in an assembly in Europe. It is a tragedy that the measure has not been drawn up in a way that would allow us to debate in full, according to your ruling, Mr. Deputy Speaker, the pros and cons of the various systems of election. I would not think of challenging your ruling on that, Sir, but it is sad that we cannot go into all the details of the advantages not only of proportional representation generally as opposed to first-past-the-post but different systems of proportional representation as opposed to first-past-the-post.
  Mr. James Wallace: The proposed system, which will involve marking X on the ballot paper, means that the representation from the
  902
  United Kingdom will not necessarily be truly representative. Does the hon. Gentleman accept that that has implications for our European partners? The unbalanced nature of our delegation to the European Assembly affects the committee structure within that Assembly? Therefore, the electoral system will have consequences not only in this country but in the Assembly.
  Mr. Rathbone rose—
  Mr. Deputy Speaker: Order. The hon. Member for Lewes (Mr. Rathbone) said that he he was sad that he was not able to develop the argument. Indeed, the whole House may be sad, but the fact is that it is my job to ensure that the debate is directed to the regulations. If the hon. Member were to follow that line, he would be out of order, as I am sure he knows.
  Mr. Rathbone: I would not think of doing so, Mr. Deputy Speaker, but I have to give credence to my honourable opponent, the hon. Member for Orkney and Shetland (Mr. Wallace). It seemed that there was a germ of truth in what he said, even though it may have been out of order.
  It is more than sad that we are considering a measure that will set the direction for important elections in the knowledge that, whatever the intricacies and details of the regulations, they will guarantee—it is not by chance—that the outcome of the elections will not he representative of this country. As a good Conservative, I believe that those elections would be much more sensibly conservative if we had another form of election rather than the one laid down in the regulations. I hope that the House will ensure, for the future, that we have the opportunity to debate the system as well as the details of elections.
  12.20 am
  Mr. Douglas Hogg: There is a handful of Liberal Members here tonight, which is an extremely large number for them. That makes me suppose that they intend to vote against these regulations. We need to understand what they will achieve by voting against them. The hon. Member for Liverpool, Mossley Hill (Mr. Alton) accused the Government of disfranchising electors, and said that the electors had been cheated of democratic rights. What rubbish! It is the Liberals who propose to disfranchise electors and to cheat them of their democratic rights by voting against the regulations. I shall explain why.
  One of the most important results of the regulations is that we shall extend to overseas citizens the absent voting procedure in respect of the European Assembly. Liberal Members are taking advantage—
  Mr. Alex Carlile: Will the Minister give way?
  Mr. Hogg: I shall not give way. The Liberal party may not like it, but unfortunately it will have to listen to it. The Liberals are seeking tonight to deny to British citizens overseas the ability to vote in European Assembly elections. That would be the result of their actions. I hope that the electorate understands that it is the Liberals, not us, who are cheating them of their democratic rights.
  Mr. Cyril Smith: On a point of order, Mr. Deputy Speaker. Am I right to assume that if the regulations are defeated it is perfectly possible for the Government to introduce new regulations; or are we to assume from what the Minister said that, if they are defeated, that is the end,

  903
  and no other regulations can be introduced? Alternatively, is the Minister just being his usual silly, ridiculous, childish self?
  Mr. Deputy Speaker: The hon. Gentleman knows very well that that is not a matter for me. I am under the impression that the House now wishes to come to a decision—[HON. MEMBERS: "No."]—but that is not a matter for me.
  12.24 am
  Mr. Alex Carlile rose—
  Mr. Deputy Speaker: Does the hon. and learned Gentleman wish to raise a point of order?
  Mr. Carlile: No, Mr. Deputy Speaker. I wish to intervene in the debate.
  I was quite content to hear the debate out and to let it conclude until I heard the Minister's speech. He displayed an outrageous lack of logic in suggesting that by opposing these regulations—because his fourth-form debating tactics will not put us off—we would bring them to an end, along with a review of European electoral regulations. That is absurd. If these regulations are voted down, the Government will have to produce much better regulations. Schedule 3(6) states:
  "After paragraph (1) of rule 29 (equipment of polling stations) there shall be inserted the following paragraph:—
  '(1A) The same ballot box shall be used for the poll at the Assembly election and the poll at the parliamentary election or, as the case may be, local government election.'"
  Until I heard the Minister, I had assumed that the Government adopted a fairly serious approach to the regulations. I also assumed that that paragraph was inserted to provide convenient arrangements at polling stations. But, having heard the Minister, I am extremely suspicious about the motive for this change in rule 29. Why are the Government insisting that the same ballot box shall be used for Assembly elections, parliamentary elections and local government elections? Is it an economy measure, for which one could almost forgive them? Is it so that police cars are not too full with a multiplicity of ballot boxes, again for which one could almost forgive them? The answer is that the Government believe that they can hide the unfairness of the electoral system that these regulations continue within the darkness of a single ballot box.
  It is my view—and I am sure my right hon. and hon. Friends agree—that when the electors go to the polling station, and the European elections and the parliamentary elections are taking place on the same day, they should have the advantage of separate ballot boxes for the different elections. Perhaps when there is only one election the Government can get away for the time being with perpetuating a bankrupt electoral system, partly because of the Labour party's apathy, but they should not be allowed to get away with disobeying the spirit of the treaty of Rome, ignoring the views of parliamentarians throughout Europe, casting aside the opinions of the British people and overturning democracy in this shameful way.
  Question put:—
  The House divided: Ayes 74, Noes 12.

  Division No. 17]

  [12.26 am

  AYES

  Alexander, Richard

  Nicholls, Patrick

  Ashby, David

  Ottaway, Richard

  Baker, Nicholas (Dorset N)

  Page, Richard (Herts SW)

  Baldry, Tony

  Peacock, Mrs Elizabeth

  Bevan, David Gilroy

  Portillo, Michael

  Boscawen, Hon Robert

  Powell, William (Corby)

  Bottomley, Peter

  Powley, John

  Bright, Graham

  Raffan, Keith

  Brown, M. (Brigg & Cl'thpes)

  Rhodes James, Robert

  Bruinvels, Peter

  Roe, Mrs Marion

  Burt, Alistair

  Rowe, Andrew

  Butterfill, John

  Sackville, Hon Thomas

  Carttiss, Michael

  Sainsbury, Hon Timothy

  Cash, William

  Sayeed, Jonathan

  Conway, Derek

  Shepherd, Colin (Hereford)

  Cope, John

  Silvester, Fred

  Currie, Mrs Edwina

  Sims, Roger

  Dorrell, Stephen

  Smith, Tim (Beaconsfield)

  Durant, Tony

  Spencer, Derek

  Forsyth, Michael (Stirling)

  Stern, Michael

  Garel-Jones, Tristan

  Stevens, Lewis (Nuneaton)

  Goodhart, Sir Philip

  Stewart, Allan (Eastwood)

  Hamilton, Hon A. (Epsom)

  Thompson, Donald (Calder V)

  Hicks, Robert

  Thompson, Patrick (N'ich N)

  Hogg, Hon Douglas (Gr'th'm)

  Thurnham, Peter

  Hunt, David (Wirral W)

  Townsend, Cyril D. (B'heath)

  Knight, Greg (Derby N)

  Trippier, David

  Lilley, Peter

  Twinn, Dr Ian

  Lloyd, Peter (Fareham)

  Wakeham, Rt Hon John

  Lord, Michael

  Waller, Gary

  Lyell, Nicholas

  Watts, John

  MacGregor, Rt Hon John

  Wheeler, John

  Maclean, David John

  Wolfson, Mark

  McLoughlin, Patrick

  Wood, Timothy

  Malone, Gerald

  Yeo, Tim

  Maude, Hon Francis

  Mitchell, David (Hants NW)

  Tellers for the Ayes:

  Moynihan, Hon C.

  Mr. Mark Lennox-Boyd and

  Neubert, Michael

  Mr. David Lightbown.

  NOES

  Ashdown, Paddy

  Meadowcroft, Michael

  Beith, A. J.

  Smith, Cyril (Rochdale)

  Bruce, Malcolm

  Steel, Rt Hon David

  Carlile, Alexander (Montg'y)

  Wrigglesworth, Ian

  Cartwright, John

  Hughes, Simon (Southwark)

  Tellers for the Noes:

  Kirkwood, Archy

  Mr. David Alton and

  Livsey, Richard

  Mr. James Wallace.

  Question accordingly agreed to.
  Resolved,
  That the draft European Assembly Elections Regulations 1986, which were laid before this House on 18th November, be approved.

  SCOTTISH GRAND COMMITTEE
  Motion made and Question put forthwith, pursuant to Standing Order No. 94(3).
  That, in the course of its consideration of the matter of Agriculture and Fishing in Scotland, the Scottish Grand Committee may meet in Edinburgh on Monday 8th December at half-past Ten o'clock.—[Mr. Cope.]
  Hon. Members: Object.
  Mr. Deputy Speaker (Sir Paul Dean): Objection taken.

  North Middlesex Hospital (Cancer Treatment)
  Motion made, and Question proposed, That this House do now adjourn.—[Mr. Portillo.]
  12.36 am
  Dr. Ian Twinn: I am grateful for the opportunity to raise tonight the subject of the proposed closure of the radiotherapy cancer treatment unit at the North Middlesex hospital in my constituency. No other issue since I have been in this House has caused more public concern among a wide range of my constituents than the proposal of the North East Thames regional health authority to close this unit. All the political parties in Edmonton are united—as are the residents' groups and all the other representative groups in my constituency, including the local authority—in opposing this proposal of the health authority.
  Nor is it just a parochial matter concerning Edmonton. This matter has concerned the hon. Member for Tottenham (Mr. Atkinson) and, in the borough of Haringey, my hon. Friend the Member for Hornsey and Wood Green (Sir H. Rossi). I am pleased to see on the Treasury Bench my hon. Friend the Member for Enfield, Southgate (Mr. Portillo), who, together with my hon. Friend the Member for Enfield, North (Mr. Eggar), have been particularly strong in ensuring that the wishes of their constituents are known to the Government and the regional health authority. I am grateful to them for the support they have given me in this matter.
  This issue goes beyond the London boroughs of Haringey and Enfield. It affects also our neighbours in Essex and Hertfordshire—my hon. Friends the Members for Harlow (Mr. Hayes), for Epping Forest (Sir J. Biggs-Davison), and for Hertford and Stortford (Mr. Wells) and my right hon. Friend the Member for Castle Point (Sir B. Braine)—all of whom have been active in objecting to the ill-founded proposal of the regional health authority.
  The Minister will be aware that this proposal affects the whole of the North East Thames region. It is proposed to decrease the number of radiotherapy cancer treatment units from nine to five. This has already provoked one Adjournment debate, when my hon. Friend the Member for Southend, East (Mr. Taylor) raised the whole question as it affects the county of Essex. I will not tonight go over the ground that he covered. Our problems are similar, though my constituency is affected more as a built-up area.
  It is strange for the House to debate the Health Service and not to mention cuts, but no cuts are involved in this matter. Indeed, the region's plans would result in the expenditure of several million pounds extra in the short term, and probably increased expenditure in the long term. I would argue, however, that the region's proposals will lead to a cut in the standard of service to my constituents and to people in neighbouring constituencies. The firm medical opinion of consultants such as Dr. Maurice Sutton and his colleagues at the North Middlesex hospital, and other medical opinion, is that there is no proof that the extra spending which the region has earmarked will result in the better treatment of patients. If we are to spend extra money in the Health Service, it should be concentrated to the benefit of patients, not to the benefit of others in the Health Service.
  906
  Some specialists involved in the proposal suggested that the demand for radiotherapy will decline. The region has not put the case strongly, but we must argue against it. Drug treatment for cancer is popular in sonic areas, but there is no proof that it is especially efficient. Indeed, the toxicity of the drug means that more deaths may arise from its use. In the latest British Medical Journal, an interesting article suggests that the results of the drug treatment of cancer are disappointing.
  Cancer will affect one in three people and will probably result in the death of one in four people. We have an ageing population, and it would seem that radiotherapy will be in increasing demand, not decreasing demand as some have suggested. Therefore, it is important to keep open centres that can provide a service to the population.
  Why then has the North-East Thames regional authority suggested the massive disruption of cancer treatment provision in our area? It is difficult to say why it has done so, but part of the reason goes back to the DHSS itself. The Department's Standing Medical Advisory Committee suggested that every region should examine cancer treatment provision and suggested that larger units should be introduced. One can understand why the region undertook the review. However, the treatment already provided in the region is among the best in the country. If one was to produce a league table of survival rates of cancer patients, our region falls between third and fourth places. The Department cannot say that the provision in the region is poor or inferior, so we must find other reasons. We know that the change is not proposed on the ground of cost since the region's plans will be significantly more expensive.
  Some people in the DHSS argue that larger catchment areas would be more efficient, and the figure of 1 million people has been bandied about. Yet there is no scientific evidence to support the view. It is an interesting and debatable opinion, but it is only an opinion. I suggest that it is the opinion of those who already work in large units and that it is based upon their experience, not upon hard evidence.
  North Middlesex hospital has one of the best buildings for radiotherapy in the country. It is modern and purpose-built and no adaptation costs are incurred for the machinery. It is a pleasant building for patients. It is light and airy and not down in the dungeons where one normally finds radiotherapy treatment in hospitals. Some radiotherapists elsewhere are envious of the facilities. It is a shame that the facilities at the hospital should be declared redundant and that new facilities will have to be duplicated elsewhere—perhaps at the Royal Free hospital or at St. Bartholomew's hospital.
  The region's proposal has already cost money. About £41,000 has been wasted by the region because a linear accelerator was on order for the North Middlesex hospital but it was cancelled at the 11th hour, 59th minute, by the region. I presume that the region had to pay the cancellation fee and many thousands of pounds for the adaptation and removal of one machine to make room for a new machine.
  My main objection to the proposal is that it ignores the patients. The Coopers and Lybrand report, commissioned by the North-East Thames region, might be a fine piece of intellectual property. I have read the volumes and they make sense. I can understand the rational argument. Bigger centres can be appealing, particularly for a medical administrator, because all the people are in one place. It

  907
  is appealing for specialists in the teaching hospitals. Larger centres, more machinery, more ancillary staff and more patients add to the status of a department. It might be useful to specialist researchers who might find it convenient to be associated with a radiotherapy treatment centre. All such arguments must be weighed in the balance.
  Unfortunately the proposals do nothing for the patients. They might do a lot for medical specialists, but they do nothing for the patients. The position of patients will become worse if the proposals are implemented. Patients who need radiotherapy are usually seriously ill. They might have only months to live. That will be true for many lung cancer patients. Any journey will be painful and trying, and will make many patients anxious. The North Middlesex hospital is easy to reach. It is directly off the North Circular road, it is within a 10 minutes' drive of the M25 and it is on the A10 main arterial road.
  My constituents from Enfield and Haringey and others from Essex and Hertfordshire can get to the hospital by private transport or by ambulance relatively easily. If they have to go to the Royal Free hospital or to St. Bartholomew's, travel will be difficult. They can be collected by ambulance only in the morning—12 patients per ambulance—and be returned after dark. It would be difficult to justify the cost of doing more than that. There are no parking facilities near the Royal Free hospital or St. Bartholomew's hospital. Journey times will be at least double. I find that worrying.
  Members of the regional health authority are not united on the proposal. The working group reported in March 1986 to a closed meeting. I have seen its private report, and paragraph 101 recommends that the centre should be established at the North Middlesex hospital for three reasons: it is close to the centre of population; it will reduce travelling time; and there is space for expansion.
  In a mysterious way, those recommendations have disappeared from the published report. The region has not justified that and it has not seen fit to answer the criticisms. I found the region's attempt to justify the decision afterwards very mysterious. The region's statement entitled:
  "A review of cancer treatment services in the North East Thames Region."
  claims:
  "One of the major considerations in the Review is the importance of avoiding excessive travelling time of patients undergoing treatment for cancer…accessibility to services will generally be improved across the Region."
  However, the only way in which the region can justify that perversion of the truth is to provide hostel accommodation for patients. Instead of living at home in the last few months of their lives, my constituents will be forced to live for five nights a week in central London away from home, or they will have to endure nasty ambulance journeys in central London. The region's argument is a perversion of the true position.
  The region has been over-influenced by fashion. It has been tempted by the idea that big is better, whereas there is no proof that that is the case with cancer treatment. Although I cannot prove it, I suspect that the region has been influenced strongly by the lobby from the teaching hospitals which would like to concentrate all the new resources in those hospitals, away from the district general hospitals. The problem is that the population exists close
  908
  to the district general hospitals while the teaching hospitals are concentrated in the de-populated areas of central London.
  If the decision is allowed to be implemented, there is a danger that the consumers in the Health Service will be ignored, that many millions of pounds will be wasted in satisfying the desires of those producing the service and that no benefit will accrue to the patients. When my hon. Friend the Minister considers these decisions, if they eventually arrive on her desk, I hope that she will take all these factors into account.
  12.52 am
  The Parliamentary Under-Secretary of State for Health and Social Security (Mrs. Edwina Currie): I congratulate my hon. Friend the Member for Edmonton (Dr. Twinn) on his success in the ballot for today's debate. I have had cause to be impressed twice by his efforts on behalf of his constituents in the past two days. He came to see me yesterday to discuss the Cry-Sis organisation that helps families with crying babies. Then, as now, he put the case for his constituents with dignity and in detail in a way that would have greatly impressed them.
  My hon. Friend referred to an Adjournment debate of my hon. Friend the Member for Southend, East (Mr. Taylor) on 31 October. He was right to state that representations have been made on the issue by numerous hon. Members, specifically my hon. Friends, the Members for Enfield, Southgate (Mr. Portillo) and for Enfield, North (Mr. Eggar). I must enter the same caveat as I entered previously.
  I am obviously a little restricted in the scope of my reply to my hon. Friend the Member for Edmonton, because if, following consultation by the district health authority on the proposal to close the unit, any of the local community health councils concerned object to the proposed closure and the district and regional health authorities confirm it, the proposal will indeed be referred to Ministers for a final solution. Because of that, it is absolutely essential that I do not anticipate the outcome of such consultation by stating a view. My hon. Friend will therefore recognise the unusual circumstance of this Minister having no opinion whatsoever and merely serving this debate by listening carefully to what has been said.
  As my hon. Friend said, the North-East Thames regional health authority has reviewed its cancer services. The review is not a cost-cutting exercise. As my hon. Friend rightly said, if fully implemented it would cost more money. It is intended to benefit patients not just in one part of the region, but in the entire region, as has been repeatedly demanded in parliamentary questions on this subject. If the proposals come to Ministers for a final verdict, my hon. Friend can rest assured that any decisions taken will ensure that the best overall service to patients in the region is provided.
  It may help if I describe the timetable to my hon. Friend. If matters proceed as planned, the region expects to provide districts with a consultation document for issue in January 1987. The districts would then submit detailed proposals to the region with the results of the consultation. If the local community health council has objected, the matter will come to Ministers for a decision. We are therefore talking about a substantial period of time, even if matters proceed as planned. I can assure my hon. Friend that nothing will be done in a hurry.

  909
  If the radiotherapy unit at the North Middlesex hospital were to be closed, it would be the subject of full public consultation. Local people would have the opportunity to express their views, and I have no doubt that, with the assistance of their excellent Member, they would do so with force and in the appropriate detail.
  The intention is to set up regional cancer treatment centres. Departmental guidance is contained in the report of the standing sub-committee on cancer, entitled "Acute Services for Cancer", which was circulated two years ago under cover of Health Notice (84)23. If my hon. Friend has not seen a copy, I shall gladly ensure that he sees either it or the relevant bits of it. He will find that it is a question not of fashion, but of careful consideration of how cancer patients should be treated, not only in the 1980s but well into the next century.
  The report recommended that radiotherapy centres should normally serve a population of not less than 1 million—equivalent to about 4,000 new cases of radiotherapy a year. North East Thames regional health authority serves a population of about 4·4 million and has a resident population of about 3·7 million. On straightforward population criteria the region would require only four units. However, the region is also required to consider geographical matters, travelling patterns, and so on. On that basis the original proposal was for five centres, and following further review it decided on six. Unfortunately, there are at present nine centres. If the broad overall strategy is to be accepted, it follows that some will have to close. That is the crux of the matter.
  I understand that it is suggested that the special cancer facilities are concentrated on six regional cancer treatment centres at the London hospital, the Middlesex, the Royal Free and St. Bartholomew's in London, and Colchester and Harold Wood in Essex. Those centres would provide the full range of cancer diagnosis and treatment.
  As a result of the region's proposals, the existing radiotherapy units at the North Middlesex and University College hospital in London, and the Essex County hospital, Oldchurch at Romford and Southend in Essex would be subject to closure. The region tells me that it believes that the proposed regional centres would be of sufficient size to make the best use of both human skills and physical resources and to encourage staff to develop specialist expertise, particularly to aim for expert knowledge of particular cancers and thereby to add to the list of cancers that are now curable.
  The difficulty with the North Middlesex hospital arises from the choice between it and the Royal Free. The regional health authority undertook an option appraisal on the two hospitals which showed that a regional cancer treatment centre at the Royal Free would be better placed to serve the catchment population and to provide the back-up specialist facilities required to support such a centre. I am told that it looked at referral patterns, the viability of centres and the impact of losing radiotherapy on either hospital. On that basis, the Royal Free was its preference.
  The only factor favouring the North Middlesex, to quote from my brief,
  "was patient travelling difficulties, particularly for residents of Enfield Health Authority."
  Obviously, I express no view, but I have heard with interest my hon. Friend's comments.
  910
  The broad overall strategy of introducing regional cancer treatment centres, which has been departmental strategy now for several years, was accepted by the regional health authority early this year nem. con. The strategy is accepted and not regarded as a fashion or a fad. it is regarded as the right way to run cancer treatment in future. The difficulty comes with how one applies it in practice. In other words, the principle is accepted, but the practice is a different matter.
  I note what my hon. Friend said about teaching hospitals and the influence of consultants on large units. However, they have led the way in research on this important illness and demonstated methods of ensuring that cancer is no longer the killer that it used to be and that there is hope for sufferers.
  I understand that the other cancer services will remain district-based. The regional health authority's intention is that the bulk of cancer treatment will continue to be provided at district level, that serices for chemotherapy, surgery, counselling, diagnosis and screening and health promotion will all be district-based. Consultants from the regional cancer treatment centres will hold clinics at local district general hospitals to enable their specialist expertise to be made available locally and to minimise as far as possible the travelling required for specialist treatment services.
  I have inquired about community services for cancer patients in the Haringey district health authority area. I am told that they are quite good and are being further improved through advertisements being placed for two more MacMillan nurses who will work with cancer patients at home. They will be in addition to the existing nurse who is at present supported by district nurses. That arrangement will continue. Therefore, my hon. Friend's constituents can look forward to an improved service, particularly for those patients who are recovering from this illness at home.
  My hon. Friend spoke about one or two aspects of treatment and compared chemotherapy with radiotherapy. I defer to his considerably greater knowledge on some of these subjects, but I can tell him that all these treatments are under constant review. Any assertion that a treatment works means that the treatment has to be rigorously tested on patients who are already ill, especially if those treatments are dangerous and produce side effects. That is true of both chemotherapy and radiation treatment, and we need to be absolutely assured that a treatment has benefits that outweigh any of its possible disadvantages before it is offered to a patient.
  My hon. Friend spoke about survival rates. I agree that the record of his local health authority on cancer treatment centres is excellent, but I am sure he would agree that it also depends a little on how early in the progress of the disease patients present themselves. There is some evidence to suggest that in some parts of Britain where general practitioners and perhaps health promotion services actively encourage people to come early, that is exactly what they do and their survival rate, particularly for illnesses such as cervical cancer, are thereby much improved. We want to encourage that practice everywhere, and I am sure that my hon. Friend will agree about that. In response to his earlier comment, perhaps I should add that we do not have Health Service hospitals with dungeons. At least I hope we have not. If we have, I should like to hear about them.

  911
  The National Health Service is changing all the time and must respond to change. Shifts in population have considerably affected all the London regions. There are alterations in the patterns of illnesses affecting our ability to deal with them, and there are improvements in medical practice. As radiotherapy equipment becomes more sophisticated and as radiotherapy treatments become more refined, it is right that the provision of radiotherapy should be restricted to a few centres. The question which then arises is: which ones?
  912
  The rest of the cancer services in the North-East Thames region, comprising the majority of treatments, will be improved under the regional health authority's proposals, and that should command some acceptance. We appreciate the deep feelings of local residents which my hon. Friends, including my hon. Friend the Member for Edmonton, have represented to us. If we are required to take a decision on this matter, I can guarantee to my hon. Friend that we will take those feelings firmly into account.
  Question put and agreed to
  Adjourned accordingly at three minutes past One o'clock.

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

Truancy in Schools
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 there has been an increase in truancy in our schools and what steps they are taking to combat this problem.
Baroness Hooper: My Lords, the Government do not collect statistics on truancy at a national level. Nevertheless, we are aware that unjustified absence is a serious problem in some schools. In February, the department issued a circular to local education authorities which made a number of recommendations about the work of education welfare officers with a view to concentrating their efforts on school attendance problems. Progress on this will be monitored early next year.
Lord Taylor of Blackburn: My Lords, I thank the Minister for that reply and appreciate the work that the Government are doing in this direction. May I ask the noble Baroness to consider the figures in Lancashire, which have gone from 7 per cent. to 10 per cent., and at the same time to read the chief constable's report on delinquency and crimes among the juvenile population, which have increased also by 3 per cent.? Does she agree that there may be a link between the chief constable's figures and the percentage increase shown in the figures produced by the education department, and that truancy may lead perhaps to glue-sniffing, shop-lifting and drug taking?
Baroness Hooper: My Lords, in response to the noble Lord, I agree that there may be a link between truancy and juvenile crime, but connections are not firmly established in spite of the statistics that he quoted. Juvenile delinquents often have a history of poor attendance at school. But whatever the interaction, the Government are committed to urgent and effective action to tackle the problem of drug and solvent abuse. A booklet giving information and advice to teachers and other education service professionals was issued last year. The appointment of a co-ordinator is being funded in each education authority area to combat drug misuse, and in-service teacher training related to drug abuse is being supported by the new scheme of INSET grants. We hope that this, together with an attack on the attendance problem, will help.
Lord Campbell of Alloway: My Lords, is my noble friend aware that there is in current circulation in certain schools a school stoppers textbook: 91 ways to
700
smash and sabotage your school; that one of the ways advocated is truancy; and that this publication is sponsored by the Lesbian and Gay Youth Magazine, Issue 69? What do the Government propose to do about that?
Baroness Hooper: My Lords, on hearing my noble friend's question, my immediate reaction was that absence from school must help guard against smashing the school! Nevertheless, I take on board the example that he has quoted and I assure him that we shall look into the matter.
Lord Mackie of Benshie: My Lords, may I ask the Minister whether she has considered paying an attendance allowance to the pupils?
Baroness Hooper: No, my Lords.
Baroness Elliot of Harwood: My Lords, may I ask the Minister whether she agrees that truancy more often than not is a problem connected with the home as well as with schools? In those circumstances should not the latest circular have been issued jointly by the Departments of Education and of Health and Social Security, since both are involved in this?
Baroness Hooper: My Lords, I believe that parents have an important role to play in this. Where they show an interest in their children's education and show that they regard education as important, truancy is less likely to occur. The Government in all the steps that they are taking are very keen on introducing and cementing parent power in this as well as in other areas of education.
Lord Avebury: My Lords, can the Ministers say whether parents are entitled to receive from the local education authority details of truancy rates at the various schools in their area, where these have been collected, or whether the local authority is entitled to say that parents will not be given these statistics because they are confidential?
Baroness Hooper: My Lords, I am not aware that there is any entitlement for parents to receive these figures, but I understand that in many local authority areas they are made available to them.
Baroness Seear: My Lords, does the noble Baroness agree that this is the sort of statistic that parents would wish to have when choosing a school for their children and that figures should be available before they choose a school?
Baroness Hooper: Yes, my Lords, I agree.
Lord Beloff: My Lords, can my noble friend explain why children should be blamed for playing truant when teachers play truant with impunity, only they call it "industrial action"?
Baroness Hooper: My Lords, perhaps I may half answer that supplementary question. I agree that teaching needs to be lively and absorbing and that the curriculum has to be seen by pupils and parents to be relevant to encourage pupils to attend.
Lord Leatherland: My Lords, may I ask the noble Baroness whether she will look behind her to see how many of her supporters are playing truant today?
Baroness Hooper: My Lords, the answer must be, not many.
Lord Wallace of Coslany: My Lords, can the noble Baroness say what is the role of the school attendance officers these days—those who in my day were known as "kid-chasers"?
Baroness Hooper: My Lords, the education welfare officer has an important role here. The officer's most important duty, in the Government's view, is to investigate and remedy school attendance problems. Indeed, the circular to which I referred in my original Answer recommends that education welfare officers devote the major part of their time towards this end.
Viscount St. Davids: My Lords, can my noble friend say whether things are any worse in schools in the London area? Can we really blame the children when we see what some London schools are trying to stuff into their unfortunate minds?
Baroness Hooper: My Lords, although we do not collect statistics on a national level, we receive some local surveys, including an ILEA survey. The survey of secondary school pupils absent on one day in 1985 produced a figure of nearly 19,000 absentees. That is 15.6 per cent. of the pupil population, and it is rather an alarming figure.
Lord Irving of Dartford: My Lords, is not the alienation of some children a by-product of the Government's failure to provide enough resources in schools to create a contented teaching staff to take care of the situation?
Baroness Hooper: My Lords, we have been over this ground before. It is, I believe, of the utmost importance that teachers fulfil their proper role in making school and education attractive and interesting to pupils.

Bus Services, Glasgow
2.44 p.m.
Lord Tordoff: 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, following the Answer of 13th October (col. 517) and the rejection by the Traffic Commissioner of an application by Strathclyde Regional Council, what steps they now propose to take to end "bus wars" in major cities.
The Parliamentary Under-Secretary of State, Department of Transport (Lord Brabazon of Tara): My Lords, the Transport Act 1985 gives traffic commissioners the power to intervene to prevent danger to road users or reduce severe traffic congestion. The Traffic Commissioner for Scotland has not rejected the application by Strathclyde
702
Regional Council for traffic regulation conditions in Glasgow. He has simply said that he is not prepared to take emergency action without holding a public inquiry to allow all the parties concerned to express their views. He has published the application and made it clear that he will be prepared to hold an inquiry if he receives a formal request for one.
Lord Tordoff: My Lords, is this not a continuing problem in Glasgow? Am I right in saying that the time-scale for the inquiry is about the middle of January? Do the Government not feel that the situation is getting out of hand and that they ought to intervene? If the Government are expecting some sort of voluntary arrangement to take place between the operators, would that not be against the spirit of the Act?
Lord Brabazon of Tara: My Lords, no. It is for the Traffic Commissioner to decide whether he should reach a decision without holding an inquiry that would allow all the parties concerned to put their case. The Scottish Traffic Commissioner decided against acting without an inquiry. In reaching that decision, he noted that the severe congestion of 11th October, when other factors were involved, had not recurred.
Lord Carmichael of Kelvingrove: My Lords, is the Minister aware that the very fact that there has been an application to the Traffic Commissioner, although it was unsuccessful in achieving the full effect that Strathclyde Regional Transport wanted, seems to have brought about a slightly more sensible attitude on the part of the Scottish Bus Group?
Is the Minister aware that there is great uncertainty about the future of buses in Glasgow? We are at present grossly "over-bused". Many buses are travelling almost empty, with the obvious intention of pushing competitors off the road. Is the Minister aware that if Glasgow loses its bus services other than those of the Scottish Bus Group there will be a monopoly situation and that after Glasgow has been conquered, the same could happen in other cities around the country? Would the Minister keep this possible development in mind? Would he also perhaps ask the Office of Fair Trading to keep the matter before it?
Lord Brabazon of Tara: My Lords, it is certainly within the power of the Office of Fair Trading to look into this matter. It is for the commercial judgment of each operator to decide what services he runs. Operators will provide services according to the demands of the market. This is the best way of ensuring that services reflect the needs of the travelling public, which of course should be the paramount consideration.
Lord Nugent of Guildford: My Lords, in view of the great interest taken by this House in the legislation that promoted the new system of free operation of bus services, could my noble friend arrange in the New Year to publish a report of a survey nationally of how the new bus services are working throughout the country in order to fulfil our hopes as well as to allay our anxieties?
Lord Brabazon of Tara: My Lords, I shall certainly take note of what my noble friend suggests and see what might be the best way of putting forward such information.
Lord Ferrier: My Lords, is it not probable that the matter will sort itself out in the middle of next month?
Lord Brabazon of Tara: My Lords, I gather that, to some extent, the problem has sorted itself out already.
Lord Teviot: My Lords, may I send my noble friend a rather nasty lob? Can he equate, in the spirit of this Bill, that there are two organisations—the Strathclyde Bus Company, which is owned locally, and the Scottish Bus Group, which has not been privatised—both intent on war and possibly keen, therefore, to keep out private enterprise? Does my noble friend think that, ultimately, this war will bring a better bus service to the citizens of Glasgow, and to the employees of the bus companies? Will he say who is going to be the winner after all in this very unsatisfactory and unsavoury situation?
Lord Brabazon of Tara: My Lords, my right honourable and learned friend the Secretary of State for Scotland is of course keeping in close touch with the competition aspect in Glasgow and elsewhere. If any evidence of anti-competitive behaviour emerges, the Government will take appropriate action. Also, as I said earlier, the OFT can also look at the matter.

Nuclear Test Ban: Progress
2.49 p.m.
Lord Mayhew: 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 why they are opposed to the resumption of negotiations for a comprehensive test ban treaty.
The Minister of State, Foreign and Commonwealth Office (Baroness Young): My Lords, as I have explained on previous occasions, it would be premature to resume negotiations for a comprehensive test ban treaty until progress has been made on resolving outstanding issues, especially verification.
Lord Mayhew: My Lords, has the noble Baroness yet studied the statement in Moscow yesterday that the Russians propose to end their moratorium on testing at the end of the year? In view of the decisive improvements in verification techniques that have been discovered recently, will the Government suspend their ban on negotiations and make a final effort to reach agreement in the matter?
Baroness Young: My Lords, as I have explained to the noble Lord before, we are committed to seeking progress before a comprehensive test ban treaty. But any negotiations would need to deal with difficult questions such as scope, duration and compliance—the key issue being verification.
Lord Jenkins of Putney: My Lords, is the noble Baroness aware that, so far from its being premature, we are almost at the eleventh hour on this issue? Will she not show some sense of urgency in the matter when an opportunity is before the Government at the moment which may not recur? If the arms race is to be arrested, some action by the Government has to be taken. It is no use them sitting around doing nothing, as they have been for so long.
Baroness Young: My Lords, that is not the case. We suggested as long ago as 1984 a non-negotiating mandate for the ad hoc committee at the Conference on Disarmament, but as yet this has not been taken up by the Soviet Union.
Lord Mellish: My Lords, will the noble Baroness give some indication to the House of how far verification, so far as the Russians are concerned, has proceeded? We all know that that is what has held it up. It is not a question of any bad feeling on the part of the Government or of anybody else. We all want peace, but we want it to be a genuine peace.
Baroness Young: Again, my Lords, the noble Lord, Lord Mellish, makes an important point. We should all like to see movement towards a comprehensive test ban treaty, but a limited unilateral gesture, as has happened with the Soviet Union, is not a substitute for a long-term agreement with verification.
Lord Brockway: My Lords, will the Government progressively reconsider their attitude on this question? Would not this step be part of a great progress towards ending the danger of a nuclear war and has it not overwhelming support in the world, with the exception of the President of the United States and of our Government?
Baroness Young: My Lords, I do not think I have anything further to add to the noble Lord, Lord Brockway, other than I have already said in answers to questions. But I really cannot accept his last statement.
Lord Mackie of Benshie: My Lords, can the noble Baroness tell us what standards of verification the Government would require before we can take this very desirable step of banning tests?
Baroness Young: My Lords, as I indicated in the answer that I gave to the noble Lord, Lord Jenkins, we have suggested a non-negotiating mandate for the ad hoc committee at the Conference on Disarmament. Some countries—the Soviet Union and some non-alligned countries—are not even prepared to accept this. It is a technical matter and it needs to be considered appropriately in that committee.
Lord Cledwyn of Penrhos: My Lords, as the noble Baroness has said, it is a technical matter. But is it not the case that it is now claimed that major advances in seismology would make possible at the very least a low yield threshold test ban? Can she say what is the Government's view on that, and is it not possible at Geneva to get a multilateral discussion on the possibilities based on recent scientific discoveries?
Baroness Young: My Lords, I am aware of the papers which were presented in Modern Geology by Sykes and Leggatt which criticised the United Kingdom's paper. But they present no new elements and we do not believe that they undermine the conclusions in the Committee on Disarmament of July 1985. In fact, officials wrote to Dr. Leggatt answering his points in August, and we would of course welcome publication of the response that we made.
Viscount Trenchard: My Lords, will my noble friend agree that one should not overstress the importance of individually declared moratoriums, and that there are more convenient moments for some powers to declare a moratorium than others?
Baroness Young: Yes, my Lords. We believe that these unilateral gestures are not a substitute for long-term durable agreements. Of course, the second point that my noble friend made is important.
Lord Mayhew: My Lords, apart from the question of verification, do the Government need to make further tests of the Trident warheads?
Baroness Young: My Lords, again I think that I answered the noble Lord, Lord Mayhew, in a Written Answer earlier this year. We are committed to the modernisation of an independent nuclear deterrent and we shall take steps to ensure this, as, of course, have previous governments. The fact is that while there are no prospects of negotiations on a comprehensive test ban treaty, it is a hypothetical question to link the two.

Nuclear Power Stations: Accountancy Life
2.55 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 how many nuclear power stations in the United Kingdom will have completed their expected commissioned lives by 1996.
Viscount Davidson: My Lords, the future operation of the Magnox stations owned by the boards and those operated by BNFL will depend on a number of factors, including the outcome of the long-term safety reviews that are currently being undertaken and the economic viability of the stations. For accounting purposes, the lives generally adopted by the boards for the Magnox stations is 30 years. This accountancy life will have expired by 1996 for the following stations: Berkeley, Bradwell, Dungeness A, Hinkley Point A, Hunterston A, Trawsfynydd and Sizewell.
Lord Campbell of Croy: My Lords, I thank my noble friend for that reply and I should like to ask him this question. Will not the replacements have to be coal-fired or nuclear stations, since renewable sources, such as tides and wind, cannot make the necessary contribution to electricity supplies? Is he aware that
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where coal is concerned there are problems of pollution, acid rain and the greenhouse effect on the atmosphere which all have to be taken into account?
Viscount Davidson: My Lords, I agree entirely with my noble friend. I understand that the CEGB is considering the possibility of building new coal-fired stations, but my right honourable friend the Secretary of State for Energy has received no application to construct new power stations apart from that for Sizewell B. Proposals for new power stations must come from the electricity supply industry.
Lord Renton: My Lords, is my noble friend aware that eventually all fossil fuels, coal and oil, will be used up and that future generations will resent our folly if we have not meanwhile maintained our development of nuclear power?
Viscount Davidson: My Lords, this subject was covered very fully in a debate the week before last and I have to agree entirely with my noble friend.
Lord Dean of Beswick: My Lords, does the Minister recall that during that debate and in previous recent answers to the same question it has been said that the Government have a policy that any new coal-fired stations will be acid rain free and that the necessary equipment will be built into any new coal-fired stations? It is a fact that the phasing out of these Magnox stations requires urgent ordering of power stations. Bearing in mind that the turbine manufacturing industry is at present in danger of further redundancies, with the loss of skilled men who cannot be replaced when we need them, may I ask the Minister whether he will use his best endeavours to try to being forward the building of coal-fired stations pending a decision on a nuclear energy programme?
Viscount Davidson: My Lords, I shall certainly bring the noble Lord's remarks to the attention of my right honourable friend.
The Lord Bishop of Birmingham: My Lords, can the noble Viscount tell us about any possible plans for decontamination, should it be the case that these Magnox nuclear power stations will have completed their expected commissioned lives in the fairly near future?
Viscount Davidson: No, my Lords, I cannot at the moment, because no decision has been made as to when they will have completed their lives. The answer I gave related to their accountancy life of 30 years. It is quite possible that some of these Magnox stations will have a much longer life than their accountancy life, and at present there are no plans for what the right reverend Prelate calls decontamination.
Lord Jenkins of Putney: My Lords, is the noble Viscount aware that with nuclear energy there are even more serious intrinsic problems than those which have been referred to already in relation to coal-fired energy? These problems might be described briefly as Chernobyl problems, Three Mile Island problems and Windscale problems. Does the Minister agree that those problems have not yet been solved, that they are

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intrinsic to nuclear energy and that it is therefore to be hoped that the Government will think carefully before continuing their total reliance upon nuclear energy?
Viscount Davidson: My Lords, the stations which are the subject of this Question have provided cheap and safe electricity over many years. There is no reason to dispense with such assets before the end of their useful lives.
Lord Campbell of Croy: My Lords, does my noble friend agree that the first generation of nuclear stations has served this country extremely well, with significantly few incidents or casualties?
Viscount Davidson: My Lords, I agree completely with my noble friend.
Lord Beswick: My Lords, is it not a fact that most of the criticism which can quite properly be brought against nuclear fission cannot be brought against fusion? Can the noble Lord say whether he is satisfied that enough effort is being made in research and development in that field?
Viscount Davidson: Yes, my Lords. I assure the noble Lord that that field is being researched with urgency.
Lord Orr-Ewing: My Lords, can my noble friend say what is the life of the 374 operational nuclear power stations around the world and what is likely to be the life of the over 150 nuclear power stations currently being constructed? How does that life compare with the life of our own Magnox? Is it greater or is it less?
Viscount Davidson: I cannot answer that without notice, my Lords.
Lord Cledwyn of Penrhos: My Lords, does the noble Viscount agree that the report of the Sizewell Inquiry, massive as it will be, will provide a new forum for a detailed and thorough study of all the alternatives? In the light of that, will he say when this report is going to be published? Is it not the case that that report is in the hands of his right honourable friend? Is his right honourable friend proposing to make a Statement when the report is published? What course will the Government follow to ensure that there is a full discussion, not only within Parliament but throughout the country as well?
Viscount Davidson: My Lords, I think the noble Lord the Leader of the Opposition is better informed than I. I had not heard that the report was in the hands of my right honourable friend. He is expecting to receive that report any day and when he has studied it he will then decide when to publish it.
Lord Somers: My Lords, can the noble Lord say, in view of the increase in the number of such stations, whether any advance has been made in the problem of disposal of nuclear waste?
Viscount Davidson: My Lords, I think that is another Question.
Lord Beswick: My Lords, may I go back for a moment to the answer given me a little while ago? In view of the extra effort which the noble Viscount says is being put into nuclear fusion research, can he put a time-scale to that? Is he able to say when it will be an economic proposition to expect power from fusion?
Viscount Davidson: No, my Lords, I cannot, but I shall write to the noble Lord.

Business
3.5 p.m.
Viscount Long: My Lords, at a convenient moment after 3.30 this afternoon, my noble friend Lord Beaverbrook will, with the leave of the House, repeat a Statement that is being made in another place on the Rover Group.

Business of the House
The Lord President of the Council (Viscount Whitelaw): My Lords, I beg to move the Motion standing in my name on the Order Paper.
Moved, That the debates on the Motions in the names of the Lord Winstanley and the Lord Kilmarnock set down for 10th December shall each be limited to 2½ hours and that Standing Order 35 and paragraphs 10 to 13 of the Rules for the Conduct of Short Debates shall apply to each debate.—(Viscount Whitelaw.)
On Question, Motion agreed to.

Personal Bills: Select Committee
The Chairman of Committees (Lord Aberdare): My Lords, I beg to move the first Motion standing in my name on the Order Paper.
Moved, That a Select Committee on Personal Bills be appointed, to which all Petitions for Personal Bills shall stand referred; and that, as proposed by the Committee of Selection, the Lords following, with the Chairman of Committees, be named of the Committee:

Banks, L.

Campbell of Alloway, L.

Murton of Lindisfarne, L.

Templeman, L.

Wilberforce, L.

Willis, L.

—(The Chairman of Committees.)

Leave of Absence and Lords' Expenses: Select Committee
The Chairman of Committees: My Lords, I beg to move the second Motion standing in my name on the Order Paper.
Moved, That a Select Committee be appointed for the general supervision of arrangements relating to leave of absence and the reimbursement of Lords'

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expenses; and that, as proposed by the Committee of Selection, the Lords following, with the Chairman of Committees, be named of' the Committee:

Denham, L.

Hylton-Foster, B.

Ponsonby of Shulbrede, L.

Stedman, B.

Tordoff, L.

—(The Chairman of Committees.)

Minors' Contracts Bill [H.L.]
3.7 p.m.
The Lord Chancellor (Lord Hailsham of Saint Marylebone): My Lords, I beg to move that this Bill be now read a second time.
Before I begin my speech, let me say how sorry I was to learn that we shall not be hearing the noble Lord, Lord Meston, whose name was on the list of speakers. He is detained in court. One of the prices we pay for having younger Peers is that they must pursue their professions. I am sure your Lordships wish him all the success that his case deserves.
The purpose of this Bill is to give effect to the recommendations of the Law Commission in its 134th Report on Minors' Contracts. The need for the report arose from a number of court decisions concerning the provisions of two rather dated nineteenth century statutes. Those statutes are respectively the Infants Relief Act 1874 and the Betting and Loans (Infants) Act 1892, both of which sought to place a gloss or glosses on the general principles of common law. To explain this, the House will of course know that under English law until very recently those under full age were called infants, owing to the influence of Franglais, which was invented by English lawyers. They are now referred to as minors—although, with respect to Mr. Scargill, I spell the word with an "o"!
The Law Commission considered the whole of the law relating to contracts made by minors, but eventually made recommendations only on those parts of the relevant law which caused injustice or difficulty.
The existing common law on minors' contracts is based on a principle which is known as qualified unenforceability; that is, with certain exceptions, a contract concluded by or with a minor may be enforced by the minor but not against him or her. The exceptions are contracts which are likely to be of benefit to the minor, such as contracts for what are called "necessaries" and contracts of employment. These are perhaps the most common but there is a further category of contract which is binding on a minor unless and until repudiated by him during his minority or shortly thereafter. These contracts, such as contracts for the sale or puchase of an interest in land, marriage settlements, or partnership agreements, all involve the acquisition of a lasting interest in property or the incurring of a continuing obligation attached to a property.
The basic principle of the common law—that a minor's contract is enforceable by but not against him or her—exists to protect the minor from unscrupulous
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adults or from his own inexperience. In the last century, however, Parliament added further glosses to the existing common law principle. Unfortunately in practice these have brought obscurity and difficulty to this area of the law. In particular the Infants Relief Act 1874, of only two substantive sections, has caused problems quite incommensurate with its brevity.
Section 1 of the Infants Relief Act, if I may remind the House, renders "absolutely void" contracts entered into with minors except in the cases to which I have already referred. In practice, however, the courts have been reluctant to give the words "absolutely void" their literal meaning. Ordinarily a void contract and particularly an absolutely void contract (whatever the word "absolute" may add to the original adjective) has no legal effect at all.
Property cannot pass under that section and money paid under it can be recovered. Nevertheless, it has been held that where goods which are not "necessaries" are delivered to a minor, the property in them does pass to the minor, notwithstanding the 1874 Act, and that money paid by a minor under an absolutely void contract cannot be recovered unless there has been a total failure of consideration. On the other hand, a guarantee by an adult of an "absolutely void" loan is itself void and a minor cannot be made bankrupt in respect of debts arising out of the supply of non-necessary goods on credit since any contact for the supply of such goods is, to quote the Act once more, "absolutely void".
Section 2 of the 1874 Act prevents a former minor from ratifying any contract made during minority. This section has at least the merit of being clear in its operation. The same might be said of Section 5 of the second Act now under review in the Law Commission's report—the Betting and Loans (Infants) Act 1892—which invalidates a new contract to repay a loan contracted during minority. However, so long ago as 1967 the Latey Committee (whose principal recommendation was the reduction of the age of majority from 21 to 18, which has of course since taken place) recommended that both ratification and the making of a new contract should be fully effective. This view was wholly endorsed by those who commented on the Law Commission's working paper.
The Bill will remove all these uncertainties and restrictions introduced by the nineteenth century legislation I have referred to, and allow the common law rules of "qualified unenforceability" to prevail. Clause 1 of the Bill disapplies prospectively the 1874 and 1892 Acts in respect of any contract made by a minor. This will mean that Section 1 of the 1874 Act will cease for the future to render a minor's contract "absolutely void" and also that a minor will be able to ratify a contract on attaining his majority. The disapplication of the 1892 Act will enable the minor for the future to make a new contract to repay a loan obtained during minority.
The Law Commission recommended that a guarantee by an adult of full age—sui juris—of a minor's contract should be enforceable. Clause 2 of this Bill accordingly provides that such a guarantee shall not be unenforceable against a guarantor simply because the primary obligation was entered into by a minor. The Bill does not affect such rights as the guarantor may enjoy against the minor himself.

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The Law Commission has also recommended and Clause 3 of the Bill provides that the court should be empowered to require, if it thinks it just and equitable, a minor who has made a contract to transfer to the plaintiff any property acquired under the contract or any property representing it. The clause would not, however, require the minor to pay the seller the purchase price or a sum equivalent to the value of the goods, since to do so would, in effect, make the contract enforceable against the minor. In this context I would remind your Lordships that the Bill is not intended to disturb the common law principle of "qualified unenforceability".
Lastly, Clause 4 repeals for the future the 1874 and 1892 Acts and makes a small amendment to the Consumer Credit Act 1974, so as to bring guarantees as well as indemnities within the provisions of that Act. The Bill will of course apply only to contracts made after the Act is in force.
The proposals in this Bill are confined to those relatively few areas of the law of contract which at present cause difficulty or injustice to minors and those dealing with them. Most of these difficulties have been caused by the statutory glosses which I have attempted to describe. On their repeal, the common law principles can be developed by the courts. These proposals have, I repeat, been greeted by a wide measure of support. I cannot pretend that this Bill will cause a revolutionary change, but as far as it goes I hope the House will agree that it is good. I ask the House therefore to give it a Second Reading.
Moved, That the Bill be now read a second time.—(The Lord Chancellor.)
3.16 p.m.
Lord Elwyn-Jones: My Lords, the House will be grateful to the noble and learned Lord. He will reflect, I hope, that his explanations are not absolutely in vain. They bring clarity to a scene not notable for clarity. The Bill has the great merit of brevity. Its quality is assured by the fact that it is a replica of the Bill that was annexed by the Law Commission to its report upon this matter in 1984. The Bill is yet another example of the debt that Parliament owes to the Law Commission not only for producing reports of very high quality but for the additional facility of making a draft Bill readily available for us.
The Bill has its basis, I suppose, in the law reform of 1969 which gave effect to the recommendations of the Latey Committee report on the age of majority. I remember that reform well as it was my pleasure to take it through another place. My goodness, yes, it was 15, 16 or 17 years ago! The report recommended the lowering of the age of full legal capacity from 21 to 18, reflecting the social reality of our time. The age of 21, as I gathered at the time, was originally linked with the ability of a knight's son to sustain a heavy suit of armour or lift a lance or sword. It was also thought necessary in Victorian times to protect from the clutches of money lenders young men who were said by the law journal of the time to be,
"prone to horse flesh, dog flesh"
I do not quite follow that, but I see the point—
"cigars, sparkling drinks, swell attire, betting and making presents to ladies who are sometimes fair and often fragile."
What a sweet Victorian note there is about all that!
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I agree with the rejection by the Law Commission, and, by implication, of the noble and learned Lord the Lord Chancellor, of the alternative proposal to make 16 the critical age for contract purposes. I note from the report of the Law Commission that the majority of adults, teachers and others whose work brought them into close contact with this situation took a similar view. They stressed the vulnerability of 16 and 17-year olds to high powered advertising and such matters.
As the noble and learned Lord has explained, the report confined itself to amending the law on qualified unenforceability—the rule that a minor's contract is enforceable by him but unenforceable against him. The Bill does not try to reformulate the existing exceptions to the principle of qualified unenforceability under which a minor's contract is enforceable against him. The most important exceptions are in respect of contracts for necessaries, contracts for employment and contracts involving certain lasting property rights or obligations.
As the noble and learned Lord said, the Law Commission confined its recommendations for legislation to the aspects of the law regarding minors' contracts which in practice cause difficulty or lead to injustice. These have been explained by the noble and learned Lord. I agree with the amendments made in the Bill. So, as a matter of comfort, does the Law Society. I suspect, too, that there will be unanimous approval both in legal circles and among those who have to deal with the problem. I am grateful to the noble and learned Lord for his explanation and I support the Bill.
3.20 p.m.
The Lord Chancellor: My Lords, the House is always indebted to the noble and learned Lord for his knowledgeable and very informative speeches—none the worse on this occasion for being short. I am particularly grateful for what he said about the Law Commission. We need to remind ourselves that without its work, and that of the two Law Reform Committees, law reform would be a virtual impossibility. It would become bogged down in the government programme year after year. As it is, the commission's process of consultation and, in this case—as in a number of other cases—the fact that it has been able to employ a professional draftsman to annex a draft Bill to its report, make it much easier for a Lord Chancellor to persuade his colleagues to give up valuable government time to it. The noble and learned Lord has probably had as much difficulty as I have in securing a niche for law reform, which seldom has much sex appeal about it, in the Government's programme and in the Queen's Speech.
That is all I have to say. I thank the noble and learned Lord very much. I agree with what he says about the rejection by the Law Commission of an even earlier age of majority at 16. Curiously enough, among the consultees there were the elder minors—those of 16 and upwards—who very much approved of the Law Commission's rejection. They found the existing protection of the common law a valuable possession and they did not want to lose it. Of course, the two Acts we are getting rid of, as the noble and learned Lord pointed out, were a reflection of, I will not say Victorian values, because that might get me into

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trouble, but of the fact that they were designed to protect young and foolish men, with, as a rule, too much money, from those who wanted to remove that money from them. They do not, I believe, reflect modern values at all.
I am very much obliged to the noble and learned Lord and I will now proceed to do my minuet to the Woolsack.
On Question, Bill read a second time, and committed to a Committee of the Whole House.

London Docklands Railway (City Extension) Bill
3.23 p.m.
Lord Hacking: My Lords, I beg to move that this Bill be now read a third time.
As your Lordships may recall from Second Reading the promoter of the Bill—London Regional Transport—is within the provisions of the Bill, petitioning Parliament to have all necessary authority to extend the London Docklands Railway by about 1·1 of a mile, from just east of the Tower of London right into the Bank and Monument Underground stations; and by so doing link the Docklands Light Railway into the entire London Underground network. Most of this journey of 1·1 miles will be underground. The railway will descend into a tunnel just east of the Tower of London and will remain in that tunnel for the rest of its journey to the Bank and Monument Underground stations.
As some of your Lordships may also recall from Second Reading, by the London Docklands Railways Act of 1984 and 1985, authority has already been given to build the London Docklands Light Railway from Stratford, to the north of the Isle of Dogs, and from Island Gardens, opposite Greenwich Royal Naval College, to Tower Gate. Therefore, your Lordships are concerned, as on Second Reading, with just the extension of the Docklands Light Railway from near the Tower of London into the Bank.
The history of the Bill is as follows. It was deposited in the House of Commons in November last year. It received its Second Reading in the House of Commons on 6th March of this year. It was then before the House of Commons Select Committee in May and June: it had its Third Reading in another place on 10th July, and then it came to your Lordships' House, when I introduced the Bill for Second Reading on 30th July this year.
Since then, with the instructions moved by the noble Lord, Lord Sefton—that instruction to the Select Committee being to have regard to the consequences of the proposals contained in the Bill on the rest of the South-East region and, in particular, on the City of London—the Bill has now been considered by our Select Commitee under the chairmanship of the noble Lord, Lord Alport. At this stage in our proceedings I should certainly like to express gratitude to the noble Lord and the members of his committee for the very careful and thorough consideration they gave to this matter.
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The committee of the noble Lord, Lord Alport, reported on 16th October. Thus, of the 15 petitions against the Bill, all relating to bodies that alleged interests had been adversely affected by it, eight were withdrawn before the committee met; six more were withdrawn on the first day of the committee, and the one remaining petition was withdrawn during the course of the committee's proceedings. Therefore, I have further to report to your Lordships that the Bill left the Select Committee unopposed and without amendments.
The Bill then went before the Unopposed Bill Committee and, by consent, various amendments were incorporated into it. For example, British Rail wanted some protection on its operational property; the Department of Transport was concerned about the workings in the tunnels; and there were also some drafting amendments. Finally, there was an amendment concerning new measures against fare dodgers. These new penalties against fare dodgers were incorporated in the two earlier Acts to which I have referred, but it was thought that there was some defect in the structure of these penalties, carrying the risk of double jeopardy. For that reason they were removed from this Bill.
They are also being removed from the earlier two Acts; but in an omnibus provision London Regional Transport intends to come back again to deal with the matter for the whole of its network. I understand measures will be incorporated in a Private Bill to be promoted by London Regional Transport during the next parliamentary Session. Therefore, the Bill now returns to this House unopposed. It remains unopposed and amended to the degree I have just described.
I think it may be helpful to remind your Lordships of some of the essential features of the Docklands Light Railway. First, I refer your Lordships to the routes. I have already indicated that these run from Tower Gate to Stratford, going towards the north of the Isle of Dogs and round to the south, to Island Gardens, which will be the station at the bottom of the Isle of Dogs opposite Greenwich Royal Naval College. At present, the total distance of the Docklands Light Railway is 7·3 miles and with this extension into the City of London it will have a total length of 8·4 miles. Therefore, the journey from the Bank to Stratford will be six miles, taking some 18 or 19 minutes; from the Bank to Island Gardens, four-and-a-half miles, taking 16 minutes; and from the Bank to Canary Quay—where the proposed Canary Wharf Consortium will be erecting its building—will be two-and-a-half miles and taking about nine-and-a-half minutes.
Briefly, to go through the other major features of this railway, it is proposed that there will be frequent services from the Bank. During the rush hours they will be every four minutes and every seven-and-a-half minutes during ordinary hours. It is proposed that it should be constructed by the modern light railway design, in which one major British manufacturer—GEC—is taking a major part; and the choice of the light railway is for speed and economy. When travelling it will consist of two articulated carriages each carrying 260 persons, making a total per train of just over 500 persons. It is expected that in the London Docklands as presently sited the initial traffic will be in

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the region of 11·4 million passengers per annum. But if your Lordships give your approval and this extension is built, it is estimated that it will then be in the region of about 30 million passengers per annum, and of those about 80 per cent. are expected to be commuters.
It is also intended that this railway should be run at a profit. The estimated operating cost will be £6 million, with a fares revenue of £10 million when under full operation. The cost will be just under £100 million. That includes not only the building of the tunnel but modernising and altering the existing track in order to take bigger trains. Just under half of that amount has been offered by the Canary Wharf Consortium. The proposal for building the Docklands Light Railway, and that regeneration of the Docklands connected with it which constitutes the Canary Wharf development, owes its origins to two major occurrences which are quite separate from one another but each of which is as momentous in its own way as the other.
I refer first to the severe decline of the London Docklands industry and secondly to the vital need for the City of London to expand its financial services industry if it is to keep its position as a major international financial centre and in so doing be a world leader. As regards the decline of the London Docklands, I can do no better than refer to the evidence given before the Select Committee by the Deputy Chairman of the London Docklands Development Corporation, Mr. Mills, who said:
"This is an area of East London which has had two devastating economic blows rained on it in the last 20 or 30 years, one being the collapse of the docking industry and all its associated trades and the other being a very substantial decline in manufacturing in the immediate hinterland and the result of this has been not only the very high levels of unemployment"—
to which your Lordships have had reference earlier—
"but also a devastating effect on the communities there who have seen one opportunity after another in social and economic terms slip away. It was a community where many of the most able had upped sticks and gone to live somewhere else. It was a community of people who were suffering considerably lower standards of living than other people in this country and one where disillusionment and despair was pretty rampant and where the economic base needed almost total renewal if the area was ever to be brought back into the mainstream of London and bright life again".
The second major matter concerns the City of London. Your Lordships may recall from Second Reading that it was estimated that the City of London will need to increase its work force to 500,000 from its present level of 300,000—which is an increase of 200,000 persons—during the next 10 years. This is exactly how the Canary Wharf Consortium came to the Docklands. It was not to help solve unemployment per se, although clearly it will do so, but for the healthy reason that there was a commercial need for the construction of that vast building.
It is proposed that it will indeed be a large building: altogether of 10 million square feet of usable office and hotel space. It will consist of three tower blocks, one extending upwards to about 850 feet. The employment levels that it offers will be high—somewhere between 45,000 and 49,000 jobs—and there is a total estimate, including jobs created off site, of about 57,000. The figure for local employment estimated by the Henley Centre is 21,000, although certain different
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figures have been given by Peat Marwick. If we get into a tussle over statistics I shall deal with that point later in the debate. Thus the Canary Wharf Consortium is offering to provide about one third of the expansion needed for the City of London.
If this proposal goes ahead, benefits will come not only to local and national employment, to which I have drawn your Lordships' attention, but also to British industry. Let me cite three examples which I did not give at Second Reading. There will be five United Kingdom construction firms directly involved in building for the Canary Wharf Consortium. About one third of UK production of structural steel will be needed for the construction of this vast building and there will be benefits to a multitude of other industries whether they be carpet manufacturers, tile makers or whatsoever.
According to the promoters and the London Docklands Development Corporation, in some ways the proposed extension of the Docklands light railway is essential on several counts. It is essential as a direct link for the Docklands community into the London Underground system. It is essential, too, for the future extension of the London Docklands Railway to the west—and I am referring to further plans to extend this railway through the Royal Docks to Beckton. It is also essential to have the presence of the large building proposed by the Canary Wharf Consortium because the consortium has made it quite plain that, if this railway link is not built, there will be no economic base on which it can proceed with that massive assistance to accommodation for the financial services in the City of London.
At this stage in the passage of a Private Bill it might be reasonable for the promoters to invite the House to be satisfied with the Bill—satisfied on the need for the railway extension for the reasons that I have put before your Lordships and satisfied that the interests of all persons adversely affected have been properly considered. As I told your Lordships earlier, all the 15 petitioners have been satisfied by the promoters and therefore the petitioners have withdrawn their petitions and left this Bill as an unopposed Bill.
However, there are other matters which have been put before the House. There was the instruction of the noble Lord, Lord Sefton, at Second Reading which the Select Committee took up and upon which it gave its judgment. There was the right reverend Prelate's amendment, which has now been withdrawn, but as I understand it he will still be addressing the House on the matters which lie behind it. I see that the right reverend Prelate nods his head. Also, there is now another amendment from the noble Lord, Lord Sefton, which must be considered by this House.
As a promoter of this Bill I have no wish to curb the debate but I must advise the House that all the matters which the right reverend Prelate and the noble Lord, Lord Sefton, propose to raise fall outside the provisions of this Bill and outside the control of its promoters, London Regional Transport. Therefore I suggest that the most helpful way for your Lordships' House to proceed—a Government Statement permitting—is to hear directly from the noble Lord, Lord Alport, and other members of his committee who put down their names to speak about how they came to deal with the instruction.

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With reference to the committee of the noble Lord, Lord Alport, I should just like to observe that as a result of your Lordships giving leave for the committee to follow such a course—although it is not usual for evidence to be heard in these circumstances—evidence was heard from two Members of another place; namely, Mr. Mikardo and Mr. Spearing, who are Members of Parliament for constituencies which are affected by the Docklands area development. Their Lordships also heard from Councillor Fred Jones who as well as being a leading local politician is also chairman of the Docklands Consultative Committee.
Those of your Lordships who have read both the report of the committee and the evidence given to it will agree with me that the committee probed the matters very thoroughly. The noble Baroness, Lady Fisher of Rednal, did not leave unexamined any of the witnesses called by the promoters and indeed she examined them with thoroughness.
I should like to remind the House also of the conclusions of the Select Committee and to highlight the appropriate passage in which the committee advises your Lordships' House, which is to be found in paragraph 18:
"In their [the Committee's] opinion the consequences of the proposals contained in the Bill are likely to be beneficial to the City of London. The City must expand and the development of the London Docklands provides it with an opportunity to do this".
That encapsulates the committee's response, having heard all the evidence which was introduced as a result of the instruction of the noble Lord, Lord Sefton.
However, I think I should give a word of warning about the amendment of the noble Lord, Lord Sefton. If the amendment is carried, it could adversely affect the execution of the Bill and the building of the railway. I ask whether the noble Lord is repeating the same exercise that he took your Lordships through on Second Reading. I have received a note from him, and I hope that he will not find it necessary to press his amendment although I accept that he wishes to address the House upon it. Therefore, however long this debate may go forward, I ask your Lordships not to allow any of the amendments to imperil the passage of this Bill, which, for reasons that I have tried to put to your Lordships, carries so much benefit for London and for England as a whole. I commend the Bill to the House.
Moved, That the Bill be now read a third time.—(Lord Hacking.)
Lord Graham of Edmonton: My Lords, before the noble Lord sits down, am I correct in having heard him twice tell the House that the developers have indicated that, unless they get the Bill, they will not find a commercial base from which it is viable to proceed? Is that not some form of blackmail?
Lord Hacking: My Lords, absolutely the contrary, if I may say so. The Canary Wharf Consortium is comprised of consistent men of commercial judgment. They are entitled to make their own commercial judgments. They say simply: "We need this railway if our project is to be commercially successful". It is a matter of commercial judgment, not of blackmail.

The Rover Group
3.41 p.m.
Lord Beaverbrook: My Lords, with the leave of the House, I should like to repeat a Statement made by my right honourable friend in another place. The Statement is as follows:
"With permission, Mr. Speaker, I should like to make a Statement on developments within certain Rover Group businesses.
"On 24th July I informed the House that agreement in principle had been reached on the sale of Leyland Bus and of a majority holding in Unipart, and I can report in both cases that detailed negotiations are proceeding satisfactorily. In reply to Questions on 5th November I also announced the disposal of majority interests in Jaguar-Rover-Australia and in Istel. The situation on Land-Rover remains as I stated last April, that Land-Rover will be retained in the Rover Group for a possible flotation or trade sale at a later date.
"The Chairman of Rover Group has also been reviewing the options for Leyland Trucks. This review has been taking place against the backdrop of continuing depressed demand, particularly in overseas markets, and severe overcapacity in Europe. Our objective is to achieve a secure future for the production of Leyland Trucks. But it must be recognised that any option for the company—whether related to collaboration, merger, sale or indeed continuation under present ownership—will involve restructuring.
"Talks are progressing with two companies. The first is DAF. Honourable Members will be aware that in October a limited but important collaboration on the marketing of Roadrunner trucks and Sherpa vans was announced. DAF and Rover Group are now in talks about the benefits that could arise from much more fundamental collaboration in the truck and van businesses.
"The second is Paccar, the parent company of Foden, who are considering the basis on which they might wish to make a bid for Leyland Trucks.
"Both sets of talks are at an early stage and, for the reasons I have already outlined, Mr. Day has my full support in pursuing them; I thought it right to inform the House at this early stage and I shall of course keep the House in touch with developments. I am sure Honourable Members will understand and accept that it would be prejudicial to the interests of those employed in these operations and in their suppliers for me to make any futher detailed comment on the discussions at this stage.
"Mr. Day's review of the plans for all Rover Group operating companies including Austin Rover will form the basis of the 1987 Corporate Plan now under preparation. After I have received it and given it careful consideration, I will announce the Government's response. In respect of Austin Rover, I should however like to take this opportunity to emphasise that I expect Mr. Day's plan to set out a positive course for the continuation of the company as a major producer and leading exporter of cars made in Britain. I stress that the Government's aim is to secure the best possible future for Austin Rover,

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its suppliers and the motor industry generally in this country".
My Lords, that concludes the Statement.
Lord Williams of Elvel: My Lords, we are most grateful to the noble Lord, Lord Beaverbrook, for repeating the Statement made in another place. We are also glad that the Government have seen fit to take us a little more into their confidence this time round than they did in the confusion that took place somewhat earlier this year when successive Statements were made basically contradicting each other.
I have several questions to ask of the noble Lord, and I hope that he will bear with me. The first two are general. After the fall in the exchange rate that has taken place, would it not be true to say that there are great opportunities even at times of depressed demand for selling our trucks overseas, and particularly into Europe? Is it not to this that the noble Lord, Lord Young of Graffham, was referring the other evening when he said that there are great opportunities for our manufactured exports?
Secondly, does the expression "restructuring", which the noble Lord used in the Statement, mean capital restructuring or is it a polite way of saying further redundancies? Perhaps the noble Lord could clarify that point. My third question relates to the specific proposal to collaborate with DAF. If this is to be a collaboration between equals, is the noble Lord aware that we shall give this a guarded welcome? We agree with the proposal that there should be,
"a limited but important collaboration on the marketing".
We would go further and say that more detailed collaboration with DAF could be successful and sensible. The only proviso that I would make is that Volvo, which has close relationships with DAF, should at least undertake to make sure that the interests of the United Kingdom are protected in any such arrangement.
My fourth question relates to Paccar. Is the noble Lord aware that Paccar is a US company; and I should like to ask what distinction can we make between the Paccar proposals and the ill-fated GM proposals that we were considering earlier this year? What protection would there be for Leyland Trucks, and what protection would there be for component manufacturers? If GM proceeds with its unfortunate plans to close down truck production and Ford does the same, what would be left of truck production in the United Kingdom or truck production under UK control? So far as I can see, there would be only a small company called ERF, which was a spin-off from Foden when it was taken over by Paccar.
My final question is a general one, but it is most important. Have the trade unions and the industry been consulted on these proposals? If they have not, why have they not been consulted, and can we have a guarantee from the Government that the trade unions will at an early stage be brought into consultations? It is vitally important, as I am sure the noble Lord and your Lordships will agree, to keep up the morale of the workforce in these difficult times, and the trade unions are representative of the workforce. I hope that the noble Lord will be able to give us that undertaking.
Lord Diamond: My Lords, we too on these Benches are most grateful to the noble Lord the Minister for repeating the Statement. We should like to add our appreciation of the fact that the Government have thought it proper to consult both Houses of Parliament at an early stage. I am sure that this will help forward the best possible outcome to these difficult and longstanding negotiations.
The questions that I have to ask are mainly covered by what has already been said by the noble Lord, Lord Williams of Elvel; but I think that I ought to make our position very clear. First, we welcome very much the very positive attitude taken by the Government at the end of the Statement, particularly in stressing that the Government's aim is to secure the best possible future for Austin Rover, its suppliers and the motor industry generally in this country. Can I take it from that that the Government accept as an economic principle that a domestic volume car production is essential for any healthy economy, as we believe?
Although my second question is similar to one that has been asked, perhaps I may ask it in a slightly different form. Has the workforce been consulted through whatever channel is appropriate, including the unions? It is absolutely essential in our view that this should be done, that their full co-operation should be sought throughout and that they should be told very fully at the earliest possible stage what this might mean to them individually and to their employment.
My third question is again about Paccar. The Statement says that Paccar is considering the basis on which it may wish to make a bid for Leyland Trucks. That is unclear. As has already been said, we want to know whether that means that Leyland Trucks will continue or that it is merely an offer to buy competing production and put it to bed.
My next question is about Land-Rover. The Government say that Land-Rover will be retained in the Rover Group for a possible flotation or trade sale at a later date. A possible flotation of what? Is it a possible flotation of Land-Rover by itself, which we would not welcome, or is it the possible flotation of the Rover Group, which would need to be looked at in the terms current at the prescribed time? We should naturally want to satisfy ourselves that such a flotation is in accordance with the Government's undertaking to secure the best possible future for Austin Rover, and is not to secure the best possible amount of cash as part of their policy of selling the nation's assets. Those are the questions in which we are mainly interested.
Lord Beaverbrook: My Lords, I am grateful to the noble Lords, Lord Williams of Elvel and Lord Diamond. I shall preface my remarks when answering their points by emphasising that the discussions with DAF and Paccar are at an early stage. The noble Lord, Lord Williams, asked whether the fall in the exchange rate would create new opportunities for the domestic motor industry. We have explored a great many avenues and we have concluded that doing nothing is not an option. We need to look at all possible means of securing a reliable, long-term future for the industry. Sale is one option, but it is not the only one.
The truck industry in one in which international links are increasingly seen as essential. Ford and Iveco and Volvo and GM are among the many examples.

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The exchange rate has an effect, but the effect may be less clear where there is international co-operation.
The noble Lord, Lord Williams, asked me to tell him what I meant by restructuring. At the moment, in the early stages of negotiations, restructuring has to be considered in the broadest sense. However, foreign ownership can be wholly consistent with an expanding manufacturing base. It is the competitiveness of industry, not its ownership, that is most important in determining what is good for Britain. Employment will have to be looked at. It will no doubt be looked at if and when more meaningful negotiations commence with Paccar and/or DAF.
The noble Lord, Lord Williams, suggested that the existing collaboration arrangements with DAF had opened up new opportunities for Leyland. The benefits of the linkages with DAF under that arrangement are already evident. That is why the possibility of closer links with DAF is now being explored. On the noble Lord's point about Paccar of the United States, he suggested that that proposal could be damaging for Leyland and that the company could be absorbed so that Paccar could gain an extra share of the market. At this stage it is too early to say what arrangements could be made. Discussions are at an early stage. We must wait and see what develops during the current discussions.
The point about Leyland's employees is important. Employees who may be affected will of course have the opportunity to express their views about future plans for the company through the normal machinery. The noble Lord, Lord Diamond, claimed that it was fundamental to the general health of our economy that we should have a prosperous motor industry. Yes, the Government fully agree with that. The long-term aim of the Rover Group Board and the Government is to return the company to the private sector as a thriving business.
The Statement makes it clear that we expect positive plans from Mr. Day. The noble Lord also asked me about consultations with the work force. Those employees who may be affected have today been circularised with the Statement and an explanatory memorandum. They will be fully informed as far as possible. He also asked me about Land-Rover. The position of Land-Rover remains as set out in the Statement of 24th April made by my right honourable friend. It is to be retained in the Rover Group for the time being.
The Lord Bishop of Birmingham: My Lords, I should like to thank the Minister for his Statement. I should like to ask him one or two questions about Sherpa Vans, which he said might collaborate with DAF or Paccar. Sherpa vans are manufactured within my see. He said that he was concerned with what is good for this country. I hope that he will tell us that he is concerned with what is good for Birmingham and Solihull. He said Sherpa Vans may belong to another group, but he did not know where it would obtain its engines. Noble Lords may not be aware that its present site is contiguous with that of Land-Rover and that parts other than engines come from there. What will the people who work there think?
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Can the noble Lord assure us that he is aware that Sherpa Vans has been and is doing well and has plans for expansion? Can the Minister tell the work force of Sherpa Vans what its future is likely to be if he does not know where its engines will come from if there is collaboration with DAF or Paccar? Finally, is he aware that his Statement will cause considerable anxiety in the West Midlands unless he can give precise answers to the precise questions that I have asked?
Lord Beaverbrook: My Lords, I am grateful to the right reverend Prelate. I am of course aware of the excellence of the Freight Rover Company. However, I prefaced my remarks by saying that discussions are at an early stage and that I cannot give any information about detailed arrangements for the future manufacture of Sherpa vans and other Freight Rover products. I should make it clear that Freight Rover is not included in discussions with Paccar. I believe that Freight Rover has a secure future. The benefits of linkages with DAF are already evident in the existing market collaboration. That is why the possibility of closer links with DAF is being explored.
Lord Sefton of Garston: My Lords, will the Minister persuade the Government urgently to seek an assurance about the future of the Leyland truck site? Will he undertake to present to this House the result of that as soon as possible?
4 p.m.
Lord Beaverbrook: My Lords, as I said, these are early stages in the discussions. I heard what the noble Lord said and no doubt if and when matters progress, in the normal procedure this House will be fully informed.
Lord Teviot: My Lords, will my noble friend please answer my question on Leyland Bus which has not so far been answered? Will he tell us what he thinks the future of this company will be, despite the current traumatic changes in the home market? I shall be pleased to hear all news that he can give us.
Lord Beaverbrook: My Lords, the Government are of course anxious that Leyland Bus will prosper as an individual company. We hope that in the plans for Leyland Bus it will prosper. Rover Group is continuing to negotiate the details of a sale with the management buy-out group.
Baroness Fisher of Rednal: My Lords, I come from the City of Birmingham, and my title, Baroness Fisher of Rednal, incorporates the large Leyland works at Longbridge. Following what the right reverend Prelate the Bishop of Birmingham said about the anxiety that will be caused in the West Midlands by the Statement that the Minister has given today, this must really be the death knell for the employees of that organisation, an organisation of workers who have accepted categorically from management that they have to become more efficient. They have taken unemployment; they have taken redundancy; they have slimmed down and now there is what is called an efficient workforce.
The workers having done all that we now have this Statement almost saying, "Thank you very much.

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You have made yourself very efficient. The Government think you are now ripe to be picked and sold off". It is an unfortunate set of circumstances. This is after we fought hard against the sell-out to General Motors. The appointment of Mr. Day filled employees with dismay because they knew the successful job he had done for the Government previously and quite obviously thought that they were in line to be slaughtered as the shipbuilders were.
This afternoon we have to ask the Minister this question. What does he mean when he talks about the normal machinery of consultation with the employees? He said that he cannot give any assurances. We have to ask whether he can speak not in Government doublespeak but in language which the employees there will clearly understand.
In conclusion, is the Minister aware that unemployment in the West Midlands is now up to 20 per cent. of the workforce? If anything happens to these industries the spill-off will involve all the other firms making motor accessory parts. We do not want to see a further worsening of the situation when the whole area is trying so hard to pull itself up without government aid. What it does not want is a government dagger in its back.
Lord Beaverbrook: My Lords, in trying to answer the large number of points I should like to say that Mr. Day's job is to run the company commercially in the interest of all concerned. I am quite sure that uncertainty surrounding the company will be minimised if Rover Group is able to get on with these discussions confidentially and quickly.
As I have said several times previously, it is not yet clear where the outcome of these discussions with Daf and Paccar will end. All I can say is that those employees who may be affected will of course be consulted at the appropriate time as to what their prospects will be. We are anxious to see the establishment of a long-term solution to the problems of the industry. The noble Baroness may be aware that there is overcapacity of truck production in Europe of 40 per cent. Therefore it is not a problem that can easily be solved.
Lord Taylor of Blackburn: My Lords, I am sure that the Minister is doing his best to answer these questions. Those of us who live in the area—both in Birmingham and in Lancashire—are aware of the commercial difficulties, but we are trying to stress to the Minister and to the Government not just the commercial side but the compassionate side as well.
Lord Beaverbrook: My Lords, we are very much aware of that side. That is why the Statement is being made today, in order to give as much information as there is at this stage on the subject.
Lord Williams of Elvel: My Lords, will the noble Lord report to his right honourable friend the disquiet that many of your Lordships have expressed on receipt of this Statement? Will he also give us a very clear undertaking that the interests of the United Kingdom, of Birmingham and of Solihull will be taken into account and fully safeguarded in any deal, whether it be with Daf, Volvo or Paccar? I refer also to
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Lancashire. I am grateful to my noble friend Lord Taylor of Blackburn for bringing that in. Will the noble Lord also give us a clear undertaking from the Government that there will be full and proper consultation with the trade unions and employees involved—not just telling them at the last moment what is to happen but proper consultation? That means that they will be allowed to express a view and that that view will be clearly and seriously taken into account.
Lord Beaverbrook: My Lords, I shall convey the views of the House to my right honourable friend but I emphasise that it is in the interest of all employees of the company that a viable long-term future be secured.
Lord Diamond: My Lords, that is absolutely right, but I want to press the Minister further on the very unsatisfactory answer he gave me with regard to Paccar. I specifically asked a question which he can answer. It does not relate to how far the negotiations have reached. It does not relate to any of the details which he regards as sub judice in some form. It relates to the Government's intention.
Is it the Government's intention with regard to Paccar to enter into an arrangement which might result in that factory being closed down, or is it intended to result in that work being strengthened? It is a very simple question. The noble Lord will remember that when we last had a series of Statements on this matter we could not get an answer out of the Government as to whether their plans were for an amalgamation or for a sell-off. It is a similar situation today. Are they proposing to achieve a situation in which there is continued manufacturing in the Paccar plant or are they proposing to enter into negotiations which might result in that plant being closed down and the employees not having jobs?
Lord Beaverbrook: My Lords, the Government wish to see a solution in the best interests of the company, the employees and all concerned. The discussions are at a very early stage. The board of Austin Rover will put to the Government the alternatives for the Government to consider once the board has completed negotiations with the two interested parties. The Government at that stage will have to review the options. The Government want to see as much as anybody else—in fact probably more than anybody else—a successful truck manufacturing industry in this country.

London Docklands Railway (City Extension) Bill
4.9 p.m.
Third Reading debate resumed.
Lord Sefton of Garston Lord Sefton of Garston moved, as an amendment to the Motion "That the bill be now read a third time", at end to insert:
("but this House considers that the Canary Wharf development will highlight the problems of high costs and congestion in the South-East and that a Select Committee should be appointed to inquire into the matter.")
The noble Lord said: My Lords, can I clear up what appears to be a misunderstanding? I certainly do not intend to oppose this Bill; I never have. I do not intend to delay it; I never have. I had assumed that the right reverend Prelate the Bishop of London having withdrawn the amendment he previously tabled, the long list of speakers did not contain anyone wanting to speak to that matter. If I have been the cause of the tremendous number of people, certainly more than I ever thought, putting down their names, then I apologise. I can perhaps say to the noble Lord, Lord Hacking, that there is nothing in my amendment that would delay, damage or obstruct the Third Reading of the Bill. In fact, if the noble Lord were so minded, he could accept my amendment. The amendment does not simply say, "this House considers". It also includes the words:
"that the Bill be now read a third time".
I believe that it is absolutely vital and essential, more now than ever before in the history of this country, that the financial world should be attracted to London. Lord knows, the deterrent to the international financial world coming to London has not sprung from someone who wishes to see fair treatment between the North and the South of this country. It has sprung from the City of London. The other deterrent factor is, of course, the high cost of setting up offices in the City of London.
The congestion that follows the setting up of offices and the high cost are also deterrent factors to the private sector coming to London. I believe this implicitly. I am a socialist. I would never subscribe to the view that the pursuit of private greed ever results in the best for the largest number of people. I do not subscribe to that feeling.
I recognise however the implicit fact that in the international field we have to be competitive; therefore, this nation should look upon itself as a limited company. Somehow or other we have to make the City of London pay. We can make it pay only by being efficient. When it takes 15 minutes to move one mile in a perfectly good British motorcar, the inefficiency should be apparent to everyone in your Lordships' House. But that is the common experience in London.
I say to the noble Lord, Lord Hacking, "Do not worry about the amendment; it has no problems for you". I look for another reason to see why so many noble Lords have their names down to speak on a Bill that would have gone through with a nod of the head if I had not tabled the instruction at Second Reading. I was told that. Everyone knew it. Now we have a long list of speakers. Why? I can only assume that the London Docklands Development Corporation sent the speakers, or some of them, the same letter that urged me to support the Bill. There is no need to urge me to support the Bill.
While we, in the City of London when we are here, appreciate all the problems in the City of London, even the greatest supporter of private, capital enterprise would agree that there are some abuses that should be stopped. We have a duty to ensure that the country is run with a sense of fairness and that we make proper use of our economic resources.
It is ironic that the Statement before this Bill, once again in regard to our economic affairs, highlights the difference between the North and the South. There is no one from Middlesex bothering about the Statement. Those taking part were from Lancashire, the Midlands, Birmingham and everywhere else in the North. That is the pattern of our economic affairs.
I suppose that we could have tackled the housing problem in London if we had got down to it properly and looked at the problem as a whole along with the needs of the rest of the country. We did not. We certainly could have tackled the congestion in the City of London and the South-East, but we did not. We could have tackled the question of high costs; again we did not. We did not tackle these problems because Parliament has never really given itself to the task of looking at a proper regional policy.
Parliament has never got down to the task of saying, "What is wrong if we have an over-affluent society in the South-East and a very poor society in the North?". Parliament did try in 1978 to divert some of the government-provided jobs from the South-East to the North, then government stopped it. There was a case made out in government circles for the moving of the jobs inside the Ministry of Agriculture and Fisheries to the North, as I said in the debate on the Second Reading, and as I say in my instructions. However, the Government saw fit to abolish it.
Do any of your Lordships really subscribe to the view that the distribution of economic resources in this country is fair, just or proper? I am not asking that the situation should be rectified overnight. I am not setting myself up as an authority as to how it should be done. What I am suggesting is that, instead of building garden festivals in Liverpool and in Stoke-on-Trent and not bothering about the result, we should look at the question of a regional policy within the context of a national economic policy. It is no use going to a region and saying "This is what needs doing here", if you are allowing all the resources to be concentrated in another region. In effect, this country is slowly and surely building up to such a situation. We have neglected all the chances to plan properly.
When I started to move the Instruction I was told not to be silly, and that nobody would take any notice; it should not be done on this Bill. I searched and searched for other ways to draw attention to this very problem, and more importantly, to get your Lordships' House during all the time that is available to stop talking in debates at which we have no vote at the end, to face up to the problem and decide to do something. Perhaps the Front Bench spokesmen on either side might tell me there is another way, but the only way I know in which problems of that sort can be looked at is through a Select Committee. It would not cost much. A Select Committee would be able to gather all the evidence needed for any change in our economic policy. The Select Committee would be able to do many things that I cannot do.
On Thursday there is a Question which will be raised which is very apposite to this subject: "What is the difference in costs paid to employees of the Government in London, and those paid to people in Merseyside?" This question arises because for some mysterious reason or other the Chancellor of the Exchequer thought that if people in the provinces

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would only lower their wage demands, and accept lower wages then people would flock up to the North. Well, are they, my Lords? Twenty per cent. more is paid by the clearing banks to the same staff in London as is paid in the North, but do the clearing banks move their staff? Certainly, they do not. Will Government move if in fact the differential is the same? Of course, they will not. This has been tried before.
There are many other questions which could be raised. With all due respect to the noble Lord, Lord Alport (whose opinion I value very greatly having had a long conversation with him about the problems of Liverpool and Merseyside), the report does not really go into the matters that are associated with the creation of 200,000 more jobs in London's Dockland. The report did not really deal with the problem of 200,000 more people having to be transported from the centre of London to the Dockland. I accept why it did not do so. I accept of course that the report is limited in its scope and therefore I do not criticise it. However, it has enabled me to air the problem here and pose the following question to Members of your Lordships' House: "Do you think there is a problem?" Do not forget that London Dockland will be followed by something else—Stolport. This would create the need for more people to move from the east of London to the city centre.
Lo and behold, when the Channel Tunnel Bill comes to your Lordships' House one of the proposals will be to take all the people arriving from France through the tunnel to Waterloo. Will that not have an effect upon the people there? I have heard already Members of your Lordships' House, particularly noble Lords on the opposite side, getting very irate about the number of tourist buses that are parked outside your Lordships' House. Of course, noble Lords have been irate. Regularly, every summer, they complain about the congestion caused by tourists. The Channel Tunnel Bill will introduce more on top of those already to be seen in Victoria. One will be unable to walk along Victoria Street, never mind go down there in a cab.
Those are some of the problems that will arise from an increase in commercial activity inside London's Dockland. Does anyone deny them? Of course not. There are plenty of speakers on today's list. If someone is going to suggest that we do not have a problem over congestion in the South-East, he can stand up and tell us all about it; he can tell us how nice it is to live in the South-East, how convenient it is to live in the City of London and how easy it is to commute between the City and home—an hour and a half each way—crammed into tube trains. They call that a civilised way of life! That is the kind of situation which pertains in the City of London.
I am not saying that it is bad. After all, if your costs go up by 20 per cent. and you are fortunate enough to be a civil servant, an employee of one of the big clearing banks or an employee of one of the financial houses, it does not really affect you because your association or union will immediately slap in a demand for Greater London weighting. What does that mean? In effect, it means that the 20 per cent. increase in wages alone, not counting the cost of housing or the rateable value of an office in London, is,
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by and large, met by the rest of the country. It is a London levy which income-tax payers in Merseyside, Lancashire, Yorkshire and the North are expected to pay so that the Government can dish out the money to civil servants in London. Is that wrong? Will someone say that it is not a true statement of affairs? Of course, it is true, and it is continuing. Therefore, that is another problem that could be examined.
I do not think that I need say much about transport congestion. I have already referred to my own personal experience this morning. Even London Regional Transport admits this, so who am I to argue? In its annual report, it says:
"Traffic congestion is causing lost mileage [and higher costs] and excess waiting times, and is worsening".
That is very nice for those who have to travel by public transport. Of course the situation is worsening, because Canary Wharf is also a generator of other activity. If Canary Wharf is to provide a third of the extra 200,000 jobs to which the noble Lord, Lord Hacking, referred, other organisations will go to Dockland in order to cash in on the prosperity of Canary Wharf. Therefore, again, congestion will increase.
I am not saying that there is an easy solution. This Government have been in office since 1979. I do not say this in a party sense; I merely mention it in order to show that governments of all colours have a certain pattern of development. As a result of pressure by Members of Parliament from the North, who were mostly Labour Members, the previous Labour Government began a regional policy that encouraged movement from London to the provinces. That was perfectly in order. Now the complete opposite has happened. This Government have stopped that flow. There is, of course, a philosophy behind their policy, and I accept it. However, I am hoping to appeal to Members of this House to forget the political philosophy of either Left or Right and to ask: is it right or wrong that the policy of the marketplace adopted by this Government should rule when we are talking about equity and fairness in the distribution of economic resources (and that means jobs) to the rest of the country? I maintain that that is not right.
I have taken up a long time, partly because so many speakers are on the list. If so many names had not been put down, the House would not have had to put up with me for so long. It is a peculiarity about this House that one is told when to put down one's name. I did not want to put down my name following the opening speaker. I wanted to speak at the end because some of the things that I have said may not have been disagreed with. So I have to repeat them over and over again. I can call in evidence only those Members of this House who share my concern. At the conclusion of the Queen's Speech, there was no vote of any moment. Everyone knew which way the vote would go; it was a vote for or against loyalty to the Government. At cols. 266 and 267 of the Official Report of 19th November the noble Lord, Lord Alport, dealt with the problems of Liverpool, my home town, of which I am very proud. I note that one of the organisations there received a very high award from the CBI. My noble friend Lord Dean—and I forgive him for coming from Manchester—was also concerned about the North. Perhaps a better person to call in evidence as regards

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concern over the North—South divide is the noble and learned Lord, Lord Simon of Glaisdale. I shall not take up time quoting his remarks. If noble Lords are interested they can read the Official Report.
My noble friend Lord Mellish, of London Docklands fame, also made some very telling remarks about the North and South. He said that it is a national problem, and that we cannot just walk away from these problems. He was referring to some of the problems outlined by the noble Lord, Lord Alport. My noble friend said that we must face them.
I am merely asking that this House goes along with that. We should face the problems; we should set up a Select Committee in order to obtain evidence. What evidence is there that something needs doing about the affluent South, while all the important statements coming from the Government are further worsening the position in the deprived North? Is there, or is there not, something to be done?
I am very sorry that the right reverend Prelate the Bishop of London has withdrawn his amendment. I was sorry to be told by some Members of this House who come from the North that I am wasting my time and should not press this amendment to a vote. Those who believe that there are problems about the North-South divide and have named some of them should at least be given an opportunity to stand up and be counted. Therefore, I intend to press my amendment to a vote. I have been told that I shall look silly if only two people vote for me. I shall look even sillier if only one person votes for me. However, as a certain famous international politician once said, "I may be in the minority of one, but that does not count. I am bloody well right." That is what matters. If I do not get another teller, I could not care less. Those who do not support me but who believe in what I am saying will let themselves down, not me.
I have already referred to the Channel Tunnel, and I conclude my remarks on that. I shall treat the House kindly and shall not go into all the quotations from the Daily Telegraph which I have here. However, in yesterday's edition of the Daily Telegraph there was an article about the British Road Federation's proposals to ease traffic congestion in London, which is something that is close to all our hearts. It will be very nice for the proposers, the developers, and the construction firms if a proposal to build a £200 million elevated road above the railway lines from Wandsworth to the City of London goes ahead. When serious-minded people propose that kind of remedy to solve our traffic problems that is the sort of farcical situation which we are reaching.
Let me draw your attention to what happened in Los Angeles. The worship of free enterprise and the freedom of people to use motor cars anywhere they wanted was pursued by the local authority, who then built motorways right throught the city. If you went to Los Angeles at a certain time, and they allowed you, you could go down a motorway and fly right off the end of it because it was never completed. They found that by planning for traffic to this density they were in effect killing the very places that the motorist wanted to get to. That is how they stopped it; they ended a motorway right in mid air.
There is Stolport, the Channel Tunnel, Canary Wharf and the extra traffic that Canary Wharf will generate, and now a proposal by the Church of England to develop Paternoster Square with, I think, a million square feet of offices. I am sorry that the right reverend Prelate the Bishop of London withdrew his amendment. Now that proposal comes along.
Members of this House may think that this is a serious issue, or they may not. Let me tell you that the people in the North think it is serious enough. People in the North think it is serious enough to get to a situation where the Tory Party in Liverpool has walked out, neglected it. They are having nothing more to do with it. It will not be long before the people in the North will be saying the same thing to this kind of government. If we go on for another 20 years with a slow Rake's Progress of dividing this nation into two, do not be surprised if the division becomes very painful, and indeed a lot more painful from Brixton, Liverpool and elsewhere, the deprived areas, because that is what will happen unless we do something to rectify the situation. I beg to move.
Moved, as an amendment to the Motion "That the Bill be now read a third time" at end to insert ("but this House considers that the Canary Wharf development will highlight the problems of high costs and congestion in the South-East and that a Select Committee should be appointed to inquire into the matter.")—(Lord Sefton of Garston.)
4.32 p.m.
Lord Nugent of Guildford: My Lords, since the noble Lord is going to divide the House at the end of the debate, I ought to spend a minute or two answering the amendment so far as it relates to the Bill. I certainly read the amendment to mean that the noble Lord wanted a Select Committee to be set up and presumably to reach a conclusion before the Bill was approved. But I am sure the House is relieved to hear that that is not his wish and that indeed he is in favour of the Bill. Therefore, when the substantive Motion is put to the House, assuming the amendment is not carried, no doubt he will vote for it.
After listening to the noble Lord, Lord Hacking, I feel that is is unlikely that any noble Lord in the House could be other than in favour of the Bill, because why it was needed was extremely well explained. But the noble Lord's main contention was the need for a national regional policy which would somehow help the extreme problems of the northern half of the country, with which we are all familiar. Certainly I respect the noble Lord's sincerity and the passion with which he puts over his case, but I must observe that that does not quite fit into the Third Reading of this Bill.
The noble Lord is probably right in his guess that the long list of speakers on this fairly simple measure was provoked by what appeared to be a hostile amendment—or at one time, when the right reverend Prelate's amendment was there, two hostile amendments—that might have stopped the progress of the Bill, which to most noble Lords appears to be an extremely valuable measure. In so far as it has provoked an interesting debate the noble Lord has succeeded, as a great many noble Lords are to speak

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who otherwise would not have spoken, including myself.
I was not invited by the London Docklands Corporation to speak. In fact, I had to ring up yesterday and ask the corporation whether it would be so good as to send me some facts so as I could speak on the Bill. Therefore, it was not all that busy getting speakers together. I assure the House that I shall not take very long in my remarks because most of my speech is not needed. The noble Lord made the primary point—about which I agree with him, and the House would agree—that what we are concerned with here regarding the London Docklands Corporation is the further development and strengthening of the capacity of the City of London to earn a substantial part of the nation's living in its trading with the world.
London, with its financial and commercial services, is I suppose by far the strongest point in our whole economy to earn the money we need in order to live as a nation. Therefore, this major expansion which Canary Wharf promises—and that kind of specialised building is needed nowadays—connected into the middle of the City is undoubtedly going to help London's capacity not only to hold its place but further to strengthen its place as one of the leading financial centres in the world; New York (Wall Street), Tokyo and ourselves in the middle. Therefore it is vital to see that we have the space to trade, and trade profitably. This is what Canary Wharf would do, and its obvious that unless it is connected into the middle of the City, to the Bank, it could not fulfil the hopes of its developers.
When you look at the names of some of the developers—I have no experience in the City but I know one or two things there—and you see the Swiss Bank connected with the development, you can be sure that it is going to be a very profitable development, as long as they get the conditions right. I do not doubt that this is something that will be very good for the City. A point I would make to the noble Lord, Lord Sefton, who speaks with such passion of the needs of Liverpool which all of us see and sympathise with, is that there is a limit to which the Government can divert resources from the South-East to help the North. There is a limit.
The way we have to look at it is this. Before the national cake can be divided, it has to be earned. Because London has such a terrific earning capacity we must do everything we can within the limits of London to see that it has the capacity to expand and to continue to increase its earnings. That will make more money available for all the other needs of the country.
In this context, where the Docklands Corporation has been so outstandingly successful is that, although it has received fairly substantial sums from the Government—not all that much more than the London boroughs and the Greater London Council were receiving before to help this area, which they were not doing very successfully—it used it as a pump priming in order to attract private money. This is where the leadership of Nigel Broackes and the noble Lord, Lord Mellish, was so brilliant. They were successful in attracting private money to the docklands to the tune of something of the ratio of six to one for the public money so as to make possible this dramatic development that we can see there today. It is a sight
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for sore eyes to go down to the docklands and see this hive of activity in an area which 10 years ago was completely derelict.
In my days gone by, when I was chairman of the London and South-East Planning Conference, I went down there several times and puzzled over it, with all the problems that the London boroughs had, and I know what a desperately depressing sight it was. However, today it is a sight for sore eyes. That has been done because the corporation has been successful in attracting private money. It does not fall on the taxpayer but on public funds. It does not trench into the money which may be available to help the North. What it does is bring in private money to earn more money, so that there will be more revenues, so that we shall be able to do more to help parts of the country which are less able to help themselves.
This is the secret of what is being achieved there. It can only be done if you can get private business to come in. That means making not only areas to build offices, factories and industries but to build private houses so that people can buy them. The local people had a chance to buy them too. They have bought some 40 per cent of them.
We were told on the original Select Committee—I see the noble Lord, Lord Ampthill, sitting there—that the local people did not want to buy houses but that they wanted to have a council house to rent. But, my word, when they got the chance about 40 per cent. of the houses went to the local people. Of course it is natural that anyone who can afford a private house would much sooner have it for themselves. But the share out has been pretty reasonable, so that, however you look at it, the Docklands corporation to date has been a great success, and I believe that with this extension it will be an even more spectacular success.
The noble Lord mentioned the further extension of this railway down to the Royal Docks, at present, an absolutely stagnant area. There we see Stolport coming in and this will connect the air services of Europe right into the middle of the City. What a marvellous thing to do to improve the trading of London, connecting it with everywhere in Europe! This is a magical development. And, there again, there are plans for massive development of offices and all kinds of commercial activities, with a huge further increase in employment.
This is a picture which should delight the heart of everybody. In terms of regional planning as far as the South-East is concerned, what a relief it has been. Previously we had an outflow from London at a serious rate, putting pressure on the areas further out beyond the Green Belt and on to the Green Belt for new housing. Here we have houses going up by the thousand, and there are many more to come in this area, which was previously completely derelict.
However one looks at it, this has been a wonderfully successful scheme. I have already spoken for eight minutes and do not propose to speak for longer, considering the large number of noble Lords who are speaking. But I hope that the noble Lord, by the end of the debate, will feel that he has made his point. There is a major national planning problem. But as far as this Bill is concerned, it would look much better without the amendment being moved at all. I hope the noble Lord will be persuaded not to move it.
4.41 p.m.
Lord Hampton: My Lords, I have listened with interest to the previous speakers' differing views and I shall be brief. The visitor to the Docklands in London today—and the noble Lord, Lord Nugent, has touched on this; and I refer in particular to the Isle of Dogs and Canary Wharf—cannot fail to get the impression of activity and life. There is some exceptionally beautiful modern architecture going up and an atmosphere of enthusiasm among the staff. A light railway has already been constructed and our task was to decide whether a vital link with the City should be authorised forthwith or delayed while a public inquiry was undertaken into the whole nature and effects of the Canary Wharf complex.
The position is now somewhat changed and I am glad that the noble Lord, Lord Sefton, is not seeking to prevent a Third Reading to allow construction of the railway extension. I am somewhat surprised now to be speaking before the right reverend Prelate the Bishop of London. I can only anticipate what he has to say. I do not have great experience of the area in question but I have been excited by what I have seen. I served on the select committee to consider this Bill under the chairmanship of the noble Lord, Lord Alport, whom I look forward also to hearing shortly. This was a committee which sat only briefly, unlike the experience of the noble Lord, Lord Nugent in 1981.
Perhaps I might repeat that in due course all petitions against the Bill were withdrawn; it was therefore unopposed and cross-examination was reduced to the minimum. In these circumstances, the committee felt—and the noble Lord, Lord Alport will make this point—that it was difficult to satisfy Lord Sefton's searching Instruction passed by the House on July 30th:
"To have regard to the consequences of the proposals contained in the Bill on the rest of the South East Region and in particular on the City of London".
But now the amendment of the noble Lord, Lord Sefton, gives chance for some further debate on North/South problems and making the point that, as Canary Wharf is in an enterprise zone, normal planning procedure is waived and no official inquiry necessary.
I have been approached by those arguing both for and against the Canary Wharf development scheme and I seek to consider the case of both sides. The London Churches Group—and I expect the right reverend Prelate to be sympathetic here, while the noble Lord, Lord Sefton, has also touched on these points—state: one, that the effects on the local community seem to be:
"not regeneration, but further deprivation"
and, two, that there is increasing polarisation in the community of the Docklands,
"with luxury housing, often heavily protected, situated next to deplorable public sector accommodation".
And it has been pointed out that the land values have rocketed to such an extent that there is very little chance for residents to buy their own houses.
Thirdly, they go on to say that the transport position is very uncertain and, as in the case of the M.25, the very success of the system may mean overloading; and, four, that the huge skyscrapers—and
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the noble Lord, Lord Hacking, referred to these—are planned with minimum consideration of position. Perhaps I may make the point here that when I saw the model of proposed Canary Wharf building, I thought that the three skyscrapers stood out like sore thumbs.
There is also the sharp division—and again the noble Lord, Lord Hacking, touched on this—about probable job creation. The sponsors of the Bill talk of more than 50,000 new jobs, of which 20,000 would be for local recruitment. The accountants, Peat, Marwick, however, report that only 1,800 would be likely to be for local people. Perhaps somewhere between the two is the truth: but any job creation must be welcomed.
On the other hand, my colleague in the other place, Dr. David Owen, living in London for 21 years, has despaired watching what he describes as its "progressive decline", and he says that only in the past few years has he sensed, in the development of Docklands, signs of hope and a sense of a new beginning. In Inner London there has been a spiral of deprivation, with less money and relatively greater need; the whole quality of life has deteriorated; the general environment and housing have got worse, many have left and there is an urgent need to check the decline. I quote Dr. Owen:
"Canary Wharf should be the exciting challenge which Britain, with 3½ million unemployed, should back wholeheartedly. It is a project that will create more construction jobs than the British end of the Channel Tunnel. It represents the biggest restructuring of London since the city was rebuilt following the great Fire of London in 1666".
I warm to this enthusiasm and optimism.
I have always thought, as did the select committee, that it would be wrong to prevent this Bill getting a third reading but we on these Benches are not blind to the problems and anxieties of the residents of Dockland. We shall, in fact, abstain on the amendment but I think, in any case, that we should issue a caveat to the LDDC. Mr. John Mills, the deputy chairman, says this:
"The LDDC sees its role in delivering socially acceptable results for the community in Docklands as just as important as economic regeneration."
It is absolutely vital that the corporation should at all times keep these admirable aims in mind; for none of the activities at Canary Wharf is subject to the normal rigours of planning control. I trust the corporation not to fail the country—the world will be watching.
4.48 p.m.
The Lord Bishop of London: My Lords, before I speak specifically about the Bill, the amendment and Canary Wharf, I apologise to the House for any confusion which I may have created in your Lordships' minds by putting down an amendment and then withdrawing it before it came on to the Order Paper. As Bishop of London, with a pastoral responsibility in the East End, I felt obliged to secure some public discussion of issues which lie behind this Bill, and I was advised that it was the proper, and indeed the only, way in which I could do so. However, I did not feel that it was right to presume on the willingness of the House to allow me to withdraw my amendment when the time came and I therefore

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decided that the proper course was for me not to ask for it to be placed on the Order Paper.
I fear that I may take a little time this afternoon, for which I ask your Lordships' indulgence but at the outset I make it clear that I do not oppose the Bill or the Canary Wharf development, with which, as the report of the Select Committee makes clear, it is inextricably linked. I believe that we are being quite unrealistic if we think that we can debate this Bill without actually talking about Canary Wharf.
I want to raise certain fundamental questions which lie behind this development. I confess I was a little disturbed and uneasy when I heard the noble Lord, Lord Hacking, suggest that it was not proper for us to raise issues which extended beyond the precise scope of the Bill. Surely when we consider legislation here we must look at its overall impact on the community as a whole, on the country, and so on. We cannot restrict ourselves to the precise wording of the Bill.
In this respect I have a certain sympathy with the noble Lord, Lord Sefton. I can share his frustration. He is saying, "Yes, we can debate these things in general terms but when it comes to the crunch how do we actually make our views effective?". I can understand him wanting to add this amendment to the Bill, although I shall not feel able to support it when the time comes. However, I hope there might be some other occasion on which we can seek to initiate action in the way he suggests.
The key questions are what regeneration of a deprived inner-city area means and what it involves. The report of the Select Committee recognises the need for regeneration in the East End. It recognises that that was the purpose of the creation of an urban development area in 1981, of the establishment of the London Docklands Development Corporation and of the enterprise zone. The report says that since 1981 much of the Docklands has been regenerated. In one sense that is true. I welcome, and those whom I represent in one way also welcome, the developments which have taken place. But can it be said that there has been regeneration of the community? As I walk round the East End I find it difficult at times to say that there has. Rather, I find a situation in which deprived areas, with acute problems of housing and unemployment, remain next-door to such developments, admirable though they are. I find these two side by side, with little relationship between them and very often without the trust and co-operation which are essential if any community is to thrive.
I want to make it absolutely clear that I do not question the need for the production of wealth, without which a community cannot prosper. Without such wealth a community is reduced to a parasitic existence, wholly dependent upon external assistance—an existence which is inimical to healthy community life. But the fundamental question is this. How are new resources and the wealth they produce to be related to the community in which they are situated?
The report of the Select Committee recognises that the extension of the railway and the development proposed at Canary Wharf are inextricably linked. Perhaps I may just remind your Lordships that this development will be the largest single one ever
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undertaken in Europe. It will be bigger than the New York World Trade Centre and it will have more investment in it than the Channel Tunnel. Such is the dimension of the development, and it is not surprising that there should be concern about its effect on the local community.
That concern can be summarised, as is seen in the report of the Select Committee, under four headings. First, there is the fact that the majority of the development, being in an enterprise zone, is not subject to any planning inquiry. The noble Lord, Lord Hampton, has already reminded us of that. As the report says, it was pointed out to the committee that this massive project has so far received less statutory consideration than would the change of use of a small shop just outside the enterprise zone. Thus local opposition to the development, so the report says, cannot be voiced or taken into account.
Secondly, there is the problem of employment. As the noble Lord, Lord Hampton, and other speakers said, there is a dispute about the figures. It was suggested that some 50,000 new jobs would be created. It was suggested during the Second Reading of the Bill that some 21,000 jobs would be available for local people. As your Lordships have heard, these figures have been questioned by independent reports, not only from Peat, Marwick but also from Queen Mary College. It is difficult at this stage to know where the truth lies—which is an argument, I would maintain, for the open discussion of this matter and for consultation. I have some reason to suppose that the developers would see greater opportunities for local employment than some people would suppose.
The figures, as I say, are a matter of dispute: from between 21,000 and 1,800. That is a big difference. I submit that we cannot just leave the matter there and see what comes out in the end. If we do that we are asking the local communtiy to face a great deal of uncertainty, and that would naturally cause much disquiet.
There is the problem of skills mismatch as we have to call it these days. I shall not go into details but perhaps I may give your Lordships one or two examples. In the neighbouring borough of Newham, fewer than 1 per cent. of the residents are qualified professionals and fewer than 1 per cent. go on to further education. It may be asked what effect that would have on the kind of jobs which will be available in a high-technology development. There is again dispute about this. Some people say there will be very few; others say that when you look at the details of the development there will be opportunities for which many people could be well fitted with a comparatively modest degree of training.
Nevertheless, what is happening at the moment, as it is seen by the local community, is that certainly jobs have been lost because of the closure of firms with small workshops—firms like John Lenanton and Son, an old-established timber firm which provided local jobs. Such firms have gone and people ask what is to come. There is distrust and concern because of this situation, and we need to know what is likely to happen and what can be done about it.
Thirdly, there is the housing problem, which is only marginally referred to in the report. The LDDC has

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recognised this and has tried to pursue a welcome policy of building some affordable housing so that local people can benefit from the opportunity to buy their own homes. But in practice the spiralling increase in the cost of houses has meant that house prices are now well beyond the reach of ordinary people. I am told that a three-bedroomed family house now costs £1,092,000.
Lord Mellish: My Lords, will the right reverend Prelate allow me to intervene? His housing figures are really monstrously wrong and I beg of him, whatever else he does, to stay to listen to what I have to say, because it is about time that this myth was exploded.
The Lord Bishop of London: My Lords, I am grateful to the noble Lord for his intervention. I certainly hope to be here to listen to what he has to say and I shall be very interested to hear what he has to say about the price of houses which are available for people who at the moment are living in very inadequate accommodation in the surrounding borough. I shall not develop the point of housing further, but I merely say that it is a problem, and it is bound to be a problem—and it needs to be faced and dealt with—when you have two different standards of housing cheek by jowl. It may be that this is inevitable, but at least it should be dealt with in a way which is based on consultation and understanding.
Then there is the concern about transport and the effect on planning. Again this is a problem which affects not only the immediate borough but other boroughs too, although they have not been consulted. I shall not go into details; I just say that there is good reason for questioning the assumption that when Canary Wharf is completed 80 per cent. of the journeys to and from it will be by public transport. That is the figure for central London, and it is achieved there because there is a dense provision of public transport in all directions. This is a figure which ought to be questioned.
There is the environmental effect, about which English Heritage has expressed its serious concern both at certain aspects of the development and at the failure of the LDDC to consult it in respect of the West Ferry Circus development, which lies outside the enterprise zone, and on the main development itself.
Having said all this, the real question is the relationship between the development and the local community. It is essential that this is right for the sake of those living in the community and if we are not to build in a situation of social conflict. If we create an enterprise zone, we must also create a mechanism for social reconstruction so that the two are related. There appears to be no strategic planning to deal with the effect of such a development on the local community, particularly in such vital aspects as housing, education and employment. There is no strategic planning. That is not the role of the LDDC, but whose role is it?
When the Select Committee on the setting up of the LDDC reported, it said:
"If a UDC is to be a success, it must work in harmony with the boroughs and give due consideration to the views of the local population as expressed through the forum. Once it is seen that the UDC is operating in this spirit opposition to it will die away".
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It cannot, alas, be said that opposition has died away. Even if we do not use the word "opposition", there is certainly much concern and distress and it will not die away unless there is a much greater degree of consultation. I recognise that the LDDC and the consortium have held numerous presentations, but presentation is not consultation.
Since the passing of the Pastoral Measure in 1964, a Bishop is under a statutory obligation to consult particular parties before making decisions on a wide range of matters, such as the pastoral re-organisation of parishes. When I so consult—and I here try to practise what I preach, though perhaps I cannot always do that—it is essential that I enter the process prepared to change my mind as a result of it. If I am not, it is not consultation; it is simply information and the two things are not the same. One of our concerns is that there has in this whole area been too much presentation and too little consultation.
Part of the development—the West Ferry Circus—is outside the enterprise zone and the Canary Wharf Development Company is seeking full planning permission for this, which is perfectly right and proper. As the LDDC press release states, the application has been sent to the Secretary of State, but with a request that the LDDC itself should determine the application.
Community groups, such as the Docklands Forum, the Association of Island Communities and the Docklands Consultative Committee, are all asking for an inquiry into this development, as are the London boroughs of Newham, Greenwich, Lewisham and Southwark. These adjoining boroughs are concerned at the impact of the development on them in terms of traffic, the size and scale of buildings and the effect on land values and existing development. The Secretary of State has not yet given his decision on this application. When a small delegation from the London Churches Group, which represents all the denominations, met with Sir George Young last December, the refusal of a public inquiry had just been announced. The Minister agreed that that meant there would have to be other and public forms of consultation so that the local community could participate and be involved.
As I said, a news release was issued by the LDDC on 3rd November, stating that the West Ferry Circus planning application was to be sent to the Secretary of State with a request that the LDDC itself should determine the application. There is an impressive list of those consulted, which includes a number of groups who are all opposed to that request, but that is not stated. It is set forward in the press release. It is simply stated that a list of people were consulted without any indication of their views. At the bottom of the list is a note that the London boroughs of Newham, Greenwich and Lewisham, as well as English Heritage, were informed but not consulted. I find that quite extraordinary. All these have complained vigorously about the lack of consultation by the LDDC, as have the officers of Tower Hamlets.
For some years, there has been thought and planning between the East London Church leaders about the setting up of an East End trust, which was to be for the benefit of and administered by the local community. Quite by chance they discovered that the

739
LDDC was also planning to set up a trust and had decided to call it the East End Trust. Obviously, consultation was needed. In response to a request, the articles of the trust were sent to Church leaders for comment and a letter was sent back expressing many reservations about the level of Community participation and representation—crucial factors in the operation of any trust of that kind.
It then took eight months to get a response to these comments. A letter had apparently been written by the LDDC, but it did not arrive. When, after many telephone calls and requests, a letter dated January arrived in September, the trust, they were told, had already been set up. I must give credit to the LDDC for recognising the problems that this has caused, and remedial action is now being taken. But the necessity for remedial action could have been avoided, if there had been more effective consultation over such things as relationships with the community.
Various other ways of co-operation have been under discussion, of which I do not think I need weary your Lordships with details—the Master Building Agreement, the Community Benefit Agreement and the Social Contract. All these have great potential in them. But it is not clear what clauses will go into what and what their status will be. Many questions are still outstanding. The response, as so often, to these proposals is in vague terms, such as that every effort is being made to secure this kind of relationship with the community. But against the present background this is not good enough.
All seem agreed that the size of the Canary Wharf proposals is exciting and will do much for the regeneration of the East End, but it is also in some ways frightening, as is clear from the dimension which I spelled out earlier in my speech. Yet the consideration of the implications of this massive development on London and the South-East, not to mention the local community, has been minimal. A high degree of public subsidy is involved and, quite apart from the needs of the local community, that should have meant a greater degree of public involvement in the consideration of the implications.
This House gave very careful consideration to the setting up of the LDDC in 1981 and the Select Committee met for a total of 46 days. This Canary Wharf development is far bigger than anything imagined then, and yet this debate is the main opportunity, if not the only opportunity, for statutory consideration of its effect in strategic and planning terms on London and the South-East. I repeat my request not for a formal inquiry—in a sense, I think the time has probably passed—but for effective and continued consultation with all involved about the social impact of the development of the City into East London, a process already starting, on East London itself and on the South-East region.
Lord Hacking: My Lords, before the right reverend Prelate sits down, perhaps he can help the House. Will the noble Lord accept that from the position of the promoters, it is a matter of extreme difficulty to deal with a multitude of complaints on non-consultation during a Third Reading debate when this Bill has been through this House and another place? In those circumstances perhaps the right reverend Prelate
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would assist your Lordships' House on whether he has made representations to the LDDC and, if he has made representations concerning these matters, when they were made. That information would be helpful to the promoters. Perhaps we may also know why, when the right reverend Prelate himself was filing his petition which was considered in another place, none of these matters was raised? Why have we had to wait through the long journey of this Private Bill to its Third Reading?
The Lord Bishop of London: My Lords, I am grateful to the noble Lord. First, I agree that it would have been more appropriate if these matters had been aired at Second Reading. However, the time factor was against us. On the question of consultation with the LDDC, all I can say is that the London Churches Group in particular, which is not generally a wild and extravagant group, has made repeated and continuous efforts for this kind of consultation. It has done so precisely because it feels that it makes its points and that there is very little come-back. I therefore felt that it was necessary to raise the points I have made to this House this evening.
Lord Harmar-Nicholls: My Lords, before the right reverend Prelate sits down, following his answer to the last question, ought he not to have kept in mind the importance of parliamentary procedures? He admitted in answering the noble Lord, Lord Hacking, that perhaps the points he made ought to have been made on Second Reading. If we are to enter upon a practice in which Second Reading speeches are made on Third Reading, it may well be that the whole of the parliamentary system, as we attempt to work within it, will not be able to function.
Lord Graham of Edmonton: We will remind you of that!
Noble Lords: Order!
Lord Harmar-Nicholls: My Lords, in the interests of self-discipline, we must keep ourselves in order.
The Lord Bishop of London: My Lords, I take the strictures of the noble Lord on the need for self-discipline, as you would expect a humble prelate to do. However, I would remind noble Lords that this whole massive development has come to us only through a Private Bill. This has made it extremely difficult. I cannot at the moment give chapter and verse. But we were certainly given to understand that it was not appropriate to raise most of these issues at Second Reading of a Private Bill. We may well have been wrongly advised, but there have been no other stages, as there are in the ordinary way with a public Bill, when we have been able to comment. Frankly, I do not see how we could have acted in any other way. Another point is the question of where, in public inquiries, could we have made our voice heard? It is precisely because of the legislation about enterprise zones and such matters that we feel that that opportunity is not given and does not arise.
5.13 p.m.
Lord Alport: My Lords, this Third Reading debate on a Bill which authorises the building of 1,000 yards of railway line has so far proceeded in a rather unusual manner. However, it has enabled the right reverend Prelate the Bishop of London to carry out his undoubted pastoral responsibilities and the noble Lord, Lord Sefton, to raise before the House the question of the North-South divide.
As chairman of the Select Committee on the London Docklands Railway (City Extension) Bill, to which was added an instruction, I have an obligation to explain (although at this stage of the debate my explanation is only for the record) the manner in which the Committee tackled the task which was given to it. As the noble Lord, Lord Hacking, has said, this is an unopposed Bill. Although, as your Committee records, we were faced with some 15 petitions initially, all these were settled satisfactorily so far as the parties to the hearing were concerned. The petitions were withdrawn by the middle of the second day of the hearing. Thus, the Bill became unopposed. None of the petitions was against the principle of the Bill; all the petitions were concerned to protect the property rights of the petitioners. There were no petitions from any local authority or other organisation which might be interested in the Bill.
It therefore became the sole duty of the Committee to give its views in response to your Lordships' instruction which was,
"to have regard to the consequences of the proposals contained in the Bill on the rest of the South-East region and in particular the City of London".
In relation to this, the Committee thought it right to respond to the request by two Docklands Members of Parliament and the chairman of the Docklands Consultative Committee to present their views. The Select Committee sought and obtained the approval of your Lordships to follow this unusual procedure. In so far as the extension of the railway from Tower Hill to Bank was a prerequisite for the developers of the Canary Wharf project to proceed with its construction, in which they had already invested some £63 million, it soon became clear that the issue being presented to your Committee was not the effect of the Bill on the City of London, either as defined by the square mile or as that complex of banking and financial services in and around it, nor its effect on the South-East of England, covering the whole of the Home Counties and beyond. It was rather its effect on the area of East London where the London Docklands Development Corporation had been entrusted in 1981 to carry out a major programme of regeneration under powers granted by Parliament. As an urban development area and an enterprise zone, the corporation was relieved of the statutory obligation to have its planning proposals vetted by public inquiry at which local objections could be voiced and local representations made.
Your Committee gave full opportunity to the two Members of Parliament and the chairman of the Docklands Consultative Committee to present their views. However, it was the clear opinion of the Committee that it had neither the right constitutionally (nor did your Lordships' instructions require it) to assume the responsibilities of a statutory planning inquiry. It therefore listened sympathetically
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to the views expressed on behalf of the community of the Docklands, and these are summarised in its report.
In its conclusions, it said:
"Changes in the way of life of the people living in the immediate vicinity of the Docklands was seen to be inevitable at the time when Parliament approved the creation of an Urban Development Corporation. In the view of the Committee, it is the responsibility of the London Docklands Development Corporation and the local authorities, assisted where necessary by the Government, to ensure that the process of regeneration is carried out with the least possible hardship to those adversely affected."
Since the Bill had become unopposed, there remained the Select Committee's responsibility only to provide an answer to the two questions implied in the instruction. First, what would be the effect of the development facilitated by the extension of the Docklands Light Railway to the Bank on the City of London; and secondly, what would be its effect on the South-East of England? The Committee did not, and was not required to, pronounce on the financial viability of the Canary Wharf project or on its architectural merits or demerits, or on those of any of the other developments completed or planned by the corporation. It concluded, on the evidence presented to it, that the provision of substantial additional technologically designed office accommodation for the expansion of the financial services industry of the City of London could and should be of direct advantage to the City in the post-industrial era.
Secondly, the Committee considered that the additional employment which would be provided, both during the period of construction and subsequently, would be of advantage to the South-East of England and to some extent to the present resident population of Docklands. It would, I think, be right to add that the view was held that this would result from the extension of the railway into London's Underground network, irrespective of the eventual materialisation of the Canary Wharf project. I hope that your Lordships will feel that, with the obvious limitations of considering an unopposed Bill, the committee endeavoured to carry out your Lordships' instructions. I can only say that I am extremely grateful to my four colleagues for the wisdom and conscientiousness which they applied to the task in somewhat unusual circumstances.
I listened with great care to the speech of the right reverend Prelate the Bishop of London who has withdrawn his amendment. As he reminded the House, this Bill was considered at great length by a Select Committee in another place and substantial amendments were made to it. In 1981 a Select Committee of your Lordships' House considered and approved proposals to give the London Docklands Corporation special powers to speed up the regeneration of the London Docklands which had suffered, as we all know, severe social and economic decline. If your Select Commitee had been asked to hear representations from the London Churches Group, it would certainly have sought your Lordships' approval to do so.
I remind your Lordships again that we did hear those parliamentary representatives and the representatives of the local authorities of the area of the docklands. Mr. Mikardo and Mr. Spearing, who are very experienced and distinguished Members of

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another place, explained the problems of the Docklands community most ably, as did the chairman of the Docklands Consultative Committee. These were, I think, fairly reflected in the Select Committee's report. Nothing that the right reverend Prelate has said this afternoon adds, at any rate as far as I am concerned, to the evidence which the Select Committee heard or, I think, would alter its view that the responsibility for tackling these problems lies with the corporation, the local authorities and the Government.
As far as the amendment of the noble Lord, Lord Sefton, is concerned, its relevance, as he made quite clear, is to the contrasting situations in the North and South of England. I hope that the noble Lord will acquit me of lacking any interest in this problem. I would make two comments on his remarks. First, it is wrong to suppose that obstructing or limiting the flow of investment to take advantage of available opportunities for expansion in the South of England will ensure that that investment is diverted to the North; secondly, the needs and attractions of the great industrial conurbations of the North for investment must be tackled in a partnership between the Government and local interests to meet the special situations which are different from those of the South of England.
As long ago as the 1560s, the government of Queen Elizabeth I passed legislation to prevent the growth of London. It was, as we know from history, completely ineffective; and the same has happened to attempts by subsequent governments. There are economic, climatic, geographical and communications factors in determining the location of population and industry in all countries and the gradual shift of activity from the North to the South is to some extent inevitable. This does not mean that nothing can be done to help areas such as Merseyside and Sunderland; but it certainly does not mean that the advantages which location in the South present should be frustrated. If that is done, the nation as a whole will suffer. I hope that I have given a clear description of the activities of your Lordships' Select Committee and I trust that your Lordships will give the Bill a deserved Third Reading.
5.24 p.m.
Lord Bellwin: My Lords, perhaps I may begin by declaring an interest in that I am a non-executive director of Taylor Woodrow. Although the company has no interest in the railway extension, it is part of the consortium that would take part in the construction of Canary Wharf, if that proceeds as I hope it will. Having said that, I should like to stress even more that I have another interest. I had the privilege of introducing into your Lordships' House in 1981 the very legislation which created the London Docklands Development Corporation. Therefore I have watched its progress—and I use that word deliberately—with more than usual interest.
I was sad to hear some of the comments made by the right reverend Prelate and I was not so much sad about as expectant of those which the noble Lord, Lord Sefton, made. I suppose that I still find it difficult to get away from the ministerial habit of wanting to comment on what has been said by those who have
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spoken before me. If noble Lords will bear with me, perhaps I may comment on the remarks which were made by the right reverend Prelate and by the noble Lord, Lord Sefton, because they are relevant to what this debate is about.
The right reverend Prelate said that it is important to look at the overall impact of the Canary Wharf proposals. We have just heard from my noble friend Lord Alport that that is precisely what his Select Committee did; and from what I gather the committee did so in detail, depth and extremely well. No one has suggested for a moment that it did otherwise.
The Lord Bishop of London: My Lords, how does the noble Lord relate what he has just said to the recognition in the Select Committee report that,
"most of the reservations expressed about the proposals related to the effect which they would have on the Docklands themselves. The Committee were sympathetic to the disquiet expressed by the local representatives but found much of what was said outside the terms of the Instruction"?
Do not those words in the report of the Select Committee indicate that it found itself unable to give concern to the total impact of the development in this respect on the Docklands themselves?
Lord Bellwin: Not to me, my Lords. To me the report was in depth and succinct and it satisfied me on what was said.
The right reverend Prelate asked where the new resources will come from and said that the issue is about how the new resources should be directed. But what are these resources? They are coming from the private sector, the very sector which for so long did not come forward with resources. It did not come forward with resources because there were not the incentives that we see here and there was not the government pump priming that we see through the Urban Development Corporation. The right reverend Prelate said that he was concerned about the fact that some talked of 21,000 new local jobs and others talked of 1,800. The noble Lord, Lord Hampton, said the same thing. Is it not nice to be wondering how many thousand new jobs will be created in contrast to the situation which pertained previously not only of new jobs not being created but of jobs being lost at a rate that can only be described as alarming.
The right reverend Prelate referred to the housing problem. I wondered how these new proposals will worsen the present position. For decades we have lived with dereliction in housing and with something that was miserable to everyone concerned. There was no shortage of protest and objection to that, and rightly so. What is now happening is that there are new houses there. They may not all be of the kind that everyone would like to see but you can be sure that as someone goes into a house accommodation will be available for others.
The right reverend Prelate was concerned that there would be two standards of housing. I say, thank goodness, there will be two standards of housing. We saw for years what one standard of council housing meant and the estates to which that led. I hope that there will be more than two different kinds of housing. I want to see houses from housing associations, from the private sector, from councils and from every other possible source.

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Perhaps I should not speak for too long on the various points made by the right reverend Prelate. He will have gathered by now—and I say this with the greatest possible respect—that we probably differ a great deal on most of his concerns. As for the noble Lord, Lord Sefton—and it is nice to be crossing swords with him again after years and years of doing so in other places—I think he will concede that there is no monopoly in concern about the situation in the North, to which he referred. I come from the same part of the world as he does.
My concern about this amendment is that if it is carried it will cause delay. The noble Lord may well feel that that is not so, but that is not only my view; many others feel the same way. But delay, as I shall mention again in a moment, is what we cannot have. The noble Lord said, and I quote him, that one has to face up to the problems of deciding to do something. But that is exactly what has happened with the Urban Development Corporation and the London Docklands Development Corporation.
One has only to remember—and sometimes it is hard to remember when one thinks back—what it was like before. It was a shambles and it was a disgrace. I do not complain entirely that the local authorities were not able to do what has been done since. The fact is that it is only the kind of body that has been set up which can make such changes. The Government must be given credit for having had the imagination and initiative to set it up. It is comprised of people who have the specialist knowledge, the drive and the energy, and who are single minded, with a single purpose. Such bodies do not have the responsibility of deciding on the apportionment of resources. The elected members of councils have that responsibility. They cannot have the same kind of single purpose and direction that there is in an urban development corporation.
That is a major factor in what can only be called the largest example of urban regeneration in the world. The right reverend Prelate will allow me to say that those words are justified. If anyone doubts that, they should go to the Docklands and ask to see the photographs of what the Docklands were like before; and if that is not urban regeneration, after 25 years or so in the business, if I can call it that, I do not know what is.
I have enormous sympathy with the points made by the noble Lord, Lord Sefton. My noble friend Lord Alport said exactly what I had intended to say when he pointed out that failing to create employment in the South does not help the creation of employment in the North. One has to answer to all the people who are unemployed in the South when they are told that they should not receive resources but that the resources should go to the North. The key point is this: it is not "either/or". It is not, for example, that the people who wish to invest in this project in London will contemplate investing either in the North or the South. The alternatives are either this country and London, or Europe with Paris, Stuttgart and other places. It is not what the noble Lord thinks.
I suggest to him, if I may, that something is being done at last, if you like, by government—although I
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wish that more could be done by local people. He does not make a good case when he refers to Liverpool; and one has sympathy for that city. I know his great record in Liverpool. If he had been in Liverpool in recent years there would not be the problems there that there are today. There are problems of credibility for people who want to build a factory there or to start a business. Can one really consider what some of the local politicians in Liverpool have done and then deny that that has nothing to do with the fact that people are not as willing to go to Liverpool as they should be? I am sure the noble Lord will not disagree with me on that.
Therefore, I say to the noble Lord that if the new urban development corporations which are to be set up—and they are to be set up now, as announced by government, in Tyne and Wear, Teeside, Trafford and the West Midlands—achieve as much for those areas as has been achieved in the London Docklands and, in its own way, by the Merseyside Development Corporation, the noble Lord will be much more content at what is happening. There are some differences, and I am the first to acknowledge them, but that is not for debate today; perhaps for another time.
The noble Lord, Lord Hacking, put it so well and so clearly that there is not a great deal more to say. He gave statistics for both employment prospects and the amount of investment, but there is one factor he did not mention. It has been given to me and I hope it is correct; namely, £1·5 billion of private money has already been committed to the Docklands and another £7 billion is in prospect. Those are staggering figures by any standards, anywhere. If they are true, as I am told they are, it can only be a triumph for what we all want to see, certainly in London and in the City.
It is true that some people in the City have been anxious about certain aspects, but to paraphrase a famous, or notorious, person, "They would, wouldn't they?", because it actually goes outside their boundaries. Nevertheless, it is my view that there can be no doubt that, given the extension of the railway, the consequent development at Canary Wharf will be a significant factor in enhancing London as a financial services centre. It will enhance British influence in the rapidly growing financial services industry and that means jobs, improvement, prosperity and all that flows from them; and it flows over to local people as well as to everyone else.
I shall bring my remarks to a conclusion. I believe that I feel as strongly about this matter as any noble Lord who has spoken in the debate. I hope that the noble Lord, Lord Sefton, will decide not to press his amendment. If for any reason it were carried we would lose the momentum that at present exists in the Docklands. There is a magnificent team of officers in the Docklands. It is a model for everywhere. Many people from all over the world, and I know many of them, are coming to see what is being done there and to learn. We should be praising that to the skies. I certainly do. I do not want the Docklands to lose that momentum. There is a great team of people who are single-minded in that respect. I do not want the investors to lose heart; I want them to be encouraged. I hope that the noble Lord will consider his amendment in that sense and, if he does decide to

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press it, that your Lordships will show resoundingly that they feel as I do and let the Bill go forward unamended.
5.38 p.m.
Lord Mellish: My Lords, the House will know that I have a vested interest to declare: I was the vice-chairman of the London Docklands Development Corporation until July of last year. I do not deny that I have a special prejudice which shines through at all times. If I relate why, perhaps the right reverend Prelate, in particular, will understand how strongly I feel about some of his remarks. They were unfair and, if he will forgive me for saying so, they were almost naïve. He has been the victim of some of the stuff he has been reading, but I doubt whether he has actually seen the Docklands. He could not have done so.
I shall start at the beginning. Over 20 years ago I made a speech pleading that the Docklands should be treated as a matter of urgency and dealt with as one entity. I said then—and I repeat it—that this is the last chance for major regeneration that we shall have in London. Let us deal with it as an entity. The last occasion when such an opportunity occurred was the Great Fire of London in 1666, and we missed it because there were a lot of petty people about then. In fact, the great plans of Sir Christopher Wren were disbanded.
Bringing history up to date, in 1981—which is only five years ago—the London Docklands Development Corporation was created. However, let me say quite clearly that it was brought in against a background of considerable bitter, personal, political recriminations. Before we even started we were told that we were no good. We were the tools of capitalism; we were rotters, Fascists—you name it, my Lords, we were it—and we had not even started. But that was the beginning. That was literally the first day. I remember that Nigel Broackes, who became chairman, and I as deputy chairman, went down there on the first day that we were legalised and I felt utterly and completely depressed. So far as the eye could see there was dereliction—8½ square miles of it. There were cranes overturned and huge mountains of filth and filthy puddles. Nowhere was there any work. We were told that it was our task to regenerate the Docklands.
We started with one very simple thesis; namely, that the first thing one does in order to regenerate anything is to own it. We happen to live in a democracy and unless you own something, developing it becomes confiscation. We wanted no part in that. We bought the land from the PLA, British Gas and others. The spend of the government of the day, through Michael Heseltine, was superb. They gave us £22 million to spend in the first year.
The next thing we had to do was to start converting that awful derelict land into a saleable commodity. We had to put in roads, drains, sewers and ditches. Had we not been there, does anyone in this House believe that what has happened down there would have happened? Is there anyone here who believes that? There was a Docklands Joint Committee in existence for nearly three years and what did it do? It did not build a toilet! All it did was to talk and pass stupid resolutions. As a matter of fact at every one of its meetings the old
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Docklands Joint Committee included the community groups, and the representatives of the Churches. I was told by many people in authority, "Bob, whatever you do, don't do that, because when you get that lot there, you can't do anything at all. Your meetings are aborted". That is something I have never forgotten.
However, we decided on the strict plan that this land would be developed, and in fact that the drains, sewers, roads and the rest would be such that private enterprise could be brought in. I make the simple point, which I have often made before and which I shall repeat, that we live in a mixed economy. Whether we like it or not, private enterprise has to be encouraged. If you do not encourage private enterprise who is to be encouraged? The state? It could not run a fish and chip shop—and everyone knows it. Therefore, what one does is to bring in private enterprise, and encourage private enterprise to come in. But at that time private enterprise could not be encouraged to come into docklands.
Our best move was to spend £9 million in building a road on the Isle of Dogs. Why did we do that? It was in order to encourage Asda to open a store—and that is what Asda did. That store, with its car park for 400 cars, is one of the most successful stores today in the whole of London. That was the beginning of the story. Everywhere we went we rehabilitated the land.
I say to the right reverend Prelate that it is nonsense not to put into orbit some of the things that we have done on behalf of the local people. One would think that we had treated them with contempt or utterly ignored them and carried on and all the rest of it. Such an idea could not be more wrong. Let me tell him one or two things that we have done. We brought in ITEC—industrial training. Has he ever been down there to see what we are doing? Every single one of those who are under training at this moment—and there are 70 of them—come from the East End. That is one of the problems. How does one define an East Ender? Listening to some people one would think that only those who live on the Isle of Dogs are East Enders. I will not have that. I happen to think that those who live in Barking, Stratford, East Ham or West Ham are also East Enders. We therefore widened our scope and every single person who is being trained at our ITEC centre, which the London Docklands Development Corporation established, aided and abetted by the Manpower Services Commission, are local East Enders. We intend to increase that number to over 1,000.
The point is of course that when these new firms with the new technology come in they cannot obtain the skilled labour they require and have to look further afield. We have said right from the beginning that we must train our youngsters to be skilled workers and able to do the jobs required. There is a reservoir of unskilled labour in that area. I was brought up in the dock industry—my father was a dock worker—and the truth is that when the dockers were once taken away from the loading and discharging of ships they had no other skills to offer. Therefore, the youngsters in particular are being trained to do the particular technical jobs that are required today.
The first point I want to put on record is that at this moment on the Isle of Dogs—and I invite the right

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reverend Prelate to come down and see for himself—there are hundreds of youngsters now being trained in hi-tech and they are doing a brilliant job. There is another matter about which I am very keen—I am not just one of those who pass resolutions and hope that everything will work out because I prefer to be realistic. I argued from the beginning that these youngsters should not be trained unless there was a job to offer them. Nothing is worse than, having trained someone, having to say to him, "Well done, son, but there is no work for you". So we have guaranteed that end of it.
By the way, did we get any help from the Churches on all that? I do not remember receiving even a letter either criticising, patronising or helping in any way—but I shall let that pass. The fact is that we have done and are doing a first class job in training youngsters for the work that is yet to come in the area. That includes the Canary Wharf development with its enormous schemes and plans for employment—and I shall not argue about the figure, but talk to the 1,000 people who have been under training—because the Canary Wharf will demand that type of work. We are prepared to see that it is provided.
But let me say something to the right reverend Prelate about housing, which is the political world I came from. Housing has always been my first priority. One figure will interest him. When we first took over in 1981, 85 per cent. of the entire housing stock on the Isle of Dogs was owned by the local authority—and what a state some of those houses were in, too. Talk about slums—by God! The local authority owned 85 per cent.; 10 per cent was owned by housing associations and 5 per cent. was owned by the people themselves. I happen to believe in a genuine property-owning democracy. There is nothing wrong in that. I own my own house—or I am trying to own it. I do not see why other people should not be given the same chance. So when I came in my policy was to ensure that the people in this area would be given the chance to buy their own homes. We stipulated the price and laid down at that time that no property would be over £40,000. When we built our first houses in Beckton most of the prices were around that figure from £35,000 to £40,000 which was the top price to which we went. Where the figure of £300,000 for the special flats is obtained comes from the fact—and this is where the right reverend Prelate may have been misled—that a great deal of property in Docklands has nothing whatever to do with the Development Corporation. The Development Corporation never owned it from the beginning and they were not able to purchase it when they came in. It is owned by the private entrepreneurs.
For example, some of the warehouses were owned by private entrepreneurs. They put capital into the enterprise and made the warehouses into luxury flats. There was nothing that I could do about it. We do not live in the sort of country in which you tell people that they cannot do such things, and they were able to sell them. So only a tiny percentage of the houses actually built are in that category.
But what can we say about the 7,000 to 9,000 houses that we built for the London Docklands Development Corporation? Who have they gone to?
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Over 70 per cent. of them have gone to the people who live in the borough, and they have been sold for prices of £40,000 and just over. Has anyone said anything for example about the scheme where in fact we plough something back and give a chance to the tenants? If a house is now worth £60,000 we say that they can buy it for £40,000 and that the other £20,000 is not repayable until they resell the property. We have given them that money out of our pockets because I was determined that housing should be made the social requirement that it always was.
So I say to the right reverend Prelate that he is quite wrong to throw up the idea as he did in the general debate that somehow we were building a great rich society with these vast hundreds of flats at exorbitant prices—because that is the tale that is told by the opponents and enemies of the Docklands, and I have seen enough of them in practice. I took that job in 1981 and we have met professional groups and people who had no other purpose in life but to destroy us—and I am the wrong bloke for that, because I am not taking that from any of them. My objective is right—and my one objective is to regenerate Docklands and put it in such a position that when I pass from the scene people will say, "That was not a bad job. It was pretty well done". I have no interest in Canary Wharf, I do not know any of the people, I know nothing of them, I have no financial interest. I do not know any of the directors, they mean nothing to me as such. But their proposals will be the biggest scheme in the whole of Europe. It is the ultimate of what I have always dreamed of in the dockyards, private enterprise coming in there in an enormous way and spending of millions of pounds of their money. That is what they are proposing to do.
The railway link, which we started long before these people came on the scene, going to the east of London, is now to be extended into the City. My Lords, what is so wrong about that? Is it not a natural consequence? Is it not right that the City should be involved, the City which had strong objections to London dockyards and was very jealous, but now suddenly realises there is nothing it can do about us? We are there to stay and doing pretty well. The City has now swung over to us, and I am all for it. It is about time that it did—it has suddenly become realistic.
There is no doubt that what is being proposed at Canary Wharf is a great fillip for the City and will make it stronger, better and more flexible. I welcome that. For me it is the ultimate in what was the adventure in Docklands. From deprivation, filth, rubbish of the worse kind, after six years of control by a docklands joint committee, that is what we inherited.
The noble Lord, Lord Sefton, made a point of talking about the North versus the South. No one can feel more about that than I do. I believe that the divide between North and South is the biggest problem for the Government. It is not right for me living in the South to be better off than someone living in the North. The people of the North are not my kith and kin, but they are my fellow countrymen.
The biggest problem that this or any government have to face is how we can apply the success stories of the South and implement them in the North. There is

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some handicap in Merseyside with the crowd there—let us get that on the record. Merseyside happens to be a big city and, I should have thought, is not unimportant. It has to be understood that, if private enterprise is to be attracted there, the conditions have to be laid on to make private enterprise come in.
I say to the critics of the London Docklands Development Corporation: come down and find out for yourselves. A total of 75 Peers visited the Docklands at my request and have seen the place. I did not tell them what to look for, they saw it for themselves. I invite any other Lord who wants to come to make a visit. He is welcome. Let us see what has been done.
I say to the right reverend Prelate, if he wants to know the prices of houses, please come and find out—do not talk from bits of paper. He should not believe some of the stuff that he has been told. He had better come down and find out for himself. If he asks the people in the houses where they come from, who they are, how much they paid for the houses, then he is qualified to talk; but he is not qualified to talk if all that he has done is to be told things by some of the kinds of groups that I have met since I have been down there. Where he has been getting his information from terrifies me. They are so "anti-us" that, no matter what we do, we are wrong. The media have given us headlines about a £300,000 flat. Who the heck believes that anyone in docklands built a flat for £300,000? It certainly was not us—although there are some, I do not deny it.
I hope that the Bill will be given a Third Reading automatically. I ask my noble friend Lord Sefton—and he is a friend—not to push his amendment. If he does, I shall vote against it, and there is no doubt that it will be swept out of the House. I do not want him to see this indignity take place, because I know that his heart is in the right place. I do not believe that the amendment is effective or worthwhile, but I believe that the Third Reading of the Bill is an absolute must.
The Lord Bishop of London: My Lords, before the noble Lord sits down, perhaps I may say two things. First, I do not propose to defend myself against the strictures of the noble Lord, Lord Mellish. I have been down there, I have visited people in their houses and the people to whom I talked are people who respect the corporation and acknowledge what it has done. It is precisely because of what they have done that we are concerned that community relations there and all that members of the community have done may not be harmed in any way.
The second point that I wish to make concerns the noble Lord's remark about how Church people have taken no part, for example, in retraining and so on. On behalf of many good Christian people, particularly in the East End, I really must say that a person is not a Christian only if he has a collar round his neck. I know many of the people who work for the community in the East End: they are good Christians and they come from Churches. I know at first hand what the Churches have tried to do in helping regeneration in the East End.
Lord Mellish: My Lords, the right reverend Prelate will remember that in his remarks he referred to the price of housing. He conveyed the impression, at least to me, that somehow we were building a type of housing ouside the reach of ordinary working people. That is why I wanted to correct what was said. That is untrue and unfair. That is why I wanted to get it on the record.
Secondly, with regard to what the Church is, I do not deny that the individuals down there are absolutely superb. I have been proud to meet some of the finest East Enders. They are first class. As to the Church—all the people with the collars—I cannot remember ever being approached by them and being told: this is the right way to do it, this is how to do it and we will help you to do it.
5.55 p.m.
Lord Graham of Edmonton: My Lords, I do not intend to follow the noble Lord, Lord Mellish, in seeking, as he did, to go back in history to denigrate democracy and—in my view wickedly—to malign some very good people who had worked not as successfully as the corporation in latter years but had worked very hard to try to do what the noble Lord, Lord Mellish, I accept, has wanted to see happen over the past 20 years. No good will come out of the debate if the opportunity is given over to using the kind of emotive and, I believe, unworthy language that the noble Lord, Lord Mellish, has chosen to use against some very good locally, democratically elected—unlike the noble Lord, Lord Mellish, and me in your Lordships' House—councillors and their supporters in the docklands area.
I wish to begin, as I believe everyone in the debate has sought to do, by separating the issues of the railway and Canary Wharf, at the same time recognising that it is not possible to separate one from the other. I have always viewed the endeavours of the LDDC to regenerate the area under its control and to breathe new life into the docklands not only as a worthy objective but as something in which in general it has been very successful.
It was the noble Lord, Lord Mellish, who said that this was the biggest scheme of its kind in Europe. I want to ask the House to stop and allow me to use that as my text. It is the biggest scheme of its kind in Europe that will not be subject to a public inquiry, a public scrutiny. This is the gravamen of my criticism of the present situation.
I am perhaps the only Member of your Lordships' House who served as a member of the committee in another place that dealt with the Local Government, Planning and Land Bill. It started off as three separate Bills which the Government in their wisdom decided to role into one—local government, planning and land. In the course of the Bill, two further Bills were added—a new towns Bill and an enterprise zones Bill. Those of us who served on the committee—the date has been given more than once, 1981—recognised that the government of the day took a decision of enormous significance, and not just for London or for Merseyside. As the noble Lord, Lord Bellwin, has pointed out, there will be lessons to be learnt, procedures to be followed and public inquiries to be

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held in other places beyond London and Merseyside. The significance of the debate goes far wider than that.
I believe that the noble Lord, Lord Hacking, did the House a service by making his remarks not only scrupulously fair, as they always are, but strictly in accordance with the terms of the Bill. He made a very good case for the extension. He also made it quite plain that, without the Canary Wharf development, there would be no need for the extension and, without the extension, there would not be the Canary Wharf development.
I want to ask members of the House who are trying to separate the conflicting arguments to realise that all those who have spoken in favour of Canary Wharf—and it is not the railway but Canary Wharf that is under debate tonight—have trotted out before us all the benefits, the entrepreneurial skills and the financial packaging and advantages for the City.
I believe that it was the noble Lord, Lord Nugent, who said that the scheme will be good for the City. I did not detect that he said much about it being good for the people who currently live in the area. It may be good for the people who will come to live in the area in future.
Lord Nugent of Guildford: My Lords, I thank the noble Lord for giving way. He cannot have listened to the rest of my speech. I made it clear that 40 per cent. of the new housing was being taken up by the local residents who have never before had a chance to buy a house. That is the first point of interest for local people. I also referred to the number of new jobs that would go to local people.
Lord Graham of Edmonton: My Lords, I assure the noble Lord that I have not left the Chamber during the debate. I heard every word that he said. I shall read with care in the Official Report tomorrow what he said.
Reference has been made to those who will live in the new housing. I also shall refer to that point. The difficulty of reconciling the conflicting figures of the jobs that will be created and the number of local people who will benefit from those jobs has been mentioned. They are all part of the argument.
I do not quibble over the railway but we are talking about a development which we are told is the biggest in Europe. The noble Lord, Lord Bellwin, said that about £7 billion of private capital could be generated. I can understand those who contribute private capital not being too interested in a public inquiry or a scrutiny, but what about the £1 billion of public money? Are we entitled to have the way in which £1 billion of public money is to be spent scrutinised by a public inquiry?
I live in the borough of Edmonton and Enfield. It is far removed from the docklands. However if a development of this size was being proposed at Cheshunt, Chingford, Potters Bar or in the Lea Valley I should want to know not just that some committee had invited members of the local council or the local Member of Parliament to discuss the matter with it; I and hundreds, if not thousands, of other people would want to know that the £1 billion of public money which was to be spent on a kind of new town—this is a kind of new town—was being scrutinised fully.
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It is monstrous that so few people in the debate are paying so little attention to something which the House and the country have held dear. We have been told that there is no time and that we cannot delay the matter. We are being invited to accept that time is of the essence. Over the centuries, many people have argued that there was not time to do certain things. That has been regretted later. The procedures are not the responsibility of the LDDC or the local councils; they are the responsibility of the Government and Parliament. Parliament, because of the way in which it is now structured, has accepted that it is proper to have such procedures.
I have been to docklands with the noble Lord, Lord Underhill. I stood on the 18th floor of a tower block in Greenwich. We looked at where the new housing and new development would be built. I must accept that it is possible for the tenants of the 18th floor of some of those blocks to sell their flats. With whatever money they obtain they can then pay the kind of money that they must pay elsewhere.
We are fortunately served by the London Standard. Last night on its commercial property page it stated:
"Rich pickings in the Docklands".
That is how it describes the Canary Wharf development. I quote selectively, as we all do. One paragraph that struck me stated
"Last month a block of flats at West Ferry Road, with prices from £100,000 for the smallest, saw its first phase completely sold out in half a day—from plans—before the marketing even began."
I am expected to believe that about 40 per cent. of the local people may have been in that queue!
I have received, as other people have, the documentation about the economic profile of the people who live in the docklands area. I do not have the experience of the noble Lord, Lord Mellish, and others who have lived, worked and represented those people, but I cannot believe that what I read in the London Standard is likely to be to their benefit.
The same article continues:
"Developers are now finding the authorities not only less bureaucratic but also the legal framework of the LDDC itself and more especially of the Enterprise Zone, conducive to their own enterprise."
The developers will find the present planning structure more conducive to their own enterprise. Tonight's London Standard states:
"An orgy of property development is under way which could totally transform the appearance of London by the late 1990s… 'The scheme is now 95 per cent. certain to go ahead', says Docklands Development Corporation supremo Reg Ward, though last-minute political problems cannot be ruled out."
I wonder what he has in mind when he talks about last-minute political problems? Mr. Ward knows, as does every Member of this House, that the Bill will receive its Third Reading tonight because, as I understand it, the Third Reading will not be opposed; that the developers' plans will be furthered, and there will be a transformation of the area. However, as I understand it, and I am not as expert as other people, there is a sourness among locally elected people on the councils and many other bodies.
I am enormously grateful to the right reverend Prelate for telling us how the LDDC, perhaps not malignly, has sought to put forward the view that it has consulted although it has not told us the result of those

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consultations. I am greatly worried that there has been a charade and that too little attention has been paid to try to bridge the gap. If the Swiss bank and others have to wait, although we have been told that we must get in quickly after the Big Bang, and in order to ensure that local democracy is served as well as financial enterprise rewarded there must be a little more time, what is wrong with that?
Although the Minister is entitled to say that it has nothing to do with him, I beg him to contemplate the possibility that part of the Canary Wharf development could be called in by the Minister so that those who live and work locally and those who represent local people get what they want. I am of course referring to the West Ferry Circus development. When one looks at this area outside the enterprise zone the size is 1.8 million square feet. It is only a small part, 20 per cent., of the total. But it is of that size. Given the opportunity, which still exists, to have a better scrutiny in the future than we have had in the past, is the Minister going to tell us that he and his colleagues will respond to the approach by the LDDC and say, "Leave it to us"? I cannot say a bad word about any member of the LDDC because I do not know them well. I would accept that they are honourable men and women. I also accept that they have a mandate and an authority. The wicked Bill which brought them into being, in my view, gives them that authority. If it means the local people will be satisfied in future that they have had a fair crack of the whip, that the roads, sewers and housing and all the other matters have been well looked at, this is surely a small price to pay. It may not be a public inquiry, but a better means of resolving this matter ought to be at hand.
This does not concern merely the docklands, as other Members have mentioned. It is not merely East London. It is those who are proud to call themselves East Londoners. It goes beyond the neighbouring boroughs of Southwark, Greenwich and the others. It also involves a great many people. But more important—and I close on this point—I believe that there is a vital principle at stake. If the Government allow matters of stupendous importance to millions of people to follow the present procedures without allowing the local people to feel that they have been satisfied it will be a very sad day.
A lady rang me at home last night. I have never met her. She said that her name was Kate Heron. She lives at 607 Manchester Road, E.14. She says that it is sometimes called Glen Terrace and she mentioned the term "Dollar Bay" which is an area in which she works. She told me that for the past two or three years there has been some kind of what she called consultation, because they had been told that their area was in what was called a "sensitive sub-zone"—I had not come across the phrase in planning matters. Until recently they had been led to believe that their area was going to be landscaped and open. But now they have been told that at the bottom of this lady's garden, about 60 feet away, there will be a depot for a firm called Ladkarn, which deals in plant hire and refuse lorries; and they have no opportunity of protesting.
The right reverend Prelate pointed out the ludicrous nature of the present situation. Outside the enterprise
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zone one cannot put up an extension or change a use without there being the possibility of a public inquiry. I hope that when this Bill is passed the Minister will reflect that even now something can be salvaged from the tawdry mess of consultation and democracy into which I believe the Bill has sunk.
6.13 p.m.
Lord Teviot: My Lords, following other noble Lords who have spoken at great length I feel that on this occasion I can be appallingly brief. I rightly remind your Lordships that we are discussing the London Docklands Railway (City Extension) Bill. Your Lordships have already agreed to the London Docklands Railway Bill. We are now discussing the extension from the Minories to the Bank station. I shall devote my remarks entirely to that aim.
It is totally wrong to think that anybody can expect any successful future of this enterprise, with which London Transport is associated, to terminate at the Minories. I shall explain the present situation at Minories station. There will be a few years before Bank station comes into operation. One has to go from Tower Hill, cross over the road and climb up a mountain to get on to this railway. That might be all right for a year or two until this Bill—which I hope will be passed this afternoon—comes into force.
Having said that, I can explain my own interest very briefly. About two or three years ago I was asked to go down and look at that area. This track follows the old London Blackwall railway line. I had the privilege one sunny day of going down to Island Gardens. I must mention to the noble Lord, Lord Hacking—I did not challenge him at the time—that I think he was slightly wrong. The railway is going from the Minories, or Tower Gate (as he referred to it), to Island Gardens, and from Island Gardens to Stratford, and not from Tower Gate to Stratford.
Lord Hacking: My Lords, that is right. One has to change trains.
Lord Teviot: My Lords, this is the right time to correct that, and not in the flow of the speech of the noble Lord.
However, I spent the afternoon walking along a track of the railway, along the Limehouse Reach. The right reverend Prelate is not in his seat to listen. But this track of the London Blackwall railway has been overgrown by a horticultural noble friend—who is again not in his place—called buddleia alternifolia, which has completely taken over this. One walked along by this auspicious church and watched people fishing along Limehouse Reach. It was a very pleasant experience. One is sorry to hear about the buddleia, but the tracks are now in its place. Next July this railway will re-open from the Minories to Island Gardens, and from Island Gardens to Stratford. We are asking this afternoon for this to be extended to the Bank station. No developer or anybody can be the slightest bit interested in putting any money into this area if it is not extended to a suitable place. That is the Bank, where all the connections go.
The Government have seen fit to do that. I gather that investors have too. All credit to them. What will

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follow is also very interesting. Your Lordships will have a very interesting experience this afternoon. We are to hear the maiden speech of the noble and learned Lord, Lord Elwyn-Jones! It is rare that Lord Chancellors sit on Back Benches. I was amazed to see his name lower than mine. I realise that it is a rare experience to have a speech from him from the Back Bench. It has not happened for a very long time.
I hope that we shall see this railway extended to Beckton in East Ham, which again will give regeneration to the area. In the absence of the right reverend Prelate, and the right reverend Prelate the Bishop of Chelmsford, I say this, because one pops out of Poplar straight into the Diocese of Chelmsford. This area will be revitalised by public transport. (I apologise to the Official Report writer. I am talking very fast.) This area will not succeed unless there is a link. It is very important. We should very much put this forward and bring our minds to it.
I think that I shall now bring my remarks to a suitable close, having listened to 13 or 14 minutes each from about the last six speakers, and just say that I fully approve of this Bill. The noble Lord, Lord Sefton, is not in his seat. Everybody flies away when I get up to speak. However, I believe that the amendment is obstructive and destructive. I wish every success to this Bill.
6.19 p.m.
Lord Walston: My Lords, first, I must declare an interest in that I am a resident of the Isle of Dogs, not, I may say, occupying one of the £300,000 flats about which we have heard so much. Therefore, the rail link, although not the area which we are discussing, is of some particular interest to me. The rail link from the Isle of Dogs to the Tower of London is well under way at the moment.
I want to make it quite clear that I am speaking purely personally and not in any way on behalf either of the Alliance or of the Social Democrats although I do not think that many of my colleagues would disagree with the general line that I propose to take. I am a great supporter of what has been achieved in the Docklands by the development corporation. It has had fantastic success in converting a down-at-heel, depressed and almost deserted area into one of the most booming areas not only of this country but of Europe.
I quite understand the criticisms that have been levelled, against the development corporation, for example, by the noble Lord, Lord Graham. It is not democratic in it workings; that is absolutely true. However, one has only to cast one's eyes around such contiguous areas as Bow and Stepney. which are democratic, and ask why they have not succeeded where the docklands corporation is succeeding at the present time? The answer, I am afraid, is that one can get quick decisions from the docklands corporation instead of going through planning procedures.
The other day we heard from the noble Earl, Lord Perth, about an American benefactor who wished to acquire the lease of a house in Regent's Park. Because of planning delays extending over years, he eventually lost patience and an exciting project is no longer going
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to take place. I am afraid that had all normal planning procedures been necessary in Docklands we would not see what we see today. This extension of the railway is I believe, a necessary part of still further development.
I do not wish to go into the merits or demerits of the Canary Wharf scheme. Personally, I think it is exciting, although there are certain aspects about which I have reservations. Undoubtedly, the Docklands will provide more employment. How much more, no-one knows, not even Peat Marwick or the Henley experts, whoever they may be. There is no doubt that more employment will be created and more wealth and rateable value brought to the area, and that the boom now taking place will accelerate.
All of us accept that the contribution that the City of London makes to the national wellbeing, to invisible exports, is of enormous importance. London is situated geographically, by chance, midway between Tokyo and New York. Therefore, it has a crucial role to play because of the time zone, and it is building on its old tradition to do that. However, it needs more space. It cannot provide it in the square mile. To provide in an area such as the Isle of Dogs is surely good for the City of London and for the country as a whole.
I do not support some of the things that the right reverend Prelate said. I am sorry that he is not here because I would say to his face that he has, I believe, perhaps exaggerated some of the difficulties. He has certainly dwelt too long on the difficulties and has ignored the benefits. There is no doubt in my mind—I speak as a part-time resident of the Isle of Dogs—that there is friction, not unnaturally, between old-established residents and the newcomers, the new industries and the new activities that are taking place.
I accept what the development corporation says. Again, I am sorry that the noble Lord, Lord Mellish, is not here because I give the noble Lord and his colleagues much credit for what they have done and what they have attempted to do. However, there is still more that they can and must do, in order to create a harmonious melding together of these many different people—the old inhabitants, the newcomers, the rich, the poor, the skilled, the unskilled, the white collar and the blue collar. There is an enormous diversity there, and the problems are very real and very great. I believe that they will be overcome but the greater the consciousness we have of it, the greater the efforts made by the Church and the social workers on the one side and the development corporation on the other, and the more concentration there is, without delays, in granting permissions and carrying on with the job, the quicker those problems will be overcome and the less serious they will be.
Perhaps I may turn briefly to the noble Lord, Lord Sefton. I have very great sympathy for his attitude, as I think most noble Lords have. However, I must say that the way he presented it diminished somewhat my sympathy. Perhaps that is because I do not come from the North. As a former regional planning council chairman, I feel strongly that we must have far more consciousness of the needs and requirements of different regions. The disparities between North and South are too obvious to need any further description by myself. Your Lordships know the facts very well.

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I believe that we are failing in our regional planning. While I do not see this particular Bill as the most appropriate hook on which to hang the coat of regional planning, I hope that the noble Lord will pursue his desire for, if you like, a really serious Royal Commission. I do not know what would be appropriate. But it should be some body that will accept that this is one of the most pressing problems facing this country and that will go on from there to propose methods by which the disparities between North and South can be overcome. I should like to echo what I think the noble Lord, Lord Mellish, said. Probably, the docklands corporation can give an example of how these needs can be met with a combination of the working together of private enterprise risk capital, and a development corporation. If there were more development corporations in the North, I believe we would at least have taken some steps towards redressing that balance.
6.27 p.m.
Lord Elwyn-Jones: My Lords, I am grateful to the noble Lord, Lord Teviot, for welcoming me to the Back Benches. In fact, I spoke from the Back Benches of this House 40 years ago. Of course, then it was in the occupation of another place and we were, curiously enough, another place for a short time, which is only capable of achievement in this remarkable institution and in this remarkable House.
I intervene, but alas the right reverend Prelate is not here to hear it, to say amen to what he has said. I think it is right and proper that the London Church leaders and those on the Churches group should be saying that there ought to be some social audit about what is going on. I speak as one who represented Newham, or parts of it, for 29 years. There is deep and real concern there as to what is happening.
As far as the people there are concerned, they have no sense of a regeneration of their community. At the present time the degree of unemployment is appalling—30 per cent. of the adult males in the area are unemployed; 60 per cent. of the young people are unemployed. I feel that they cannot see the prospect of betterment in the job scene, resulting in particular from this massive development of office accommodation, 10 to 12 million square feet of it, in three enormous blocks, which will dominate the scene. They cannot see job prospects for themselves out of what is arising. Indeed, I understand that the original estimates were that as many as 75,000 jobs would be created (50,000 direct and 25,000 indirect), with no fewer than 20,000 for local residents. The present estimate is that there could be 1,800 jobs for local residents. I hope that when the noble Lord comes to reply, rather than intervening at this stage, as he has done more than once—if he insists I shall give way—I shall have his comment as to whether the figures which they started with or the figures which are given now are correct.
As regards the housing scene, with a number of noble Lords I was present when we received a delegation from the Docklands Consultative Committee and the Docklands Forum. They expressed their grave concern as to the state of play. First, they found it astonishing that this enormous
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Canary Wharf development received less planning consideration than would the change of use of a chip shop situated outside the zone, because of its good fortune and that of the developers that it is in an enterprise zone. Therefore, that has not given them a great deal of comfort or reassurance.
With regard to the prospects in the housing field, I am bound to say that the information that has been given by the Docklands Forum, which as far as I know is not an irresponsible body, is that:
"House prices will increase way beyond the reach of local people. Few houses in the Isle of Dogs can be afforded by Docklands residents at the moment. For instance, a 1 bedroomed flat will cost in the region of £51,000-78,000. A 3 bedroomed family house will cost a minimum of £92,000 and up to £175,000. This must be compared with the fact that 75% of Tower Hamlets residents earn below £8,000 p.a., enough to support a mortgage of £25,000".
Those are the realities which I am informed exist.
Lord Simon of Glaisdale: My Lords, if the noble and learned Lord will allow me, I have merely visited this area in the company of the noble Lord, Lord Mellish. However, is not the noble and learned Lord giving figures of houses and flats which magnificently overlook the river, like Venetian palaces overlooking the Grand Canal?
Lord Elwyn-Jones: No, my Lords. I can tell my noble and learned friend that I am not saying anything of the kind. I am quoting figures that were given to my colleagues and myself by the Docklands Forum on what house prices will be for the people of the area as the development takes place. Perhaps when the noble Lord, Lord Hacking, replies to the debate he may be able to give us some firm guidance as to his sources.
Lord Nugent of Guildford: My Lords, perhaps I may interrupt the noble and learned Lord for a moment, as he is so generous with his time. He may be interested to know that I visited the area when it had been 12 months under the corporation and saw the first tranche of houses which were built in Beckton and which were selling for £23,500. A number of local people were buying them. Since then the prices of those houses have gone up, but I am informed that the local people have been buying them for £40,000 and less. There is no doubt that the local people have had first pick at very reasonable prices.
Lord Elwyn-Jones: My Lords, in the times when house prices were about £20,000 it was a different scene, but I have quoted the figures. A one-bedroomed flat will cost between £51,000 and £78,000 and a three-bedroomed house will cost from £92,000 upwards. It is put to me that those prices are well outside the range of local inhabitants and that is one reason why, as a former Member of Parliament for the area, I believe that these fears should be met by positive assurances from reliable sources.
Therefore, I believe that the House would be wrongly advised to dismiss the criticisms and the points of concern that have been expressed as grossly exaggerated and unrealistic. There is real concern and it is right that this House of all Houses should ventilate those concerns so that what may happen as a serious tragedy for people who have suffered so much is not repeated.
6.35 p.m.
Lord Geddes: My Lords, sandwiched as I am between two such eminent and learned Lords as the noble and learned Lord, Lord Elwyn-Jones, and the noble and learned Lord, Lord Simon of Glaisdale. I think that my remarks must and will be very short. The debate has been somewhat of a pot-pourri around the subject of the Bill itself. I was privileged to speak on the Second Reading of that Bill and nothing that I have heard or seen since has in any way changed my mind in favour of the particular Bill which is under debate on Third Reading. I shall not repeat what I said on that occasion, but I shall try to highlight one or two points which have either been made this evening or which perhaps may usefully be made.
I strongly support the argument that, to use a rather nasty pun, by robbing the South one does not necessarily pay the North. There seems to be a growing misconception, that, if the money being invested as a result of this particular Bill and the Canary Wharf development itself was not so invested, it would go elsewhere. I do not think that there is any logical connection whatever between those two.
Lord Sefton of Garston: My Lords, if the noble Lord will give way, he said that he was dealing with points that were raised in the Bill. Will the noble Lord indicate which Member of this House said that money invested in Canary Wharf should he diverted elsewhere?
Lord Geddes: My Lords, I think that it would be invidious for me even to try to do that because I do not think that that has been said. I said that I do not believe that if money was not put into Canary Wharf, it would therefore go further north, and I said that I do not think there is any logical connection between those two. That is not quite the same thing as the noble Lord has just said.
Lord Sefton of Garston: My Lords—
Lord Geddes: My Lords, perhaps I may continue, because this debate has gone on for a very long time. I do not wish to dwell at any great length on the amendment of the noble Lord, Lord Sefton, but my attention was drawn to an article which appeared in the Sunday Telegraph magazine two days ago and which spoke of extensive developments, as it happens, in docklands—in Liverpool in the Albert Dock complex, in Bristol, with 200 acres of dockland being converted to housing, in Middlesbrough, where they want to acquire the old town docks, and in Hull, where the Humber Dock has become a 270-berth marina. Money is being invested there. I do not at all deny the point raised by the noble Lord, Lord Sefton—I think that it is an extremely valid one—but I think that it is misplaced in the context of this particular debate and therefore perhaps ill-conceived.
On the question of job creation, I shall certainly not enter the contest of one set of figures against another, but I have had a certain amount of experience in this area and I just instance to your Lordships that there are very real possibilities of job creation. I am not being facetious when I mention such activities as
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baking, window cleaning, the electrical industry, plumbers, joiners, manufacturers of furniture, let alone the enormous number of varied job possibilities within leisure pursuits. A very large amount of development is being made in leisure in docklands, and I for one am very glad to see it.
I believe I am right in saying that the heritage was raised during the debate, I think by the right reverend Prelate, but I beg his pardon if I am wrong. There is one not-so-minor benefit of this particular extension which is that it will enable a through passage, albeit with a change at the Bank, not only to the Stolport, which I mentioned on Second Reading, but to the southern end of the London Docklands light railway, which in turn connects with Brunel's very little used pedestrian tunnel under the Thames, which goes direct to the Palace of Greenwich. For the first time there will be easy and fast access to that magnificent complex, if I may call it that, at Greenwich. At the moment the Tower of London is statistically the largest single tourist attraction in the country. I am willing to lay a certain amount of money outside this Chamber that Greenwich will rapidly catch it up once one can get to Greenwich easily and quickly.
I started by saying that perhaps we had gone slightly off the main track of the Bill. May I say bluntly to your Lordships that I would have supported this particular Bill as a major improvement to the facilities of London and the South-East even if it had not been funded as to between one-third and one-half? I hope that I am not giving the developers a chance to back away, but given the situation that they are funding, and have said that they will fund, to that extent, are we really going to throw out such a benefit in that it is also going to be subsidised to a large extent by the private sector?
I am sure that your Lordships will approve the Bill and give it a Third Reading. The amendment itself seems to be misplaced and therefore ill-conceived, and not least—and here I would support the noble Lord, Lord Mellish, and I am sorry he is not in his place—because I have had occasion, if you like on the other side of the table, to have discussions with the LDDC. I can assure your Lordships that they are the most stringent body of people I have ever had to deal with.
The fears that have been expressed that perhaps the enterprise zone situation and therefore the lack of formal planning consent are disadvantageous overall are themselves misplaced. I can assure your Lordships that the LDDC really watch exactly what is going on and are tough negotiators. I warmly endorse this Bill.
6.42 p.m.
Lord Simon of Glaisdale: My Lords, I have no hesitation in supporting the Third Reading of this Bill, the case for which has been made out in a great number of notable speeches following that of my noble friend Lord Hacking. Nevertheless, I entirely agree with what the right reverend Prelate said, that we have to consider this Bill in its overall impact.
Although the noble Lord, Lord Teviot, gave us a salutory example of parliamentary austerity, the rest of your Lordships—and I follow your Lordships in this respect—have gone from the extension of the railway

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to the railway itself, to the Docklands development area, to the contiguous areas of the City of London and the east and south-east of London, and then embracing the whole of the South-East of England, with the problem of the North-South, to which the noble Lord, Lord Sefton, referred, and whose thrust of argument I venture to follow.
Although I agree with the noble Lord, Lord Sefton, I hope that he will not divide the House. I cannot think that it would be advantageous to have a Select Committee. What we want are government decisions. A Select Committee is inappropriate and will cause delay.
I want to make three points. The first follows up what I ventured to say in the economic and employment debate on the Queen's Speech. This, in my respectful submission, answers the point made by the noble Lords, Lord Alport, Lord Bellwin and Lord Geddes; namely, that if you inhibit investment in the South you do not necessarily divert it to the North.
That is true if one stops there. But what happens at the moment is that it is apparently government policy positively to attract investment by beneficial rewards to the South-East. During the debate on the Address I asked the noble Lord, Lord Young of Graffham—and he agreed with my interpretation— whether it was his policy, and obviously the government policy, to ease planning permissions in the South-East.
If you ease planning consents in the South-East comparatively, you make planning consents comparatively more difficult in the North, in the distressed and depressed manufacturing areas. It is not only what the noble Lord has admitted, but I have had the strong impression—and I hope that the Minister will deal with this—that when planning consent is refused in the South-East the Secretary of State calls the case in.
That is discrimination in favour of development—particularly high tech development—in the South-East to the detriment of where we so sadly need it, namely, in the depressed manufacturing centres. I do not speak of the environmental consequences, although I think that they too are deplorable. I speak mainly in the context, as the noble Lord, Lord Sefton, put it, of the economic consequences.
My second comment is that even the most non-interventionist governments intervene powerfully in the economy. I do not think only of the enormous defence contracts, but the noble Lord, Lord Sefton, and the right reverend Prelate both mentioned the Channel Tunnel. One can think of the enormous investment even in ancillary services that will be involved on the part of the Government in the decision to build a Channel Tunnel.
When we discussed the Channel Tunnel the noble Lord, Lord Elliott of Morpeth, was so impressed by that consideration that he seemed to be suggesting that it should start off from the North-East of England. But it is a matter that the Government must consider in their regional policy. It is a consideration which far outweighs any regional grant.
My third point is merely a summing up of that. With these distortions in planning consents and in government commitment willy-nilly in the economy in favour, as I think, of the South-East, it demands
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positive encouragement to countervail that; positive encouragement in the depressed manufacturing areas. To have countervailing power of that sort, countervailing expenditure and procedures, seems entirely consistent on ultimate analysis with the economic thinking of the Government.
I have ventured to follow the noble Lord, Lord Sefton, because it does not seem to me that this issue, which has been so acutely and finely examined in your Lordships' House, can properly be left without its total national repercussions being considered.
6.50 p.m.
Lord Marshall of Leeds: My Lords, I shall try to avoid any repetition of the very many points made by so many eloquent previous speakers, not least by the noble Lord, Lord Mellish. One has to admit at this time of the evening that most of the points have been made already. The original instruction initiated by the noble Lord, Lord Sefton, required the Select Committee, on which I served as a member, to consider the consequences of the Bill on the South-East region and on the City of London in particular. After the House had agreed that the Select Committee might hear evidence from sources other than the promoters, we were offered no evidence which related to that instruction, or no evidence which I can remember.
On the contrary, such evidence as was proffered related to the effect the proposals would have on Docklands themselves. This evidence would have been of greater relevance to the amendment subsequently moved by the right reverend Prelate the Bishop of London and now withdrawn. But the evidence of local representatives, although clearly outside the terms of the instruction, was given sympathetic consideration. The result, however, was that, in default of relevant evidence, the Select Committee members had to draw upon their own background knowledge of the subject when they considered the terms of the instruction.
As the Bill became unopposed during its consideration by the Select Committee, we concluded that the proposals would benefit the City of London and would certainly not materially harm the south-eastern region, either. Indeed, they would be of very great benefit. We were also aware that a Select Committee on a Private Bill is not the most appropriate forum to decide major planning issues or regional development strategy either.
But the fact still remains that the noble Lord who originally moved the instruction would have been at liberty to give evidence, either himself or through others, to the committee touching upon his concerns which prompted either his instruction or today's amendment, which anyway is in totally different terms and which raises quite a different argument. He would have been wiser—would he not?—to have incorporated the substance of his amendment within the terms of the instruction. But for his own reasons he chose not to do so, and we cannot argue about that.
Having dealt with the instruction to the best of our ability and having concluded our work—if I may so, under the expert and incisive direction of the noble Lord, Lord Alport—the House is now being asked to

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blow the whistle on this Bill until yet another Select Committee has been set up and has reported. That is what is asked for.
A noble Lord: My Lords, but—
Lord Marshall of Leeds: Yes, my Lords, it is. I speak with some experience of inner-city problems both in the North and the North-East of England. I also have not a little experience of the problems of the eight-and-a-half square miles of London's Docklands.
During the course of an inquiry into the government of Greater London which I conducted during 1977 and 1978, when evidence was given to us by the director of the Docklands Development Team, I used these words:
"In common with other parts of Inner London, the Docklands Area has suffered from the inability to compete for new development on equal terms with other parts of the country with which its problems are comparable".
No question there of the effect of the regeneration of Docklands on the rest of London! Indeed, it was the other way round. It highlighted how far behind the startline Docklands was when compared with parts of the country which had comparable problems.
I concluded in that inquiry that the implementation of any action to regenerate the Docklands might founder:
"because conflict and friction between the constituent members of the Docklands Joint Committee (that is, the five Docklands Boroughs) can so easily lead to indecision, compromise or simply no action at all".
Those were my views in 1978 and I have to tell your Lordships that they have not changed since.
My report continued in this vein—and I am sorry to be tedious about it:
"My view is that the successful regeneration of the Dockland Area is so vital to the future prosperity of the whole of the inner city that a more positive form of direction is needed than the present arrangements can provide. This could perhaps be given by an independent body on the lines of a new town development corporation. My recommended solution is the introduction of a new, comprehensive development area or areas to cover the territory of Docklands".
These were my recommendations of 1978, an imposed solution. The time for talking had gone even in 1978. I think that my recommendations happen to be in line with the subsequent views of the 1981 Select Committee, when the London Docklands Development Corporation and, later, the development zones, were set out.
Speed is essential if the opportunity is not to be missed. If this amendment were to be accepted it would adjourn sine die the possibility of the major regeneration of docklands. It would put back the clock 20 years or more; and in this respect I agree with the views expressed by my noble friend Lord Bellwin. Yet another exhaustive inquiry by yet another Select Committee would consume invaluable lead time which can never be and which will never be made up; for the world will have moved on.
The recommendations of any future Select Committee will by then be too late to be of any more use than the gathering of a great deal of dust. By then the opportunity would have passed us by perhaps, and probably forever. My noble friend Lord Teviot said that Canary Wharf would not succeed without this
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link. The sobbering and melancholy fact is that without this link Canary Wharf will not be developed at all, ever. For all these reasons I hope that the amendment will be rejected, that the report of the Select Committee will be accepted and that this Bill will be given a Third Reading.
7 p.m.
Lord Montagu of Beaulieu: My Lords, I intervene very briefly just to express a few views on behalf of the Historic Buildings Commission, of which I am chairman. We have no doubt that the effects of the Canary Wharf development on London as a whole and on the regeneration of the East End in particular will be indeed profound, particularly on the historic buildings, of which there are so many in that area. However, my commission does not take an indiscriminate objection to new development; nor does it make a blanket objection to redevelopment. Indeed I was the chairman of a committee, and that led to the report on new users for old buildings. Certainly many old buildings are finding new users down there.
Although my commission's primary responsibility is to seek to preserve our ancient monuments and historic buildings and to promote conservation areas, we are very conscious of the importance of the development and conservation schemes which can produce jobs and in turn help to regenerate the area. I therefore approach this debate constructively and with the hope that development of the docklands will bring new life and vigour.
However, I should like to record our concern on two issues. First, we are concerned about the impact of the extremely tall towers on the London skyline and on the glories of the superb baroque architecture across the river at Greenwich. In the right setting, tall towers can add enormous strength to the area, but it must be in the right area. The impact of the proposed enormously high towers would go far beyond the area of Canary Wharf itself.
Secondly, we consider that the development of Canary Wharf ought to take place within a firmly established strategy which recognises the great architectual and historical importance of the area. We are seeking some satisfaction on these concerns, which will be taken into account in the Canary Wharf development. Indeed, we should be very hesitant in wrecking a Bill, but I believe we should seek to ensure that the conservation of the past, respect for present communities and the enhancement of a great city are central considerations in any future development of the docklands.
I must confess that in the early stages the commission was less than happy with the consultation that had taken place between the corporation and the commission. However, in recent times we have established close relations, and I am sure that that will pay good dividends in the future. With regard to the railway itself, it is certainly vital. Perhaps I may end by quoting the words of the great poet Rudyard Kipling when he said, "Transportation is civilisation". I think this railway will prove to be a very civilised thing indeed.
7.2 p.m.
Lord Carmichael of Kelvingrove: My Lords, anyone who did not know the procedure of your Lordships' House, walking in today, will have been surprised that a transport Bill (which is what this is, actually) has gone on as long and has gone down as many by-ways as it has. But of course as everyone has said, and particularly the right reverend Prelate, it would be unrealistic to discuss this Bill only in relation to Canary Wharf, because the whole question of the Docklands Light Railway, although it was originally seen as an aid to local regeneration, is now clearly being seen as a developer's railway and for that purpose primarily.
I personally accept that exceptional problems frequently require that corners have to be cut, and particularly bureaucratic corners. They can be very time-consuming and very frustrating: questions of planning, building control and such things. However, I would suggest with great humility that the London docklands Bill of 1981 perhaps went a bit too far and made rather too big an enterprise zone for local people to feel that they had any involvement in it whatsoever.
We had a situation long before 1981 in Glasgow, where we had great deprivation. An organisation was set up which was known as GEAR, that is, the Glasgow Eastern Area Renewal. The difference between that and the docklands corporation is that the Glasgow Eastern Area Renewal was composed of the local authority, the Scottish Office and the Scottish Development Authority, acting as a unit, and not needing to go and get votes, and so on. Many of the things they did were not very popular but at least there was a channel through which ordinary people could go to see their local council and complain about certain things. That is becoming even stronger now that people realise there is a channel and that they have a say in things. This has obviously been a good thing.
There is a great deal of resentment—and I am from the very far north, from the docklands point of view—among many people (not just the usual cranks that we always get) that this huge development is going on and they have no say at all. As I saw enterprise zones originally, they were meant to be relatively small areas where relatively small industries would be able to get on with their jobs without meeting too many problems. But here we are to have the biggest single development in Europe, if not in the world—far bigger than the New York World Trade Centre—with no restrictions and no local people being able to object or even to comment.
One noble Lord said that the London Docks Group were very tough in their examination of things; but, with great respect, that is not enough. They have perhaps a different purpose from that of the local people and so I think there has been possibly a slight slip-up and that just a little too much power has been given to this enterprise zone. In Glasgow we do not have billions of pounds on our doorstep looking for a place to go, as is the case in London, and so our development is a bit slower. Also of course our bootstraps are somewhat shorter than those of the LDDC. I cannot really believe that Parliament had actually expected quite the amount of development
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and the power to go to one single body, as has happened in this case.
However, we are discussing the special report of the Select Committee, and looking at the map it would be quite crazy for the House not to give the go-ahead to this extension. I think it would be just a nonsense not to go ahead. In pure transport terms permission must be given, but I think a number of points are worth raising. It may be lowering the general standard of the debate if I descend from the heights, where we have been discussing the big principles of population dispersal and regeneration, and go to the mundane question of the transport itself and who is actually going to pay for this extension.
Originally, I understand the Minister said this was going to be privately funded and I should like to have that point cleared up by the Minister in his reply, or if not then at a later stage. But during the Second Reading in another place the Minister reserved his position and said that the Government would be paying for part of the extension. My latest information is that the Government are now about to pay half the cost—in other words, approximately £45 million. The total will be something in the region of £90 million. I should like to know whether that is the case, and if so why the change has been made.
The other important point about the Government's part in this is that it seems as if the Government, through London Regional Transport, will be liable particularly for the tunnelling part of the operation—which of course is the hazardous part. I wonder whether the Minister can say if the total cost will be divided and that London Regional Transport will not have any additional costs added to them because of ground failures or anything else that goes wrong with the tunnelling, with the result that they will be left with a much bigger bill and the public purse will therefore have to pay a great deal more than the original amount. I think that liability for this part of the route should at the very least be met in some way other than by London Regional Tansport alone, and that claims for such things as damage to buildings overhead should be looked at as well. That is therefore another point to which I hope the Minister will be able to reply.
My third point is on the question of the eastern extension to the railway. Speaking in purely transport terms, it seems crazy, if one is going so far as this, not to take advantage of vacant land and carry on with an eastern extension of the route. I understand that this is well into the planning stage. But there is, again, doubt as to who will be paying for it. Yesterday in another place the responsible Minister, Mr. Mitchell, said:
"The Government have been assured by the London Docklands development corporation that, in its view, the project could go ahead without any expectation of Government contribution to capital or running costs."—[Official Report, Commons, 1/12/86; col. 61].
But I have been given another quotation from Mr. Ward, who is the chief executive of the LDDC. He said:
"The financial and economic evaluation of the railway which we have just completed underlines the obvious fact that a project of this dimension simply cannot be sustained wholly by the private sector, because it is unlikely to develop the required rate of return in the end."

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So it has to be a partnership between the public and private sectors. There are fairly large sums of money involved and those are two statements made within 21 days of each other. I hope that the Minister is able to give us his opinion on them.
Lastly, I am afraid that I must disagree with the noble Lord, Lord Marshall, about the amendment of my noble friend Lord Sefton. I cannot see any contradiction between this amendment and his suggestion that he wants the Bill to go ahead. After the Motion, That the Bill be now read a third time, the amendment reads:
"but this House considers that the Canary Wharf development will highlight the problems of high costs and congestion in the South-East and that a Select Committee should be appointed to inquire into the matter."
My reading of it, and I have spoken to others with more knowledge of procedure than I have—
Lord Simon of Glaisdale: My Lords, I wonder whether the noble Lord will forgive me for intervening. While I entirely agree with his reading of the amendment and its effect, nevertheless does it not contain the implication that the best way to deal with regional unemployment problems is a Select Committee?
Lord Carmichael of Kelvingrove: My Lords, I agree that that is perhaps a flaw in the wording; but since the amendment is down, and since practically everyone who has spoken today has expressed sorrow at the state of the North, as it is called, and has said that something should be done, it would be churlish of us to reject the amendment when we are wishing the Bill god-speed. That would be wrong for anyone from the North and certainly for me. I could not go back to Glasgow, and would not want to, and say: Yes, we gave Canary Wharf the go-ahead and, though everyone in the House said that we have to do something about the North, a simple amendment like this was rejected.
So if my noble friend feels that he has to push the matter to a vote, then in a purely personal capacity I would want to support him. But that does not detract from the fact that, in purely transport terms, I believe that this Bill is something which must be given the approval of the House tonight.
Lord Marshall of Leeds: My Lords, before the noble Lord sits down, does he not agree that what I was saying was that the terms of the instruction initiated by the noble Lord, Lord Sefton of Garston, were completely different from the terms of his amendment which is before the House today?
Lord Carmichael of Kelvingrove: No, my Lords, I listened very carefully to my noble friend Lord Sefton, partly because I knew that there would be this dilemma. He said very early on that he would not oppose the Third Reading of the Bill. He merely wanted to take an opportunity, which, fortunately, our democracy gives us the chance to do, to raise once again the disparity between the North and the South. In view of the way that the House has gone today, I find it difficult to believe that anyone would not sympathise with this amendment.
7.15 p.m.
Lord Brabazon of Tara: My Lords, it may be helpful at this stage if I intervene to give a brief indication of the Government's view on the Bill and on the amendment to the Motion for the Third Reading. The Government are fully committed to the regeneration of London Docklands. This railway scheme would be a valuable aid in the process of regeneration and for that reason the Government support this Bill. It is an essential preparation for the Canary Wharf development which would create major new job opportunities in Docklands. It would also increase the benefits provided by the railway already under construction.
That is not to say that we are prepared to provide unlimited supplies of public money to pay for the railway: the negotiations that LRT is conducting with the Canary Wharf Consortium are designed to secure a significant private sector contribution to the costs of the City extension to ensure that it will generate the required rate of return on any public investment which is made. At the end of the day, London Regional Transport will have to satisfy itself and the Government that the deal to be struck meets this requirement. But this afternoon's debate has gone very wide of the railway Bill itself and it might be helpful to give a word of background to the situation on the Isle of Dogs.
The creation of the London Docklands Development Corporation in 1981 signalled the start of a period of rapid economic development across the eight square miles of its area. The corporation has successfully replaced decline and dereliction by innovation and activity. The £289 million of government grant provided to the corporation since 1981 has already attracted private sector investment commitments of nearly £1·5 billion. Over 7 million square feet of new commercial industrial and office floor space have been constructed. Over 300 companies have moved into the corporation's area and 8,000 jobs have been created. There is also an average of 1,500 construction jobs in the Docklands at any one time. Progress on this scale would not have been thought possible in 1981.
Local people have shared in the corporation's success. Mention has been made, particularly by the noble Lord, Lord Mellish, of the 6,000 new private homes that have been built and about 40 per cent. of those on the corporation's land have been sold to local tenants under the LDDC's Affordable Homes policy. Bus services have been improved; voluntary organisations and local projects supported; housing estates renovated; and a wide range of environmental projects undertaken. The area has been transformed in just five years. Perhaps the most obvious of all the London Docklands Development Corporation's achievements in support of local people has been its insistence on rail connections for previously isolated communities. Without the corporation there would be no Docklands railway.
The City extension is an essential pre-requisite for the proposed £1.5 billion development of Canary Wharf. This development prepresents an exciting opportunity to attract large numbers of new jobs and substantial amounts of private investment to a depressed area of London. If the House fails to support

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this Bill, it will be denying the people of East London the major job opportunities that the scheme would bring. It would also be rejecting the chance to lay the foundations of long-term prosperity in an area where it is badly needed.
Complex negotiations are currently in progress on the Canary Wharf development. The site is also subject to a number of statutory planning processes which I must not prejudge. I cannot, therefore, comment on the details of the scheme or on the prospect of an inquiry. The Corporation's decisions on Canary Wharf are, however, being taken with the benefit of wide consultation. It has been in very close contact with Tower Hamlets from the outset of the negotiations and has given presentations to other interested local authorities and MPs. It has also held over 50 meetings with local community groups, including the Docklands Forum, the Association of Island Communities and the Limehouse Development Group.
The right reverend Prelate the Bishop of London criticised the inadequate quality of the consultation, but the corporation and the developers have shown themselves very ready to respond to issues raised by their extensive consultations. For example, the Canary Wharf towers were moved to the end of the wharf out of the Greenwich axis as a result of comments from the Royal Fine Arts Commission and Greenwich council. As another example, when the LDDC asked the Docklands Forum to produce a list of the demands of local people, it produced 18 requests, 11 of which have been accepted and a further four accepted in part.
Lord Graham of Edmonton: My Lords, has the Minister taken on board the point that it is still possible for the Secretary of State to call in the application for planning permission for the circus and to say to the LDDC that that is what they intend to do? Is that still an option?
Lord Brabazon of Tara: My Lords, I was going to come to that point later, but I shall deal with it now, since reference has also been made by the right reverend Prelate to the fact that part of the proposed Canary Wharf development lies outside the enterprise Zone and therefore comes within the normal development control processes. These provide that my right honourable friend the Secretary of State for the Environment may call in planning applications for his own determination. I understand that a planning application in respect of the part of the Canary Wharf scheme outside the enterprise zone will shortly be referred to him as a departure from the development plan. It will then be for him to decide whether or not he should call in the application for his own determination and, if it were called in, whether there should be an inquiry. It would not be proper for me to anticipate my right honourable friend's decision or even to comment on the merits of the application lest I prejudice his decision.
The Government are of course concerned with problems elsewhere in the country, and particularly in the North. As my noble friend Lord Bellwin said, there is no monopoly in this concern on the other side of the House. The Government are drawing on their experience of regeneration in London's Docklands to support urban areas outside the capital.
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In 1981 we set up a development corporation for the docklands of Merseyside, just as we did for London. These two corporations have demonstrated that urban development corporations are a powerful and effective stimulus for urban regeneration. As a result my right honourable friend the Secretary of State for the Environment has recently announced his intention to create four new urban development corporations in the North. The first of these will be in the North-West, based in Trafford Park in Greater Manchester. Subject to discussions with the local authorities concerned, the orders designating that urban development corporation should be laid before Christmas. The other areas selected for designation are in the Black Country, on Teesside and in Tyne and Wear. I should expect the designation orders to be laid in the spring. Each of these urban development corporations is expected to spend more than £100 million over the next six or seven years.
In addition to the Merseyside Development Corporation, a range of other initiatives have been developed for Merseyside and the North-West; we have given assisted area status to much of the region. We have provided extra cash for deprived inner-city areas through the inner-city partnership and programme schemes. We have created a free port in Liverpool. We have created enterprise zones at Speke, at Salford and in Cumbria. We have funded derelict land reclamation on a massive scale. The North-West already has a motorway network which is second to none. Over £1,000 million of government money is going into Merseyside alone every year. But as my noble friend Lord Nugent so wisely said, the money has to be made somewhere before it can be spent.
Your Lordships accepted the proposal of the noble Lord, Lord Sefton, at Second Reading, to instruct the Select Committee on the Bill to have regard to the consequences of the proposals contained in the Bill on the rest of the South-East region and in particular on the City of London. The Select Committee has done this, and very thoroughly too, producing a special report that concludes that the creation of new jobs at a time of high unemployment, even in the South-East, must be welcomed. It went on to state that change in the character and appearance of the Docklands would no more arise as a result of Canary Wharf than any other scheme of regeneration and that such changes in the way of life must be seen as inevitable when Parliament approved the creation of the LDDC.
The noble Lord, Lord Carmichael, actually asked me some questions concerning the Bill itself, which was fairly rare during this afternoon's debate. He asked about the funding of the western extension. Strictly speaking, negotiations are a matter for LRT and agreement will be between LRT and the consortium. However, any investment by LRT in this project requires the approval of my right honourable friend the Secretary of State for Transport. He will have to be satisfied that, taking into account the contribution to be made by the consortium, the project meets the Government's criteria for public sector investment. Negotiations with the consortium on the financial contribution are being conducted with this requirement in mind.
The noble Lord also asked about the possibility of the Eastern extension to Beckton. As he will be aware,

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a Bill has now been deposited and the Government have been assured by the London Docklands Development Corporation that in its view the project could go ahead with no expectation of Government contribution to capital or running costs. However, the Government will want to see, before the Bill proceeds to Second Reading, the specific arrangement which the LDDC can make to secure that there shall be no signifiicant risk that any of the costs shall fall as a burden upon LRT. We shall also want to see the full financial and economic appraisal of the railways project from London Regional Transport.
I should now like to turn to the precise terms of the amendment of the noble Lord, Lord Sefton, for the appointment of a Select Committee of your Lordships' House to inquire into the problems of high costs and congestion in the South-East. I listened carefully to the arguments of the noble Lord, but I am not convinced that there is a case for a Select Commitee to be appointed at this time. The Government do not agree with his arguments, nor with the evidence which he advanced. Nor do I think that it would be appropriate for the House to decide such an important matter as the setting up of what would be a major Select Committee of your Lordships' House on a Motion relating to the Third Reading of a Private Bill.
The Government's view on this Bill is clear. We believe that the regeneration of London's Docklands is a desirable and worthwhile aim and that this railway proposal will contribute to achieving that aim. Third Reading of the Private Bill ought to concentrate on the consideration given to the Bill by your Lordships' Select Committee. When it went into committee there were 15 petitions against the Bill; they have all been withdrawn. We have heard today from the noble Lord, Lord Alport, who was chairman of that committee and we have before us the committee's special report on the Bill and on the instruction given to the committee at Second Reading, following the proposal of the noble Lord, Lord Sefton, to the House on that occasion.
Lord Carmichael of Kelvingrove: My Lords, perhaps I may ask the Minister whether he can confirm that, even if the amendment of the noble Lord, Lord Sefton, were to be carried, it would have no effect on the Bill itself? Even if that amendment were carried, the Bill would still go through. Can the Minister confirm that?
Lord Brabazon of Tara: My Lords, the Bill would still go through, but it might put doubt on the project which the Bill is intended to put forward. The noble Lord, Lord Hacking, has already made that point; I am sure he will wish to mention it again shortly.
This Bill has been very thoroughly considered. For all the reasons I have given, I very much hope that the House will reject the amendment and go on to give the Bill a Third Reading.
Lord Sefton: My Lords, before the Minister sits down, may I ask a question, since it will affect whether or not I shall want to divide the House? He stated that this is not the appropriate time or place to suggest a body to examine the question of regional policy. Can he tell the House when he considers that a reasonable time and place will occur?
Lord Brabazon of Tara: My Lords, I do not think it is in my power to say when a reasonable time and place will occur. It is for the House to decide. I am merely giving my advice.
7.29 p.m.
Lord Hacking: My Lords, it seems a long time ago that I was telling your Lordships about a short extension to a light Docklands railway which was to run only 1·1 miles from the Minories to the Bank of England. The case for the promoters remains as I tried to put it in my introductory speech. The promoters say that there is a need for this railway and that all of those who may be adversely affected have had their views fully considered. Indeed they have had more than that; they have been satisfied because all 15 petitioners who presented petitions to your Lordships' House withdrew them.
I did suggest to your Lordships at the beginning of this long debate that that should be sufficient for you to give this Bill a Third Reading and allow it to pass without impediment through the House. However, because a number of matters which are quite outside the control of the promoters have been raised during the course of this debate and because I, who have been asked by the promoters to introduce this Bill at Third Reading, wish to be helpful, I shall do my best to deal with some of the points that have been raised.
It is clear to me, and I think it was clear before I came into this debate this afternoon, that the English have a great love for certain traditions and habits. One of those great traditions and habits since the Town and Country Planning Act 1947 has been the public inquiry. I have been the beneficiary of long public inquiries. When I was at the Bar, these long tedious public inquiries with large piles of papers kept my family in bread and butter. I had some doubt whether public inquiries produced the result that they were meant to. They certainly produced delay. Perhaps the inspector did not understand my client's case. I have always had some doubt about the validity and efficacy of public inquiries.
But that is not the issue here. In 1981 Parliament in its wisdom passed certain legislation. The noble Lord, Lord Graham of Edmonton, drew our attention to it. At the same time Parliament paid attention to the incorporation of urban development corporations and enterprise zones. Parliament did that with its eyes open. Parliament knew when it was doing so that it would cut back or curb the institution of the public inquiry. It did so for solid reasons, the solid reasons that the noble Lords, Lord Bellwin and Lord Walston, have put to the House. The noble Lord, Lord Bellwin, said that councils cannot have the same single direction as urban development corporations.
Referring to the London docklands areas, the noble Lord, Lord Walston, said, if I noted his words correctly, that if normal planning procedures had been followed we would not be where we are now. Therefore, when your Lordships bemoan, and are distressed about, the absence of public inquiries—I understand the emotion behind those feelings—you should he reminded of the decision of Parliament in regard to the Docklands not to go for the public inquiry route. But not going for the public inquiry route does not mean that there is going to be no

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consultation or no influence. During the passage of this Bill, the Select Committee of another place allowed a body called the Docklands Forum, which was not represented by parliamentary agents and was not represented by counsel, to make representations. The Select Committee of another place was influenced, and as a result, an undertaking was extracted from the promoters that they should consult with the Docklands Forum concerning the building of the railway. That is a precise example of how influence can be achieved without going for the public inquiry.
Lord Graham of Edmonton: My Lords, I am grateful to the noble Lord. He places great reliance upon the sanctity of parliamentary approval for what the LDDC can do. Would he care to square that with the conflict that exists with the Greater London development plan which has a statutory basis and yet is in conflict with what has been proposed?
Lord Hacking: My Lords, the debate has gone wide enough. I hope that the noble Lord, Lord Graham of Edmonton, will forgive me if I do not follow that hare.
Perhaps I may go back to the premise that I was putting to your Lordships. Even without public inquiries, there is an opportunity for influence. For that reason I was concerned that, at a fairly late stage of the proceedings, the right reverend Prelate should be raising so many questions and indeed complaints about non-consultation. I was mindful that the Bill was drawn to his attention in a way sufficient to cause the right reverend Prelate and other clerics in the City of London to file a petition on 6th February before the Select Committee of another place. If he will forgive me for saying so, when the right reverend Prelate filed the petition he appeared to be concentrating more on property than on souls.
I should not wish to discourage any Member of this House from moving to consider matters of how people are affected but in doing so those who are concerned about the lack of consultation should take active steps. This is what worried me when the right reverend Prelate spoke. I have before me a list of consultations carried out by the LDDC. There have been 15 meetings with a variety of bodies—the Docklands Forum, the Canary Wharf working party and the London Borough of Greenwich. There were 15 meetings between September 1985 and the end of that year. In January of this year there were 12 more meetings with other bodies. I have another list of 13 meetings which took place with the Docklands Forum and the Canary Wharf working party. I have another list of 12 meetings with the Limehouse Development, and so forth.
Lord Mellish: And the public meetings, my Lords.
Lord Hacking: And the public meetings, my Lords. With great respect to the right reverend Prelate, the consultation process has been going on for some time. I draw it again to his attention in the hope that from now on, those who have approached him and who are concerned about the area will make use of these consultations. Such consultations are not without influence. The noble Lord the Minister has drawn your
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Lordships' attention to the re-positioning of the whole Canary Wharf consortium because of representations made by Greenwich council, the Greenwich Society and others. As a result of those consultations—showing that the influence does exist and that it can be effective—a major change of decision was made. I quote that example but I am sure that many others could be quoted. I therefore ask your Lordships to look in fairness at the Bill and to look in fairness upon those from Canary Wharf and the LDDC who have been using their best endeavours to carry out consultations.
I wish briefly to tackle one or two other points. With great self-restraint, I did not attempt to intervene in the speech of the noble and learned Lord. I knew that I was being reproved as he was standing there waving the palm of his hand at me. I showed great restraint and did not join in the debate on the employment figures. The truth is that there have been several studies about prospective employment. There was the Henley report, the Peat, Marwick report and one from Queen Mary College which the right reverend Prelate mentioned. All the reports have come out with different emphasis and different figures. I do not know whether the noble and learned Lord knew it but I think he was quoting from the Peat, Marwick researches when he mentioned that only 1,800 local people may expect jobs. In fact, the Peat, Marwick report went higher on the overall employment prospects of Canary Wharf and produced the figure of 76,000. The figure came down to 1,800 by a curious route. I shall not take your Lordships through the mathematics in detail, but the report showed that 9,000 jobs would go to local people. When divided by the five boroughs, that produces, according to the person who has done the arithmetic for me, a figure of 1,800.
At the present time, there is serious unemployment in the area. There are no jobs available for the reasons that I described to your Lordships when I quoted from Mr. John Mills. Whatever amount of employment may come for the local people—and it will probably come on the upper level rather than the lower level—the fact is that this means new work and new jobs. That fact is undeniable.
There is new work from the Canary Wharf development, from the Heron quay of 1·5 million square feet and from the harbour exchange scheme of 1 million square feet. The Canary Wharf development may be the biggest but it is one of several schemes. The more such schemes come in, the more substantial employment will be created. This will help those who have suffered appallingly high unemployment and appallingly low wages. A figure of £8,000 was quoted by the noble and learned Lord, Lord Elwyn-Jones.
That brings me to housing. If wages are low, and if house prices are driven up by people of higher wages coming to the area from outside, local people will be at a disadvantage. The immediate answer, and the answer striven for by the LDDC, is to provide and keep control over as much publicly owned housing as possible. According to those who have given me information, that is exactly what the LDDC is doing. The longer term answer is to regenerate the area and bring up wages closer to the level of house prices in the area.

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I think that deals with the matter of housing. Therefore, I return to the Bill and to the amendment tabled by the noble Lord, Lord Sefton. More than once during the debate the noble Lord stated that he had no wish or intention either to stop or delay the Bill. Although he may think that his amendment will do neither of those things, I am advised that it will. It will obviously cause uncertainty over the Canary Wharf development. That uncertainty will cause delay—delay in negotiations on the positioning of the station, and other matters. That is how it has been put to me and how I put it now to your Lordships. It will cause delay and uncertainty.
If your Lordships were minded to accept the amendment, and even though the noble Lord, Lord Sefton, as he puts it, would not wish it so, there would be problems for the promoters in the execution of the works. For that reason, and many noble Lords have urged this upon the noble Lord, Lord Sefton, I hope that he will not press the amendment to a Division. If he does, I hope that your Lordships will vote against it.
7.41 p.m.
Lord Sefton of Garston: My Lords, some Members of this House will be blaming me for the fact that they are not about their social duties at this hour of the day; but that is not my fault. A number of speeches today, and even the Government brief, were useless. Who is opposing this Bill? The last speech took 12 minutes in which the noble Lord defended the Bill. I should like to see anyone in this Chamber who is opposing it. I am not, but I seem to be the troublemaker.
The noble Lord, Lord Marshall, tried to get out of what he said when replying to my noble friend Lord Carmichael of Kelvingrove. He said that if the amendment were passed there would be another inquiry and then said, "which would subsume"—a lovely word that—"the lead time taken already by the London Dockland Development Corporation in regard to Canary Wharf." That is not true. The promoter of the Bill tried to tell this House that if a chap from Liverpool named Sefton came down here and moved an amendment which merely sought to establish a Select Committee to look at what a lot of Members in this House believe is a serious problem it would stop or delay the developers at Canary Wharf. I only wish that that were true and that the developers would take notice of what this House decides.
I do not know why, for 11 minutes, the Government brief had to deal with supporting the Bill. Someone should tell the Government that no one is opposing the Bill. It seems to me that the only item of contention is that somone from the North had the cheek to come down here and draw attention to a problem that is vexing this nation. The problem can be highlighted by referring to British Rail in the London area not being able to recruit 7,000 members of staff who do not need training. The 7,000 members of staff could not be recruited because no one in the South-East wanted the jobs.
One hundred people from the North of England responded to an advertisement for four jobs as waiters in the South of England. In the end one chap from Liverpool and three Northerners were given the jobs because no one in the South applied. Do not talk to me
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about the unemployment problem in the South—it does not exist. The black economy exists. So I am not in great sympathy with the right reverend Prelate the Bishop of London when he pleads for East London. I am not in very great sympathy with him because measured against the privation in the other parts of this country people in that area are on to a good thing.
I was pleased to hear the noble Lord, Lord Walston, say that he considered the question of a proper regional policy was a serious matter and that it should perhaps be given consideration by another body. I was hoping that the noble Lord speaking for the Government would have given me some indication that the Government would look sympathetically at the question of setting up an investigation into the affluent South-East and the deprived areas of the North. I did not get such an indication because the Government are entirely satisfied that these problems will be worked out by market forces. It is a political credence which they will, of course, continue to support. I cannot do anything to stop them.
The noble Lord, Lord Marshall, also said that someone was trying to "blow the whistle" on the Bill. All I can say to that is that the noble Lord, Lord Marshall, has not been listening to the debate and has not read about the issues. He evidently got everything wrong. Some noble Lords agreed that the problem was there, but felt that carrying the amendment would delay the Bill. I think it has been perfectly well shown that the Bill would not be delayed by the carrying of this amendment. It will not be delayed, it will not be hindered and it will not be obstructed. I think that that is accepted by the House and if anyone disagrees let them interrupt now and tell me how.
Lord Bellwin: My Lords, I can tell the noble Lord exactly that. So far as I am concerned, there is no doubt whatever that the Bill will be delayed, and I suggest that that is the view of most noble Lords.
Lord Sefton of Garston: My Lords, that tells me how—"It is the view of most noble Lords"! Am I seriously being told that Swiss banks and American banks will take note? As I said before, I should be very glad to think that they would take notice of your Lordships' House setting up a committee. Some Members of this House suggested that if I adopted a different course and introduced this subject in a different manner the House might agree to set up an inquiry. Would the developers then back out? Of course they would not. Too much money is involved.
Let me say this about the developers. I wish them speed. I hope they are successful, but I hope the LDDC has not been conned, because it is still only in the process of development. Now it has a challenge. Nobody is stopping it. This amendment will not delay the corporation, so it can go ahead. But when these developers who are speaking on behalf of all these international financiers come along to the LDDC and say that perhaps the wonderful schemes are not going to come to full fruition, just remember that someone introduced a note of caution about trusting developers too much.
I have had some experience. I have seen them flow into Merseyside. Of course they would have had an opportunity of seeing the wonderful schemes they

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produce, and I have seen them disappear into thin air like a mist disappearing with the sun. I hope it does not happen here, because I have already explained the reasons why I believe we should encourage the private sector, particularly in the financial world, to come into London.
Let me conclude on this note. Several noble Lords have spoken in the debate about the necessity to provide space for the expansion of the commercial and financial worlds in London. I agree. The future of the country depends on it. It is vitally important. But I suggest to those same noble Lords that when speaking about space in London they should first of all walk down Whitehall, then down Victoria Street and Tothill Street, and Nine Elms Lane, and see what is going up there; because the greatest users of space in the capital city of London are the Government and Government-sponsored organisations. There is not the faintest reason why HMSO should be at Nine Elms Lane. There is not the faintest reason why the Department of Health and Social Security should be in the Elephant and Castle when most of its customers are north of the Wash. And why on earth we should have the head office of the unemployment services in Victoria Street beats me, because it would do its job much better and more cheaply if it were sited in Manchester. I am simply saying: let the Bill go through.
I have been asked more questions today than I have ever before been asked in my life and they always boil down to one simple question: Are you going to divide the House? Until now I have not told anybody. I would divide the House—but I forgive you, and I shall not do so. I shall not do so for one reason. Let it be to the undying glory of all those people who really worry about the North-South divide that, on the first occasion when they had a chance of registering a vote about the importance of cutting the South-East down to size and allowing a comparative development to take place in the North, I could not ask this House to divide because I am not too sure that I would obtain a teller.
With those few words—and I am prolonging this speech a little—I beg leave to withdraw the amendment standing in my name.
Amendment, by leave, withdrawn.
On Question, Bill read a third time, and passed.

Recreation and Youth Service (Northern Ireland) Order 1986
7.52 p.m.
The Parliamentary Under-Secretary of State, Northern Ireland Office (Lord Lyell): My Lords, I beg to move that the draft Recreation and Youth Service (Northern Ireland) Order 1986 which was laid before your Lordships on the 18th November this year be approved.
This draft order which we have before us this evening will re-enact, with some amendments, the Recreation and Youth Service (Northern Ireland) Order 1973 and also the Recreation (Northern Ireland) Order 1975. The two main amendments—in
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fact there are several main amendments—relate to the functions of the Sports Council for Northern Ireland and the arrangements for payment of grants under the order.
The Recreation and Youth Service (Northern Ireland) Order 1973 provided for the establishment of a sports council and a youth committee for Northern Ireland and required district councils to secure adequate provision of recreational, social, physical and cultural activities. The Recreation (Northern Ireland) Order 1975 amended the 1973 order by enabling district councils to vest land for the purposes of the 1973 order and enabled the Department of Education to make grants towards the expenses of voluntary organisations which provided facilities for social, physical and cultural activities (in addition to those voluntary organisations providing for sport, recreation or the youth service as cited under the 1973 Order).
I wish to stress the excellent co-operation that has existed during the past 13 years between government departments, statutory and voluntary bodies, the sports council and the youth committee, each of which has played a significant part in the furtherance of sport, recreation and the youth service in Northern Ireland.
The proposal for a draft order was widely circulated for consultation and, as a result of recommendations made by the former Northern Ireland Assembly and the comments of other interested bodies, three changes were made to the proposal. These are incorporated in the draft order which is before your Lordships this evening.
The first of these changes is that Article 3 will enable the sports council to assist financially a non-voluntary organisation, provided that the Department of Education's prior written approval is obtained.
The second change is that Schedule 2 of the order before us this evening will provide for consultation with respresentatives of district councils regarding the membership of the youth committee.
The third change is that Article 11 (7), which your Lordships will see on page 9 of the order that is before the House this evening, will provide that where, in the opinion of the Department of Education, grant-aided premises cease to be used in accordance with the grant conditions, or cease to be required for the purpose for which they were grant-aided, the department, in recovering the grant and also the enhanced value of the premises, will have discretion as to the date from which interest on those sums will accrue.
Perhaps I may take your Lordships on a brief tour of the draft order. It is a relatively short measure consisting of 14 articles and three schedules. I should like to take your Lordships through the main changes to the existing law. First of all, if we look at Article 3 (3) we see that this will revise the functions of the sports council. It will no longer be required to fulfil a facilities planning role, because since the publication of the proposal we have found that the article has been extended to allow the sports council, with the Department of Education's prior approval, financially to assist these non-voluntary bodies. We may take as one example the purchase of a specialist piece of equipment which is required for a sporting event at a university or a public facility.

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Further, looking at Article 3 (9), which is at the foot of page 3 of the order, that extends to the Sports Council the Commissioner for Complaints Act (Northern Ireland) 1969 and also Sections 19 and 21 of the Northern Ireland Constitution Act 1973. These two Acts already apply to other public bodies in Northern Ireland—for example the Northern Ireland Housing Executive, the Education and Library Boards and Enterprise Ulster. Therefore we think it is consistent to bring the sports council within their ambit.
The Commissioner for Complaints Act empowers the Commissioner to investigate complaints concerning actions taken by the public body in the exercise of its administrative functions. The application of the sections of the Constitution Act will make it unlawful for the sports council to discriminate on grounds of religion or politics or for the sports council to require an oath or declaration as a condition of service or employment. Article 4 enables the council to make loans to its officers to enable them to purchase motor vehicles considered essential for their official business.
Article 6 enables the sports council to borrow temporarily any sums which are seen to be necessary to meet its approved expenditure. These borrowing powers are to be subject to certain limits and conditions which will be specified by the Department of Education and any sums borrowed are to be repaid before the end of the financial year in which they are borowed. I hope that your Lordships will see that that is short-term borrowing and it will be very closely monitored.
If we look further to Article 11—which is entitled Grants and your Lordships will find it on page 7 of the draft order before us—that re-enacts with amendments the Department of Education's power to pay grants to district councils in respect of their functions under the order and to voluntary organisations which provide facilities for recreation, sport, the youth service or for social, physical or cultural activities.
The main amendments which are made to the existing legislation are that there is no longer a requirement for the department of education to consult the sports council about applications for grant; and the power of the department to make grants to persons following approved courses of training for employment in connection with recreation, sport or the youth service is extended to courses for employment in social or cultural activities and will include part-time courses as well as full-time ones. Article 11(3) enables the Department of Education to attach such conditions as it considers necessary when making grants.
These conditions will include a requirement for those in receipt of capital grants to make repayment when grant-aided facilities are disposed of or, in the opinion of the department, cease to be used or required for purposes for which they were originally provided. With the significant increase in the value of property in recent years, it has been necessary for the Department of Education to seek additional safeguards to ensure that, where grant recovery is being sought, the department may also recoup an equitable share of the enhanced value of these facilities. Provision has also been made to enable
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interest to be recovered on the sums repayable from a relevant date to the date on which repayment is made to the Department of Education.
Schedule 1 Part 1 sets out the constitution and powers of the sports council, arrangements for the appointment and removal of members, and for setting up committees. The law is not changed except that the chairman of the youth committee is no longer a member of the sports council as of right, but both the sports council and the youth committee have agreed that each will have observer status on the other.
Schedule 2 sets out the constitution of the youth committee. Following publication of the 1984 proposal, an amendment has been made to provide for consultation with representatives of district councils when the head of the Department of Education for Northern Ireland is considering appointments to the youth committee. The chairman of the sports council will no longer be a member of the youth committee as of right but, as I have said, both bodies have agreed to be cross-represented by means of observers.
That concludes my brief journey through the draft order. I hope that I have not delayed your Lordships too long. I thought it wise to point out the main amendments. If there are any points which noble Lords wish to raise, I shall do my best to reply this evening. If not, I shall certainly write to your Lordships. With that, I commend the order to the House.
Moved, That the draft order laid before the House on 18th November be approved.—(Lord Lyell.)
8 p.m.
Lord Graham of Edmonton: My Lords, am I to understand that the Minister has taken both orders together?
Lord Lyell: My Lords, no, just the Recreation and Youth Service (Northern Ireland) Order 1986. I shall make brief reference to the next order.
Lord Graham of Edmonton: My Lords, I am more than grateful. From these Benches we approve the action of the Government and the thrust of what they are doing. We all appreciate, perhaps even more so in Northern Ireland, the value and benefit of properly funded recreation and sports facilities. We know just how big a boost it was to Northern Ireland when Mary Peters won the Olympic Gold Medal, and we know just how devoted are the soccer fans and the boxing fans. However, they are the names that hit the headlines. There are literally hundreds of thousands of other men and women, boys and girls, who enjoy this, so we do not intend to be obstructionist in any way.
The Minister talks in terms of powers and rights. I wonder whether he can introduce some sums of money or figures. After all, these are constitutional changes. Although finance ought not properly to form part of this, for the benefit of the House and for my own benefit, I should like to know exactly what we are discussing. It would help if he could give a general framework. I do not want to make a point about reducing the amount of money, but I should like to know what we are discussing.
The Minister talked about bringing the sports council within the ambit of complaints procedure

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practices. Can he tell us not only why this has been done but whether there are instances that cause him to believe this is necessary? This may be what the Minister would call a precautionary arrangement to make it all of a piece with other bodies. I should like to know whether he can quote some evidence.
In respect of the loans to officers, what he said sounded to me eminently sensible. Can he tell us what has triggered off doing this at this time? Have representations been made or dissatisfaction expressed? Is there an attempt to unify practices in a number of places?
Article 11(1) says,
"make grants towards the approved expenses of a district council in carrying out its functions".
Can the Minister give us some illustrations of the kind of matters for which he believes grants will be given? I appreciate that this may be a hostage to fortune. People may well be waiting, saying, "I wonder what we can apply for. The Minister in the House of Lords last week has in mind this, that and the other". On the other hand, to be fair, I assume that the Minister wants this to be useful and to be used, so it is not wrong to encourage people to do certain things that we like and of which we approve, for which public money is available. If the fund can bear it, one has to consider it.
One sees also in Article 13 that:
"A district council may acquire land otherwise than by agreement for the purposes of the section."
Can the Minister tell us some other ways? Is he talking about compulsory purchase in "otherwise than by agreement"? I can understand a public body needing a piece of land that somebody refuses to part with, but are we talking about compulsory purchase?
Regarding Schedule 1, the Minister talked in terms of the chairman of the sub-committee. I understood that it was someone who previously as of right sat on the sports council, and I thought that the Minister referred to some other body, but now it is not as of right.
Lord Lyell: My Lords, I shall come to that. It is the youth committee and the sports council.
Lord Graham of Edmonton: My Lords, these provisions are not dreamed up by civil servants for the sake of it—although on the other hand they may be. However, if they are not, they clearly rest upon some experience. I should like the House to be told why the Minister feels that it is proper to do that at this time.
With those few observations, I wish the operation of the order well.
Lord Hampton: My Lords, I thank the Minister for introducing this order. In an area where unemployment is so high, it is of particular importance. I notice that the original format has been amended at the recommendation of the Northern Ireland Assembly and other interested bodies. It is absolutely right that local opinion should be allowed to play its full part. It is a great tragedy that the Assembly, which could have done so much, does not at present operate.
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To summarise, the continuing functions of the sports council are to advise, encourage and assist as relevant. The council is empowered to make loans to its officers to help them buy cars or motorcyles for use in their work. Can the Minister say what the current rate of interest chargeable is? The sports council is itself to be allowed to borrow. Can the Minister say what rate of interest is here payable?
We are told that there shall continue to be a Youth Committee for Northern Ireland to advise the department, to co-ordinate the youth service and to encourage the provision of facilities. Are any young people invited to sit on this committee?
Lastly, we are told that a district council shall secure the provision in its area of adequate facilities for recreational, social, physical and cultural activities. When grants are considered, who decides whether the facilities at present available are inadequate?
I shall be glad to know the answers to these few questions. With that, we support the order.
8.9 p.m.
Lord Lyell: My Lords, your Lordships will, I am sure, be grateful, as I am, for the close attention paid to the order by the two noble Lords who have spoken, Lord Graham of Edmonton and Lord Hampton.
The noble Lord, Lord Graham, was kind enough to mention the famed sporting achievements of Northern Ireland. He drew attention to Mary Peters, who of course has had marvellous athletic facilities named after her. He will be aware that tomorrow night Mr. Pat Jennings, Northern Ireland's famous goal keeper, is having a jubilee match to which footballers from all over the world are coming. That will be a great sporting night for Northern Ireland and for Mr. Jennings. The noble Lord mentioned Mr. Barry McGuigan. I wish to add my tribute to Mr. Joey Dunlop who has done a great deal for the motor cycle industry and for Northern Ireland sport and who is something of a folk hero in North Antrim. That is the glory of sport. All those ladies and gentlemen take the smiling face of Ulster around the world.
The noble Lord, Lord Graham, asked about figures. I shall not take the noble Lord into the algebra of Article 11(5) on page 8.
Lord Graham of Edmonton: Please, my Lords.
Lord Lyell: My Lords, not tonight. The dinner hour calls and we may discuss the point later. I hope that the noble Lord will forgive me if we leave out the algebra this evening. He asked about the budget and what figures we were thinking of. I have a huge list of figures of what are called recurrent grants and capital grants. Since its inception in 1974, the sports council has received fairly large sums from the Department of Education, which is the sponsoring government body. I have not added the total, although perhaps I should. In 1985–86, the recurrent grant paid by the Department of Education to the sports council amounted to about £1,082,000. It paid about £36,200 in capital grants. Your Lordships will see that the amounts of recurrent grants are fairly substantial. For 1986–87, the estimate is £1,112,000. Capital grants have fallen, but they have fluctuated during the sports

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council's life under current legislation from £20,000 in 1974–75 to nearly £183,000 in 1979–80 and to as low as £5,500 in 1983–84. There is a fair amount of fluctuation in the amount of capital grants. I have no reason to believe that there is any shortage of capital grants for facilities that the sports council may want. There is a fair sum available, and £26,000 is estimated for this year.
The noble Lord also asked me about the sports council being brought under the jurisdiction of the Commissioner for Complaints Act (Northern Ireland) Act 1969. We used the opportunity of the draft order to extend that 1969 Act to bring the sports council into line with other public bodies in Northern Ireland; for example, the Northern Ireland Housing Executive, the Education and Library Boards and Enterprise Ulster, with which we shall be dealing in a few minutes. We believe that that was right and consistent and will not have any practical effect on the day-to-day life of the sports council.
The noble Lord also asked me about district councils and the type of facility that they provide. They range over a fairly wide area from multi-purpose district centres which comprise swimming pools and sports halls—the type of thing that I as a layman would call a "complex"—with swimming pools, sports halls, and small gymnasia with circuit training and so forth, to arts and community centres and fairly small playgrounds. They will cover sport and play, if one can call it that, over a fairly wide area.
I am advised that capital grants for district councils in the current year amount to about £3 million and that capital grants for voluntary sports clubs are about £230,000. Voluntary sports clubs include athletic teams, football teams and all the village and community sports clubs about which we read in the local newspapers. As the noble Lord pointed out, they do a great deal for the young people of Northern Ireland.
The noble Lord also asked me about what I would call cross-representation between the youth committee and the sports council. They were originally combined as the Youth and Sports Council. When we formed the separate bodies under this legislation, we did not think that there would be too much duplication of interests. The sports council and the youth committee have agreed that each body will have one or more members from the other body taking part in discussions. I understand that they will not technically be members of the sports council. The youth committee will be able to send at least one person, and maybe two, to represent it in the sports council, purely as an observer. I understand that such representatives will be able to speak but will not be able to vote. They will not be classified as members of the sports council. I understand that a similar arrangement will apply to the youth committee. I hope that that covers the point raised by the noble Lord.
The noble Lord, Lord Hampton, asked four questions. I had intended to write to him, but the winged messenger seems to have given me some information. The borrowing rate about which he asked is classified as the bank rate. We had better not
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go into that too deeply. I think it is the bank base rate. I do not think that the commercial rate would be much above bank base rate. Perhaps I may write to the noble Lord with clarification of that point. I promise to be brief in my written communication to him.
As to the adequacy of facilities, I understand that district councils will have the responsibility for determining that. District councils pay close attention to the sports council. That is their channel.
The noble Lord, Lord Graham, asked about the acquisition of land. I understand that district councils have powers of compulsory purchase but only after the normal procedures, including local inquiries, have been completed. I understand that compulsory purchase powers for sports or recreational facilities have been used only ten times since they were originally enacted in 1975. I hope that the noble Lord will see that there is no likelihood of any grave injustice being caused.
The noble Lord, Lord Hampton, asked about the age of members of the youth committee. I understand that young people are represented on the youth committee. I had perhaps better not go into the definition of "young people". They will be over 16. I think that they will be 16, 17 or 18. I assure your Lordships that the youth committee lives up to its name. Its members are not stiff and geriatric like some of the spokesmen in your Lordships' House.
I hope that I have covered most of the points raised by the noble Lord. I shall peruse my remarks and if I have missed anything raised by the noble Lord, Lord Hampton, I shall write to him. I promise to be brief.
On Question, Motion agreed to.

Enterprise Ulster (Continuation of Functions) (Northern Ireland) Order 1986
8.20 p.m.
Lord Lyell: My Lords, I beg to move that the second order before us this evening, the draft Enterprise Ulster (Continuation of Functions) (Northern Ireland) Order 1986, be approved. It was laid before us under the Northern Ireland Act 1974. Enterprise Ulster was established as a corporation under the Enterprise Ulster (Northern Ireland) Order 1973. This gave Enterprise Ulster powers to undertake works of environmental, amenity, cultural or social value for the purpose of creating employment in Northern Ireland. We hope that Enterprise Ulster will employ an average of some 1,200 employees in the course of the present financial year.
However, I am sure that your Lordships will agree that the work of the corporation is being hindered by the fact that its authority to undertake new project works lapsed on 31st March 1986. If action is not taken to rectify this position, Enterprise Ulster will begin to run out of sufficient work to keep its workforce gainfully employed. There is a degree of urgency in this matter arising from the recent introduction of a programme of initiatives through which the corporation aims to reduce job costs over the next three years.

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The programme needs to diversify into a much wider range of projects permitted by the 1973 order than the corporation has hitherto been accustomed to undertaking. Unless Enterprise Ulster's powers to engage in new work are restored at the earliest opportunity, progress on the achievement of the projected savings in job costs will be limited, and as a consequence the number of jobs it is hoped to provide will have to be reduced.
The simple purpose of the draft order before us this evening is to restore the authority of the corporation to undertake new project work and to remove the limitation on the duration of that authority for the future. The order will enable Enterprise Ulster to maintain its valuable contribution to the alleviation of the high levels of unemployment which we are currently experiencing in Northern Ireland. I commend the order to your Lordships.
Moved, That the draft order laid before the House on 18th November be approved.—(Lord Lyell.)
Lord Graham of Edmonton: My Lords, I simply rise to say that we on this side fully support not only the renewal of the order but the manner in which the Minister has introduced it. Can the noble Lord give us one or two illustrations of the new projects which it is possible may be included? If one looks at the order under the heading "Continuation of certain functions of Enterprise Ulster" we refer to:
"The functions of Enterprise Ulster under Article 4 of the Enterprise Ulster (Northern Ireland) Order 1973 shall, so far as they relate to new, projects for the carrying out of works or activities".
I wonder whether the Minister can give us some idea of the kind of new projects which he knows from conversations or consultations are in the pipeline? That is the only question that I wish to ask.
Lord Hampton: My Lords, I too thank the noble Lord the Minister for introducing this order. The stated aims are admirable and I shall not go over them again. They are to undertake works of an environmental, amenity, cultural or social value in order to create employment in Northern Ireland. We are told that its authority to accept new project work expired on 31st March this year. I should like to ask the Minister three questions. First, why was this lapse allowed to occur particularly as no extra public expenditure is anticipated? Secondly, have any new projects been held up, and if so what? The noble Lord, Lord Graham, touched on this matter. Thirdly, I should be glad to be reminded as to what the allowed annual budget for Enterprise Ulster is?
Lord Lyell: My Lords, I thank the noble Lord, Lord Graham, and the noble Lord, Lord Hampton. The noble Lord, Lord Graham, wanted me to specify any of the extra duties that can be carried out by Enterprise Ulster. I understand that there certainly would be new projects in the social and amenity fields. These would be, as I understand, such matters as small repairs to buildings and houses and matters of this level, but on a fairly small scale. I understand that there are no specific new projects yet lined up.
This order before us this evening is principally in the nature of being permissive since the original order about which I spoke, the Enterprise Ulster (Northern
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Ireland) Order 1973 in Article 12 is marvellously headed, "The cessor of functions of the Corporation". It says:
"The functions of the Corporation under Article 4".
this was written in 1973—
"so far as they relate to new projects would cease on 31st March 1978".
That originally provided for a span of about five years. I understand that the order was renewed again in 1983. However, this time it was for only three years, because the order was not seen as being absolutely necessary, and its lifespan in 1983 was perceived as being necessary for only three years. This has not been the case. That is why we are moving the order tonight. There will be no finite date. The order tonight will permit Enterprise Ulster to carry on with whatever projects are permitted by the original order in 1973; however, not for a specified period of three or five years but for the foreseeable future. That is the reason we have the order before us this evening.
I am not able to spell out to the noble Lord, Lord Hampton, what harm has been done by the gap between 31st March this year and today when we are moving the new order. However, I understand that the Enterprise Ulster has been able to continue to function. But we wish to have the powers to carry on any new projects which might come to hand.
On the budget, I am afraid that I do not have a figure regarding how much is spent. Perhaps I may write to the noble Lord. I was able to tell the noble Lord that we aim to maintain 1,200 jobs this year. The new probationary wage of £75 per week for new recruits will give some indication of the costs. Of course, they are only the wage costs. They do not take into account administration and the support costs for Enterprise Ulster. I am extremely grateful to my noble friend. I understand that it is in the region of £7½ million. Indeed the exact figure I have is £7.465 million. That will be the cost of Enterprise Ulster this year.
Once again I promise that if I have missed any questions from the noble Lords, Lord Hampton or Lord Graham, I shall certainly write. However, I think that it would be the wish of the House that I should commend the order to your Lordships.
On Question, Motion agreed to.

Speech Therapists: NHS Pay
8.28 p.m.
Baroness Turner of Camden Baroness Turner of Camden rose to ask Her Majesty's Government whether they will comment on the difference in pay between speech therapists in the National Health Service and other graduate professions in the National Health Service.
The noble Baroness said: My Lords, I rise to put to your Lordships the Unstarred Question standing in my name on the Order Paper. In so doing I must declare my interests. Speech therapists are members of the union ASTMS of which I am assistant general secretary. However, I am not speaking today simply to make a salary plea for a section of membership. I quite appreciate that your Lordships' House is not a suitable forum for salary negotiation. I am emboldened to speak to your Lordships on this subject because I have been impressed since I have been in the House with the

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concern that is frequently expressed for the welfare of the disadvantaged and the disabled. It is on the subject of speech therapy as a profession and its rewards that I wish to speak. It is my belief that too little is known about it.
Speech therapy for speech disorders began in this country in about 1906, when classes for children with speech problems were developed in Manchester. Other cities followed suit. The original pioneers of the profession were ladies of independent means who worked for an honorarium to establish the foundations of the discipline. They trained recruits of a high academic standard. University entrance qualifications have been required for at least 22 years.
Academically, speech therapy has never been an easy option. It involves a wide range of academic subjects, including advanced neurology, normal and abnormal psychology, phonetics and linguistics, the whole field of speech and language pathology and a wide range of medical and surgical specialities, with heavy clinical commitments during training. The profession is now all-graduate entry. I have here the outline syllabus published by the University of Newcastle on Tyne for a B.Sc. (Honours) Degree in Speech and Psychology, obtained through a four-year course, and the B.Sc. (Honours) Degree in Speech similarly obtained through a four-year course leading to a recognised professional qualification. This is a fairly tough course to undertake.
The profession has always been poised between medicine and education. There is of course a strong teaching element. However, there has been uncertainty about precisely where the profession fits in. There was an examination of the situation by a committee chaired by Professor Quirk, which reported in 1972. The Quirk Report still provides a valuable insight into the profession and the problems it faced then and indeed still faces.
The foreword to the report, which was signed by Margaret Thatcher, Keith Joseph, Gordon Campbell and Peter Thomas, says:
"Although disorders of speech and language may not be as obvious as physical disabilities, they nevertheless cause great distress to large numbers of people. They hinder some of the most fundamental human activities—making wants known, expressing ideas and getting to know other people. Those engaged in the treatment of these disorders are therefore performing an essential service and making an important contribution to human happiness.".
The foreword expresses thanks to Professor Quirk and his committee for the helpful account of the nature and uses of speech therapy and the emergence of the profession and for its rigorous analysis of the problems.
As I have said, it is a valuable source of information as to what speech therapy actually is and the qualities required successfully to undertake it. Not only are these qualifications academic. As one school concerned with the training of speech therapists put it to the Quirk Committee:
"One of the main interests of this work lies in the fact that every case has to be assessed as an individual problem, because the personality of the individual can affect the results of treatment. For this reason, students [of speech therapy] should have a stable, well-balanced personality themselves, as well as a sympathetic and understanding attitude towards others. This work calls for patience,
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initiative and imagination: to the prospective student these qualities are as important as the necessary academic ability.".
When one considers what the work actually entails, it is clear why these qualities are required. Speech therapists are involved in the treatment of a wide range of communication problems in childhood, including specific language disorders, delayed language development, articulation disorders, stammering and disorders associated with cerebral palsy, with emotional disturbance, with hearing loss and with mental subnormality.
As far as adults are concerned, patients include those with an acquired reading and writing problem as the result of a stroke or head injury. Indeed, speech therapists helped many young men wounded during the Second World War who had to face speech difficulties as a result of head injuries. Stammering is also a condition where speech therapists have been of great help. Here there have been some very famous clients, including His Majesty George VI.
There are voice disorders, hearing loss and mental illness, as well as mental subnormality to be dealt with as far as adult patients are concerned. Anyone who has seen, as I have, a formerly articulate person who has suffered from a stroke struggling to make himself understood, or parents of a child with learning difficulties because of problems of communication, can have no doubt at all of the value of the work that speech therapists do and of the need for it.
It is an almost entirely female profession. When the Quirk Report was published, 99 per cent. of the profession was female. I gather it is almost the same today. I think the figure is 98 per cent. It may well be that the history of the profession and its purely female, caring character has been responsible for its lack of status and the low level of pay which has been a feature for a long time and which no doubt contributes to the shortage of qualified speech therapists at the present time.
It is an undoubted fact that the service is inadequate to meet present needs. A recent report by Dr. Pam Enderby and Dr. Robin Philipp, extracts of which appeared in the British Journal of Disorders of Communication, makes this very clear. They say:
"The study of the literature supports a widely held view that the true incidence and prevalence of speech and language disorders is much higher than previously estimated. The data that have been gathered are deficient in many respects but suggest a revised estimate for the size of the speech and handicapped population in the United Kingdom as follows:
Severe communication disorders (that is, people with little or no spontaneous speech) 800,000 persons;
Moderate communication disorders (speech and language is noticeably disordered) 1.5 million persons".
They suggest that these estimates of the size of the speech and language handicapped population in the United Kingdom could well be conservative, because there are some groups of people who suffer from speech and language disorder which have not been included. Nevertheless, the estimates strongly suggest that the speech impaired population quoted in the Quirk Report, which at that time was 324,180, is a considerable under-estimate. It is clear from a report produced by VOCAL, (Voluntary Organisations Communication and Language—a voluntary organisation concerned with these problems) that there is an unfulfilled need. The VOCAL report is

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critical of the restructuring of the National Health Service in 1982 which VOCAL claims produced a serious setback for the profession because of the loss of Area Speech Therapy Management, which had existed until that time.
The report which VOCAL produced is the result of a questionnaire sent to speech therapists who are members of the College of Speech Therapists. The overall impression is of an overloaded, understaffed service struggling against ignorance and apathy. Speech therapists are well aware that they are not reaching all who need their services but are equally well aware that they could not cope with the volume of work if all the patients were referred to them.
The VOCAL report says that it did not seek views in the questionnaire regarding salaries and levels of grading. It says that this was a deliberate omission because the report it was seeking to make was primarily concerned with patient care. Nevertheless, VOCAL concludes that:
"It appears that little progress has been made in recognising and rewarding the important role of speech therapy in health care. It is deplorable that a graduate profession highly trained in all aspects of human communication should be accorded such low priority in staffing, accommodation and clerical back-up."
There has been, and still is, great dissatisfaction with pay levels. Perhaps I may quote some examples drawn from the salary structure at present operative (the date is with effect from 1st April 1986). A speech therapist who is a graduate, gets at point of entry £6,096 per annum. At point 04 in the scale (four stages on) the salary is £7,056 per annum. These are speech therapists with what is known as a "relevant degree". A senior speech therapist can attain the princely salary of £7,368 per annum rising to £8,676 per annum. A senior at the next level commences at £8,676 and rises to £9,720. Your Lordships will be aware of many professions and other occupations in which far less social commitment is required where the salary and the rewards are very much greater than that.
It is not surprising that with rewards at this level there is a shortage of people willing to undertake this necessary work. A survey conducted by the College of Speech Therapists in 1986 showed that, of 130 recent vacancies for speech therapists remaining unfulfilled for more than three months, 20 per cent. were vacant because of low pay. It is all very well to be socially motivated, to enter a caring profession, but bills nevertheless have to be paid. The profession is out of line with other graduate professions in the health service—for example, clinical psychologists—to the tune of several thousand pounds per annum.
As I have already said, speech therapists themselves, who are almost entirely women, believe that there is an element of sex discrimination here. They believe that if this were not a female profession it would be more highly valued. So, they decided to test out our equal value legislation and three of them recently took test cases to an industrial tribunal. However, they failed. They could not even get to the point of having their cases considered in substance with an independent expert undertaking an evaluation, because the industrial tribunal has accepted the argument of the employing health authorities that because salary scales are approved by Regulation 3 of the National Health Service Remuneration and Conditions of Service
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Regulations 1974, the health authorities concerned have no power to vary the salaries paid, even though they may be discriminatory. I have no doubt that the speech therapists concerned will pursue this further. However, if the Government would themselves look again at the profession and its rewards, or lack of them, an expensive trek through the courts on the matter of equal value could be avoided.
It is surely necessary to do something. Every so often newspapers carry stories which highlight the desperation of parents who cannot get speech therapy for children who need it. There was the case of Mr. and Mrs. Wallace, who went to the High Court to try to force a local education authority to provide speech therapy for their nine-year-old boy, who had profound difficulties in learning to speak. They failed in their action. There was the case of the Wilson family, which was referred to in a recent story in the Sunday Times, who were in despair when a school language unit was closed, but who fortunately were able to secure the support of VOCAL, the voluntary organisation to which I have already referred, and the unit was reopened. Incidentally, VOCAL has a great deal of information available about unfulfilled need, based on the material that it has collected.
I therefore appeal for this important but undervalued profession to be given the necessary support and for the Government to ensure that badly needed services are extended and made available to the large numbers—young and old—who need them. On behalf of these kindly, gentle women, who are most unmilitant, I appeal for support.
8.41 p.m.
Earl Attlee: My Lords, when I was a child I could have done with the services of a speech therapist. This morning I could have done with the services of a computer therapist. I wrote the speech on my computer and I crossed the "t"s and dotted the "i"s. Then, after polishing the priceless prose, I pressed the wrong button and lost the lot. I had to start again from scratch.
I should like to begin by congratulating the noble Baroness, Lady Turner of Camden, on putting down this Question, which is, I think, very important. I am only sorry that there are not more noble Lords present on both sides of the House.
I speak with a personal interest. In my maiden speech in your Lordships' House, I mentioned the fact that one afternoon I was talking to a very pleasant lady in the London Press Club. After some time she asked me whether I stammered as a child. I admitted that I had. That was over 50 years ago. I was rather puzzled as to how she knew this. She explained to me that she was a speech therapist. I wondered whether she knew I stammered because there was a certain hesitation in my voice and because there were certain words that I consciously avoided. To be honest, one of those words is "therapist." One cannot very well speak on this subject without using that word. I wondered also whether it was because I speak slowly. This lady had more than just a keen ear. She had spent four years training to become a speech therapist.
The noble Baroness has mentioned some of the attributes that are required. I must admit that some I

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did not know until the noble Baroness mentioned them. Four years' training is a long time. When you have your degree and are a qualified speech therapist, what have you got? You have a job that pays less money than if you had spent three months or possibly six months learning to be a shorthand typist. That is disgraceful.
Therefore, is it any wonder that we have a shortage of speech therapists today? Who do they treat? Obviously, they treat the old. The noble Baroness mentioned those who have had a stroke and who have to be taught to speak again. Speech therapists also teach the young. I should like to give one small illustration. In my new family there is a young son. Let us call him Sid, because that seems to be quite a popular name these days. At the age of nine, Sid had a lisp and, being concerned, his mother went to his school and was told "What do you want? Expert advice? You want a speech therapist? No, you will give the boy a complex". How could the boy have a complex when he knew he lisped. However, the school said "No". By the time the boy was 13 years old his lisp was well developed and he went to another school. Little boys being what little boys are, they teased him. His mother told the school that she was worried about Sid and his lisp. The school said, "We quite agree. What Sid needs is to see a speech therapist." And he did. At the end of the period of speech therapy, his mother was told, "What a pity we did not have him at the age of nine because we could have cured his lisp in six weeks rather than the six months that it took". One cannot really blame the first school. How many of your Lordships know about the training of speech therapists, what they can do and what they do? If we do not know and if the general public do not know, then, sure as hell, local authorities do not know. That is a great shame.
In the broad spectrum of these medical matters—noble Lords can hear how technical I am getting—everyone knows what physiotherapists do. If you have aches or pains or something wrong with your neck, they do the right thing and you are cured. However, with a speech disorder—a great many people have a speech disorder—if you are lucky and you are caught young enough, you will go to a speech therapist, and the disorder will be put right.
As a young lad, I stammered because I was left-handed. There were attempts to make me write with my right hand. But there was no way that I could do so. Left-handed people always notice other people who are left-handed. The noble Baroness the Minister is left-handed and the Government Whip who was sitting in the Chamber a few minutes ago is also left-handed. Unlike me, I do not think that the noble Baroness the Minister has a stammer. Possibly, unlike me, she is also not dyslexic. Whenever I can I mention the fact that I am dyslexic, because it helps those who are dyslexic to know that just because they are dyslexic does not mean that they cannot stand up and speak in public.
The noble Baroness, Lady Turner of Camden, kindly sent me a leaflet produced by the ASTMS, the union to which the speech therapists belong. It contains a foreword by Clive Jenkins, the general secretary and, as she was then, Muriel Turner, the
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assistant general secretary. It is a short leaflet. It is a good one. I would recommend it to your Lordships. I would recommend it to local authorities, and I would recommend it to those members of the DHSS who have responsibility for the payment of salaries and for the numbers of qualified speech therapists who are employed. If your Lordships, myself and everyone else knew more about what speech therapists do, perhaps we should start to get somewhere in respect of having sufficient numbers and paying them the money to which they are entitled.
8.51 p.m.
The Earl of Halsbury: My Lords, before addressing your Lordships this evening, I have an interest to declare. I am in mid-term of my second term of office as the elected president of the College of Speech Therapists. I am therefore deeply grateful to the noble Baroness, Lady Turner of Camden, for having raised this subject at all in your Lordships' House this evening, and equally grateful for the extremely distinguished presentation that she has made of her subject. It really renders it quite unnecessary for me to say any more about speech therapy than she already has. Instead, I am going to draw on my own experience to advise your Lordships about where the difficulties lie.
Some 16 years ago the total mess in which successive governments had landed the salary structure of the National Health Service was deposited in my lap by the Prime Minister and the Secretary of State of the day, and I was asked to make of it what I could, starting as chairman of the review body for doctors' and dentists' salaries. To that was added a few years later a departmental committee of inquiry—with a different committee of which I was chairman so that I was the common factor to both—for the salary structure of nurses and midwives in the National Health Service.
Then a third branch fell into rebellion and I was landed with another departmental committee of inquiry into the salary structure of what were sometimes called the paramedicals and sometimes called the PSMs—an acronym which stands for "professions supplementary to medicine"—together with the speech therapists, who were not at that time classified as paramedicals or PSMs. After five years of struggle, I brought a rational scheme of salary differentials into the National Health Service which was accepted by the government of the day, but the great problem, having got this scheme of differentials, was where to level peg the centre of gravity of this system with the centre of gravity of other professions.
After a lot of discussion with my colleagues—and if I sometimes speak in the first person singular I hope you will understand that this is not out of any egotism on my part; it is just a habit of speech—I and my colleagues finally agreed to level peg the ward sister in a hospital with the police sergeant in the police force at the station level. That is the station sergeant in the police force. That was, I think, really the least sexist piece of level pegging there ever was. It gave universal satisfaction. No one in the police force complained that the nurses, midwives and paramedicals were paid too much, and no one in their professions complained that they were paid too little.

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As a result of this exercise I came to the conclusion that the mess from which I had rescued the system would recur within a decade unless the Secretary of State accepted my private recommendation—this was not a public recommendation—to render my function permanent by having a review body for these other bodies. This was because my analysis led me to the conclusion that the Whitley Council procedure was invalid outside the Civil Service.
It is extremely important to realise that in the Civil Service the Treasury is the employer, and in the Whitley Councils the employees, or their representatives, can meet the employer in a bargaining match. But the moment you try to apply that to the National Health Service you find that the National Health Service is in fact a man of straw. It has no money of its own other than the money that the Treasury give it. The Treasury is ever willing to play hide and seek, and to put a third party between it and whoever seeks to get money out of it who will say impassively and with great regret, "Unfortunately, the Treasury won't agree to it'.
I do not want to say anything ungallant about the Treasury. I have always maintained that probably they are the most brilliant collection of double firsts dedicated to the national interest that you could find if you searched the world for them. I think that that is unarguable. Whether in some contexts they possess an ounce of common sense between the lot of them is arguable, but I shall not argue it this evening because in other contexts they undoubtedly work on a basis of common sense.
They are dedicated to the proposition that Her Majesty's Government should spend less. They are the only body of people in the country dedicated to this proposition. Everybody else wants Her Majesty's Government to spend more, provided they spend it on somebody's pet thing. The Treasury do not care what you do not spend money on, as long as you do not spend it, and that is their maxim. Quite frankly, without them we should all be bankrupt.
The speech therapists are now excluded from the review body system, which, eight years after I had brought order out of chaos, collapsed into chaos again, and the Secretary of State of that day then had to institute the type of review body for nurses, midwives, paramedicals and so on that I had recommended earlier. That has now been going for a few years. All they ever ask for is, "Back to the Halsbury scale" so I did them well in the past, and that is probably why the Treasury thought that I was too expensive, and they would not accept my recommendation that I be made a permanency of some kind or other.
The speech therapists stood ouside this arrangement. Why? It would be easy for the noble Baroness to say, "Well, they are the victims of their own decision. The reason they don't get properly paid is that they are looked after by Whitley Councils and not by review bodies". But, my Lords, self exclusion from the review bodies that exist is deliberate because they feel themselves to have more in common with other bodies such as medical psychologists than they have with physiotherapists or radiotherapists, who work under supervision from doctors. Speech therapists are not the subject of reference from doctors. They practise on
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their own. They are their own kind of profession and they want their own kind of review body.
Twelve years ago I liberated them from two situations, both of which were intolerable and one of which has been referred to by the noble Baroness, Lady Turner of Camden. The first was that pay scales were linked to the number of subordinates controlled. Speech therapists do not control large numbers of subordinates. They are much more like counsel learned in the law who practise on their own at the Bar and whose remuneration depends upon their reputation and their skill. At most they may have a junior; and a speech therapist may have at most an assistant. From that prison I liberated them by saying, "There is no connection, or there should be no connection, in some professions between your salary and the number of people you control, where those professions do not control large numbers of people".
The second situation from which I liberated them was that they were imprisoned in far too low a salary structure because of it. It seems to me the ultimate in reductio ad absurdum that a person should be paid less in the profession for which he or she has been trained than he can earn in some semi-skilled profession outside it. That is absolute nonsense from beginning to end. This was the point made by the noble Baroness and to which I believe your Lordships will agree.
The essence of false economy is to spend good money on training experienced people and then have half of them desert the profession for which they have been trained because they are being underpaid. It is a totally false economy. You end by training twice the number of people that you need in order to have perhaps not quite the number of people that you want.
That will conclude what I want to say to your Lordships this evening, because I have tried to place before you what amounted to five years of my life dedicated as a voluntary public service to this subject to enable your Lordships to understand exactly why this situation has recurred and will recur until a proper review body is appointed for the speech therapists equally with the medical psychologists and with one or two other professions in a similar group who do not work under medical supervision, who do their own diagnostics and have their own means of therapy.
I must tell your Lordships that it is a wonderful experience to sit at the side of a speech therapist watching her taking down in international phonetic shorthand the utterances of somebody who, from a speech point of view, is handicapped and then turning back her notes of last week to compare the performance of last week with their performance of this week in order to evaluate the progress that is being made. When you actually do this and talk to them, you will realise what very highly skilled, dedicated people they are. It was always my friendship with them and my insistence on taking the most general, rather than the narrowest, view of the profession that persuaded the speech therapists to extend their interests a little wider than they were originally—from such subjects as stammering and so on, or recovery from strokes, into such associated subjects as dyslexia, which they now take under their wing to a very large extent, which are so important in the educational field.

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The speech therapists and the medical psychologists are a different kind of person altogether from the physiotherapists and the radiotherapists; they are a different kind of person from the doctors and the surgeons; they are imprisoned in the Whitley Council system (as they ought not to be) and they badly need a review body to look after them. Although, as the noble Baroness has said in introducing this subject, it is quite right that this is not the forum in which to discuss finance, pay, individual salaries and that sort of thing, it is a very right and proper forum to discuss the structure whereby these matters are evaluated and settled. On that note, I think I may conclude what I have to say.
9.4 p.m.
Lord Lovell-Davis: My Lords, the subject of this debate, framed as a deceptively simple-sounding Question to the Government, is not only important of itself—to speech therapists, those who have embarked with some understandable trepidation on the qualifying course and to many thousands of our population who will desperately need speech therapy to live or to regain a full life—it is also important in that it raises the question of the support or lack of support the Government give to services, other than crisis-intervention services, which a constantly reorganised and increasingly restricted National Health Service is attempting to provide.
A very wide audience outside your Lordships' House will appreciate the initiative taken by my noble friend Lady Turner in asking the Government to state their position on a distressing, not to say dangerous, anomaly which affects the quality of so many lives.
I hope that what the Minister says in her response to this Question will at least give us some cause for hope—if only that the Government are aware of the seriousness of the problem, of the strength of the "equal value" claim and the need to remedy the present situation.
My Lords, it is desperately serious. In the limited community of your Lordships' House, in the 12 years I have been here, we have witnessed many sad instances of lively and articulate colleagues suddenly and tragically transformed by the effects of cerebral haemorrhage or stroke. Many of us have personal acquaintance of people, even young or in early middle-age, whose whole happiness and ability to function in society has depended upon their being able to regain their speech following a stroke. As has been said, the need for speech therapy goes far beyond the victims of stroke. Thousands of children are born with, for one reason or another, speech defects which, unless remedied, will effectively wreck their lives, causing misery and the frustration of any hope of their leading a full and useful life.
It is quite astonishing to me, as it is to the noble Earl, Lord Attlee, that we have come to the position in which it would be hard to find a recently-qualified typist for the £5,000 or £6,000 a year which is all a graduate speech therapist, after several years of intensive study and practical work—an essential part of the training process—can expect to earn on present scales of pay. Is it any wonder that many give up the struggle, either during training or even having qualified, when the reward for so much work and
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dedication, often having to pinch and scrape to survive as a student, is an income on which one can barely live? Where is the incentive to train for or stay in the profession, vitally necessary though it be, when all that is likely to happen at the end of the day is that your interest and dedication will be exploited and you will be grossly underpaid? As a one-time member of a district health authority, a trustee of a hospital's academic centre and someone still deeply involved in the health service and community care, I know of potential recipients of that derisory £6,000 a year who, in the process of achieving their aim of becoming speech therapists, have acquired academic qualifications up to an MA degree before earning their qualification as a speech therapist—because speech therapy is, of course, a graduate entry profession.
As result of all that effort, and provided you can keep body and soul together in the process, what can you look forward to as the financial crown of your career? It is from £10,556 to £13,770 as a district speech therapist, as against the comparable professional qualification of top grade clinical psychologists of from £18,000 to £24,000. That is a difference at the top grades of £10,000 a year.
Obviously, if the Government set up and maintain such ludicrously inappropriate pay scales and disregard any reasonable claim for improvement, they will get what they deserve, or at least they will get what the country neither needs nor deserves—that is, qualified people dropping out of the profession altogether, or going into the private sector where they can devote their talents to curing lisps rather than post-stroke defect, or they will go abroad and take one of the posts regularly advertised in publications in this country, at starting salaries in excess of the equivalent of £25,000 a year. It is a rotten choice to be confronted with when, as a qualified speech therapist, you recognise only too well that the real and desperate need for your skills lies within the National Health Service.
There is of course an aspect of this problem which does not help towards its solution. It is pretty clear to anyone who looks at the situation carefully that we are into the old "equal pay" bind. Most speech therapists, as my noble friend Lady Turner has pointed out, are women. Therefore any authority seeking an escape route from facing social need, because it costs money, can dismiss speech therapy as a second income profession. This is the argument, which I rather hoped was by now wholly discredited, which says that women get married and have children and their husbands can support them; and so we can deal with the problem on a second income basis. My Lords, what outrageous nonsense, 10 years after the Sex Discrimination Act became law!
It seems to me that the case is so clearly made that I need not go over it in great detail. The answer is obvious, and I believe it has been clearly made by the Association of Scientific, Technical and Managerial Staffs who, although they were not responsible for prompting me to intervene in this debate, have done much to draw attention to the plight of speech therapists. The union is to be applauded for so forcefully taking up the case of this small but socially very important sector of its overall membership.
At the risk of offending the susceptibilities of those whose interest I am trying to promote, I have to say that in contrast to the Association of Scientific,

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Technical and Managerial Staffs, the professional body, the College of Speech Therapists, seemed to me—until tonight at least—to have chosen to maintain a discreet silence on the subject of pay. I hope the college are not deliberately adopting a low profile—and the contribution made by the noble Earl, Lord Halsbury, encourages me to believe they are not—for it is disappointing when one comes across a professional body which distances itself from problems such as this because of a misguided fear of political involvement, as though to say anything in the political arena is implicitly to make a commitment to one party or another, which of course is not the case.
I hope—though I have to admit without great expectations—that in replying to the Question raised
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by my noble friend, the Government, through the Minister and her officials, will not simply resort to bombarding us with statistics. In recent years we have had a surfeit of bland and often misleadng figures to divert attention from what everyone really acknowledges to be problems fundamental to our society. I should like to think, in the interests of a vitally important profession and of those who now need, and in the future will probably increasingly need, its expert help, that this debate will draw from the Government a real expression of concern and commitment—and, what is more important, some practical demonstration of sincerity. The profession has more than a legitimate claim: it has an irrefutable case. It is within the Government's power to concede this claim. They should do so.
9.13 p.m.
Lord Hooson: My Lords, I have an interest to declare in that my elder daughter is a speech therapist of five years' standing and she certainly would not have forgiven her father if he had not taken part in this debate. But I am also very happy to do so because, over the years when she was an undergraduate and since, I have had occasion to meet speech therapists and students of speech therapy at different stages of their development—and not only from this country but from other countries—who have stayed with us.
I must say that I have always been tremendously impressed by them as a body, by how gentle they are, by the great sense of social devotion that they have. They are a body of people in a small, relatively new profession and they need a great deal of help. I should have thought they were the last people on this earth who were likely to prove a militant body, and they are among those who render dedicated service to the community.
The noble Lord, Lord Lovell-Davis, at the outset of his speech expressed the belief that a large number of people outside this House would be grateful to the noble Baroness, Lady Turner of Camden, for raising this debate. I wish I could share that belief. I think the noble Baroness is to be greatly congratulated on raising this debate and on the way in which she has framed her Question. But I think one of the problems of the speech therapist is that so few people in this country appreciate what speech therapy is about. There is a great deal of ignorance about it.
The noble Lord was correct in saying that people who have experience of speech therapists—those who have a relative who has had a stroke, those who have had handicapped children, those who have had any kind of contact with children with speech defects and have seen the speech therapist at work—will have very great appreciation of their work. On the other hand, the vast majority of people in this country have not had need of the service of a speech therapist. Unlike a doctor or a nurse, the vast majority of people in this country do not know what speech therapy is about. They are unaware of what speech therapists do, of their substantial skills, of their expertise and of the great range of their responsibilities.
Already reference has been made to the fact that the speech therapist, by the nature of her profession—and, after all, we are talking of a profession with 98 per cent. female members—has to work on her own. From the moment that speech therapists qualify, they are on their own, without direct day-to-day supervision, and they bear a very heavy responsibility. They have to diagnose, to counsel and to treat all kinds of conditions. The range of their patients is great, from the child who the parents learn is having difficulty in expressing himself or herself in communication, to the man or woman who has been highly articulate but suddenly has a stroke; the range of responsibilities is very great.
Then there is the width of their duties, the articulation problems which affect a number of people in their intelligibility and effectiveness of speech. There are the language disorders which affect the use and understanding not only of the spoken word but
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these days of the written word as well. There are voice disorders which affect audibility and the effectiveness of communication. There are all the problems that are involved with people who have had operations on their throat, the larynx and so on, who must have restored to them the means of communication. There are the fluency disorders such as stammering when the continuity of speech is interrupted. Every aspect of these very wide problems has to be assessed, evaluated and treated by the speech therapists. Therefore, with the greatest respect, I do not think that the average citizen has any idea of the breadth of the duties of speech therapists.
I remember that when my daughter was studying speech therapy a cousin of my wife, who is a distinguished orthopaedic consultant surgeon, was staying with us. She happened to look at my daughter's books on the medical aspects of the throat and so on that speech therapists were learning, and her view was that they studied them in far more detail than any GP would need to do in order to qualify. It is a more limited sphere that speech therapists have to study, but that surgeon's view was that she would not like to have to do it, and she had no idea until she saw the books and the notes that speech therapists had to study these matters in such depth.
Today we have the ludicrous position that fully qualified speech therapists, who have entered a university course which is very trying and difficult because they need high academic qualifications, who have to work on their own when they are qualified and who have very heavy responsibilities, are paid less than somebody else who has completed a three-month secretarial typing course. It is a national disgrace and we are taking advantage of them. Everyone knows that that is true.
I not only congratulate the noble Baroness on bringing this matter before the House, but I also congratulate her on the way she has framed her question. As the noble Earl, Lord Halsbury, rightly pointed out, we are an unsuitable body as such to go into the details of precisely what relative pay should be. What we need and press for is an adequate review body. The beauty of the way in which the noble Baroness has framed her question is that it invites the Government, in the form this evening of the noble Baroness, Lady Trumpington, to comment on the difference in pay between speech therapists in the National Health Service and that of other graduate professions. We therefore look to the Government, who surely have a responsibility towards this group of dedicated graduates, to express their view on the matters which have been drawn to their attention this evening.
9.22 p.m.
Lord Rochester: My Lords, like other noble Lords who have spoken in this short debate, I am most grateful to the noble Baroness, Lady Turner of Camden, for having asked this Question and for the way in which she has done so. Our discussion seems

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clearly to have demonstrated that the National Health Service is facing a serious and growing shortage of speech therapists. Perhaps your Lordships will allow me to take this opportunity to say how, in terms of overall pay policy, the situation might perhaps be improved.
I join with my noble friend Lord Hooson and also with the noble Earl, Lord Halsbury, in saying that in the short term the best way forward may be to arrange for speech therapists to be included, along with doctors, nurses and dentists, among those whose pay and conditions are determined by review bodies set up for that purpose. I also join them in expressing the hope that the noble Baroness, Lady Trumpington, when she comes to reply, will have something constructive to say to us on that point.
There is a further basic problem from which I think we cannot escape; namely, that the Government at present have no pay policy other than exhortation for the private sector and arbitrarily set cash limits for the public sector. All past experience shows that one great difficulty in the public services is that when matters relating to the pay and conditions of a particular group—such as teachers—are examined in isolation, attention is concentrated on the problem from the viewpoint of the group concerned rather than from that of others affected by it. That, surely, leads to the conclusion that there is a need to establish procedures for pay determination which in the longer term might apply to the public services generally.
As I understand it, there are within these services at least five major groupings: the health service, the Civil Service, education, the police and the armed forces. Similarly, there are at least three different kinds of employer: central government, local authorities and what might be called "quangos". Provisions for pay determination therefore need to be sufficiently flexible to take account of the different circumstances affecting each of these groups.
I do not for a moment underestimate the difficulties of working out practicable procedures along these lines. But that is no reason for inaction. In my view, arrangements should be such as to ensure that the relevant trade unions continue to play a part in pay negotiations. The application of the raw principle of market forces is surely not enough. We cannot merely seek to recruit and retain a sufficient number of staff for a particular public service at a given point in time. Many people in the National Health Service—speech therapists are a good example—need training, experience and expertise that can be acquired only over a period of years. That necessitates provision for career development and for a progressive salary structure.
It is surely inefficient and contrary to the public interest that such people should move in and out of the health service in accordance with fluctuations in their pay and conditions relative, it may be, to those in the private sector. There is also a need for staff—even such dedicated staff as speech therapists—to be thoroughly well motivated. That means that they need to feel that they are being dealt with fairly. Under these conditions there is surely no escape from ensuring
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that, in the public services, pay is broadly comparable with that available for similar work in the private sector.
A number of consequential requirements arise, none of which can be satisfied easily. This is not the occasion, I realise, to do more than merely mention some of them. I refer to the need for a generally acceptable means of collecting and assessing relevant data; the need to take account of factors such as fringe benefits, pension arrangements and security of employment; and the need to ensure that comparability is applied within a particular pay structure in a way which makes internal sense in the public service concerned. In return, society, which has to foot the bill, is entitled to receive a service comparable with that available in the private sector.
This might perhaps be achieved through some kind of efficiency audit on which, again, it is not possible to elaborate now. But in all this, the essential point is that it is surely unreasonable for the Government to argue that the taxpayer can afford only a certain level of pay increase in the public services unless they are prepared to introduce a pay policy that is applicable to public and private sectors alike.
Finally, I suggest, not for the first time, that provision needs to be made for the settlement of disputes by a third party in the event of negotiations resulting in a failure to agree. At this late hour I shall not weary your Lordships by rehearsing once more the precise form that such an arbitrating body might take, nor the procedure under which its findings could be overturned only by parliamentary resolution. But it is only if treatment of the kind that I have sought to advocate is accorded to those employed in the public services that they will feel they are being rewarded fairly.
I recognise that, at first sight, all this may seem a little remote from the specific plight of speech therapists. But, in my view, their situation cannot be divorced from the larger question of overall pay policy and structure. It is when that question is resolved that the pay of speech therapists will fall into place.
9.30 p.m.
Lord Ennals: My Lords, as others have done, I want first to thank most sincerely my noble friend Lady Turner of Camden for raising this very important issue and for the admirable and clear way in which she has done so. She has attracted a significant number of your Lordships to the debate who have in one way or another a great deal of experience on this subject. I am thinking of the noble Earl, Lord Attlee, who, clearly from his lucidity and the way in which he always speaks, has benefited from the skills of the speech therapists.
I think of the noble Earl, Lord Halsbury, as the great liberator. There are many people in the health service who look back with gratitude to the work he did over the years to which he made reference. The speech therapists are very fortunate to have him as their president.
I want to move on to pay tribute to the speech therapists themselves. As with almost every profession, theirs is a changing one. I must add that I am not uninfluenced by the fact that two of my close

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relatives are also practising speech therapists. They are very proud of it and I am proud of them. Moreover, I shall not conceal the fact that my membership of ASTMS, which represents most of their interests, prejudices me in their favour.
The importance of their work is increasingly recognised by the public and by the professions, not only because it has become an all-graduate profession—important though that is—but on account of the very wide range of skills and experience required. As the noble Earl, Lord Halsbury, said, they are not like professions—he said "supplementary" but I prefer "complementary"—to medicine. They are not working under medical instruction. They are highly skilled, and highly trained.
A speech therapist is responsible for the acceptance of cases and for the planning and determination of treatment, having regard to inter-disciplinary consultation and co-operation. This places a high level of responsibility on a speech therapist, particularly on the newly qualified therapist who is in the main working alone, without direct day-to-day supervision. As the noble Earl said, it is quite different from the newly qualified physiotherapist who will probably be working in a large hospital department where patients may be allocated on a daily basis and where he or she is constantly under supervision and able to take advice.
My noble friend Lady Turner and the noble Lord, Lord Hooson, went through some of the speech therapists' major responsibilities, and I do not need to do so. Every aspect of the problems with which they are faced must be assessed and evaluated. That involves the use of test procedures which the speech therapist is trained to administer. Careful and detailed assessment is needed before an appropriate treatment can be planned and carried out.
Thus the speech therapist is completely autonomous in the clinical sense. This accountability is not unlike the level of responsibility borne by members of the medical profession. The speech therapist alone has the expertise to assess, diagnose and treat disorders of communication in children and in adults—sometimes the very elderly and the very young, and sometimes the disabled. Speech therapists are specialists and consultants in the field. As such they do not receive direction or guidance from other professional associates. Of course where the speech therapists suspect that other disorders may be present they will freely consult other professional colleagues.
From the start the speech therapists go alone into schools, day centres, adult training centres and homes. They tackle consultants, give talks and demonstrations, including career guidance talks. They give lectures to doctors, nurses, medical students, physiotherapists, teachers, and so on. Each one is an expert in his or her own field and should be seen as such. With that pattern, which is clear to all of us, one has to ask why speech therapists are so badly paid. It is not as if it has always been so—which was a point made by the noble Earl, Lord Halsbury—and it went on after the noble Earl ceased to have those responsibilities.
If we look at the year 1979, in which I have a particular interest, in some instances the salary of
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speech therapists was similar and in some instances better than people in a range of other comparable professions in the National Health Service; yet by 1986 speech therapists have become by far the least well paid, in spite of the fact that during the same period the level of qualification—and I think the level of performance—improved enormously. We now recognise entry to the profession as being through a three or four year degree course. Many therapists have gained further qualifications including an MSc or a PhD. They are highly qualified people. One asks how it happens that they are so badly paid.
The noble Baroness, Lady Turner, gave some figures which were very alarming indeed. It is ludicrous that these people at the end of a four-year course will receive not much more than £6,000 a year, and one wonders how the profession is able to attract people. It can only be by deep commitment, and I say to the Minister that the National Health Service can no longer rely upon deep commitment. People need to be paid for the job and if the best people are to come into vital professions such as this we have to pay them what they deserve.
Let us look at the teachers, who after industrial action achieved an increase of 16 per cent., and compare them with the speech therapists who would never withdraw their labour from their patients but who have had to accept a 6 per cent. increase. In fact, over 20 per cent. will be necessary to retain the pay status that speech therapists enjoyed in 1979. One asks what action the Government will take. What effect do the Government think that these appalling conditions of pay will have on recruitment? One has to recognise that the demand for speech therapists is increasing greatly and there is a shortage in this profession.
The speech therapist's caseload would be daunting enough if she had only patients with stroke and head injuries to treat. Conservative estimates give a combined figure of between 20,000 to 25,000 new cases per annum in Britain requiring speech therapy following strokes and head injuries. Yet this small, predominantly female profession also treats communication disorders arising from cancers of the head and neck, brain tumours, Parkinson's disease, multiple sclerosis, motor neurone disease, cerebral palsy, cleft palate, hearing loss, etc. The list is a very long one. The Government will have to face up to this problem.
Perhaps I may raise just one final issue, which was touched on by the noble Baroness, Lady Turner. A few days ago in the courts the parents of a nine year-old boy who had profound speech difficulties failed in the High Court to oblige a local education authority to pay for the speech therapy that he needed. First, I do not understand how this could be so. Lord Justice May, sitting with Mr. Justice McCowan, said that he had the "greatest sympathy" for the family but local education authorities were not responsible for providing such therapy. That seems to me to be quite wrong. After all, children with other disabilities are taught by the education authority.
The judge went on to say:
"Its provision should be a matter for the district health authority through the National Health Service".

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Of course the decision had been awaited with great anxiety by parents all over the country who have children in need of speech therapy. It was clear that when they went to the National Health Service it could only offer a very much smaller service than was known to be needed by the child. The area health authority had agreed to provide three daily sessions but it said that lack of funds prevented it from providing more.
I do not understand why speech therapy is not an educational responsibility for a child of school age in the same way that it is a health responsibility for children and adults of a greater age. If this is so, why is there a lack of funds to prevent the child having the necessary therapy?
The debate is about pay. It is in the interests of all speech therapists that we are speaking today, not just the present speech therapists but the speech therapists who will be coming into a noble and skilled profession—or not coming into a noble and skilled profession, because I say to the Minister that unless the situation is improved and improved quickly, in a few years' time we shall find the same shortage of speech therapists (I speak as president of the College of Occupational Therapy) as we are now finding of occupational therapists. We shall find that skilled people will simply not perform this essential role in the National Health Service unless the Government are prepared to find the funds to make the situation compatible with that of other professions to which they may well be attracted.
9.41 p.m.
The Parliamentary Under-Secretary of State, Department of Health and Social Security (Baroness Trumpington): My Lords, I am grateful to the noble Baroness, Lady Turner of Camden, for so elegantly and eloquently raising this important matter. I should like first to say to the noble Lord, Lord Lovell-Davis, that I am seldom bland and, I hope, never misleading.
My noble friend Lord Campbell of Croy led a debate on this subject, to which my noble friend Lord Caithness replied, in May last year. The noble Earl, Lord Attlee, paid his tribute to speech therapists. I am glad to be associated with a fellow south paw.
Today's debate gives me the opportunity to say publicly how much we appreciate the value of the work of speech therapists. Many thousands of people throughout the country are forever in debt to them for their expert and painstaking work, and of course I see much of the wonderful work that they do when I am working with disabled war pensioners.
In times past there was limited understanding of the extreme feelings of frustration and isolation experienced by those who were speech impaired and the distress suffered by their families. The noble Lord, Lord Hooson, was quite right to draw attention to that fact. Happily today ignorance is giving way to a greater knowledge both of the cause and effects of this form of handicap and how it may be overcome with the help of speech therapy. Health authorities have recognised this and have expanded their speech therapy services at a greater average rate than the general rate of increase in NHS expenditure as a whole.
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The noble Baroness, Lady Turner, mentioned the extremely valuable work done by VOCAL. I am sure that she will be interested to learn that my Department made VOCAL a three-year grant of £20,000 a year to enable it to establish a permanent base.
I should like to reply to another point raised by the noble Baroness concerning the Enderby Philipp Report, which states that the size of the speech and language handicapped population is not known. It goes on to quote the estimates that the noble Baroness mentioned and to which the noble Lord, Lord Ennals, in turn referred. These estimates were gathered from various texts used in speech therapy departments of colleges in the United Kingdom and in the United States. The department has no other figures on the instance and prevalence of speech impairment in the population.
The noble Baroness, Lady Turner, in the course of her excellent speech, raised particularly the question of the pay of speech therapists and the difference between their pay and that of other graduate professions. That indeed was the theme taken up by many other noble Lords.
I should say at the outset that the pay of NHS staff who are not either general managers or covered by pay review bodies is a matter for negotiation within Whitley Councils. Representatives of speech therapists negotiate with the management side of the Scientific and Professional Staffs Council. The management side members are appointed by the Secretaries of State to represent the management interests of the whole NHS in reaching decisions on the sums available to the management side and have regard to the overall needs of the service and the total sums available for pay, prices and service developments. Agreements are made by both sides.
Historically, speech therapists, as the noble Baroness, Lady Turner, acknowledged have hovered between education and health. The Quirk Committee in 1972 described them as preferring:
"To remain in the perhaps slightly precarious position of a small autonomous profession, between education and medicine, claiming affinity with both, defending their independence against both and enjoying the patronage of neither."
I return to a point made by the noble Lord, Lord Lovell-Davis, apart from those speech therapists employed by voluntary bodies such as the Spastics Society, few speech therapists choose to enter private practice.
The noble Baroness, Lady Turner, mentioned the case of Gregory Wallace. I watched that case with interest, and noted that the judgment concluded that the provision of speech therapy was a non-educational provision and was a matter for the health authority. The Government accept that.
I return to the noble Earl, Lord Halsbury. Although it is true, as he said, that speech therapists do not depend upon medical referrals, nevertheless, in normal circumstances referrals are made by doctors and when they are from non-medical sources a relevant medical opinion is sought as soon as practicable.
Despite the fact that speech therapists feared for their independence and status by being associated with the other professions supplementary to medicine, until

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1982 they were included with them in the Professional and Technical "A" Whitley Council for pay purposes. One of the recommendations of the committee of inquiry chaired by the noble Earl, Lord Halsbury, in 1974 was that the pay of speech therapists should be formally linked to those professions, and that recommendation, as he well knows, was implemented.
In 1983, the pay review body for nursing staff, midwives, health visitors and professions allied to medicine was set up and speech therapists were invited to take part but refused to do so. While most speech therapists said that they were not opposed to the principle of a review body, they did not wish to be linked with other professional groups with whom they believed they had little in common. The noble Earl, Lord Halsbury, said that speech therapists need a special pay review body, but the present body represents a variety of different professions. It could well have dealt with their special needs but they refused to join, as was their right. Their decision was crucial and one which some speech therapists now regret.
Because the setting up of the pay review body excluded a number of staff groups from the existing negotiating machinery, the system of Whitley Councils had to be rearranged. The present position is, as I mentioned earlier, that representatives of speech therapists negotiate with the management side of the Scientific and Professional Staffs Council. That is an ad hoc arrangement until the trade union side can agree on the formation of a new council.
I understand that in 1985 speech therapists made a formal claim for pay parity with other graduate professions. They eventually received the same percentage increase as other staff groups, but the management side agreed to examine jointly with the staff side the arguments which bore on that aspect of their claim. That examination was to be completed in time for the next 1986 pay round.
Soon after giving that undertaking, the management side became aware that three speech therapists, with the backing of their union, had made claims to industrial tribunals for equal pay for work of equal value with named psychologists and/or pharmacists under the Equal Pay Act 1970, as amended. When the management and staff sides met again earlier this year, the management withdrew its offer of joint examination of the pay parity claim on the grounds that it might prejudice any defence that health authorities might want to make against the industrial tribunal claims. The industrial tribunal has recently found in favour of the health authorities concerned, but I understand that an appeal to the Employment Appeals Tribunal is likely to be made. I am sure that in these circumstances your Lordships would not expect me to comment.
I am informed that the management side conducted its own review of the speech therapists' claims and consulted NHS management. The speech therapists' 1986 pay claim again included a claim for pay parity with other professions. In the light of its consultations the management side told the staff side that it did not believe that the pay of speech therapists should be linked with that of any other profession either within or outside the NHS. Eventually, the speech therapists agreed to accept the management side's final offer of 6
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per cent. on the pay bill. I remind the noble Lord, Lord Ennals, that this is the same as that for most other Whitley staff groups and is twice the current rate of inflation. I emphasise that there was no sex discrimination in this award.
I must try to clarify the position with regard to a subject mentioned by the noble Earl, Lord Halsbury. I understand that the management side of the Whitley Council wrote to the staff side over two years ago agreeing to discuss the grading structure and asking for ideas. No reply has been received, and the staff side has not raised the matter again. If the staff side were to put forward proposals even at this late stage, I am sure that the management side would be happy to discuss them without commitment on either side.
Comparisons on pay are difficult. We can argue all night whether profession A should get more than profession B. But the fact is as the noble Baroness, Lady Turner, agrees, that statistics show that there is no shortage of speech therapists against authorised posts. Neither are we aware that there is any lack of applicants for training. Indeed such evidence as we have suggests that the opposite is the case.
The noble Lord, Lord Rochester, stated that there is a growing shortage of speech therapists. However, the number has increased by about 9 per cent. over the year to September 1985 and the number of speech therapists in post has almost doubled since 1974. Pay therefore does not appear to have had any impact on recruitment. The fact that speech therapy is now an all-graduate entry profession does not automatically qualify them for increases in pay. Many practising speech therapists do not have degrees under the old entry rules. Pay ought to be related to service and not qualifications. Other factors such as conditioned hours have also to be taken into account.
We have had an interesting and informative debate. The noble Earl, Lord Attlee, mentioned an ASTMS leaflet. I have seen this leaflet. However, the NHS has many demands on its services; pay is by far the largest. The merits of each demand have to be looked at in the light of overall priorities and available resources. Pay levels must reflect various factors, including recruitment and retention of NHS staff. As the noble Baroness, Lady Turner, said, this House is not the proper place in which to conduct pay negotiations on behalf of any staff group. However, I hope your Lordships will agree that we have certainly reviewed the position this evening.
House adjourned at four minutes before ten o'clock.

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